Everything About Customs Brokerage For Beginners

Feb 9, 2021 Business
Woman in charge of customs brokerage

Each country operates on different rules and regulations for imports and exports. Each product has different requirements based on its classifications and valuation. Beyond the national governments, international regulatory bodies also monitor global trade. The more you know about international trade, the better you will be able to navigate its complexities. However, this knowledge itself is a special skill set, that takes time, experience, and money to navigate. Hence, you can hire someone instead to manage the difficulty of all tasks: clearing the customs.


How does customs brokerage work?

If you are involved in export and import expect a lot of paperwork. You have to collect forms, fill them and submit them to relevant authorities. All of these forms differ based on the nature of the goods, the taxes and duties that are levied on those goods, and the specific customs rules of the country. To ensure that you do not accidentally miss or worse, break any of the regulations around international trade, you have to be familiar with all the nitty and gritty of this process called the Customs Clearance. Customs Clearance involves the valuation of the goods for their authenticity in terms of both physical inspections as well as value assessment. The Customs inspect the documents submitted to determine the duty for the product. On receipt of duty payment, the consignment is released.

If you outsource getting your consignments cleared from customs to a specialist, that person is called a Customs broker and the process of getting your customs cleared becomes Customs Brokerage. Customs brokers help you breeze through the ever-changing regulations regarding particular products. It is their job to be knowledgeable of all requirements for admission, duties, taxes, and classification imposed on the goods you are attempting to import.

Customs Brokers work individually or with brokerage firms or with freight forwarders. These third-party agencies are licensed by the Customs Department to represent the Importer. They must have a Customs Clearance License to operate. To get the license, a Customs Test is passed to ensure that the broker is well aware of all rules and laws regarding customs. These firms are responsible for streamlining the process of shipping goods so that their clients can focus on what they know best: running their business. Oftentimes, these firms have contacts with important government focal persons and can significantly accelerate the process for their clients. Since all businesses have different needs, brokers provide personalized advice. The profit margin for a small-size business with a low volume of import/export would be expanded if they employ a good customs brokerage firm to attend to their particular needs. Clients can expect a stress-free road as they grant the brokers the authority to submit documents on their behalf.

In the digital age, the regulations of shipments have largely shifted online. Many old businesses have suffered from this transition due to the general digital illiteracy. At this time, customs brokerage firms would come in handy. They keep themselves abreast of the latest developments and have developed their own internal infrastructure which can handle all the procedures required, manual or digital.


The cost of Customs Brokerage 

Brokers have varied prices based on the product, the services, whether they are an individual or a firm or part of a freight forwarder. The following costs should be expected:

  • A Customs Clearance Administrative Flat Fee
  • Inspection fee paid to government agencies
  • Delivery charges
  • Any transaction fee such as banking
  • Multiple third party charges for consignments by ships such as handover fees

Even though the brokers claim they charge a flat fee, the changing process of clearance can add costs as you go.

Hence, to ensure a profitable, stress-free, streamlined import/export business, it is advisable to take assistance from expert customs brokerage firms.

By Whitney

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