Knowing the differences between freight forwarder companies and clearing and forwarding companies can help you make an informed decision about which carrier is best suited to your specific business needs. Jay Devers, president of Bestway International in Kansas City, Missouri, explains the difference between a freight forwarder and a customs broker and the use cases for hiring them. Devers illustrates a freight forwarder as a freight agency, a third-party company that arranges a trip for an amount of money to facilitate the trip, including paperwork and documentation.
In fulfilling the same role, the two entities that transport your shipments from point A to point B – freight forwarders and customs brokers – meet different commercial requirements and offer their customers advantages that cannot be achieved in any other way. The main function of clearing and forwarding companies is to help companies and freight shippers find reliable forwarders to transport their cargo, and the conditions are negotiated with the forwarder. Companies that offer freight forwarding and customized brokerage services offer door-to-door services that seamlessly integrate the entire export and import process.
Clearing and forwarding companies are primarily responsible for organizing the delivery route of their customers “goods and applying money and time-saving strategies, including deciding which shipment (road, sky, sea, or rail) is most suitable for the shipment. Clearing agents have a more localized, if not global, presence than freight forwarders. Smaller freight forwarders have a limited network of freight forwarders in other countries and act as agents for local delivery, collection, and customs clearance.
Clearing and forwarding companies have their own customs clearance department or division, which means that under normal circumstances they do not use a third-party customs clearance office for shipments. In this case, it is their responsibility to handle the freight sent for the shipment and the customer appoints another customs clearance body. Clearing and forwarding companies can earn more revenue than clearing agents, but the biggest advantage that clearing agents have over freight forwarders is that they have a service that is only needed by the shipper or consignee for a shipment and that they do not have to use the services of freight forwarders for another shipment.
For example, if a freight forwarder and a customs broker are two separate entities, the exporter could manage its partnership with the freight forwarder for the transaction with the importer. The exporter in Kentucky could have his freight forwarder make an offer for delivery and ask the dealer to appoint a Canadian customs broker. By paying duties and taxes related to the transport of goods from Canada to the US and partnering with a Canadian customs broker, freight forwarders offer their customers a full-service experience that they could not have agreed with the customs broker.
We are often asked this question because there is a difference between freight forwarders and customs brokers. The best way to describe the difference is to compare it with a similar industrial model.
Clearing and forwarding companies are the main contractors who deal with customers and play a major role in understanding the needs of customers.
If you import or export goods to another country, you need the specialized assistance of a forwarding agency or customs clearance company. The clear difference between freight forwarders and customs agents is that macro-handling companies specialize in one or the other. Clearing agents are often hired by clearing and forwarding companies because they might not be familiar with the rules of the country from which you are importing.
A clearing and forwarding company or agent handles the customs clearance of the import/export business. Freight forwarders can be considered units that transport the cargo from one customer to another at one point, while a clearing agent is an agent who handles port and customs formalities on behalf of the consignee/recipient of the cargo at the port of destination.
Clearing and forwarding companies and agents oversee many aspects of the process, such as documentation, conformity, extensive research, and tariffs. Forwarding agents select the best customs brokers and warehouse operators (VOCs) that best suit the customer. Customs brokers are also called clearing agents, freight forwarding customs brokers or customs agents, or whatever you want to call them.
Freight Forwarders (FF) are shipping companies that concentrate on delivering commercial cargo in one place or another and cooperate with others. A freight forwarder or freight forwarder (also known as NVOCO) is a person or company that organizes transportation for an individual, a company, a freight manufacturer, a manufacturer, a market or a customer to the final point of sale via a channel.
The job of a clearing and forwarding company is to follow the instructions of their principal regarding the distribution and forwarding of their cargo. In addition to negotiating freight rates, the freight forwarder also books freight according to the wishes of the customer.
The parties involved in the transport and clearance of the consignment, such as carrier, freight forwarder, dispatcher, port, customs authority, and customer, need a packing list. The packing list helps the parties to make suitable arrangements for the loading, transport, unloading, transport, stacking, and storage of the consignee. Freight forwarders are responsible for the preparation of waybills and negotiation documentation.