Customs Brokers and Freight Forwarders

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Guide to Customs Brokers and Freight Forwarders

Shipping internationally? Customs brokers and freight forwarders can help
By Jennifer Baljko

If your business ships internationally, you'll quickly find that there's a long checklist of things to be done before your goods can get to where they're going.

To alleviate the stress of coordinating these logistics functions, you may want to work with customs brokers or freight forwarders. They can:

1. Help prepare import and export documentation
2. Facilitate the movement of goods through customs
3. Reserve cargo space on various transportation modes and monitor shipments
4. Deliver products to a warehouse or other destination chosen by the sender

Basically, customs brokers manage imports and inbound customs clearance, while freight forwarders oversee exports and arrange transportation for outbound shipments. However, as the industry becomes more competitive, logistics companies are adapting a one-stop-shop model and offering a variety of services.

Action Steps

The best contacts and resources to help you get it done

Understand the basics Regardless of whether you engage more in exports or imports, you'll need to learn the lingo, decide how to best utilize third-party shipping providers and hammer out contracts.

I recommend:  Global Trade & Logistics Services Inc. and the U.S. Government Export Portal have information about the role customs brokers and freight forwarders play. And, although this Inbound Logistics Magazine article addresses U.S.-Mexico trade issues, many of the tips are still valid and can be applied to other shipping scenarios.

Find a partner While an online search of customs brokers and freight forwarders will yield hundreds of names, you can save time by scanning the membership directories of industry trade organizations.

I recommend:  The National Customs Brokers & Forwarders Association of America, the International Federation of Customs Brokers Associations and the International Federation of Freight Forwarders Associations are good places to start.

Manage the relationship Although you're hiring a third party to handle your shipping and customs requirements, you could be liable if your partner violates federal and international regulations. It's important to keep tabs on what they are doing.

I recommend:  The Export Import Law Institute has an online course where you can learn how to manage these relationships.

Stay abreast of new rules and trade programs In the wake of the September 11 terrorist attacks, new regulations have been adopted and various customs and border safety programs have been launched.

I recommend:  The U.S. Customs and Border Protection site provides information about the Free and Secure Trade and the Customs-Trade Partnership Against Terrorism programs, and ask your shipping partners how they are complying with regulation changes. For updates, Logistics Management Magazine is one site to bookmark.

Tips & Tactics

Helpful advice for making the most of this Guide

• The cost of freight forwarding services is a legitimate export cost that should be included in the price you charge to your customer.
• Freight forwarders can help you prepare price quotes by advising on freight costs, port charges, consular fees, costs of special documentation, insurance costs and their own handling fees.
• They can also recommend the best packing methods for protecting your goods during transit or can arrange to have the merchandise packed at the port or containerized.
• If you prefer, freight forwarders can also reserve the necessary space on a vessel, aircraft, train or truck.