How a customs broker works: role in international transportation

A customs broker is a specialist who helps with document processing. Find out what brokerage services a business needs and what role they play in logistics.

Every year, many companies face problems at customs related to cargo delays, fees, and fines for incorrect document processing. But there is good news that this can be avoided if you cooperate with a customs broker. Who is he and what function does he perform in international logistics? We will understand in the article.

Who is a customs broker and what are his responsibilities

A customs broker is a specialist or company that acts as an intermediary between business and customs, with an understanding of the basics of customs procedures and a clear algorithm of actions for business. It is knowledge in jurisprudence, logistics, and accounting that helps a broker find the right solutions for his clients and ensure that border crossings are legal, fast, and with minimal costs.

What services does a customs broker provide?

Consultations before shipment: its analysis and selection of the correct customs regime (import, export, transit),
Determination of the UKT foreign economic activity code, because the correct classification of goods is very important when calculating taxes and duties).

• Verification of documents and consultation on compliance with customs requirements. The broker helps not to overpay, suggesting what benefits or special conditions can be applied.
• Preparation of electronic declarations and submission to customs, control of the correctness of invoices, packing lists and certificates.
• Communication with customs authorities and settlement of all issues that may arise.
• Quite often, brokers work together with transport companies: they select optimal routes, control that the carrier’s documentation meets the requirements.
• Support for inspections if customs still decides to inspect the goods, as well as support for specific cargo (for example, medicines, food products that require veterinary or phytosanitary certificates).

That is, the customs broker solves all the issues instead of the entrepreneur. And here it is very important that his activity consists not only in the registration of documents, but also really contributes to saving the client’s time and money, helping to avoid blocking of goods, fines and unforeseen expenses. The customs broker provides services individually, taking into account the specifics of each product.

What documents are required for customs clearance of goods

The list of documents depends on the specific product and country of origin. However, there is a basic package without which the registration will not pass:

• a foreign economic contract (FEA contract), which is a confirmation of the agreement between the buyer and the supplier;
• an invoice with prices, currency and terms of delivery;
• a packing list with a detailed description of the quantity, volume, weight and packaging;
• transport documents: CMR (auto), air waybill and bill of lading (sea);
• certificates of conformity or origin, depending on the product;
• insurance documents if the cargo is insured.

Other, additional documents may be required for specific categories of cargo: a phytosanitary certificate for plants, a veterinary certificate for animal products, and licenses or permits for the import/export of certain goods.
It is very important that the broker checks the documents almost under a microscope, because if one is missing or incorrectly filled out, this will lead to delays, transportation downtime and additional costs.

The role of a customs broker in international logistics

International logistics is more than transporting goods from one place to another. This is a complex system where every mistake can be costly. And here the customs broker plays a significant role in this logistics chain.
Before sending the goods, he communicates with the client and helps prepare documents, suggests what customs payments will need to be made. During transportation, the customs specialist coordinates the actions of the carrier and the consignee, checks the correctness of the execution of accompanying documents. At customs, he represents the interests of the company, prepares declarations, communicates with inspectors, organizes inspections and customs clearance if necessary. And after registration, he reports on payments, maintains an archive of documents so that the company does not have problems with the tax office later.
That is, the broker minimizes the risks of delays at the border, correctly determines the UKT of foreign economic activity, knows how to save you money, helps to avoid unforeseen delays and promotes quick registration even in the case of non-standard goods.
For example, a customs broker will help to clear a car without queues and unforeseen payments.

How to choose a customs broker in Ukraine

There are many brokerage companies and individual specialists providing relevant services on the market in the country today. Finding one who would really know all the intricacies of the matter is a difficult task. Because many specialists position themselves as experienced, but in practice, unpleasant cases arise. In order not to play the lottery, you should understand by what criteria to choose a broker.

Licenses and accreditations – in Ukraine, a broker must be entered in the customs register, thereby confirming that he can legally represent the interests of client’s res.

1. Experience and specialization: find out what goods the broker works with. Some specialize in equipment and medical products, others – in agricultural products. Choose those who have experience with your category of cargo.
2. Clear pricing: honest specialists at the beginning announce the cost of brokerage services and possible additional costs.
3. Efficiency: in international trade, in addition to knowledge, speed of reaction is also important. That is, the broker should always be available.
4. Recommendations and reputation: of course, be sure to ask for reviews from real clients.

How much do customs broker services cost

The cost depends on several factors: type of goods, volume of work, complexity of the procedure and urgency. Brokerage services include:

• basic registration of one declaration – 1500-3000 UAH and above;
• complex cargo – 4000-8000 UAH and more;
• additional services (consultations, contract review, participation in customs inspection, urgent clearance) are paid separately and can be another 20-50% of the basic cost.
• In short, the right choice of a broker is not about finding a cheaper specialist, but one whose cooperation will ensure the speed and safety of your transportation.

What the price depends on

The price of services is based on several factors and depends on:

Type of goods: the more complex it is in classification, the more time the international customs broker will spend on selecting the correct UKT ZEA code. For simple goods, the cost will be lower.

• Batch volume: for a large cargo, several declarations must be issued, respectively, the price will be higher; and for small or prefabricated goods, on the contrary, it may be low.
• Permits and certificates: if necessary, the broker involves its partners to obtain additional certificates, and this also affects the cost.
• Urgency: in this case, an increased tariff applies.
• Geography of work: the cost may vary depending on the customs post.

Additional costs

As you already understood, the broker’s services are not limited to paying for the declaration. At the start, you should immediately consider the occurrence of additional costs. What is this about?

1. Mandatory import duty, excise duty and VAT.
2. Costs for certification and permits (phytosanitary and veterinary certificates, certificate of origin, SES conclusions and other permits).
3. Logistics costs (fee for transport downtime in case of delay at customs due to lack of a document or additional inspection).
4. Additional broker services (urgent clearance, support during customs inspection, translation of documents, consultations on optimizing customs payments).

By the way, the client pays customs payments and certificate costs separately. A customs broker provides services for both large companies and small businesses.

Conclusions

So what does a customs broker do? Helps entrepreneurs avoid delays and fines, optimize costs for duties and taxes, quickly and smoothly go through all procedures, and most importantly, focus on business and not waste time on bureaucracy.
A qualified customs broker performs his duties responsibly, because the speed and correctness of the passage of goods across the border depends on his work.