The Difference Between A freight Forwarder and A Clearing Agent

Freight Forwarder and Clearing Agent Difference

What makes the shipping business confusing is the fact that there are several entities involved in it. Among these entities, we can find freight forwarders and clearing agents. These two entities play a significant role in the success of any shipping business. In this article, we will explain the difference between these two entities emphasizing their functions and their roles in the shipping industry.  

Freight Forwarders

Freight forwarders are entities (they can be individuals or companies) who handle the transportation of shipments from one location to another depending on the sellers or buyers request. Their main function is to deliver goods from supplier to buyers at a requested location. It is also their duty to make sure that the goods being delivered reach their final destination in the same condition that it is picked up from the origin.

In a very sensitive business like shipping, you should be organized and focus. Managing many activities at the same time such as arranging trade and finance documentation, negotiating freight contracts, monitoring the movement of the cargo, transportation, customs clearances, port inspections, etc, can be very stressful and time-consuming.

Freight forwarders role is to handle all these activities and allow you to focus more on customer service. However, you should make sure to work with an experienced freight forwarder who is capable of:

- Arranging all modes of transportation
- Arranging  the storage and distribution of the cargo
- Providing competitive freight rates
- Processing all shipping documents
- Issuing a Bill of Lading

Clearing Agent

Customs regulations are different from one country to another. However, the only common requirement to release goods at customs is a clearing agent. Clearing agents, also known as customs brokers are entities that make sure and facilitate the entry of your goods to a certain country.

Clearing agents main role is to clear the goods for the clients. Thereby, they should possess a valid clearing license and they should be accredited with the local customs authorities, border agencies, and ports.

The Difference Between Freight Forwarders and Clearing Agents

As you can see, clearing agents are specific to their country of origin and their main role is to deal directly local customs authorities. Their main role is to lodge documentation with customs. They will neither negotiate freight rates for you nor issue a bill of lading.

Clearing agents can be hired by freight forwarders if a freight forwarder is not familiar with the regulations of the country you are importing to or from. As a shipper, you will necessarily need the services of clearing agents, however, hiring them directly or through your freight forwarder is up to you.

2 comments:

said...
Good observation on the differences between a freight forwarder and a clearing agent.however I can also add that a clearing agent can also double as a freight forwarder because at the origin a clearing agent can deal with local customs authorities and negotiate for freight rates and issue bill of ladings.a freight forwarder cannot double as a clearing agent because he or she lacks the expertise and licence to release goods with local customs authorities.I write this from experience in customs clearance spanning 20yrs.now.

April 3, 2019 at 9:33 AM
said...
Hello, You are right thanks for the comment. Freight Comparator Team

April 4, 2019 at 12:03 PM

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