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Difference Between a Freight Forwarder and Customs Broker:

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When shipping internationally, you will come across the terms ‘Freight Forwarder’ and ‘Customs Broker’ – however, you might not understand the difference between the two. Do you require both in order to ship internationally?

Many imports and exporters assume that Freight Forwarders and Customs Brokers are two names for the same job. However, whilst both are in the same industry, a Freight Forwarder and a Customs Broker are different and provide specific types of services. Each has distinct roles and responsibilities, but both play a critical role in international shipping – whether by Sea or Air Freight. Many international transactions will use the service of both Freight Forwarders and Customs Brokers, and often some companies will provide both – which we do here at Gava Australia.

If you’re looking to import into Australia or export from Australia, here is a guide explaining what you must know about Freight Forwarders and Customs Brokers and how they fit into the international shipping process.

What is a Freight Forwarder?

A Freight Forwarder is responsible for transporting goods from one destination to another. Freight forwarders specialise in organising the entire process for their customers, from shipping their goods to storage.

They act as an intermediary between the transportation service and the customer, liaising with ocean, air, truck and/or rail carriers. Freight Forwarders negotiate with these carriers on prices and decide on the most reliable, economical, and quickest routing.

A Freight Forward not only saves you time and money in arranging transportation, but they also use their expertise to help clients prepare the proper paperwork and understand the import requirements and export regulations. Additionally, they offer advice on correctly packing your goods and specific insurance requirements.

 

 

Freight Forwarders will advise their clients on issues including: 

  • Cost of Shipping – Including freight rates, insurance costs, and port charges.
  • Documentation – Required documents needed for certain shipments.
  • Incoterms – Understanding how the incoterms work and affect international transactions.
  • Safety – Ensuring the cargo is kept safe from external threats, including biological hazards such as the Brown Marmorated Stink Bug.
  • Rules – Explaining the rules regarding importing certain goods, such as prohibited goods, food, or COVID-19 Safety Equipment; and
  • Shipment Methods – Explaining the options of the various shipping methods, including transhipment, cross-trade shipping, and coastal shipping. 
Freight Forwarding graphic, air land and sea freight.


What is a Customs Broker?

Customs Brokers are licensed professionals who manage documentation for exporting and importing goods in Australia. They must be licensed by the National Customs Broker Licensing Advisory Committee.

A Customs agent’s job is to deal directly with the government, airport, and port authorities to ensure your import complies with customs legislation. A Customs Brokers’ primary role is to help importers navigate a complex regulatory system, ensuring the goods are ‘cleared’ for entry into Australia. They are responsible for classifying goods correctly, checking the clearance documentation and ensuring there are no errors made on the documents. When a customs agent does their job correctly, the clearance of goods will be done quickly and effectively. 

A Customs Broker offers an array of services, including:

  • Customs and Quarantine Clearances,
  • Understanding what tariffs apply to your goods,
  • Free Trade Agreements (FTAs),
  • Calculating what taxes and duties are payable on the import,
  • Duty drawbacks and refunds, including how to obtain a refund of paid customs duties,
  • Preparing and submitting import declaration documents to government agencies. Ensuring the goods are legally allowed to enter Australia; and
  • Ensuring the goods are correctly classified in accordance with customs regulations.
Workers in a warehouse checking documents


Differences between a Freight Forwarder and a Customs Broker:

  • The difference between a Freight Forwarder and a Customs Broker is that Freight Forwarders handle the transportation of goods, whilst Customs Brokers deal with the entry of goods at the point of customs.
 
  • Freight Forwarders specialise in transportation and logistics by coordinating the movement of your goods to ensure that your cargo arrives at its destination in the quickest and most cost-effective way. However, they do not handle customs clearance unless the company employs customs agents as part of their business. Gava Australia offers the expertise of our in-house Customs Broker. 
Difference between a freight forwarder and customs broker graphic


Reasons why Custom Brokers are crucial when Shipping Internationally:

 
Help Navigate the Complexity of Australian LawsMost importers choose to engage a customs agent to act on their behalf due to the complexity of the federal laws governing the importation and exportation of goods in Australia. With Federal laws, including the Customs Act 1901, Customs (Prohibited Imports) Regulations 1956, and the Customs Regulations 2015, customs agents will help you navigate these highly lengthy laws and manage your clearance stress-free.
 
Minimise the chances of delays – The customs clearance process is often lengthy and an area where customs brokers can assist. By utilising their extensive network and knowledge of the customs clearance process, they can identify potential issues before they become a problem, suggest compliant solutions, and minimise any risk of possible delays. Without having a customs agent to flag certain matters, you could be exposed to delays and extra costs if your goods are held up.
 
Experts in Customs Clearance – Customs Agents are licensed by the Australia Border Force to manage the customs clearance process. They assist with appeals and dispute settlements, undertake tariff classifications and customs valuations, facilitate refunds, drawbacks, and remissions of duties, and advise on biosecurity and quarantine measures. Additionally, customs brokers offer valuable advice on every aspect of the customs clearance process. 
 
Reduce the risk of Non-Compliance – The customs clearance process poses many risks, and several critical steps must be completed. Despite the size of your shipment, importers and exporters have a legal obligation to pay the correct duties and taxes, lodge accurate declarations and classify the cargo with the correct Harmonised System Code. Failure to comply will result in heavy fines and penalties, which is why it is vital to have a customs broker. Don’t risk hefty fees, your cargo being detained or the potential seizure and destruction of your goods.
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Gava Australia: Offering the Full-Service Logistics Package

Need the complete logistics package? At Gava Australia, we offer both Freight Forwarding and Customs Clearance Services and have over 25 years of experience in the industry.

Gava Australia is a boutique Freight Forwarding company, that offers a professional and personalised service. The right Freight Forwarding service for your business is one with the right people that understand your business, listen to you, and have the network to execute your freight needs. That’s us at Gava Australia! Our Freight Forwarding Sydney team and Freight Forwarding Melbourne team specialise in all areas of Freight and Logistics. Aside from organising the transportation of your cargo, we also take care of the following on behalf of a client’s company:

  •  Strategic decisions regarding transportation, warehousing, and distribution,
  • Negotiations for contracts, costs, and other requirements,
  • Administrative tasks, including documentation and arranging insurance (if you request insurance through Gava),
  • Constant shipping updates on the tracking of your goods; and
  • Coordinating storing and shipment to ensure your goods arrive in a timely and secure manner.

Additionally, the Gava Australia Team of Customs Licensed and Quarantine Accredited Customs Brokers have extensive industry knowledge, integrity, and professionalism to guide you through the process. Our brokerage specialists are experienced in a broad range of subjects related to customs brokerage. We offer:

  • Tariff History Database
  • Electronic Customs Clearance
  • Quarantine Clearance
  • Landed costing
  • Direct Debit EFT to Australian Customs
  • TCA (Tariff Classification Advice)
  • By-Law or Tariff Concession Application
  • Duty Refund Application
  • Duty Drawback Application
  • TRADEX Application / Implementation / Reporting
  • Project By-Law
  • Compliance Audits and Investigation

Still need information? You’ve come to the right place. Book a Free Consultation with our Gava Australia Team.

Should you have any questions regarding what services we provide, please don’t hesitate to contact us at Gava Australia. For additional updates and information on the Latest News in the industry, please visit our new Gava Website www.gava.com.au/blog/.

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