Difference between a freight forwarder and clearing agent

Difference between a freight forwarder and clearing agent

This is one of the questions that many people ask.. The answer is that in the current economic and business scenario, the line dividing these two is quite thin..

Freight Forwarder : Essentially secures the business of various exporters and importers and has the ability/facility to

  • store cargo belonging to the clients at their warehouse (usually all big forwarders have their own warehouses)
  • arrange the distribution or “forwarding” of the cargo as per the instructions of their client.. This could be a regular routing or various routing
  • negotiate freight rates with the shipping line to cover the interest of their clients
  • book the cargo with the shipping line as per the requirement of the client
  • forwarder vs clearing agentprepare bills of lading and associated shipping/negotiating documentation (F178, Certificate of Origin, etc)
  • issue their approved house bill of lading as applicable
  • MAY or MAY NOT also do Customs Clearance

Clearing Agent : Essentially takes care of the customs clearance aspect of the business..

  • is a company accredited with the local customs authorities, border agencies, port etc
  • arranges to pass the relevant documents at customs
  • arrange for customs inspections as required
  • check and process Duty and VAT payments as applicable
  • apply for refunds etc where applicable
  • cannot issue own bills of lading if not registered or acting as a freight forwarder

These are the major differences between a Freight Forwarder and Clearing Agent..

What did you think of the above article..?? Comment below..

34 comments on “Difference between a freight forwarder and clearing agent

  1. revocatus says:

    what is types of transshipment

  2. what are the main requirements of the ISM code and a structure of a typical liner organization. please answer if you can

  3. Am a lecturer in one of the colleges, i normally deliver about clearing and forwarding, am very much happy to be on this site, hope we will discuss a lot about clearing and forwarding and even shipping management, maritime management and procurement etc.

  4. James says:

    Hi I’m James from Chennai one of client asking live chicken & goat for faming propose its possible to export to srilanka

  5. Htet Ko Zin says:

    Thanks a lot, sir

  6. sipho says:

    good, simple and easy to grasp explanation thank you

  7. Gio says:

    Hi all,
    I’m new in the freight forwarding industry and I don’t have a lot experience in the custom clearance , maybe you could help me.
    Usually in an import procedure before the vessel arrive , I do the custom clearance base on the only copies of commercial invoice and paking list sent to me by email by the overseas agent without having had on my hand the original commercial invoice and packing list yet , because usually the importer send to me all commercial docs by mail two or one day before the vessel arrive.

    What could it happen if I have made the custom clearance but after that I haven’t received any original commercial invoice and packing from the importer but only the original hbl for release the cargo ?
    Is it always necessary save the original commercial invoice and packing list or it could be enough having an attached copies sent by email?

    1. Hello Giovanni, each country has different rules relating to what documents you have to present to customs and whether those should be original or copies.. If you are able to do clearances based on the copies, then there is no real need for the commercial invoice or packing list originals.. The copies serve the same purpose.. Trust this answers your question..

  8. Hirwa says:

    Freight forwarder this very good on the exporter for risk mitigation or minimizing and on cleaning agents are very needed for every country if not there’s no need for some documents in export so the disappeared of that document may cause the problem of life like supplying of harmful product to the clients and other which destroy our environment
    Thank you

  9. Very educative article. This is my line of duty Export & Import. Keep up

  10. Very good post. thanks for sharing.

  11. aaron langat says:

    My name is aaron langat i aspire to study a clearing and forwarding course, smby opt that i take procurement and supplies management..how are they related???

  12. Happy says:

    Hi guy.
    My name is Happy
    Please can anyone help me to delineate parties involved in clearing and forwarding?thanx

  13. francis says:

    hey guys,

    i am new to import export and shipping. could you lay mans terms explain how i can bring goods from india to UAE and also reexport the same without any hassles to other countries as and when required. Are there companies who pic up the goods from the manufacture and send it directly to us after taking care of all the formalities from country of origin to country of destination. thanks a lot for the information

    1. Iien Kims says:

      Hi, Francis…you can drop email for your enquiry to m.irsan@sdvindonesia.com. We are big 5 of global forwarder in the world with spread over 602 offices in 1200 countries.

  14. Emmanuel kabera says:

    Hi! my name is Emmanuel kabera; i think the relationship depend on exsting on that freight clearing and forwerder roles essentially all of this two sides secures the business of various exporters and importers .

    1. Welcome to the blog Emmanuel.. 🙂

  15. There is no doubt in my mind that this site is going to be my port of call anytime I need to learn something. Thank you and keep on the good work.

  16. Tami says:

    Thanks so much for this informative article. I am planning to venture into this kind of business since I am getting lots of potential customers from my blogs which deal with used cars from japan. There is no doubt in my mind that this site is going to be my port of call anytime I need to learn something. Thank you and keep on the good work.

    1. Hi Tami, glad to be help.. 🙂 You can follow the blog for any new updates..

  17. Ajay Kaushik says:

    Hi Guys,

    Can any one of you tell me the difference between Freight order and Forwarding order and the scenario’s when we use a freight order and forwarding order?

    Thanks,
    Ajay Kaushik

  18. dreki says:

    I want to know about clearing and forwarding

    1. Hirwa says:

      My friend cleaning is likes to manage or to control the export and import documents but forwarding is all about to your responsibility to other one
      Thank you

  19. Many freight forwarders nowadays also do customs clearing, which – in this case – adds up their advantages over other freight forwarders who don’t provide the clearing service. It’s very likely that the shipping will go faster and cheaper with the freight forwarders which offers clearing service.

    If you are looking for a freight provider, give us a quote request at X2 Elite Global Logistics Network

    We are X2 Elite, a global logistics network whose members are the professional freight forwarders representing major ports around the world.

  20. Tanvir says:

    If custom house authorized me as a custom clearing, forwarding and shipping agent then what will be the my functional activities

  21. Michael says:

    Is there any way for you to put freight company, shipping agent/ broker & etc parties into a diagram for better understanding?

  22. manaadiar says:

    Hi Mfana, that possibly could be true, but also bear in mind that there are more clearing agents who need warehousing facilities which the forwarders have.. So i think the co-existence will possibly continue for quite some time..

    1. Dz Jve says:

      can any one could help me on how to calculate alternative duty refund for partial export?

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