difference between a freight forwarder and customs broker:- Over the last few years, with the advent of online businesses, exports and imports have increased. In addition, communication barriers have been eradicated thanks to advanced technology. With so much trade going on between countries, the need for a freight forwarder and/or a customs broker has increased. If you want to start an export business, then it is vital that you understand how you deliver your products to the final customer.
For example, you are selling goods to customers who are located in the US and Canada. So, how do you send your shipments to the final customer at minimum risk? The answer is hiring a professional freight forwarder. There are various logistics companies that provide the services of a freight forwarder as well. But what exactly is a freight forwarder?
A freight forwarder is the one who takes up the responsibility of transporting your goods overseas. A freight forwarder acts as the middleman who eliminates all the obstacles which you face while sending your goods to a customer who is located in some other country. They deal with the transportation, carriers services, customs and timely delivery of the product to your final customer. Without a proper freight forwarder, you may not be able to deliver your product on time to your customer. Hence, hiring a professional freight forwarder is always advisable.
What are the roles of a freight forwarder and customs broker?
By now we know the gist of what a freight forwarder does. Now let’s look into their actual responsibilities.
Just imagine you have packed the goods, loaded them on a plane and then delivered them to your final customer. We wish it was that easy, but in reality it is very difficult to get your goods moved from one country to another. If your paperwork’s not right, then there is a high chance that your goods will get confiscated. Hence, while sending your goods, make sure you have a thorough knowledge regarding all the paperwork required. For example, you have to have COO (Certificate of Origin) from a BOL (Bill of Landing).
If you are unsure about what is required, then it is advisable that you hire a freight company that offers the services of a freight forwarder. Freight forwarders have detailed knowledge of the paperwork that needs to be done; this will help you to get your goods through customs without any problems as they ensure that you have completed all the paperwork properly before transporting your goods. This reduces the risk of loss.
Good relations with customs
Freight companies which have offices located in various locations around the globe, especially in areas near the border, tend to have an advantage when it comes to clearing your goods at customs. Maximum export goods get stuck while transitioning at the customs. For example, if you are a seller in India and you are sending goods to countries like the US, then having a freight forwarder office in US customs helps the procedure of clearing your goods in a seamless manner. But do not mistake freight forwarders to be custom brokers. These freight companies have their own in-house coordinators who ensure that your goods pass through customs without any major obstacles.
Due to the advent of the internet and the countries opening up for global business, now freight forwarders have access to customs information and procedures of every country via their website. Because of this, freight providers can provide accurate data of the entire transition process to the client in real-time. Also, a few freight companies offer a separate platform where clients can access all the information about their shipments.
What is a custom Broker?
Since now we know in detail what a freight forwarder does, let’s look at what a customs broker does.
For centuries, countries have traded goods and services with each other to meet each others requirements. Earlier, the barter system was prevalent, but now goods and services are also exchanged for money. These international transactions help a country to widen its economy. For example, India is known to produce rice, and there is a shortage of rice in the USA. So, the US buys rice from India to meet its needs.
But these exports and imports are carried on keeping in mind regulations and restrictions which differ from country to country. Every good that enters a particular country must meet certain standards like packaging, labels, taxation, and many more. So, if you are a seller who wants to export your products to a foreign country, you need to be aware of the rules and regulations. To ensure your goods meet all the customs regulations, you can always hire a customs broker.
A custom broker basically looks into the custom regulations part of the transition process. He ensures that the products meet the parameters, packaging standards, has adequate labeling, is subject to duty fees, and other requirements. Overall, a customs broker is a bridge between you and the customs of the country where you are shipping your product to.
A customs broker needs to have a valid license by the authorized government, which allows them to carry out their services. Make sure to hire a reliable and professional customs broker, as these brokers have access to a huge amount of data and information which can be fatal if not correct.
Basic difference between a freight forwarder and customs broker
When you are planning to send your goods to another country, it is necessary to hire two types of services: the services of customs broker and the services of a freight forwarder – without these two, you cannot ship your products to another country. The basic differences between them are that a custom broker looks after the documentation and the bureaucratic side and a freight forwarder looks after the logistics side of the shipment.
- Posted by admin
- On September 15, 2020