Selecting the right freight forwarder or customhouse broker for your business by Mark Hirzel

Choosing The Right Freight Forwarder / Customsbroker For

Your Supply Chain!

Mark HirzelRegional Director, West

– 26 Years in the Customhouse Brokerage Industry– 25 Years as a Licensed Customhouse Broker– 6 Years on the Board of Directors of the Los Angeles

Customs Brokers and Freight Forwarders Association (LACBFFA)

What is a Freight Forwarder?

A person or firm that arranges to pick up or deliver goods on instructions of a shipper or a consignee from or to a point by various necessary conveyances and common carriers.

International

Domestic

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What is a Freight Forwarder?

Completes documents on behalf of their clients and when asked must make full disclosure of costs.

Fee for Services

“Travel Agent for Freight”

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What is a Customhouse Broker?

An individual or company who acts on behalf of the Importer of Record, facilitating the import transaction, but never taking actual title to the goods.

Regulated by Title 19 Code of Federal Regulations Section 111.

Customs and Border Protection (CBP)

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What are Ocean Transportation Intermediaries ?

Ocean Transportation Intermediaries (OTIs) are either:

Ocean Freight Forwarders; or

Non-Vessel-Operating Common Carriers

Both are regulated by the Federal Maritime Commission (FMC).

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What are Ocean Transportation Intermediaries ?

An Ocean Freight Forwarder (OFF) is an individual or company which:

•Arranges cargo movement to an international destination

•Arranges space for those shipments on carriers on behalf of shippers

•Prepares and processes the documentation and performs related activities pertaining to those shipments

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What are Ocean Transportation Intermediaries ?

A Non-Vessel-Operating Common Carrier (NVOCC) is:

•A common carrier that holds itself out to provide ocean transportation, issues its own house bill of lading or equivalent document, and does not operate the vessels by which ocean transportation is provided

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What are Air Forwarders?

International Air Transport Association (IATA)

•Global trade organization that facilitates the standardization of the Industry

An Indirect Air Carrier (IAC) means any person or entity (not a carrier) that uses air for the transport of property. (Regulated by the Transportation Security Agency)

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What are Domestic (Ground) Forwarders?

Freight Brokers “Truck Brokers” are regulated by the US Department of Transportation (www.fmcsa.dot.gov)

They are required to obtain and maintain a Property Brokers License, and a bond that can be tapped to pay freight-bill claims, and be properly registered with the Uniform Carrier Registration (UCR)

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What are Domestic (Ground) Forwarders?

Freight Brokers “Truck Brokers” are regulated by the US Department of Transportation (www.fmcsa.dot.gov)

They are required to obtain and maintain a Property Brokers License, and a bond that can be tapped to pay freight-bill claims, and be properly registered with the Uniform Carrier Registration (UCR)

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What are Domestic (Ground) Forwarders?

Freight Brokers “Truck Brokers” are regulated by the US Department of Transportation (www.fmcsa.dot.gov)

They are required to obtain and maintain a Property Brokers License, and a bond that can be tapped to pay freight-bill claims, and be properly registered with the Uniform Carrier Registration (UCR)

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How do I find the right one?

Personnel and Professional RecommendationsTrade Associations

National Customs Brokers and Forwarders Association of America www.NCBFAA.org

Los Angeles Customs Brokers and Freight Forwarders Association (LACBFFA) www.LACBFFA.org

How do I find the right Forwarder?

What services do you need?Air?Ocean?

From Where to Where?

Warehousing?At origin?At destination?

Distribution?

How do I find the right Forwarder?

• General Information about the company• Global Capability - What services are available globally.

In which countries are they strong.• Price - how is price determined?• Transit times• Allocations with airlines, trucking, etc.• Computer/EDI capabilities• Insurance• Experience with certain types of products and

transactions• Invoicing options• Industry references

How do I find the right one?

Customs Clearance Expertise

Ask if they have experience with your commodity from that origin

Only US Customs can “guarantee” the Harmonized Tariff Schedule classification (duty rates)

How do I find the right one?

Get written quotations

Review the exceptions / exclusion carefully

How do I find the right one?

OTI’s: http://www2.fmc.gov/oti/CHB: http://www.cbp.gov/xp/cgov/toolbox/contacts/ports/

All examinations required by US Customs are paid by the importer / exporter.

The Importer Security Filing requires, for all shipments sent via ocean to the US, 10 data elements must be sent to US Customs 24 hours prior to export.

The Importer of Record / US PPI is ultimately responsible for everything

How do I find the right one?

Avoid reliance on a Freight Forwarder for Customhouse Broker work

Ask if they have Remote Location Filing (RLF) capability (CHB only)

Ask if they will provide you with copies of all documents files on your behalf

• Thank You & Questions

Mark HirzelOffice: 310.217.4822Cell: 714.225.6196E-mail: mark.hirzel@miq.com