I get asked this question so many times.
What is the difference between a Freight Forwarder and a Clearing Agent?
With the globalisation of world trade, there is increasingly a thin line between a Freight Forwarder and a clearing Agent.
However, there are differences which you need to know so that you manage your expectations at every level of delivery of your cargo.
- Is an agent for the the exporter or Importer of cargo from one destination to another. The destination can be within a country or from country to country.
- A Freight Forwarder should have the knowledge and ability to handle paperwork concerning the importation and exportation of your cargo.
- A Freight Forwader prepares Bills of Lading and associated documentation.
- A Freight Forwader should have knowledge about regulation of handling cargo by air, sea, ocean, train or road in various foreign countries. ( This will depend on the areas covered by your preferred Freight Forwarder)
- Freight Forwarder can assist exporters to prepare price quotes, advise on costs. Port Charges, Consular Fees, Handling Fees, Insurance fees.
- A Freight Forwarder recommends on secure packaging methods
- A freight Forwarder can arrange for the storage and warehousing of your cargo before and after delivery.
- Can do customs clearance if they are accredited to the local customs or Port.
A good freight forwarde will review all documents to make sure that everything is in order, this is particulary important when dealing with a letter of credit. Documentation errors are usually costly to correct once the cargo is in transit.
A Customs Clearing Agent is a person or company accredited to the local Customs Authority or Port.
- Takes care of all the customs clearing component of the business. Customs business is limited to activities involving transactions
related to the entry and admissibility of merchandise; its
classification and valuation;
- Submission of Clearance documentation to Customs Authorities.
- Sending advicse and other documents to the exporter/ importer.
- The payment of duties, taxes, or other
charges assessed or collected; or the refund, rebate, or drawback
- They cannot make their own bill of lading if not registered or acting as a Freight Forwarder.
Like the Freight Forwarder, a Clearing Agent will recomment efficient methods of clearing your cargo, reducing the Government red-tape associated with customs rules and regulation.
In most cases Freight Forwarder and Clearing Agents work hand in hand to facilitate a smooth transaction.
Care should therefore be taken in appointing Afreight Forwader and a Clearing Agent.