Customs broker vs freight forwarder: who files your import entry

What does a customs broker do?

Customs brokerage is declaring goods at the border: what they are, where they were made, what was paid and what duty and tax is due, which the broker can then pay. US regulations call this customs business, covering entry and admissibility, classification, valuation, duty payment, refunds and the documents behind them, and a customs broker is licensed to do it for others [1]. In Canada the work can also include registering the importer's Business Number import-export account [4].

For apparel, the broker works from your invoice, packing list, fibre content, construction and production locations. A US broker must tell you promptly about errors it knows of in documents the law requires from you [1], but it cannot fix facts it never received. A “customs clearance company” is a broker or customs agent, or a forwarder reselling one. Put simply: the forwarder moves the cartons, and the broker moves the paperwork.

Do you need a customs broker?

Not by law, usually. A US importer acting only for its own account needs no licence [1], Canadian importers may file their own release and accounting documents [4], and an Australian owner of goods may lodge its own import declaration [6]. Filing for someone else is what requires a licence [1][4][6]. If you would rather not run the filing and own every classification yourself, hire one. One limit applies in Britain: a business not established in the UK that imports into Great Britain can appoint a representative only on an indirect basis [8].

Customs broker vs freight forwarder vs carrier vs agent

US regulations describe a freight forwarder as a business that dispatches international shipments for others and handles the formalities that go with them: a transport role, separate from the customs business a broker is licensed for [1]. A carrier physically moves the goods; in the US it may make an in-bond transit entry without a broker licence, but any other entry made for you needs a licensed broker [1]. So a customs broker is neither a common carrier nor a forwarder, though one group of companies may hold several roles. “Agent” is the loosest word: in Canada any authorised agent can handle some CBSA business, but only a licensed broker may account for goods and pay duties for an importer [4].

Does a freight forwarder handle customs?

Often, but as coordinator rather than filer: in the US a forwarder either holds a broker licence itself or passes your entry to a broker it works with. A broker may pay a forwarder for referring you only if you are told the broker's name in advance, receive the broker's charges directly unless you waive that in writing, sign the power of attorney directly with the broker, and nothing in their deal stops you contacting the broker [1]. Before the first shipment, ask two questions: which licensed broker files my entries, and under whose power of attorney?

Power of attorney: what you sign, and with whom

In the US a broker must hold a valid power of attorney from you before doing customs business in your name, and keeps it on file rather than lodging it with CBP [2]. CBP Form 5291 or an equivalent can be used, and written notice to CBP revokes it [2]. A company that is not resident in the US must name a US-resident agent authorised to accept service of legal process against it [2].

Canada accepts any written authority, often called an agency agreement, that names both parties with their business numbers, the transactions covered, how long it runs, whether sub-agents are allowed and an effective date, signed by both; an online tick-box does not count as a signature [5]. You must also grant the broker access in the CARM Client Portal, and remove it when the relationship ends [5]. In the UK you agree whether the agent acts directly or indirectly, and supply your EORI number, invoices and a description of the goods [8].

Do customs brokers pay tariffs, and who is liable?

Brokers often pay duties and taxes for clients and invoice them, and a US broker must pass client money for duties to the government by the due date [1]. The liability stays with you. US brokers must give clients a written notice, on or attached to the power of attorney, that paying the broker does not release the importer of record if the broker fails to pay CBP [1]. In Canada the importer remains fully liable, including penalties and interest, if a broker gives wrong information or fails to remit [4][5].

In the UK, with a direct representative you alone are liable for records, accuracy and any duty or import VAT, though the agent may share liability if it makes a deliberate or unreasonable error despite clear instructions; an indirect representative is jointly and severally liable with you [8]. Agree whether payments run through your own duty deferment account or the agent's [8].

Who licenses customs brokers, and how to check one

Under 19 CFR Part 111, an individual US broker must be a citizen aged at least 21, not a federal officer or employee, and must pass CBP's examination; a firm needs at least one licensed partner or officer, and a national permit is required to transact customs business [1]. Brokers must keep records, pay over client money on time, not withhold information from clients and never file documents they know are false [1]. Canada has had one national licence, valid at every customs office, since 1 April 2024 [4]; Australian brokers are licensed under Division 3 of Part XI of the Customs Act 1901, for up to three years [6]. In the UK, as checked on 22 September 2026, no licence or registration is needed to act as a customs intermediary, and HMRC's consultation on mandatory registration closed on 21 September 2026 [10].

How customs brokerage fees are built

None of these customs authorities sets brokerage prices. The CBSA treats brokerage fees as a private matter between broker and client [4][5], and HMRC's guidance gives a fixed fee, a fee per declaration, or both as examples [8]. In the US, a broker hired by a forwarder rather than by you must send you its bill or a copy of the entry, unless the goods were bought delivered duty paid or you waive it in writing [1].

How to choose a customs broker

No authority ranks brokers: CBP, the CBSA and the ABF list licensed or permitted firms, and HMRC says its register is not vetted, approved or recommended [3][4][7][9]. The best customs broker, in the USA, Canada, Australia or Sydney, is the one best suited to your goods, ports and volume. In the UK, ask about Authorised Economic Operator status [9] and the voluntary Standard for Customs Intermediaries published on 3 June 2026 [10].

What to put in writing before the first shipment

Put these on paper before goods move: the authority you gave the broker and its scope; who is importer of record; how duty is paid and how you will see proof that customs received it; the fee schedule, including hold charges; the documents sent with each shipment; and who approves a classification before it is filed.

On SEAMDANCE orders, a proposed HS code is supplied for each style with the shipping documents. It is a starting point for your broker; the classification the broker files is the one that counts.