Published On: Fri, Sep 20th, 2019

Vital essentials that you need to know on customs brokers: Should your business use one?

Have you been investing your time in researching for the best business options for importing goods to another country? If answered yes, you have definitely come across customs brokers that claim to make HMRC customs clearance hassle-free. It is indeed tempting to reduce the burden of importing goods but at the same time, it is also necessary for a business to leverage the services of a customs broker so that the business owner doesn’t have to deal with the custom authorities himself. 

This post will offer you a handy guide in helping you determine whether or not utilizing the services of a customs broker is going to be an appropriate choice for your business. If you wish to know who they are, what their services are, what their charges are and everything else about them, read on. 

A customs broker – Who is he?

Did you ever hear about an import broker? If yes, then that is what you call a customs broker who strives hard to make the experience of exporting and importing goods as seamless and smooth as possible by accelerating the process of goods clearance through customs processes. Usually, a customs broker is an expert and adept in international trade as that is their job to stay aware of the laws that are ever-evolving. He also makes sure that the clients have all licenses and paperwork ready which they require for importing goods to the intended country. 

Once you enter the market, you’ll find both the customs brokers and the freight forwarders promoting their services to the potential businesses. While the former are experts in logistics, the latter are experts in import/export processes. Nevertheless, there are several freight forwarding agents that can even act as customs brokers where they handle all sorts of customs requirements along with logistics. In case you’re someone who wishes to use a freight forwarder who can support transportation of goods, enquire whether he has a proper understanding of import brokerage as well. 

photo/ pixabay

Tasks and services of a customs broker

Whenever you hire a customs agent, he will work with the importers to make sure all sorts of documents and licenses are in place for the goods that are being brought into the country. They can even make sure that the right taxes and duty are paid so that all sorts of delays are done with. Here are some other services to expect from a broker.

  • He checks the value and classification of goods and makes sure the commodity codes are entered.
  • He negotiates with the customs authorities and government agencies on your behalf.
  • He prepares and submits documents which are filed in order to clear customs processes
  • He gives you advice on the required licenses for import in case you deal with any of the restricted goods or hazardous ones
  • He also assists you in arranging all payments of import duties and VAT whenever necessary

Valid reasons why importers need to hire a licensed broker

For an importer, import brokerage can be an overwhelming and daunting process, especially when he is new into the business. We live in an era where national security is the most important thing and there are several responsibilities and regulations which you have to abide by when you’re attempting to import or export products. If you make the mistake of attempting to navigate through the process without much knowledge, you will end up in a mess of headache and penalties that might cost you in the long run. 

Now that you have the services of a licensed customs broker, you can figure out why you should hire a licensed customs broker. Here are few reasons to hire a customs agent. 

Compliance with rules and regulations

When an importer thinks why he should hire a licensed customs agent, the first reason that comes to mind is compliance. It is a mammoth task if you have to navigate through Harmonized Tariff Schedule or the HTSUS all by your own. Not only that, when you have to go through the details, abide by them and also file an entry, this becomes a tough procedure that needs the assistance of a professional. 

Hiring brokers can reduce the stress of this entire process as they will classify items on the business invoice of the importer and proceed with other filings that are required by government agencies for entry. 

A customs agent will also have more knowledge on the latest regulations and requirements that the OGA or Customs is imposing at present. As there are several brokers associations all over the US and memos being issues regularly, it is impossible for the importer to take into account all the complicated details. A licensed broker will be of much help rather than self-filing. 

Proper guidance on customs clearance

Yet another reason for preferring the services of a broker rather than self-filing is the ease of mind that the broker has. An importer hires a broker in order to receive proper guidance through the whole importing process. They’ll not just classify goods but also play the role of a liaison between the government and importer and inform the importer about the latest rules and regulations related to each commodity. In this process, the importer will gain better understanding of the trade. Amidst the several tasks that the importer has, is it possible for him to make entry for the freight? This can also be handled by a reputable broker as they help the importer focus on boosting their sales. 

Less likelihood of committing mistakes

Whenever the importers don’t have proper knowledge on the trade, they tend to make mistakes which can cost them in the long run. Hiring a customs broker can make sure that there are fewer mistakes on the entries. Mistakes can lead to strict and severe penalties issued by the customs department and it is your duty to avoid them as much as possible. 

