What is the difference between freight forwarders and customs brokers?admin
Custom brokers and freight forwarders play very important roles when it comes to transferring goods from one place to another. It is important to understand how these two operate so as to mitigate any delays and confusion that may arise when exporting/importing merchandise.
Forwarders take care of the inter-country movement of cargo – from one country in the world to another (through sea or air) by acting as the middlemen between the shipping lines/airlines and the importer/exporter.
Custom brokers act as agents of importers/exporters with the objective of using their expertise in smooth clearance of cargo at the customs – export and import. Clearance is a very technical and highly regulated activity (for obvious reasons), and hence importers/exporters (even if their nation allows them to) like to let the experts handle.
Logistics wise, forwarders will talk to shipping liners and airlines to book space, to receive and load cargo. They will also coordinate with partner agents in other countries. They might also link up with trucking firms for inland haulage. And they talk to custom brokers (a separate team in their firm or a different broker appointed by the importer/exporter) for documentation and cargo handover.
Costs wise, forwarders do not need much money to set up and operate because there is no capital involvement. Also, most employees would only need a phone and a computer.
Custom brokers also do not need much working capital to set-up. But their manpower requirements are higher, since brokers need their people to be present at docks, customs offices as well as back in the shop.
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