A freight forwarder and customs broker may sound like they could be two different names for the same job. Both have important roles in making sure shipments arrive on time and in the most economical way for their clients. However, a freight forwarder looks after the transport of the goods while a customs broker handles the paperwork required to import the goods into the country.
What Is a Customs Broker?
Almost all importers of goods into Australia with a value of more than AU$1,000 are liable to pay duties and taxes. Upon a ship's arrival at the point of entry, a customs broker will prepare the relevant documents and forms, clear a customs entry and electronically transfer bills and invoices.
What Can a Customs Broker Help With?
- Calculating the cost of duties, taxes and fees payable
- Dispatch for final delivery
- Customs bonds
- Duty drawback
- Certification of goods
Also known as custom clearance agents, a customs broker can handle all types of sea freight, air freight and parcel post shipments. Depending on the type of goods, a customs broker may also liaise with government agencies that deal with product safety, drug administration and agriculture. For goods that are subject to biosecurity import conditions, a customs broker will need to organise an import permit which can take 20 working days. If these goods arrive without a permit, authorities may export or destroy them.
Is Using a Customs Broker Required?
No, there's no requirement to use a customs broker, however many businesses will choose to use their services due to the complicated nature of international trade.
Customs brokers in Australia must undergo a process to be a Licensed Customs Broker that individuals and businesses can use as their chosen broker. Although individuals are also able to self-clear goods, due to some commonly made mistakes, the Australian Border Force recommends all first-time and infrequent importers use a reliable customs broker who is licensed, to clear their goods.
What is a Freight Forwarder Responsible For?
A freight forwarder handles the logistics and transportation of goods across international borders.
Freight forwarders are involved in the process of moving cargo from its origin to the chosen destination within a client’s requested time frame. Often freight forwarders will look for solutions to solve problems that can occur with a shipment.
When an order is ready, the consignee will send details of the cargo to the freight forwarder so they can make the bookings with the carriers which may include shipping, rail, air or trucking companies. Freight forwarders can choose to arrange the contract directly with the carriers or use their client’s negotiated contract.
It is the job of freight forwarders to advise shippers about:
- The freight cost
- Port charges
- Insurance costs
- Terminal handling fees
- Costs of any special documents
The freight forwarder will check the contracted shipping terms that determine the responsibilities of the seller and buyer for the delivery of goods. Shippers across the world use Incoterms, the standard international trade definitions, to reduce misunderstandings and disputes. Your chosen freight forwarder should be able to recommend the appropriate term for your transaction.
So, What's The Difference Between Customs Brokers and Freight Forwarders?
Both freight forwarders and customs brokers require a high level of attention to detail as a mistake in the process can delay clearance, cause unnecessary freight or duty costs, and cause authorities to export or destroy the goods. However, the main difference between the two is that a customs broker will look after everything related to the customs entry of goods while a freight forwarder organises the transport of cargo.
A business may choose a company that offers the service of both freight forwarders and customs brokers so that all their importing and exporting requirements are handled by one business.
If you need the services of custom brokers or freight forwarders we can recommend some trusted providers - just call Vara Allied on (08) 6115 0118 or contact us online.