Frequently Asked Freighting Questions
What is a Freight Forwarder?
Simple answer: A Freight Forwarder is a company that’s responsible for transporting goods from one destination to another.
Complex answer: A Freight Forwarder specializes in handling movement of cargo (domestic or international) on behalf of a shipper or consignee (customer). A partial list of what Freight Forwarders do includes:
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Serving as the mediator between the shipper, consignee, and shipping lines/airlines/carriers
Recording and presenting documentation which includes (but is not limited to): master and house bills of lading, arrival notices, and commercial documents
Organizing, planning, and scheduling the shipping plans – whether that be through one mode of transportation or multiple modes
Obtaining freight insurance (if necessary)
Coordinating warehousing needs such as packing, storing, and distributing goods during any part of the supply chain
Facilitating and preparing documents for customs clearance and compliance for international shipments
Freight Forwarder vs. NVOCC: What's the Difference?
As mentioned above, a Freight Forwarder is basically a travel agent for cargo – handling paperwork, schedules, and communications. NVOCC’s (Non-Vessel Operating Common Carriers) are slightly different. These entities perform all the services of a cargo carrier but do not operate their own vessels, instead purchasing significant space on existing vessels that they then offer to customers. NVOCC’s also have more financial responsibilities like high bond and insurance requirements, and they issue their own bill of lading to shippers. As an NVOCC and Customs Broker, Falcone Global Solutions is licensed, bonded, and insured to negotiate rates and service contracts directly with steamship lines which provides a significant price and service advantage.
What is a Customs Broker?
A Customs Broker is a private individual, partnership, association or corporation licensed, regulated, and empowered by U.S. Customs and Border Protection (CBP) to assist importers and exporters in meeting federal requirements governing imports and exports. Customs Brokers ensure that all shipments are compliant with any rules, regulations, tariffs, duties, or other mandates from CBP so that goods are not delayed or held at port.
Our in-house Licensed Customs Brokers at Bruning International Services have been serving the Customs Brokerage needs of thousands of importers (and Forwarders) and have held a National Permit and Remote Location Filing (RLF) for over 50 years. We can handle everything from customs compliance, ISF 10 + 2 filing and tariffs to drawbacks, ATA Carnets and more.
What is the Best Method for Shipping my Goods?
This answer depends on many factors that differ from customer to customer. Some of the considerations that determine which mode of transportation to ship with include:
Origin and destination of shipment
Size of shipment (mass and volume)
Schedule, transit time, and delivery date requirements
Financial considerations
And more
As a general rule, ocean freight takes longer but is more affordable, air freight is quicker but much more expensive, and ground freight is a balance of the two – but is less functional over very long distances.
What are the Benefits of a Full-Service NVOCC and Customs Broker?
Full-service NVOCC’s and Customs Brokers integrate the main roles of each service into one system, allowing for all aspects of the logistics process to be handled by the same team. Rather than having to communicate with other providers who use different systems or may be on different schedules, full-service firms like Falcone Capital Holdings perform all of these services internally, which enables efficiency and scalability as well as improved communication with customers.
What Does a Customs Broker Do?
The complexity of the job is evident when one considers that for every shipment entering the United States there is an official greeting: 500 pages of Customs Regulations and thousands of tariff items. The broker must be well versed in determining proper classifications and dutiable value and be be fully aware of the vast number of commodities subject to quotas. Customs regulations are constantly changing so interpreting the regulations and classifying the merchandise being entered requires that the Customs Broker update and maintain his/her knowledge of Customs' regulations and opinions on a myriad of subjects. The Customs Broker is considered an expert by U.S.Customs.
It is important to state that you are not required to use a Customs Broker on some importations.
If you are willing to maintain a bond with Customs, purchase "ABI" (Automated Broker Interface) software which allows you to connect directly with Customs Computers. If you then become approved by Customs as an "ABI" filer, hire employees whose responsibility will be to know Customs regulations. If you then will be willing to be completely responsible for fines and penalties if a mistake should occur, you might not need the services of a licensed Broker.
Also, if the value of your importation will not exceed $2,500 in total value, you can do your own clearance.
Clearance of my Merchandise: What do I Need?
Your Customs Broker requires the following, at a minimum, in order to prepare an entry:
Commercial Invoice - Preferably in English, which describes the product, terms of sale, and the purchase price FOB origin port. If the product originates in a country other than the one you purchase from, the actual country of origin of the merchandise should appear somewhere on the invoice. The name of the seller and the buyer and the currency of purchase should be clearly stated. Some importers think that they should include as little information as possible in the invoices they provide to their Customs Broker. This works against you! When we can't get enough information to substantiate a lower duty classification on merchandise, we are required to use the higher classification. So, give your Customs Broker enough information to do the job properly.
Bill of lading or Air Waybill - This is the transport document that covered the movement from origin to the port of entry.
Country of origin Marking - One of the most common problems that will hold up an entry is when the product or merchandise does not have any marking which indicates its origin. "Origin" does not necessarily mean where you bought it. "Origin" should be discussed with your Customs Broker so that you understand the term as it relates to U.S. Customs. Marking requirements are clearly stated in the regulations and your broker can be a valuable asset in determining what you must do.
