What is Customs Clearance in Freight Forwarding and How Does it Work

Freight Forwarding Customs Clearance and How Does it Work?

To understand customs clearance in freight forwarding, it is important to understand freight forwarding first. Most importers and exporters use freight forwarding to arrange and manage freight shipments. The people who conduct freight forwarding are known as freight forwarders or freight-forwarding agents; they are well-versed in the workings of the shipping process and can get it done for you. They almost function as a travel agency does, but for freight instead of people.

There are different types of freight forwarders. Some are big, some are small. Some offer more local shipping options, others specialize in international shipping. Large freight forwarders function globally, while smaller ones tend to operate in a few selected countries where services are popular and where they have local logistics helping out the process. Here is everything a freight forwarder provides as a service:

  • Makes all the bookings, ensures that all paperwork is put together and complete, takes care of payments for each step of the shipping process.
  • Co-operate and coordinate with others who are involved in the shipping process, such as air cargo carriers, truck delivery companies, or any logistics provider.
  • Provide support with all issues related to the shipment, if any happen to crop up.

Customs clearance is an important part of the freight forwarding process. Any goods shipped internationally have to pass through customs check before being allowed into or out of a country. Once customs clearance and checks are completed, the freight forwarder pays the customs duties and receives a document that functions as a receipt for the transaction. Usually, the customs clearance procedure is managed by the freight forwarder, but a customs broker can be hired if you want to.

The preparation of a shipment is crucial, as customs holds the authority to confiscate or hold your goods until further notice if a shipment is prepared poorly. To ensure a smooth passage through customs, a few pre-requisites must be met. First is the preparation of a shipping container. If a container is loaded poorly or incorrectly, the customs agent overlooking the process will red-flag it immediately. Utilize all the space available and make sure all cargo is stowed away correctly, otherwise, customs will deny your container the necessary clearance.

The next thing to look out for is paperwork. Customs agents are extremely cautious when it comes to inspecting and verifying your paperwork. Your paperwork and documentation should be error- free with all necessary details mentioned, such as the content of the shipment and your business details. Here’s a list of the basic documents you should keep with you to ensure a hassle-free shipment:

  • Shipping quote
  • Origin certificate
  • Material safety data sheet
  • Commercial invoice
  • Booking confirmation
  • Shipper’s letter of instruction
  • Booking confirmation
  • Bill of loading
  • Packing list
  • Letter of credit