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The difference between Forwarders and Brokers

Importing and Exporting 101: Differentiating Brokers and Forwarders

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The difference between Forwarders and BrokersThere is some confusion over what customs brokers and freight forwarders are. Some think that one is the other or believe that the two terms mean the same thing. Customs brokers and freight forwarders two distinct roles, however. Each provides a different set of services and caters to different kinds of companies participating in international trade.

Customs Brokers

Customs brokers are individuals, associations, or companies that handle customs transactions. They ensure products receive customs clearance upon entering the Philippines or any other country. Brokers help speed up the process and make sure the importing process all goes smoothly. Though less common, they can also handle customs requirements for exporting products.

Companies that deal with imported goods are the main clients of licensed customs brokers. They serve as intermediaries between importers and the government’s department of customs. Brokers ensure importers’ products are up to code, appropriately classified, and have all the necessary paperwork.

Customs brokers need in-depth and accurate knowledge of import codes and regulations, so they are required to pass a comprehensive examination. This ensures their familiarity with applicable trade restrictions, agreements and tariff laws to receive their license before engaging in official business.

Freight Forwarders

Freight forwarders take care of the logistics and shipping part of the supply chain. They arrange for, track, and facilitate the smooth shipment of a company’s products. They traditionally deal with the export of goods, although some have expanded their services to include importation for additional customer service.

Take note, though, that freight forwarding firms act as intermediaries between its shipping partners and a company looking to ship or receive goods. They may provide clients with temporary warehouse facilities, as well, or connect them with partner warehouses for any goods that need to be stored before delivery, but their core service lies in logistics.

Best of Both Services

Companies that offer both freight forwarding and licensed customs broker services provide clients with greater efficiency and convenience. These third-party logistics services companies provide a more seamless process and offer simplified routing solutions for an improved delivery time frame.

Both customs brokers and freight forwarders help companies have a stress-free experience in dealing with their imported and exported goods. They help facilitate smoother transactions and logistics for efficient business operations of their clients.

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