What is Freight Forwarding and Clearing?

LTL carriers face a unique combination of obstacles in maintaining a profitable model. Government regulations, transit costs for delivering to multiple locations, driver retention, constant implementation of new technologies to keep competitive, and even environmental compliance regulations are just a few of the obstacles faced. Navigating these challenges often offers little leeway for progress, but approaching logistics problems from a fresh angle can keep your overhead costs in check, while still maintaining quality standards.

One of the most effective areas to improve your company’s processes is the supply chain. The most convoluted function of any LTL carrier, it includes handling your freight processing, freight Bill of Lading (BOL), POD processing, and more. Simple steps can make the process run more smoothly and affects all related tasks. Freight Forwarders and Clear Agents can tackle multiple issues in one swoop, gutting overhead expenses and providing new life to your company’s growth.

If you haven’t yet brought a freight forwarder or clearing agent onboard to help with your operations, you’ve left an obvious gap for your competition to take advantage of. 

What is Freight Forwarding?

Performed by a freight forwarder, this originally included arranging transport and preparing documentation on behalf of the shipper, including both importing and exporting (depending on INCOTERM). With multimodal transportation and containerization becoming more prevalent, the responsibilities of freight forwarders have grown. Today it often consists of transport operators providing container services, who are often additionally responsible for multimodal inland and international transportation. Those who practice the latter are typically called non-vessel operating common carriers (NVOCCs).

The scope of responsibility for most freight forwarders today means that they can effectively provide the following services:

• Consultation on the most efficient and cost-effective means of transport
• Act as a shipper’s agent, preparing documentation, and arranging transport services
• Serve as the principal transport operator directly responsible for the carriage of goods
• Provide specialist services managing container packing and unpacking, customs clearances, and the raising of insurance claims

Consolidating these responsibilities into one role over which the freight forwarder has oversight can streamline your processes and improve communication between departments. Everyone will be able to coordinate their logistics through that position, which serves as a central hub.

What is Freight Clearing?

Clearing agents represent the shipper and arrange the customs’ clearances of imported goods. Clearing agents are responsible for:

• Arranging customs clearance/release with the appropriate requirements, such as customs stops, port health exams, and more
• Collecting payment from the shipper for taxes and duties, as well as making payments to Customs and SARS
• Framing the Bill of Entry before submission via electronic data interchange to customs
• Calculating the import duties and VAT payable/taxes
• Establishing the proper harmonized tariff heading of the goods for customs 
• Assisting with clearing instructions to confirm that all information received from the shipper and consignee is accurate before submission to customers’ clearance

Similar to freight forwarders, clearing agents are specialists with a specific set of expertise. While you could likely fumble your way through the legalities of shipping internationally, you’ll almost certainly save more money and time by leaving international logistics to the international logistics experts.

What Next Steps Can You Take?

If you don’t ship internationally on a frequent basis, you may be able to hold off expanding your operations with a clearing agent. Once you begin operating outside of one country, however, they will become essential to maintaining a streamlined logistics process. More importantly, freight forwarders can help at every level of domestic and international freight delivery and should be a priority investment as soon as the resources are available. 

Are you ready for your customized freight solutions? Reach out today to learn more!