How to Choose a Customs Clearing Agent and Freight Forwarder

By Hima Bindhu Dec 5 2019 / Grain Mart News

The successful export or import of a shipment is dependent on several entities. No matter how big or small a shipment is, two entities stand out due to the importance of their roles in a shipment. The two entities are clearing agents and freight forwarders.

Freight Forwarding and Clearing Agent
How to Choose a Custom Clearing Agent and Freight Forwarder
Freight Forwarder and Clearing Agent

The duty of movement of consignments in favor of the shipment owner is the major responsibility of a freight forwarder. The agent complies the duty by following on clearing and forwarding aspects of the consignments. In several cases, they may be carried out by the same agent. While a Clearing agent is specifically responsible for the clearance of goods in the export or import.

Role and Capabilities of a Freight Forwarder
  1. The freight forwarder should have the capability to offer cost-effective shipping according to the requirement of customers.
  2. He should be able to arrange the storage and distribution of the cargo.
  3. He must have the skills to process the required shipment documents (certificates of origin, customs documentation, bills of lading, etc,).
  4. The freight forwarder should have knowledge about the shipping bill, schedule and movement.
  5. He should provide transportation from port to customer warehouse.
Role and Capabilities of a Clearing Agent
  1. The custom clearing agent must have complete knowledge over HS codes, the calculation of Duty and GST.
  2. He should have the capability to provide all the necessary documents for the customs clearance.
  3. He should be able to explain the customers about duty drawbacks.

A customs broker is more specific to a country when compared to a freight forwarder suggesting that freight forwarders have a more global presence.

Choosing the Right Freight Forwarder

The exporter must consider a few of the below-mentioned factors while choosing a Freight Forwarder.

  1. Experience– must be familiar with harbor lockouts, strikes, emergencies, overseas cargo shipment issues which would allow easy and quality shipment of the cargo.
  2. Network in the market– freight forwarder must have overseas contacts that would help the laidback flow of the consignment.
  3. Link ups with familiar global associations- freight forwarder should have an affiliation with WCA or FIATA. It provides a sense of validity that builds the reputation and thereby increases trust in the customers. Further, market reputation and customer positive reference and feedback are important.
  4. Services presented– despite all the reputation and validity, a Freight forwarder must provide all the necessary shipment services.
  5. The extent of expertise- The area of their expertise must coincide with the necessities of the cargo owner. For instance, in the case of transportation of fuel or oil, a professional who is proficient in handling hazardous materials must be appointed.
  6. Cost-effectiveness- must be capable of providing the best economical option.

 Choosing the Correct Clearing Agent

An array of documentation is required to achieve customs clearance, thereby it is necessary for a broker to tie all the loose ends between the importer, exporter and the government for the smooth clearance of the cargo shipment. Some guideline for appointing the right Clearance agent is highlighted below;

  1. Experience– As mentioned above experiences eases the flow of goods overseas as experienced professionals can provide necessary and specific documents.
  2. Dedication– A dedicated customs broker mainly focuses on customs obedience and complex trades thereby facilitating the process.
  3. Positive customer reference– With good work comes good references, thus we can easily trust clearance agents who possess positive feedback from prior customers.
  4. Validated customs brokers– Choose clearance agents that are approved by the administration and owns a lawful license for their practice to avoids frauds. Additionally, must have all technological resources, provide customs permits, and rest of the necessary documents.
  5. Expert– An expert who can handle the volume of the cargo as well as have in-depth knowledge about the specific requirements based on the type of your cargo.
  6. Cost-effective Contract- He/ she must be capable of drawing an agreement that benefits both the parties involved, especially you should not face losses at any given circumstances. Moreover, the contract must contain all the information about pricing, method of shipment, schedules, ports, etc.

In conclusion, be it Clearing Agent or Freight Forwarder, it is necessary for them to fully understand the basics and needs of the company. It must also be noted that they part take in the success of the shipment, hence a long- term trust is necessary to optimize the supply events, cost competence, transfer, and time-sense.

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