Other regulatory agencies - Some products are also subject to approval by other agencies of the U.S. Government before entry is approved. Among these are: Food and Drug Administration (FDA), Department of Agriculture (USDA), Department of Transportation (DOT), Environmental Protection Agency (EPA), and others. Discuss this with your Customs Broker. He will coordinate entry with these agencies as part of his/her service.
How long does it take? After the first few entries, where Customs may take a little extra time to become familiar with your company and the products you import, the usual time for clearance can be a short as a few hours up to 2-3 days. Perishables are usually cleared immediately.
Your Cooperation - The Customs Broker is a professional that wants to do the best job for a Client. In order for this to happen, the client should work closely with the Customs Broker in supplying needed information, paying duties (import taxes) on time, and generally including the Customs Broker as part of the Client's team. Remember, your Broker has the right to rely upon the information you supply. If the information is erroneous or incomplete and a penalty is issued by Customs, YOU will be receiving that penalty.
Assistance in transportation arrangements from the vendor in country of origin, to your door.
Suggestions regarding packing and labeling.
Placing cargo insurance on your purchase to protect your interests in case of loss, damage, or pilferage.
Insuring that you are aware of Customs regulations regarding Country of Origin marking and other important facts that may affect your merchandise when it arrives in the United States.
Classifying your merchandise and maintaining knowledge of changes in classification practices that could affect the duties applicable to your entry.
Analyzing your import program to determine costs of packing, transport, entry, and delivery to yourself or your customers.
Providing ongoing consultations to improve and simplify your importing program.
Of course, there are many other things that a Customs Broker, by virtue of his/her experience and training can do for the importer. As the Customs Broker becomes more familiar with your business, you will find that the relationship becomes one similar to your relationship with your CPA or attorney.
Most Customs Brokers are also licensed by the Federal Maritime Commission as Ocean Freight Forwarders (now called "Ocean Transport Intermediaries") (OTI). This means that they will have numerous contacts within the freight community and can assist in shipping your goods on a worldwide basis.
Why Use a Customs Broker?
Your Customs Broker handles the details of entering your merchandise into the United States and is involved with Customs and the Carriers on a daily basis. As a result, friendships are built with carriers' employees, familiarity with your merchandise is built, and many problems can be identified before they have a chance to occur.
Many Brokers (ourselves included) help clients choose modes of transportation and appropriate carriers, a task which requires analyses of a vast body of data. We also provide assistance to importers in assigning the best routes on shipments, preparing cost estimates, Letter of Credit consulting, cargo insurance, packaging, and assistance in dealing with other regulatory agencies. The broker's operation often trancends Customs, calling for contact with more than 40 other government agencies, such as the Department of Agriculture (USDA) on meat importation, the Environmental Protection Agency (EPA) on vehicle emission standards, or the Food and Drug Administration (FDA) on product safety.
Some of the services may include:
When is the best time to talk to your Customs Broker?
Before your shipment arrives or before your first entry.
Clearance of my merchandise: What do I need?
Your Customs Broker requires the following, at a minimum, in order to prepare an entry:
Commercial Invoice - Preferably in English, which describes the product, terms of sale, and the purchase price FOB origin port. If the product originates in a country other than the one you purchase from, the actual country of origin of the merchandise should appear somewhere on the invoice. The name of the seller and the buyer and the currency of purchase should be clearly stated. Some importers think that they should include as little information as possible in the invoices they provide to their Customs Broker. This works against you! When we can't get enough information to substantiate a lower duty classification on merchandise, we are required to use the higher classification. So, give your Customs Broker enough information to do the job properly.
Bill of lading or Air Waybill - This is the transport document that covered the movement from origin to the port of entry.
Country of origin Marking - One of the most common problems that will hold up an entry is when the product or merchandise does not have any marking which indicates its origin. "Origin" does not necessarily mean where you bought it. "Origin" should be discussed with your Customs Broker so that you understand the term as it relates to U.S. Customs. Marking requirements are clearly stated in the regulations and your broker can be a valuable asset in determining what you must do.
Other regulatory agencies - Some products are also subject to approval by other agencies of the U.S. Government before entry is approved. Among these are: Food and Drug Administration (FDA), Department of Agriculture (USDA), Department of Transportation (DOT), Environmental Protection Agency (EPA), and others. Discuss this with your Customs Broker. He will coordinate entry with these agencies as part of his/her service.
How long does it take? After the first few entries, where Customs may take a little extra time to become familiar with your company and the products you import, the usual time for clearance can be a short as a few hours up to 2-3 days. Perishables are usually cleared immediately.
Your Cooperation - The Customs Broker is a professional that wants to do the best job for a Client. In order for this to happen, the client should work closely with the Customs Broker in supplying needed information, paying duties (import taxes) on time, and generally including the Customs Broker as part of the Client's team. Remember, your Broker has the right to rely upon the information you supply. If the information is erroneous or incomplete and a penalty is issued by Customs, YOU will be receiving that penalty.