written by | August 1, 2022

Importance of Selecting the Right Clearing and Forwarding Agent

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Table of Content


Clearing and forwarding agents (C&F agents) are multitasking experts. They are responsible for collecting the bill of lading, bill of entry, buying order, certificate of origin, sales invoice, and others. This entity (either a company or an individual) is also capable of arranging the transportation of goods. A clearing and forwarding agent efficiently manages the smooth and timely shipment of goods from one destination to another. 

Before the receiver hauls the cargo, the country of origin must clear it. Customs brokers usually arrange/take care of this by establishing an agreement between the consignee and the shipper. If not, then a third-party customs broker service is required to settle the issue. 

Did you know? You may ensure smooth business operations and on-time delivery by choosing the best C&F agency without actually being engaged in the clearing and forwarding processes. It will also determine whether your participation in the C&F procedure is necessary. 

Role Of Clearing And Forwarding Agents

Also read: Import Export Business - Step By Step Guide for Starting An Import Export Business in India

The responsibilities shouldered by C&F agents are mentioned below:

  • The main duty of a customs clearing and forwarding agent is to obtain the custom clearance after submitting the shipping bill. 
  • They are responsible for the movement of the cargo.
  • The clearing forwarding agent is also required to arrange for a warehouse at the port. 
  • To reserve shipping space/air freight.
  • Should know the usage of shipment data entry software. 
  • They must also submit data reports on clearance and delivery to the supervisors or consignee. 
  • Arrange equipment and labour for loading and unloading of goods. 
  • Forward papers of banking collection. 
  • Work in accordance with marine coverage policies. 
  • They must draft and submit the documents needed for customs clearance to the authorities. 
  • Process delivery documents, payments, dock receipts, export declarations, and others. 

Other Functions Of C&F Agents

C&F agents must be efficient in the knowledge of local laws and customs formalities. Following are the other functions performed by them:

  • Cargo insurance
  • Close coordination with agencies
  • Container arrangement
  • Marketing and labelling
  • Packaging
  • Reservation of shipping space
  • Selecting the appropriate mode of transport
  • Warehousing 

Also read: Exporting from India: Everything You Need to Know About Starting an Export Business in India

Advantages Of Hiring A Custom Clearing Forwarding Agent

Starting from paperwork, bookings, and arranging payments for different shipment sectors, a C and F agent performs several services like:

  • They perform both clearing and forwarding duties.
  • They work on behalf of other parties involved in shipments and cargo carriers. 
  • They can anticipate problems and are ready with a solution in case a problem arises. 

Importance Of Choosing The Right C&F Agent

Selecting an experienced and efficient C&F agent for your export company is necessary. It ascertains smooth running of the business, timely deliveries, and customer satisfaction. Also, you will be able to concentrate on the core activities of the business. An efficient C&F agent is an expert at getting the goods through custom clearance, coordinating with the transport carrier, and managing safe and timely shipping and delivery of the cargo. 

Since C&F agents can avail of the broad network of logistics providers, they can rely on different modes of transportation like road, rail, sea, and air. They also possess a healthy working relationship with transport companies, services at the port, international shipping lines, marine insurance brokers, customs agents, and others worldwide. So they can perform at their best throughout. 

These agents are not like staff but more like business partners because they shoulder very important and difficult responsibilities on your behalf and for your business to function smoothly. An efficient C&F agent will understand your requirements and serve accordingly. 

How to Choose a Freight Clearing Agent? 

You must consider certain points before hiring a C and F agent.

  • Be very clear about the requirements of the company. 
  • The specific services you expect from a C&F agent.
  • Decide on the mode of transport you wish to adopt for your shipments. 
  • Estimate the expected volume of your shipments.
  • Select the terms you plan to ship on.
  • Any specialised support you require from your agent. 
  • The most important criteria while selecting a C&F agent is experience. Make sure that they have the right knowledge regarding laws and regulations and deal with different types of cargo both at the origin and the destination points of the shipment. 
  • You must choose a digitally equipped freight forwarder.
  • Insist on a transparent pricing structure. 
  • Ensure that they offer cargo insurance.
  • Make certain that they offer the right services for your shipment needs.
  • Consider freight forwarders who have access to a good network in your destination country, as they will have complete knowledge of situations like customs issues, port strikes, etc. It will result in a hassle-free shipment most of the time. 

