Difference between customs agents and freight forwarders
Over the years, people in countries engaging in buying and selling of goods with exchange of services. The services of customs agencies and freight forwarding services are important in international trade between countries for smooth cargo delivery to the final destinations.
In today article, I will explain the services that customs agents and freight forwarding companies offer. You will get more insights on how customs agents and freight forwarders operate. At the end of this article, you can differentiate between the operations of customs agents (brokers) and freight forwarders.
First of all, I would like to talk about the responsibilities of customs agents and freight forwarders. This will help you to have basic knowledge about operations and define their differences.
Customs agents play a vital role in terms of preparation and submission of documents for customs clearance process. They assist in getting documentation for import duties payment. They also supervise examination of the goods with customs officers at terminal. They facilitate Inspection act document which is final custom release on behalf of the importers and exporters.
Freight Forwarders assist in documents with customs, logistics aspect of the shipping (inland transportation and shipping) from the origin to the port of delivery or destination. They understand the international shipping requirement in each country and they have in-depth knowledge about international trade.
Roles that distinguish Customs agents Forwarders from Freight
I will explain in details what makes customs agents different from freight forwarders. Many people in Nigeria, combine the two professions in a common phrase that is Clearing and Forwarding agents. By the time you finish reading this article, you will have the accurate knowledge how the professions of customs agency and freight forwarding services differ from each other.
Let me give you the major key indicators that define the roles of customs agencies and freight forwarding companies especially in Nigeria.
- Global shipping coverage
- Understanding Customs regulations
- Professional logistics management
- International trade
Global Shipping coverage for importers and exporters
One of the roles that distinguish customs agents and freight forwarders is global shipping coverage. It means how they manage, plan and operate shipping process from one country to the other. Freight Forwarders covers more countries in terms of shipping. The customs agents only operate in one country. In Nigeria, I know of some customs agent, that do call on my freight services when they have a project from clients to ship from another counties to Nigeria. Freight forwarding company in Nigeria can initiate shipping process from USA, India, and China without leaving Nigeria. They have more understanding of shipping policies in each country in the world more that customs agents do.
Customs regulations for importers and exporters
When it comes to customs regulations in each country, customs agents have in-depth knowledge in all the proceedings. Freight forwarding company may have slight insight on the regulations. Most times, when a freight forwarding company wants to offer door to door shipping services, he will need the service of the customs broker to facilitate the customs clearing process. Freight forwarding companies and customs agencies work hand in hand to facilitate door to door shipping for importers and exporters.
Professional Logistics for shipping and delivery
Transportation of goods is one of the core duties of freight forwarders. They understand the logistics system for shipping goods from one country to the other. Customs agents are not so familiar with in-land transportation in other country but they may have little insight of inland transport in the country of residence. A professional freight forwarding company understands and plan pickup service in any country. They also execute delivery at country of destination for the importers after customs service have release the imported goods. Logistics management is related to freight forwarders due to their roles for moving goods from one place to another.
This is the type one trade deals that exist between importers and exporters in one country with other countries. The transactions across countries have rule and policies that guide them. Freight forwarders have vast and deep understanding of how the transactions work. Most times, freight forwarders have to explain in details to importers or the exporters which incoterms can secure the deal better. Whereas, the customs agents may not understand in the details, how each incoterm work for the buyers and the suppliers. Freight Forwarding services play one of the important roles in making international trade effective.
In Conclusion, I believe the explanations above have given more insights on the roles that distinguish customs agents from Freight Forwarders in the international shipping.