Freight forwarder vs. Customs broker: what’s the difference

When you’re importing products, understanding what kind of service provider (or providers) you need can be confusing. Do you need a freight forwarder? A customs broker? Both?

This week, we’ll break down what each of these professionals do and how they can help smooth the import process for you. We’ll also talk about customs consultants and full-service logistics providers who can offer even more value to importers.

Freight forwarder vs. Customs broker

Freight forwarders specialize in the movement of cargo. Often described as a “travel agent for freight,” a freight forwarder arranges the transportation of goods by air, land, and/or sea.

They also handle all the paperwork and documentation, and monitor the movement of the goods, ensuring that cargo travels smoothly from origin to destination.

Customs brokers are licensed professionals who support that part of the import process that happens right at the border. They're responsible for preparing and clearing a customs entry. They submit the necessary information and payments to the agency on behalf of their clients.

They must be experts in the entry procedures, admissibility requirements, classification, valuation, the rates of duty, and applicable taxes and fees for imported merchandise. In the US and Canada, brokers are licensed, regulated, and empowered by the border agency.

So, what’s the difference between a freight forwarder and a customs broker?

• A freight forwarder is a more general term, and customs broker is very specific.
• Some freight forwarders may also be customs brokers or have access to brokerage services, but a customs broker is not a freight forwarder.
• Customs brokers usually handle the import side of a transaction, so goods entering a country. In many countries, including Canada and the USA, the importer can do the clearance and accounting themselves for the export side if they so choose—and if they want to take the risks involved in getting it right.
• Freight forwarders handle the whole journey from origin to destination, which may involve multiple border crossings.
• Customs brokers and freight forwarders can also provide export reporting and export documentation.

Full-service logistics provider

The most comprehensive providers are those who offer both freight forwarding services and Customs brokerage. These full-service logistics providers secure and coordinate the transportation, gather the necessary paperwork, clear the goods, and arrange for final delivery.

Customs and trade consulting

Sometimes importers need more than customs brokerage services. A customs or trade consultant may be the way to go. A consultant analyzes an importers’ operations for both risk and opportunity, offering ideas and solutions.

Consultants can help if businesses are:

• paying too much duty
• unsure how to use a Free Trade Agreement
• being audited
• dealing with penalties from a border agency

Cole International is proud to be a full-service logistics provider, offering customs brokerage, freight forwarding, logistics planning, and trade consulting services. We’ll offer a comprehensive, coordinated approach to your logistics needs. Contact us today.