Many people are familiar with the term “customs brokerage”. Many confuse a custom broker with a freight forwarder. Though they work in the same field (international trade and international shipping), they have different roles they perform. Sometimes, one company can offer the two services. In this article, we will explain and define the roles of a customs broker and a freight forwarder; customs brokerage and freight forwarding.
Custom brokers—Who are they?
A customs broker may be a licensed individual or corporation that works in a customs brokerage firm that facilitates the process of the shipping of goods across geographical borders while meeting customs requirements. To put it simply, if you’re an importer, a customs broker will act as an intermediary between you and the Government and will help you clear your goods or raw materials.
Stages include preparing the required, checking the shipment documents, taking care of taxes and duties, giving the freight forwarder the right documents, etc.
This is a summary of what customs brokerage entails.
Freight forwarders—Who are they?
A freight forwarder is a company or an individual that handles the shipping of cargo from the seller to the buyer. It’s not as easy as it sounds. They arrange and prepare the proper documentation while at the same time overseeing the entire process as the goods are transported until they get to their desired location in safe conditions either on the sea, air, road, or rail.
In this way, shippers save time and money and go about their businesses while they allow freight forwarders to use their expertise to handle the whole process. This is all part of the international trade transaction which is quite different from customs brokerage.
The stages of freight forwarding are; export haulage, items checkpoint, export and import customs clearance, handling of goods at destination, and import haulage.
Differences
It’s vital to understand the difference between the customs broker and the freight forwarder so you don’t confuse their jobs with each other. The following are their key differences;
- It’s possible for a freight forwarder to also be a customs broker but the likelihood of a customs broker being a freight forwarder is slim.
- Customs brokers are most times limited to the import side of the international transaction and not the export side as explorers don’t need them except to the country they are exporting to.
- An exporter can hire the service of a freight forwarder to work hand-in-hand with a customs broker to manage risks bordering on international shipment. This is still within the scope of customs brokerage.
- A freight forwarder works directly with carriers to manage air, land, rail, or water bookings. Also, the freight forwarder briefs shippers on the costs of documentation, insurance costs, freight costs, etc.
On the other hand, as part of the customs brokerage, customs brokers ensure the goods being imported meet the customs requirements and other various Government agencies.
If you peradventure, you woke up tomorrow and developed amnesia and you forgot everything in this article. Please don’t forget that while a custom broker works in a customs brokerage firm, a freight forwarder is a licensed individual or corporation that manages and handles the movement of goods from the seller until it gets to the final destination.
