Difference between Freight Forwarders and Customs Clearance from CJ Darcl Logistics's blog

Freight Forwarders – the critical Veins of EXIM

For businesses looking to explore and expand on international soil, freight forwarding services are one of the crucial links in streamlining the process and ensuring accuracy. The process is complex, yet the right & highly skilled freight forwarder can make the business easy.   

Freight forwarders play an enabling role in moving goods across international borders by arranging transport, overseeing customs clearance on behalf of their clients, and troubleshooting complexities that may arise while goods are in transit. These global shipping experts help companies in managing aspects such as negotiating and booking freight capacity from carriers, reviewing all required import/export documentation, assisting with duty payments, clearing customs, arranging insurance, tracking & tracing shipments, finding the most appropriate and cost-effective transportation by volume – air, freight, ocean, warehousing, risk assessment, to name a few.

With heightened competition, these freight forwarders are pushing the envelope and are not just focusing on forwarding consignments from one international border to another, they are also filling the transportation gap by providing specialized expertise, alongside entrusting transparency, and complete control over the process. The Freight forwarding Service possess the skills to manage any sort of emergency and are taking this profession to the next level.

Customs Clearance                                          

Customs clearing agent acts as the facilitator in getting the goods customs-cleared for delivery to the importer’s premises for further processing. The process encompasses preparing and submitting documents required for customs clearance, conducting due diligence, and required inspection, paying customs duty, and collecting & checking all the documents to show that the goods have been cleared correctly adhering to customs rules and regulations. Once these steps are followed, the imported goods get the clearance from the port or customs bonded warehouse to the customer’s premises. Customs clearance is an arduous and a time-consuming process involving various legalities. It is prudent to partner with a highly skilled freight forwarder who can manage these procedures in a time-bound and seamless manner so that goods can get faster clearance during inbound & outbound logistics. 

The PLUSES

By selecting the right freight forwarding partners, companies are in a better position to negotiate with carriers basis their freight volumes. Sometimes, freight forwarders are also able to consolidate cargo with freight from other customers to bring in economies of scale, which is mutually beneficial for both the parties. As the forwarders can scrutinize a wide range of shipping modes and carriers, companies get the best deal in selecting the mode that works best for them in terms of cost and service requirements.

The biggest advantage of having the right freight forwarder is that they possess the right knowledge and have the up-to-date information regarding customs regulations, duties, and taxes, which is MUST in dealing with global trade. As these forwarding agents manage a long list of document requirements and coordination points, companies can focus on their core competency hassle-free.

Freight forwarders’ access to a global network of specialists is one of the biggest USP that can help logistics operations traverse in a seamless manner. This facilitates companies in deciding the best route for the transportation of goods, as well as reducing transit time and selecting the best freight rates. These people are the experts in dealing with the ups & downs of global trade and are capable enough in handling operations with utmost efficiency from beginning to end. Owing to their experience & expertise of managing global freight, they can successfully evade myriad maritime challenges, such as port closures, cargo rerouting, natural calamities, customs, and so on.

Furthermore, freight forwarders ensure speedier & uncomplicated customs clearance by dealing directly with any legal documentation requirements and ensuring a successful transaction. As a result, goods reach their intended clients and customers in a safe & secure manner, which enhances customer satisfaction and garners higher revenue for companies.

The infusion of technology has made the freight forwarding process a highly efficient affair. New age freight forwarding companies are accelerating their digital transformation journey to adhere contactless sales, better customer engagement or make more business sense. If recent reports are anywhere to go by, India's Digital Freight Forwarding Market is estimated to be US$311.48 million in 2022 and is set to touch US$925.36 million by 2027, growing at a CAGR of 24.33%. this is a huge transformational trajectory and things are surely going this way.

Many freight forwarders provide flexible and responsive inventory management with value-added services such as packaging, and delivery, all tailored to suit the needs of their clients. In a nutshell, freight forwarders facilitate companies in improving planning, evaluating risks, defining roles and responsibilities, automating processes, expanding storage area and takes care of logistics. This ultimately results in enhanced productivity, optimized tasks, greater customer satisfaction and holistic growth of companies. With supply chain & logistics gaining much-needed traction from all quarters, freight forwarding is also going to gain prominence with one report aptly highlighting that the Target Addressable Market (TAM) of Indian freight forwarding market is expected to reach US$ 8B by FY26 owing to improved transportation infrastructure and government policy support.