Freight Forwarder vs Clearing Agent: Difference and Comparison

In almost all the economies of the world, the chain of demand and supply holds utter significance as it ensures that the demanded goods are being delivered to the consumers safely and securely.

In this complete process, multiple tasks are included, and two of them are the duties of a Freight Forwarder and a Clearing Agent. In the very first instance, it seems that these two are very similar, but in reality, there are a lot of differences between the roles of these two positions. 

Key Takeaways

1. Freight forwarders manage transportation and logistics for shipping goods while clearing agents handle customs processes and documentation.
2. Clearing agents are responsible for ensuring compliance with import and export regulations, whereas freight forwarders coordinate the movement of goods.
3. Both roles are essential for smooth international trade and collaborate to facilitate efficient shipping processes.

Freight Forwarder vs Clearing Agent 

A freight forwarder is a company or individual that arranges the transportation of goods from one place to another on behalf of a customer. A clearing agent, also known as a customs broker, is a person that specializes in handling customs clearance procedures for imported or exported goods.

The term Freight Forwarder explains itself by the very look of it. It is a term used for a person or an enterprise that has the basic job of storing the goods or parcels belonging to a particular client in certain warehouses.

The person handling this particular job looks after safely moving and forwarding goods to designated locations. 

But on the other hand, a clearing agent is basically someone who helps the client in getting clearance from customs of different borders.

He looks after all the formalities and technicalities related to the custom and gets clearances to make sure that the goods are being delivered without facing any trouble in transportation. 

Comparison Table

Parameters of Comparison	Freight Forwarder	Clearing Agent
Meaning	It refers to a person responsible for moving and storing the goods of a client.	it refers to a person responsible for getting required clearances from the customs department.
Duty	To move and store goods at the designated locations so that they could be supplied further	To get all the required clearances so that no disturbance occurs while the moving of the goods is taking place.
Looks after	The transportation aspect	The legal aspect
Occurs	This duty is performed after getting clearances	This duty is performed first
Additional duties	Does not take care of the VAT payment	Sometimes takes care of the VAT payment

What is a Freight Forwarder? 

The term freight forwarder explains itself by its very name of it. It basically refers to a person or an organization that has the duty of forwarding the cargo or the goods of a particular client to a designated location after complying with the necessary instructions that the client provided.  

The basic duty is to take care of the goods throughout the whole process of transportation and move them to the location to which the client wants them to be moved.

However, this particular job is a work of caution as it is very important to take care of the goods while moving them, and it requires a lot of carefulness on the part of the person doing it.  

In some cases, a freight forwarder not only moves the goods but also stores them in certain warehouses if the client requires him to do so.

It happens to be crucial work as the entire supply of goods depends upon this process of moving and storing the goods at the designated locations. 

What is a Clearing Agent?

When the activity of selling and buying goods and other products is conducted overseas, or throughout the borders of many countries, a very specific job rule comes into play that is of a clearing agent.

In simple words, a clearing agent is any person, organization, or institution that helps the client of a particular cargo or goods get clearances from different customs of different countries, etc.  

Whenever any such kind of business is conducted overseas, the job of a clearing agent comes into play at the very beginning of the process, as without gaining the required clearances, it is almost impossible for anyone to conduct business overseas.  

This agent has the duty of reading the fine print of all the legal aspects related to the customs department and then applying for necessary clearances for the transportation of goods.

The agent has to talk to the customs people and then negotiate upon the price and other terms and conditions of clearances on behalf of the client. 

Main Differences Between Freight Forwarder and Clearing Agent 

1. A Freight Forwarder is a person responsible for moving and storing the goods while, on the other hand a Clearing Agent looks after getting the clearances of customs. 
2. A Freight Forwarder does not look after VAT payment; on the other hand, a Clearing Agent looks after VAT payment. 
3. A Freight Forwarder performs his duties after getting clearance, while on the other hand, a Clearing Agent performs his duties at the very beginning of the project. 
4. A Freight Forwarder looks after the transportation aspect while, on the other hand a Clearing Agent looks after the legal aspect. 
5. A Freight Forwarder moves the goods so that the supply can go on, while on the other hand, a Clearing Agent gets the required clearances so that the transportation can take place. 

References

1. https://www.sciencedirect.com/science/article/pii/S0377221709000411 
2. https://www.nature.com/articles/srep09808?origin=ppub  

Last Updated : 13 July, 2023