“Freight Forwarder vs Customs Broker: What’s the Difference?
Freight Forwarding: Definition
Freight forwarders are defined as supply chain-related specialists who specialize in the logistics and physical transportation of goods. They are in contact with any entity that handles or knows about the goods being shipped by truck, ship, plane, or a combination thereof during the export process. Freight forwarders are responsible for assembling and completing various documents and compliance documents.
TJ china freight exemplifies a freight forwarder as a “”freight travel agency””, a third-party entity that arranges the trip and then facilitates the entire trip, including paperwork and documents, for a single sum of money.
Customs Broker: Definition
As defined by the U.S. Department of Homeland Security, a customs broker is defined as a private individual, partnership, association, or corporation licensed, regulated, and authorized by U.S. Customs and Border Protection (CBP) to assist importers and exporters in meeting U.S. government regulations Import and border protection requirements. Export.
Brokers submit necessary information and appropriate payments to CBP on behalf of their clients and bill them for this service. They must have expertise in entry procedures, entry requirements, classification, valuation, and duties and applicable taxes on imported goods.
A customs broker is a specific term used to identify an intermediary between an importer and the customs department of the government of the importing country.
The difference between a freight forwarder and a customs broker
The main difference between a freight forwarder and a customs broker is that the freight forwarder handles the logistics of actually moving the shipper’s goods from the origin to the destination. Freight forwarders contract directly with carriers to secure bookings by sea, air, rail or truck and provide shippers with estimated freight, port charges, special documentation costs, insurance costs and terminal handling charges.
Customs brokers, on the other hand, deal with bureaucracy, complete documents, and ensure that shippers’ goods move in and out of a country. Customs brokers typically focus on the import side of export transactions and have direct contact with various government agencies, including the Department of Agriculture, the Consumer Product Safety Commission, the FDA, and, of course, U.S. Customs Border and Protection.
Due to the complexity of importing goods into the United States, many importers hire customs brokers to help clear US imports. Individuals can self-clear goods for their own accounts, but corporations, partnerships and associations rely on licensed brokers to navigate all aspects of the “”customs business””.
Freight forwarders without licensed customs broker capacity often work with customs brokers to help resolve export transactions.
case study
An exporter in Kentucky wants to ship a few cars to Vancouver. Their freight forwarder gives them a quote for the goods and asks the Canadian dealer if they have a customs broker. They say they have, so the freight forwarder only handles shipping.
The exporter (car manufacturer) cooperates with the importer (car dealer) and needs to agree on the terms of sale (Incoterms) and the details of the transaction, including hiring a customs broker, etc. In this example, the freight forwarder and the customs broker are two separate entities; the exporter must manage his partnership with the freight forwarder and the transaction with the importer.”
