How to Select Your Customs Broker

Hank Selby | November 10, 2002 | Import Basics
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U.S. Customs Brokers are private individuals, partnerships, associations or corporations licensed by the U.S. Customs Service to prepare and file entries, arrange for payment of duties, arrange for release of goods in Customs Custody, and otherwise represent their clients in Customs matters. By U.S. law, these are the only entities that are authorized to act as agents for importers in their import business.

BrokerU.S. Customs Brokers are private individuals, partnerships, associations or corporations licensed by the U.S. Customs Service to prepare and file entries, arrange for payment of duties, arrange for release of goods in Customs Custody, and otherwise represent their clients in Customs matters. By U.S. law, these are the only entities that are authorized to act as agents for importers in their import business.

Although importers have the legal right to represent themselves for Customs purposes and to file their own entries, the vast majority of importers use one or more Customs Brokers to clear their imports.

It is vitally important that you select a Customs Broker who can handle your customs business efficiently and accurately. A good Customs Broker is an invaluable partner. By working closely with the broker on classification and valuation issues, you can minimize entry errors and enhance compliance. The wrong Customs Broker, however, can result in delayed clearances, errors on entries, and possible fines.

Here are a few points you should consider when choosing (or changing) Customs Brokers:

  • Do you have a specialized product line or type of import? You may wish to find a broker who either specializes or has a great deal of expertise in clearing your type of products. For example, textiles, apparel and alcoholic beverages have numerous laws and regulations that apply to their importation. Not every broker is experienced in handling these products.
  • How many ports will you be using for your imports? If you are importing through a great number of ports, you will want to hire a broker with its own offices in those ports. Your local one-office broker may give you great service in his home port, but they will have to use sub-agents in other ports and thus will lose a great deal of control. By the same token, if you are only importing through one port, the smaller, one-port broker may be perfect for you since they can often give you much more personalized, hands-on service.
  • Automation is key! Any broker—regardless of size—must be fully automated with full connectivity not only to U.S. Customs but also to various web portals and cargo tracking sites. Your broker should be able to communicate easily with you via telephone, e-mail and fax.
  • What is the broker’s general reputation? Don’t automatically believe what the broker’s marketing material says about its capabilities and reputation. Your best source of information is from the broker’s own customers. Ask for references. You can also get a relatively non-biased opinion from local ocean and air carriers.
  • Do you need a dedicated account representative? If your volume of imports is large enough, you should have a key operational contact at your broker who will coordinate all aspects of your account.
  • Most importantly, I recommend that you write a working agreement with your broker(s). The agreement should include the scope of work that you want the broker to perform, the fee structure for each service performed, and operational procedures and contacts. This document should be available to all of your personnel who work directly with the broker. You should periodically review the agreement with your broker and make adjustments to reflect any changes in your business situation.

If you have just chosen a new Customs Broker or have recently changed brokers, you will probably experience a shakedown period. You should expect some delays and adjustments. If the adjustment period lasts longer than a month, then you should reevaluate your situation. If you have any problems, call a meeting with your broker after two weeks to try to nip them in the bud.

Your Customs Broker should be your partner in every sense of the word. Be sure to give your broker all the information they need to handle your entries. Similarly, insist on getting all the information from your broker that you need to have a successful import program. If you have questions about how your broker is handling your account, ask!

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