Every day, thousands of shippers are transporting goods internationally to overseas destinations across the world. As countries and businesses around the world globalize, it’s only a matter of time before the logistic industry booms even further. At the heart of the global supply chain lies a complex and active logistic network filled with specialists that form the foundation of modern day logistics. Tackling the global trade head-on are two such specialists: Freight Forwarders and Customs Brokers.
If you’re reading this article, you are probably involved or deal with the logistics industry in one form or another. But, to recap, a freight forwarder is an agent who handles the movement of goods from point to point on behalf of the cargo owner. Essentially, freight forwarders are hired to move/organize shipments from the shipper to the client’s designated location.
Now, why are freight forwarders so crucial to logistics as a whole? The reason lies in their specialized skill set to provide a seamless experience throughout the transportation process. Freight forwarders are extremely knowledgeable of supply chains and are trained to deal with unforeseen obstacles that inherently plagues the logistics industry. These understandings become even more relevant when dealing with international parties due to the complicated import/export process that requires specific documents to be submitted. With that said, there is another agent in the transportation process that plays an important role as well.
Using a Clearing Agent or Customs Broker?
Customs brokers, or clearing agents as known in some countries, are another group of highly specialized individuals that deal with a specific obstacle: customs clearance. Clearing customs has become even more relevant as trade between major nations continues to grow steadily. Delays in customs clearance can cause businesses to lose thousands of dollars in fees and lost profit per shipment. That’s where a customs broker comes into play. They know exactly how to deal with each countries’ procedural rules and requirements from handling the paperwork to identifying the VAT charges to shipments. Customs brokers are all-stars when it comes down to making sure your shipments are not stuck in port racking up fees.
How It All Comes Together
At the end of the day, modern day logistics require both freight forwarders and customs brokers to work hand in hand to provide the best possible service. Freight forwarders like SFI handle the point-to-point shipping process that requires a vast network and an in-depth understanding of supply chains to create a seamless transportation experience. On the other hand, customs brokers utilize industry knowledge to clear customs hurdles that block the way of many business owners.
Here is an example of how a shipping scenario involving both parties would play out:
“The shipper/client finds a freight forwarding company and is given a quote for their shipment. The freight forwarder handles the shipping after receiving all the relevant information and the shipment goes from Destination A to Destination B. If Destination B is located abroad, a customs broker is contacted and they submit the customs clearance documents containing all relevant shipping information. The shipment arrives at the terminal port and is reviewed by a customs officer before being cleared for pick-up.”
Now, there are cases where both a freight forwarder and customs broker can be represented by one agent, but this is rare and not necessarily better. Generally, freight forwarders and customs brokers remain separate to provide their respective specialized services to clients for the most efficient and cost effective shipping possible.
If you’re in need of a freight forwarding agent, talk to SFI today and we will provide you with the best possible quotes for your shipping needs.
Email us at [email protected] or call us at (909) 594-3400.