When devising international shipping strategies, importers are often advised to hire a freight forwarder or customs broker to help with the process. As your logistics partner, they can offer knowledge and guidance to ensure a smooth shipping experience.
Freight forwarders and customs brokers work within the same area and share similar operations. Although they can perform some of the same duties, their areas of expertise differ. Here is a look at the core differences and how either one may better suit your business.
What is a Freight Forwarder?
A freight forwarder is an expert or a company specializing in organizing the storage and shipping of goods on behalf of a business. Freight forwarders wear many hats and regularly provide a wide range of services, such as transport, preparing paperwork and documentation, tracking, freight rate negotiations, consolidation, insurance, warehousing, and other aspects of supply chain management.
Freight forwarders don’t actually ship your goods. They are an intermediary service between shippers and transport services, ensuring a smooth process and that shipments arrive within the desired time frame.
Freight forwarding services cover many logistical and administrative duties that could potentially cause issues for the shipper. Errors (even unintentional ones) can cause long delays and are punishable by law.
While a freight forwarder is not necessary for international shipping, their experience and contacts can save you time and money.
What is a Customs Broker?
A customs broker is an expert or company licensed and regulated by the United States Customs and Border Protection (CBP) to help importers and exporters in preparing and clearing a customs entry.
The CBP is responsible for preventing prohibited goods from entering the US. No merchandise can enter the country without permission from the CBP. If shipments don’t meet CBP requirements, they can be confiscated and held indefinitely.
Licensed customs brokers are logistics experts in port of entry procedures, admission requirements, freight classification, freight evaluation, and financial details, including payment of duties taxes for imported goods. They offer customs brokerage t0 companies to ensure their goods pass through customs clearance efficiently.
Key Differences Between Freight Forwarders and Customs Brokers
- While freight forwarders act as intermediaries between a business and a transport company, customs brokers are an intermediary between a company and the customs department of the United States government.
- Freight forwarders cover a wide range of duties within the field of international transport. Customs brokers provide a very specific service.
- Customs brokers focus solely on imports. Companies exporting to international borders (even Canadian customs) will be dealing with a non-US broker. Freight forwarders may work with importers and exporters.
- In some circumstances, freight forwarders can offer a full service, door to door operation that includes services provided by a customs broker. However, a customs broker will never act as a freight forwarder.
When Should You Use a Freight Forwarder?
If your business is beginning its venture into international shipping, utilizing the services of a freight forwarder is highly advisable. A freight forwarder can make the process manageable, from negotiating the best shipping rates to arranging storage and warehousing of your goods.
A freight forwarder reduces risk and allows you to concentrate on the core aspects of business.
When Should You Use a Customs Broker?
If you have an effective and efficient logistics strategy that has proven successful, you may not need a freight forwarder. However, unless you’re well versed in the complex field of international customs, you should be using a customs broker. It is a complicated, tedious, and ever-changing area that requires knowledge and expertise.
The Last Word
While there is no legal requirement to hire a freight forwarder or customs broker, their services can be a critical aspect of a business’ success. Depending on the circumstances, either one may be suitable.
If you’re interested in finding out more about international freight shipping, contact Asiana USA, a world-class international shipping service. Call us today at (855) 500-1808.