What Is The Difference Between a Customs Broker and Freight Forwarder?

Importing

An older white male in a high visibility orange jacket and light blue hard hat, who is smiling infront of a large red sea freight container that is being loaded with red cargo containers for international shipping
Customs broker and freight forwarder sound like they could be two different names for the same job. Both have important roles making sure shipments arrive on time and in the most economical way for their clients.

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 Does a Customs Broker Do?

Almost all importers of goods into Australia with a value of more than AU$1,000 are liable to pay duties and taxes.  A customs broker prepares and clears a customs entry upon a ship’s arrival at the port of entry. They prepare documents and forms and electronically transfer bills and invoices.

A customs broker can help with:

  • Calculating the duties, taxes and fees payable
  • Dispatch for final delivery
  • Customs bonds
  • Duty drawback
  • Certification of goods
  • Reconciliation

Also known as a customs clearance agent, 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 liaise with government agencies that deal with product safety, drug administration and agriculture.

If the goods are subject to biosecurity import conditions, a customs broker will organise an import permit which can take 20 working days. If goods arrive without a permit, authorities may export or destroy them.    

Do You Have to Use a Customs Broker?

No, you can complete the customs requirements yourself - there’s no requirement to use a broker. However, international trade is very complicated so many businesses choose to leave it to a customs broker because they have the expertise.

Individuals can self-clear goods but mistakes are easy to make. The Australian Border Force recommends all first time importers and infrequent importers use a licenced customs broker to clear their goods.

Customs brokers in Australia must undergo a process to be a Licensed Customs Broker that individuals and businesses can use as their nominee broker.

 

What is a Freight Forwarder Responsible For?

A freight forwarder has the job of organising the logistics and transportation of goods across international borders.

The forwarder acts as an agent to move the cargo from its origin to the destination within a client’s requested time frame. Often a freight forwarder 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 order to the freight forwarder so they can make the bookings with the carriers which may include shipping, rail, air or trucking companies. Freight forwarders may arrange the contract direct with carriers or use their client’s negotiated contract.

It is the freight forwarder’s job to advise shippers about:

  • Freight costs
  • Port charges
  • Insurance costs
  • Terminal handling fees
  • The 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 freight forwarder should be able to recommend the appropriate term for your transaction.

 

Summing up the Similarities and Differences Between a Customs Broker and Freight Forwarder

A customs broker looks after everything related to the customs entry of goods while a freight forwarder organises the transport of goods.

Some businesses choose a company that offers the service of both roles so that all their importing and exporting requirements are handled by the one organisation.

Both roles require a high level of attention to detail as a mistake can delay clearance, cause unnecessary freight or duty costs and even cause authorities to export or destroy the goods.

If you need the services of a customs broker or freight forwarder we can recommend some trusted providers - just call Vara Allied on (08) 6161 8041 or contact us online.