There is often confusion about the differences between freight forwarders and customs agents and brokers. What are the differences in their roles and responsibilities and when they are best employed to help international traders with their import requirements?
There are certainly crossovers between the two, but it’s important for new traders to become clear on the differences between these functions. In this blog, we will help to clearly define the key differences, making it easy for international traders to direct their resources to the right place.
What does a freight forwarder do?
A freight forwarder specialises in moving cargo. For many traders, a freight forwarder is the most important service provider for shipping. They provide transport for your goods via sea, air or road. Freight forwarders also offer a range of other services, from export packing, warehousing, eCommerce fulfilment, customs clearance, documentation, marine insurance and supply-chain management. Many freight forwarders can also handle dangerous goods and other large cargo that may be difficult to transport or that may need to be kept in specific conditions, such as pharmaceuticals. All in all, very comprehensive!
What does a customs broker do?
Customs brokers provide a very specific service, namely the clearance of your cargo at international borders. They do not handle the shipping part of the process like a freight forwarder but they do handle everything to do with the customs process. They ensure that the import and export of goods runs smoothly, confirming that you have all the right paperwork and licences you need to transport your goods and ensuring that you adhere to all the rules and regulations.
Should I use a freight forwarder or customs broker?
Whether you use a freight forwarder or customs broker is totally up to you. However, you will receive a more comprehensive service from a freight forwarder. A freight forwarder will arrange for your goods to be transported from one country to another and can often provide a customs clearance service directly. Customs agents and brokers may only be responsible for the clearance of your goods through customs en route to the final destination or delivery point.
If a freight forwarder does not have their own in-house customs clearance capabilities, then they will employ a customs broker to manage their customer’s clearances for them. Also, a customs broker will act independently between a freight forwarder and the shipper or consignee.
Customs agents and brokers usually operate as direct representatives, but they can also act as indirect representatives. A direct representative acts in your name and can’t be held liable for your customs debt. An indirect representative acts in their own name but on your behalf. They can be held liable for your customs debt.
Whether you decide to use a freight forwarder or a customs broker or agent, make sure that you provide them with full and accurate information. The key things to provide are a copy of the commercial invoice and the tariff classification code for your goods, which is your responsibility as the owner of the goods.
So, depending upon your specific requirements, you may choose to employ a customs clearance broker or agent solely for this part of the process or a freight forwarder to manage the entire supply chain for you.
If you’d like the help of a freight forwarder, contact Pinnacle today and speak to one of our global logistics experts for information, pricing and advice for your unique requirements.
+1 757 306 1211 / firstname.lastname@example.org