Customs clearance is an important part of international trade, and the value of customs brokers is reflected in the process. On behalf of importers and exporters, they deal with customs and are responsible for delivering the goods smoothly. The following article will explain it in detail. Let’s take a look.
What is a customs broker?
A customs broker, also known as a customs clearance agent, is an agency or individual that helps importers and exporters handle customs clearance procedures. They hold a customs broker license issued by the customs administration. Customs brokers prepare the necessary documents and procedures for customs clearance, helping you avoid potential errors or omissions that could occur if you were to handle the clearance yourself, ensuring that your goods pass through customs smoothly.
You might wonder, is a customs broker necessary?
No, using a customs broker is not a legal requirement. People choose customs brokers mainly for convenience. They can save you a lot of time and effort, allowing you to focus on your core business. Since different countries have different customs regulations, which are also constantly changing, if you choose to handle customs clearance yourself, you may have to learn the customs regulations of a new country with each trade, which can be costly in terms of time and effort.
Moreover, customs brokers are more professional. They regularly interact with customs, ports, and other related departments, not only making the clearance process more efficient but also helping you avoid fines or unnecessary expenses.
What does a customs broker do?
Suppose you need to import goods from China to the United States. Let’s see what a customs broker can do for you.
Classify goods accurately
They help you classify goods to choose the correct HTS code to identify your cargo attributes, so that the U.S. Customs and Border Protection can determine tariff rates.
Complete ISF security declaration
Your Chinese supplier needs to provide ISF(10+2) information to your broker. ISF (10+2) is the security declaration required when importing goods into the United States. Most of the content is about your Chinese supplier, such as company address, factory name, etc. Your broker should ensure that the ISF is submitted electronically to U.S. Customs 24 hours before shipment.
Submit the bond and tax ID
You need to purchase a customs bond. A customs bond is primarily used for unexpected situations during customs clearance. For example, if you fail to meet a specific clearance requirement and incur a fine, customs will use this bond in advance. This fee acts as a guarantee between you and U.S. Customs. Without this fee, your goods cannot clear customs because they are not registered with U.S. Customs.
The bond is typically purchased by your broker from a surety company. You will need to fill out relevant documents and provide your company’s tax ID number.
Provide relevant documentation
Customs clearance documents include a bill of lading, an invoice, a packing list, a notice of arrival, certificates of origin of goods, etc. Once you receive the arrival notice and the above documents are prepared, your broker can submit the paperwork to apply for customs clearance within five days before the goods arrive at the port.
Arrange necessary payments
Your customs broker will help you pay all the necessary fees for the import of goods, such as customs clearance fees, Merchandise Processing Fees, import duties, etc. Then you should pay these charges to him.
Note that different countries have different policies. If you need to import goods to other countries such as the United Kingdom, your U.S. brokers are not familiar with its procedures. You need to find another professional one.
Customs broker vs freight forwarder, what's their difference?
A customs broker is mainly responsible for handling the customs clearance of goods, which includes preparing documents, classifying goods, calculating taxes and fees, and ensuring that the goods can enter or leave a country without any issues. They communicate directly with customs.
However, a freight forwarder handles a variety of tasks. They need to arrange the transportation of goods from the point of origin to the destination, including booking cargo space, loading and unloading goods, purchasing transport insurance, delivering the goods, etc.
Essentially, a freight forwarder acts as a coordinator, connecting suppliers, shipping lines/airlines, customs, local customs brokers, and others to make international trade smooth and efficient.
What are the customs broker fees?
Your broker usually collects customs broker fees in advance and settles according to the actual amount incurred. These fees include three aspects.
Customs fees
It includes customs declaration fees, VAT, and customs duties. Customs declaration fees have no relation to the value of the goods and are charged at a certain fare. VAT and customs duties vary depending on the country and the properties of the goods.
Charges in port
It includes THC, commodity inspection fees, inspection and quarantine fees, etc. These charges vary from port to port.
Agency fees
There are significant fluctuations in agency fees of different countries.
In China, the export agency fee is 0.8%-2.5% of the value of your goods, and the import agency fee is about 1% of the total value of the declared amount (the value of the goods you declare to customs). For example, if you have a shipment of 30,000 USD, the agency fee is 1%*30,000. The difference in labor costs between countries determines the difference in agency fees.
In addition, if your goods are inspected by customs, then your broker needs to coordinate and charges a service fee. If you have lots of customs declaration names, thus increasing the time for your broker to enter, this charge is definitely higher.
Although agency fees may incur additional costs, they are worth it. Because a professional customs broker can help you avoid fines and other unnecessary expenses, which may arise from improper handling due to your unfamiliarity with the process.
Where to find customs brokers？
From your freight forwarders
Your freight forwarder has rich experience in international trade, he must be close to many reliable customs brokers. You can entrust him with the whole process, and won’t need to worry about the details of the international trade. This is one of the most common ways.
JingSourcing has long-term cooperative freight forwarders, and can help you with customs clearance.
From some authoritative websites
Some professional websites such as CBP, NCBFAA can help you find a reliable customs broker. CBP lists all the customs brokers in different parts of the United States. All you need to do is select your address and port to get relevant authorized ones and their information.
NCBFAA is similar to CBP, it classifies customs brokers by location. In addition to finding professional customs brokers, you can also find freight forwarders. Just choose from these sites according to your situation.
What is a reliable customs broker?
Great expertise
If your goods belong to a specific category, you’ll need to find a broker who has a deep understanding of your goods, which can save you a lot of trouble. They should be familiar with customs procedures for specific goods and port operations, and have knowledge of the latest customs regulations.
Attention to detail
Customs brokers have to handle lots of documents and make sure they are complete and correct. So your goods can pass inspection without any problems. Therefore, a reliable broker is detail oriented and makes sure that every piece of information is accurate.
Ability to solve sudden events
A reliable customs broker can quickly find solutions when questions arise. For example, when customs has questions about your cargo and needs to inspect it, your cargo will be held up at the port. A reliable customs broker will go through the situation in detail and understand how to communicate with customs more efficiently.
Responsive to requests
Customs clearance is a complex process, a delay can have knock-on effects with incalculable consequences. So it’s crucial to work with a broker who can respond quickly to your requests. He can keep you informed of the latest news about your shipment and rest your mind at ease.
The End
Believe you have a clear understanding of the customs broker. If you have any questions, feel free to leave a comment below.
We are JingSourcing, China’s leading procurement agency. We maintain good relationships with many reliable freight forwarders and customs brokers.
If you need help, please Contact Us.
FAQ
Do I really need a customs broker?
If you’re a novice in international trade and customs clearance, then a customs broker is essential for you. Don’t try to handle everything on your own the first time.
Is a customs broker the same as a customs agent?
Customs brokers are third-party entities that serve importers and exporters, while customs agents are government enforcement officials who primarily inspect cross-border international trade.
