GLOBAL SELLING BLOG

Role of clearing and forwarding agents in exports

Choosing the right clearing and forwarding agent in export process is important to ensure smooth and timely shipment of goods. Here’s a guide to know more about their importance roles and responsibilities.

One of the key steps in exports is logistics and shipping. In the process of international shipping, clearing and forwarding agents play an important role to ensure smooth and timely shipment of export products. Exporters can seek advice from them about the availability of alternative modes of transport and then make a final choice of transport to achieve the optimal cost of transporting goods within the delivery schedule. These clearing and forwarding agents undertake most of the functions connected with exports such as marketing, labelling, packaging of goods, advising on trade laws, arranging local transportation, and also help exporters with claiming duty-drawback.

Who is a clearing agent?

Clearing agents are experts who assist in getting goods cleared through customs formalities, coordinating with the carrier and handling shipping and delivery-related activities. The presence of a clearing agent allows exporters to focus on their core business activities.

Who is a forwarding agent?

Forwarding agents, also known as freight forwarders, act on behalf of exporters to organize the transport of international freight in a secure, efficient and cost-effective manner.

Why do exporters need the services of clearing and forwarding agents?

Clearing and forwarding agents are well-versed with customs and shipment procedures. They support exporters with facilities like¹:

• Warehousing facilities before goods are transported to docks
• Booking of shipping space or freight
• Advice on cost of shipping via sea or air
• Arrangement of loading goods onboard
• Information on shipping lines and freight to different destinations
• Obtaining marine insurance policies
• Preparation and processing of shipping bills like Bill of Lading, Dock receipt, Export declarations, Consult invoice, Certificate of Origin, Commercial invoice, etc
• Forwarding of bank collection papers

Roles and responsibilities of a clearing and forwarding agent

Clearing and forwarding agents play an important role in ensuring smooth shipment and clearance of cargo. Their responsibilities include timely documentation, submission of appropriate paperwork to authorities and related subsidiary activities such as arranging specialized labour and transport to help clear goods quickly. Some of their key roles are²:

• Determining harmonised tariff of goods for customs duties
• Calculating import duties and taxes or VAT as applicable
• Assisting with clearing instructions to confirm that all information received from shipper and consignee is accurate before submitting for customs clearance
• Framing Bill of Entry (BOE) to be submitted
• Arranging customs clearance or release with relevant requirements as per the cargo to avoid penalties and delays
• Facilitates shipments for exporters while acting as a guarantor to ensure that commercial operations take place under agreed conditions

How to choose a clearing and forwarding agent?

Some of the parameters to consider while choosing a clearing and forwarding agent are:
• Experience: Choose an agent who has a good amount of experience in this field to ensure they understand the requirements as per your shipment
• Problem-solving ability: The agent must be capable enough to resolve problems related to customs clearance, logistics challenges and problems related to government policies and their interpretation
• Cost involved: Consider your budget and choose a clearing and forwarding agent accordingly

By availing the services offered by clearing and forwarding agents, exporters can focus on their business goals. These agents ensure smooth shipment and delivery without any hassles due to documents or licenses.

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Frequently Asked Questions

What is clearing and forwarding?

Clearing and forwarding agents are experts who provide assistance to get goods cleared through customs formalities, coordinate with the carrier and handle shipping and delivery.

What is the difference between clearing and forwarding agents?

The forwarding agent has to see that the cargo is forwarded according to instruction of the exporter. Whereas, a clearing agent arranges to pass the concerned documents at customs.

Are clearing and forwarding agents private entities?

Yes, they are private entities.

What is the difference between a clearing agent and a carrying agent?

Carrying agents form a link between the owners of goods and owners of means of transport. They help in efficient movement of goods to the buyers. On the other hand, clearing agents help in clearance of goods in customs.

Does Amazon offer assistance in international shipping and documents?

Yes. With Fulfillment by Amazon (FBA), Amazon stores, packs and delivers products on your behalf to international customers. Amazon recommends FBA to sellers as this helps them focus on their business expansion while Amazon takes care of international shipping.

Visit Exports Compliance dashboard to meet your documentation requirements

Published on June 20, 2022.

Sources:
1. https://documents1.worldbank.org/curated/en/209531468202812567/pdf/638040BRI0Frei00Box0361527B0PUBLIC0.pdf
2. https://www.cbic.gov.in/htdocs-servicetax/st-profiles/clearing-fwding-agent

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