Features of a Forwarding Agent and a Clearing Agent in Freight Logistics

Export-import procedures are very complex and time-consuming processes. Hence, every exporter should avail the services of clearing and forwarding agents who are experts and familiar with customs and shipment protocols. Exporters need to appoint an expert clearing and forwarding agent in order to ensure smooth and timely shipment of goods. These agents are assigned to carry out the following essential duties: 

• Transportation of goods to docks and arrangements of warehousing at port 
• Warehousing facilities before the goods are transported to docks 
• Booking of shipping space or air freighting and advice on relative cost of sending goods by sea and air.
• Arrangements for loading of goods on board. 
• Being equipped with information on shipping lines and freight to different destinations, they must calculate the charges payable by exporters. 
• Obtaining marine insurance policies 
• Preparation and processing of shipping documents like Dock Receipt, Export Declaration, Consular Invoice, Certificate of Origin, Bill of Lading 
• Forwarding of banking collection papers   

While the above are the essential tasks, the following are some of the desired services of the clearing and forwarding agents: 

• Storage facilities abroad, to warehouse the goods, in case the importer refuses to take delivery on any account, at least in major global markets. 
• Arrangement for assessment of the damage to shipment en route. 
• In case the shipment goes astray, the agents should be able to trace the goods through their international contacts. 

Despite some of the overlapping duties, there are some discernible differences between the responsibilities of a freight forwarding agent and a clearing agent. These have been discussed below: 

A freight forwarder essentially secures the business of various exporters and importers and can: 

1. Store cargo belonging to the clients at their warehouse. Usually, all well-established forwarding agents have their own warehouses. 

2. Arrange the “forwarding” of the cargo according to the instructions of the client. This is usually regular routing.  

3. Negotiate freight rates with the shipping line to the best of the client’s interest. 

4. Book the cargo with the shipping line as per the requirement. 

5. Prepare bills of lading and associated shipping/negotiating documentation (F178, Certificate of Origin etc.). 

6. Issue their approved house bill of lading as an application. 

A forwarding agent does not necessarily have to deal with customs clearance. 

On the other hand, a clearing agent has the exclusive responsibility of monitoring and dealing with the care of the customs and clearance aspect of the business. 

1. A clearing agent is ascribed with the local customs authorities, border agencies, port etc. 

2. He arranges to pass the relevant documents at customs. 

3. He is assigned with the duty of checking and processing the Duty and VAT payments as applicable. 

4. A clearing agent can apply for refunds where these are applicable. 

5. A clearing agent can issue bills of lading only if he is registered or acting as a freight forwarder. 

In the current globalised economic and business scenario, the differences between the two are gradually blurring.