Clearing and forwarding and its role in transport management

Distribution logistics is an important area of planning in exports. Distribution logistics refer to the process of physical flow of goods from the place of exporter to the location of importer, at right time, with minimal cost. In this significant area, Clearing and Forwarding Agents are a link between the owners of goods and owners of means of transport. They help cargo owners in efficient movement of goods to the buyers by completing a number of procedural and documentary formalities. They are experts and knowledgeable in laws and regulations governing shipment of goods through the customs authorities.

Clearing and Forwarding agents are the specialised people with knowledge of procedures and documentation involved in shipment of goods. So, the exporter has to appoint clearing and forwarding agents, experienced in the product and country to be exported. Range of services exporter intends to avail determines the choice of the forwarding agent.

Basically, they guide the exporters in providing information on the various alternative routes of transport to reach the buyer‘s port along with relative cost implication and finally facilitate in the selection of mode as well as route of transport to meet the delivery schedule, at economical cost. They are the competent people to comply with procedural formalities of the customs and port
authorities, separately.

1. To provide different range of services to exporters
2. To ensure smooth and timely shipment of goods
3. To select mode and route of transport
4. To guide in the selection of the shipping line/air line
5. To achieve optimal cost in transporting the goods, well within the delivery schedule
6. To undertake marking, labeling, packing of goods, advising on trade laws, arranging local transportation as well as apprising developments on transportation and claiming duty drawback claims on behalf of the exporter.

There are no standardised rates for the services provided by the clearing and forwarding agents. The exporter negotiates the fees, depending on the range of services provided and competence of the clearing agent. Selection of a competent clearing agent is highly important for the smooth completion of export contract. Fees, naturally, depends on experience of the clearing agent in the
product/country exported and on the frequency of exports of the exporter, above all, bargaining capacity of the mutual parties.

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