January 2019 | Sponsored | Knowledge Base

Customs Broker vs. Freight Forwarder: Use a Customs Broker for Added Compliance

Tags: Freight Forwarders, Logistics, Supply Chain

Having a consistent point of contact that is familiar with your account, your product, and your business, can help you avoid a lot of headaches associated with importing.

Jack Bender, Director of Sales and Marketing, A.N. Deringer,, 888-612-6239

Why do some businesses choose to work with one company to manage their freight forwarding and another for Customs brokerage? The answer is they think they will pay less.

Negotiating rates with two separate providers may seem a better strategy. However, hidden costs, delays, or confusion between the different parties can quickly wipe out any savings.

Sole Responsibility

Many freight forwarders rely on partnerships they've developed with other companies to provide Customs brokerage.

Choosing to work with two different companies who have very different roles to play—Customs brokerage and freight forwarding—can be problematic. For example, if miscommunication or operational coordination issues ensue, the shipment could be delayed leaving the container terminal and then incur demurrage fees, which makes it easy for the two companies to point the finger at one another instead of solving the problem.

When you're in a situation like that, knowing who to blame doesn't matter as much as knowing who's going to fix it. Working with a full-service Customs broker for your freight forwarding will increase accountability.

Consistent Point of Contact

Ever had to deal with a large company's customer service department in your personal life? It can be frustrating to be passed from one person to another without receiving a clear answer to your question.

Having a consistent point of contact that is familiar with your account, your product, and your business, can help you avoid a lot of headaches associated with importing. Having a rotating set of customer representatives is the scenario least likely to result in solid communication with your freight forwarding partner.

Avoid Variable Pricing

Choosing a freight forwarder or Customs broker based on price might not be the best strategy long-term. Creating a bidding war between two companies seems like a smart tactic, but you may end up with a quote that is far more optimistic than it is realistic.

The shipping industry hinges on fixed costs and strategic margins. It's rare to encounter a significant cost difference between two companies who are being honest about their pricing. There's a lot of potential for additional fees when you don't carefully review your quote. If you ask the right questions, you should be able to see through any unduly favorable pricing.

Apples to Apples

When evaluating the performance of your freight forwarding partner, you'll want to compare apples to apples.

If you're working with multiple companies, it can be challenging to identify weaknesses unless you have a pre-determined benchmark. Working with a single company means you can manage performance against a standard procedure, not to mention the predictability of the experience.

Lower cost options may come with less service than the slightly higher priced option, and you may ultimately lose money on an attractively priced quote.

Using one qualified company for Customs brokerage and freight forwarding reduces the logistical work on the customer's end, while also making it easier to achieve Customs compliance and an optimal experience from pick-up to delivery.






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