For anyone importing goods into the US, there are two main types of companies providing services to help you bring them in: freight forwarders and customs brokers. Forwarders focus on the cargo transport, from origin to destination, whereas customs brokers focus on efficient, compliant clearance of your imports through customs. While there may be some overlap in duties, the roles of brokers and forwarders are more complementary.

So what is a freight forwarder vs. a customs broker? Let’s start with a high-level, side-by-side comparison, and then dive into the details.

The Role of a Customs Broker

As the name implies, a customs broker makes sure your imported shipments clear through US Customs and Border Protection (CBP). While your broker helps with many aspects of the importing process and completes documentation on your behalf, you as the importer are ultimately responsible for the accuracy of paperwork filed with CBP and paying all necessary taxes and duties.

A licensed customs broker knows all the ins and outs of import procedures, regulations and documentation. They’re responsible for double-checking the information in your filings, making sure all the data is in place, and ensuring that CBP submission deadlines are met. They also calculate all the import duties and fees you’ll be assessed.

Every imported item needs to be assigned a ten-digit Harmonized Tariff Schedule (HTS) code – the product classification system used in the US. The HTS code is based on the international Harmonized System – a globally accepted product classification system managed by the World Customs Organization (WCO) that is used by more than 200 countries. The HTS code determines the US duty rate on imported goods. Part of the customs broker’s job is to ensure you have the right HTS codes entered to reduce the risk of inspections, delays and fines from CBP.

The customs broker is also responsible for completing and transmitting the Import Security Filing (ISF). This electronic document, which includes the first six digits of the HTS code, lets customs agents know what products to expect, where they’re coming from, and when they’re scheduled to arrive. It must be filed at least 24 hours before the cargo is loaded at the port of origin; failure to do so results in a $5,000 fine. The broker also procures an ISF bond that acts as a guarantee that customs will receive the ISF filing.

The broker handles submission of the final customs clearance documentation roughly a week before the ship is due in port. This has much of the same information as the ISF but in more detail, including the complete 10-digit HTS codes and all the commercial invoice details. When your goods are regulated by the Food and Drug Administration (FDA), the US Department of Agriculture (USDA) or the Environmental Protection Agency (EPA), this filing also includes any data those agencies require.

Costs incurred by importers for each shipment, including the duty, Merchandise Processing Fee (MPF) paid to CBP, the Harbor Maintenance Fee collected by the CBP, and the customs bond fee, are all handled by the customs broker.

There are various types of customs documentation involved in importing goods to the US, such as the Customs Entry Summary (Form 7501), the ISF, and the commercial invoice. It’s the job of your customs broker to create, submit or ensure the timely filing of these documents. 

Responsibilities of a Freight Forwarder vs. a Customs Broker

If the customs broker can be thought of in broad terms as responsible for all dealings with CBP, then the freight forwarder is responsible for all the logistics of the actual shipment. They act as an intermediary or agent between shippers and carriers, ensuring the smooth, efficient transport of goods to the US. 

Here are more distinctions between a freight forwarder vs. a customs broker.

While not responsible for the actual customs filing, freight forwarders may be involved in preparing several shipping-related documents, such as the bill of lading, packing list, certificate of origin, and import declaration. They closely coordinate with customs brokers on import documentation. Often, forwarders provide customs brokerage services as part of their service offering to customers

Beyond logistics, freight forwarders can arrange insurance, provide shipment tracking, and coordinate warehouse services, when needed. Their expertise in international transportation – mode selection, carrier selection, route planning, regulatory compliance, document management, and carrier management – makes them essential for US importers.

Freight forwarders can handle a wide variety of freight, from standard containerized shipments to heavyweight and oversized/out-of-gauge cargo. They can contract for air freight as well as ocean freight, arrange for drayage from port, and coordinate trucking or intermodal transportation to the final destination.

Freight forwarders also closely monitor client shipments to minimize disruptions. They communicate with carriers, rerouting shipments if necessary, and keep you in the loop about any changes. If there are delays, they can help you find temporary storage for your goods at a reasonable rate through partnerships with third-party logistics (3PL) firms.

While delays and disruptions can happen, an experienced freight forwarder can find alternative solutions, such as coordinating with different carriers or adjusting the logistics plan. They can’t eliminate hangups entirely, but they can help reduce their impact on your supply chain.

NVOCC vs. Freight Forwarder

In addition to our consideration of a freight forwarder vs. a customs broker, there is a further distinction to be considered. Some freight forwarders are also Non-Vessel Operating Common Carriers (NVOCCs), a license that is conferred by the Federal Maritime Commission (FMC) in the US. As the name implies, NVOCCs can provide shipping services without owning or operating their own vessels, booking space with ocean carriers on behalf of shippers.

Most importantly, an NVOCC can procure bulk cargo space from ocean lines and sell it to shippers at a discounted rate based on volume, which a freight forwarder cannot do. With a forwarder, you would need to sign a contract with the ocean carrier. NVOCCs have their own service contracts with carriers and can issue their own bill of lading. Because of this, NVOCCs take full responsibility for your cargo, including direct legal responsibility for transporting your goods from port to port.

The Best of Both Worlds: An NVOCC Offering Customs Brokerage Services

While it’s certainly doable to work with an NVOCC to handle all the logistics of your import shipments and separately engage with a customs broker, why not opt for a seamless “one-stop shop” approach? This gives you a single point of contact for preparing and submitting customs documentation, as well as for booking freight.

I.C.E. Transport, a New Jersey-based NVOCC in business for over 35 years, provides customs clearance services as part of its comprehensive global shipping solution. Through its customs brokerage expertise, I.C.E. stays abreast of trade compliance changes so you don’t have to – things like changing CBP regulations, tariff changes, section 232 or 301 exclusions, and other critical information.

I.C.E. focuses on managing freight shipments between North America and Europe, with a particular specialty in shipping between Poland and USA. I.C.E. Transport handles everything from air freight to standard container shipping to heavyweight/oversized loads and LTL/TL shipping. We combine global scale with the personalized service of a family-owned, professionally managed business. To learn more about our integrated approach to import and export freight, contact I.C.E. today.