How To Choose A Customs Broker For Your Business
Considering the range of trade agreements many countries now have in place, and the constant tightening of customs regulations, there has never been a better time to work with a certified, experienced and licensed customs broker.
A customs broker handles the declaration of your shipments through international customs by ensuring that appropriate customs permits are obtained for goods entering, leaving or being transshipped through a particular jurisdiction.
It’s often better to let an experienced customs broker handle the selection of Harmonised System (HS) codes, obtaining of Preferential Certificates of Origin (PCO), electronic declaration submission, trade document archiving and other customs matters while you and your employees focus on the core strengths of your business.
In general your customs broker will take care of all the ‘loose ends’ between the importer, exporter and government bodies, and deploy the appropriate technology for those purposes, as much of this work is now performed using dedicated trade management systems.
A good customs broker will also provide advice on availability of Free Trade Agreements for a particular pattern of trade, and how to obtain the benefits thereof. In performing this role, the customs broker may also assist with preparation of the necessary cost statements to qualify for such agreements.
Benefits of Using a Customs Broker
For any business that participates in high volumes of importing or exporting it is imperative to use a qualified, experienced and technologically adept broker, allowing you to remain focused on what you do best.
Instead of spending your time overseeing what are often subtle and complex customs procedures, let a professional leverage their experience to complete the job with precision, ease, and accuracy.
Here are some of the specific benefits of working with a customs broker.
1. Stay Up-To-Date With Policy and Regulation Changes
If you take it upon yourself to manage your companies imports and exports without using a customs broker there is a good chance things will be running smoothly one day and terribly the next.
One of the main tasks of a customs broker is to keep up with the policies and regulations specified by various agencies. Your broker will assume the responsibility of making sure your company is up-to-date in its compliance with these standards.
By using an experienced customs broker your company avoids compliance setbacks that might give rise to financial penalties and delays.
2. Take Advantage of Trade Opportunities
The same way your customs broker steers your company clear of shipment problems, they will also seek out and take advantage of applicable trade agreement opportunities. Trade agreements like ATIGA, NAFTA and others can reduce shipping duties and taxes, allowing your company or your clients to retain greater profits.
3. Customs Brokers Come Equipped
A good customs broker comes equipped with all of the software, hardware and technology needed to manage your company’s shipments, so there’s no need to shop around for the necessary resources.
A quality broker has the tools to ensure timely delivery of approved permits to your colleagues, customers or vendors. Not all customs brokers are cut from the same cloth, and some might be more experienced or more appropriate for the job.
So you’ve come to the realisation that outsourcing customs or trade compliance will bring benefits to your business, but how do you go about making the optimal broker selection. The following guidelines might help point you in the right direction.
Guidelines For Choosing The Right Customs Broker For Your Business
1. Choose a Broker With Experience In Your Industry
If you are importing or exporting a specific type of product, a customs broker with experience in your niche or industry (i.e. semiconductors, pharmaceuticals, oil and gas equipment, automobiles, food, textiles, etc.) will be much more helpful than a general customs broker.
Not all brokers are experienced with specific products or specific Government agencies, so it is important to find one with a resume that meshes well with your requirements. Not only will this save you headaches, but it saves you a considerable amount of time and money as well.
2. Choose a Dedicated Customs Broker
If you have only a handful of product types moving over a handful of trade lanes using a single freight forwarder, then the customs department of your freight forwarding partner may be all you need. The moment things become a little more complex, it’s time to seek out the services of dedicated customs broker.
The reason for this is that in most cases freight forwarders do a great job of getting product from A to B, but they often do not have the resources, technology or upto date specialist knowledge to provide the right customs advice or optimal declaration process.
A dedicated broker does not manage warehouses, does not run a trucking fleet and does not move cargo over international trade lanes. They focus on customs compliance and trade facilitation, which are already specialist areas in themselves.
3. Choose a Broker With Positive References
Your business is too time-sensitives to invest in the wrong broker, so it’s best to learn from the mistakes and successes of the people around you. When choosing a customs broker, do your research and look beyond their marketing materials.
For client confidentiality reasons, many customs brokers do not disclose who their clients are, much less describe the activity they undertake so ask for testimonials from previous clients, or request an unbiased third party source for opinions and reviews.
4. Choose an Approved Customs Broker
It is important to choose a broker that uses an approved customs declaration system based on the latest technology and preferably controlled in-house rather than licensed-in. Additionally, they should be a registered declaration bureau or licensed customs broker in your jurisdiction(s).
By choosing a broker that possesses their own technology resources they can create a seamless link to your company ERP for the swift and stable transfer of commercial invoices, packing lists and any other documents required. Additionally, they should be able to return approved customs permits to you through a system link.
Technology can make a lot of things easier when it comes to dealing with customs and reduces the amount of work required on your part in almost every case.
5. Choose a Broker That Can Handle Your Volume
Are you working with a large volume of goods? If so, it’s worth it to pick a broker that can dedicate their resources exclusively to your account.
Your broker should know the ins and outs of your company and its import/export requirements to ensure proper usage of energy, time and budget.
With advance export declaration (AED) now in place in an increasing number of jurisdictions, it is no longer as easy as it used to be for thinly-resourced customs brokers to hop between clients.
6. Draw Up a Dedicated Contract
When working with a customs broker, it’s a smart idea to protect yourself and your assets by drawing up a contract. Get a clear working agreement on paper that can be used if any issues arise.
If your broker objects, explain the contract is intended to protect all parties involved! The agreement should include pricing, scheduling, services, ports of usage, methods of shipment, termination policies, and any other legalities that protect and promote a positive, long-term relationship.
7. Shop Around
Never choose a customs broker without comparing at least a couple of different options. It is important to sacrifice some of your time in the short-term to shop around instead of rushing into a relationship with the wrong broker.
Depending on what your company needs it is important to compare pricing, experience, specialization, resource, and more. After speaking with several brokers, draw up a list of pros and cons that will help you visualize your decision.
Whomever you decided to work with, make sure they fully understand your company, its needs, and exactly what will be expected of them. Keep in mind that once you start working with your new broker, things may be a bit bumpy at the onset.
Allow time for your company and the broker to get used to one another before making any rash assessments.
Communication, both before and after signing a brokerage contract, is the key to success along with patience and a positive outlook.