Importing and exporting are key fundamental for many profitable businesses. International shipping could present great business opportunities for you, but may also seem astounding. If you have not heard about the term “customs broker freight forwarder” before, you may be a little confused. Is it a shipping company? A distribution manager? An importing and exporting partner?
This blog covers the basics of what do you mean by freight forwarder? What does a freight forwarder do? How one can get a customs broker license?
What do you mean by freight forwarder?
Freight forward may be defined as a firm that specializes in arranging storage and shipping of merchandise on behalf of its shippers. It usually endeavors a full range of services such as tracking inland transportation, preparation of shipping and export documents, warehousing, booking cargo space, negotiating freight charges, freight consolidations, cargo insurance, and filing of insurance claims. In other words, a freight forwarder is a company that arranges you’re importing and exporting of goods. So what does that mean in terms of what freight forwarders do?
What does a freight forwarder do?
There is a lot that goes into authorizing your international shipping. While the freight forwarder handles the details of your international shipping, it is decisive to know what a freight forwarder does. The freight forwarder act as an intermediary between a shipper and various transportation services such as ocean shipping on cargo ships, trucking, expedited shipping by air freight, and moving goods by rail. A freight forwarding service employs established relationships with carriers, from air freighters and trucking companies to rail freighters and ocean liners, to negotiate the best possible price to move shippers goods along the most economical route by working out various bids and selecting the one that best balances speed, cost, and reliability.
What do you mean by international freight forwarder?
The heart of world trade is the import and export of goods, and international freight forwarder administer the pulse of this process. An international freight forwarder act like a travel agent for cargo. They coordinate transportation details between international sellers and buyers so that goods get shipped where they need to be shipped.
How one can get a customs broker license?
Must like a freight forwarder or logistics expert on exports, licensed customs brokers are individuals, associations, corporations, or partnerships that are licensed and regulated by US Customs and Border Protection (CBP). Here are some of the steps by the benefit of which one can get customs broker license such as –
. Need to get eligible
To become a customs broker you must be a US citizen, need to attain an age of 18 years of age, and not be a federal government employee at the time of the customs broker exam. If you fulfill all these requirements then you are eligible to apply for the customs broker license.
. Need to know about importing
Knowledge of importing means you need to have an understanding of entry procedures, entry requirements, valuation, fines and penalties, classification, and the rates, duty, taxes, and fees for imported goods. As a licensed broker, you need to submit necessary information and appropriate payments to CBP on behalf of its clients and charge the clients a fee for this service. It is decisive that you exhibit responsible supervision and control during the import process. Because you will determine this by passing an exam.
. Need to pass the exam
The exam is given at most CBP service ports on the fourth Wednesday in the month of April and October respectively. Make sure that you apply at a port where you want to practice or transact customs business as a broker. You are culpable for bringing proof that you meet all the eligibility requirements (e.g. photo ID, proof of registration). CBP must receive the examination registration application and $390 application fee at least 30 days in advance of the examination. The examination lasts for four and one-half hours and consists of 80 questions. To pass the exam, you need to achieve 75% correct answers or better. In case you fail to pass the exam, you can retake it until you pass the exam.
. Need to submit a license application and pay the appropriate fees
Assuming that you have passed the broker exam, now you need to pay the $200 application fee for the broker license application. There is also a fingerprint check and processing fee for the application. Because as an applicant, you need to undergo a background investigation that includes a fingerprint analysis and a review of character references, credit reports, and any arrest record.
. The application form needs to be reviewed and approved by CBP
There are three levels of reviews such as –
- Multiagency background investigation
- CBP port director secondary background investigation
- CBP port director forwards an endorsement to CBP headquarters in Washington DC.
The Assistant Commissioner, Office of International Trade, will advise you on whether your application is approved or not.
. Period of application to process
The length of time it takes to complete the license application process can vary depending on various factors, but generally, the CBP works to issue licenses within six months of the application.
Wrapping Up for Customs broker freight forwarder
This is how one can get a customs broker freight forwarder license. If you still need any kind of assistance in getting your license. You can contact LGOA, for your help in getting the license.