Advantages of utilizing the services of a customs broker

Whenever you utilize the services of a customs brokerage or a freight forwarder, here are the few advantages that you can get:

  • You’ll be at peace: The broker will make sure the shipment is completed and sent as per the present laws and regulations. Since you have his hand, you won’t have to learn things yourself or appoint someone in the house who is good at all this. 
  • Things get organized: As the broker works on your behalf, you won’t have to work with other government agencies. So, things gradually get systematic when the broker works on your behalf. 
  • Avoid overpaying VAT: Under the guidance of a broker, you won’t overpay VAT or duty and eliminate the risk of underpaying only to be charged with hefty fines and penalties later on. 
  • Reduce delays:  Until all VAT and duty is paid off, the customs of the respective country won’t release your goods. You also have to make sure that the documentation is in perfect order. Hence it goes without mentioning that customs broker can reduce all delays and keep your business going. 
  • Additional services: There are several other customs brokers who offer additional services like tracking delivery as it starts moving from the origin destination. 

The disadvantages of hiring a customs broker

There isn’t any legal liability of hiring a customs broker and in case you consider yourself to be a skilful and experienced importer, you might as well do things alone. Just as everything has its pros and cons, here are the few pitfalls of working with a customs agent. 

  • There are countries that may not have a similar licensing procedure as the USA and this means that depending on the country you reside in, you have to go through the credentials of the selected provider and ensure they’re capable of delivering everything that they claim to. 
  • Unnecessary costs can get added as against customs clearance that you do on your own.
  • When you employ customs broker, you can exercise limited control on the shipment. All you can do is have faith on the agent whom you’ve chosen to hire. 

Is it right for me to hire a customs broker?

Are you relatively new to the industry of importing? If answered yes, it is important have a kind of support to navigate through the customs process with ease. This not only takes off the stress of importing but it also means you don’t have to invest your energy and time in learning about customs regulations. 

If you don’t have anyone in your house who is good at accounts keeping or understanding customs, it is perfect to be assisted by a standalone customs broker. Moreover, if you import high volumes of products, it is even more worth to learn about customs processes. Nevertheless, in the early days of an importer, they usually prefer an outsourced provider for attaining peace of mind. 

Fast and efficient custom brokerage – What needs to be done?

Playing the role of clearance specialists, customs brokers supervise the import of goods on their client’s behalf and this procedure is called customs brokerage. Each country has its own set of regulations that govern the import and export of goods but keeping in mind the dynamic nature of trade, such rules keep changing with time. There are several brokers who are experts in clearance of definite goods like perishable items or bigger shipments. 

So, what should the customs brokers do in order to make sure an efficient and fast custom brokerage process? Here are the few steps that you can take in order to facilitate the process with ease.

#1: Embrace the digital way

With changing times, the way businesses are run is also changing. Majority of the manual processes are gradually being altered with online programs. With the help of digital technology, submitting documents, tracking goods and handling paperwork becomes easier by following the latest trends. 

#2: Be serious about doing your homework

If you want to make sure you have a problem and stress-free import, the brokers also need to do their homework and research. They require grabbing details on shipment, review the regulations that are applicable and make sure the submission deadlines are met. This is only applicable to the commodities as you can get enough time to address the concerns and issues. 

#3: Decide on the kind of import

It is necessary for the broker to check whether or not the goods that are being imported have any special restriction or requirement. Like for example, weapons, alcohol, animal products, certain medicines and other chemicals can have import licenses. Majority of the countries have a prohibitive rule for toxic substances, illegal products and goods with cultural heritage or even for endangered species. 

#4: Documentation should be done

In order to avoid delays, fines and damages to the items, the customs documents should be completed and submitted within the right time. The paperwork needs to include detailed description of the items, packing list, and certificate of origin, bill of landing and tariff classification number. Then there can be special permits for goods which are subject to federal regulations and these also need to be grabbed. 

#5: Watch out for ways to import costs

Brokers also need to look for ways in which they can reduce import costs. There are few goods and items that are granted under PTAs or preferential trade agreements. In such cases the tariffs on import might not get eliminated but it can certainly be reduced. 

#6: Rectify errors

In order to abide by the rules and regulations, brokers have to recognize the errors that lie in the original entries. These have to be submitted to customs, corrected within a set time frame. You have to check the total number of items, the origin of items, shortages, surpluses tariffs and values. 

Therefore, if you’re feeling confused of the ways in which you can facilitate the customs brokerage process, you should keep in mind the above mentioned tips. Hire a customs broker after doing the required homework so that you can work with someone who has your best interests in mind. 

Author Bio:
James North is a young entrepreneur, who has accomplished a great feat in the world of marketing and advertising. He is the husband of a accomplish writer, and the father of two young adults. He has been contributing to digital platform for quite some time now. He loves to share his innovative ideas and thoughts so that readers could be benefited. He loves playing cricket at his leisure time.
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