Selecting the right agent will be very fruitful in managing smooth cargo shipping. So, research well and pick the best freight forwarder. 

Also read: Import-Export Code (IEC) Number - Guide on IEC Meaning, Registration and Requirements

Process of Freight Forwarding

The process of freight forwarding is discussed below:

Stage 1 – Export Haulage

Moving the cargo from the shipper’s location to the warehouse is known as export haulage. This is mostly managed via road or rail. The time taken depends on the distance and the size of the shipment. Depending on the cargo, it may take some hours or some weeks to reach the checkpoint. 

Stage 2 – Items Checkpoint

After the export of goods, freight forwarders check the cargo to ensure that it is damage-free. 

Stage 3 – Export Customs Clearance

The cargo requires export customs clearance from the country of origin before being shipped. The customs broker submits details about the cargo and other necessary supporting documents. Usually, an agreement is made between the consignee and the shipper.

Stage 4 – Import Customs Clearance

Authorities of the destination country check the import customs documents to release the goods.

Stage 5 – Destination Arrival and Handling

Once the cargo reaches the destination, the freight forwarders receive documents related to the cargo, including carrier bills and outstanding documentation. 

Stage 6 – Import Haulage

Like the initial export to the destination, the cargo is removed from the warehouse and sent to its final destination under import haulage.  

Also read: List Of India's Top Exported Products

Conclusion

We hope this article has been of help in providing information about C&F agents. To deal with the complexities of the export sector, it is a necessity for the exporter to appoint C and F agents who are specialists in the field. They get the customs clearance, arrange goods shipments, and manage smooth cargo transactions. 

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FAQs

Q: What are the stages in the freight forwarding process?

Ans:

The stages of the freight forwarding process include: 

  • Stage 1 – Export Haulage 
  • Stage 2 – Items Checkpoint
  • Stage 3 – Export Customs Clearance 
  • Stage 4 – Import Customs Clearance
  • Stage 5 – Destination Arrival and Handling
  • Stage 6 – Import Haulage

Q: Who is a C&F officer?

Ans:

A C&F officer is an individual who manages all import and export functions from packaging to shipping and delivery of the consignments.

Q: What are the forwarding costs?

Ans:

Forwarding costs are the expenses incurred during cargo movement from the country of origin to the destination country. The customs duties are also included in the forwarding charges.

Q: What should I consider before hiring C&F agents?

Ans:

Factors to decide on before looking for a c and f agent are given below:

  • Be very clear about the requirements of the company. 
  • The specific services you expect from a C&F agent.
  • Decide on the mode of transport you wish to adopt for your shipments. 
  • The expected volume of your shipments.
  • The incoterms you plan to ship on.

Q: Who is a shipping clearing agent?

Ans:

A shipping clearing agent is an individual or a company responsible for collecting the bill of lading, bill of entry, buying order, certificate of origin, sales invoice, and others. It also arranges the transportation of goods.

Q: What are the duties of a carrying and forwarding agent?

Ans:

Some duties of the carrying and forwarding agents are given below:

  • The main duty of a clearing and forwarding agent is to obtain the custom clearance after submitting the shipping bill. 
  • They are responsible for the movement of the cargo.
  • The clearing and forwarding agent is also required to arrange for a warehouse at the Port. 
  • To reserve shipping space/ air freight.
  • Should know the usage of shipment data entry software. 
  • They must also submit data reports on clearance and delivery to the supervisors/consignee. 
  • Need to arrange equipment and labour for loading and unloading of goods.

Q: What are the functions of a clearing forwarding agent?

Ans:

The following are the functions performed by clearing and forwarding agents

  • Cargo Insurance
  • Packaging
  • Marketing and labelling
  • Container arrangement
  • Selecting the appropriate mode of transport
  • Close coordination with agencies
  • Warehousing 
  • Reservation of shipping space

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.