One of the basic mistakes people generally make, who are a beginner in this field or just unrelated, is to get confused between a Freight Forwarder and a Custom Broker. Understanding the nitty-gritty of the supply chain process is of essential importance to succeed in the international trading business. So if you have precious cargo on a fleet or are planning to have one, it is imperative that you understand the basic terminology connected with the trading business, and the difference between a freight forwarder and a customs broker is the first one you should get at.
Now suppose you have a cargo to export from point A to point B. You need someone to be responsible for the logistics and the physical transportation of the cargo. That person is your freight forwarder. Freight forwarders are responsible for the transportation of your cargo and will have to be in touch with any export personnel and entity in the process. They are the ‘travel agent of the cargo’ and are in charge of assembling and completing a variety of documentation and compliance filings.
A Custom Broker on the other hand in the person or a legal entity who deals with the local government and port authority over the jurisdiction over the imported cargo. They are an extremely vital part of the process if you want to save money and time over the hassling that happens in international trade. We live in a multi-nation world, which has multiple rules and regulations when it comes to trade, and on top of that, there is local government and port authority and the ever-changing laws. It would be best if you have a customs broker to sort this stuff out for you beforehand.
One thing to keep is mind in that a freight forwarder can also provide their service as a customs broker as their job is related but one shouldn’t assume that they are the same. They will work in co-relation can be exclusive. They work together to facilitate your transaction.
Something to look out for – In the US, a customs broker must be licensed under the CBP, United States Customs and Border Protection.
