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.
Freight Forwarder vs Clearing Agent
The main difference between a Freight Forwarder and a Clearing Agent is that the former is basically a person or an organization that looks after storing the goods of a particular client in certain warehouses all storehouses, but on the other hand, the latter is basically a person or an organization that looks after the clearance of customs related issues of the 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 a basic job of storing the goods or parcels belonging to a particular client in certain warehouses. The person handling this particular job looks after the moving and forwarding of goods in designated locations safely.
But on the other hand, a clearing agent is basically someone who helps the client in getting the 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 the transportation.
Comparison Table Between a Freight Forwarder and a Clearing Agent
| 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 the 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 were provided by the client.
The basic duty is to take care of the goods throughout the whole process of transportation and move them to the location on which the client wants them to be moved. However, this particular job is the 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 a very crucial work as the entire supply of goods depends upon this very 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 or organization, or institution that helps the client of a particular cargo or goods in getting 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 a Freight Forwarder and a Clearing Agent
- 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.
- A Freight Forwarder does not look after VAT payment, while on the other hand, a Clearing Agent looks after VAT payment.
- A Freight Forwarder performs his duties after getting clearances, while on the other hand, a Clearing Agent performs his duties at the very beginning of the project.
- A Freight Forwarder looks after the transportation aspect while, on the other hand, a Clearing Agent looks after the legal aspect.
- A Freight Forwarder moves the goods so that the supply could go on, while on the other hand, a Clearing Agent gets the required clearances so that the transportation can take place.
Conclusion
The total act of selling and buying certain products requires so many additional activities attached to it that help the entire project to become a successful one. Whenever certain goods are sold and bought throughout the borders of many countries, certain issues such as the storage and transportation of goods arise. In order to get rid of these particular issues, certain specific duties are assigned to some persons or organizations.
A freight forwarder and a clearing agent are two such positions that hold utter significance in the entire act of selling and buying some products overseas. The former ensures that the goods are being stored and moved to the exact designated location, while the latter ensures that all the legal aspects are being fulfilled correctly.
References
- https://www.sciencedirect.com/science/article/pii/S0377221709000411
- https://www.nature.com/articles/srep09808?origin=ppub