The Deringer Difference

    How to Evaluate A Customs Broker

    Posted by Erica Rawson on Jul 12, 2019 8:03:40 AM


    Times are changing, especially if you’re importing and exporting goods. In the current trade environment, it pays to have an expert on your side.

    Trade agreements are fluid, the state of the global economy is uncertain, and Customs regulations on imported goods are tightening. A company that partners with an experienced, licensed Customs broker when importing or exporting goods can be confident that their shipment will not experience unnecessary delays or errors when entering the United States. But how do you know if you have an excellent Customs broker? 

    A Customs broker assists importers and exporters with clearing their goods through US Customs and Border Protection (CBP). They also provide expertise and services that can help an importer to ensure their products meet federal regulations and laws, all taxes and fees are paid, and proper documentation is filed. A good Customs broker has your best interests in mind. Comparing key performance indicators (KPIs) against your Customs broker’s performance ensures they meet your company’s objectives.

    Know the ‘Why’ Behind the Data

    KPIs demonstrate how effectively a company is achieving key business objectives. When evaluating a Customs broker’s performance, KPIs might examine how many CF28s—a request for information—and CF29s—notice of action—you have received from CBP.  If the broker helped you respond to them, were they thorough, prompt, and concise? Other KPIs may include post summary corrections, whether the broker has failed an audit, or you’ve failed an audit under their care, and if unexpected storage, demurrage or waiting time charges have been incurred. 

    Though KPIs can point out issues with your Customs broker, be sure to understand the root cause (the “why”) behind the data.  There may be a logical explanation behind these situations, requiring your company to look further into the issue. For instance, if you received a CF28 from CBP, it could be the wrong classification was provided for the shipment. Or it may merely be a CBP import specialist who, upon reviewing your entry or product, wishes to verify the data reported is correct.

    One KPI that can be a red flag is a CBP reject. A reject occurs when CBP does not accept submitted data; it could be due to conflicting information between the data and your documentation, or it could be challenging a potentially incorrect tariff classification or country of origin. If your Customs broker is doing their due diligence, most rejects can be avoided.

    A reject can also occur when a product is potentially subject to anti-dumping (AD) or countervailing duty (CVD). Anti-dumping occurs when a foreign manufacturer sells goods in the United States at less than fair value. Countervailing duties arise when foreign governments offer subsidies, such as tax breaks, to manufacturers exporting goods to the United States. This would enable foreign manufacturers to sell products cheaper than domestic manufacturers. Shipments containing goods subject to AD or CVD are subject to heightened scrutiny from CBP. 

    It’s important to note that, although CBP may issue a reject to verify AD/CVD status, this is an exception rather than the norm. Most often, CBP issues a reject because of problems with the data or documentation submitted. 

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    Filing Information on Time

    Another measurable KPI is the timely submission of information. When dealing with ocean shipments, businesses may wish to review whether their Customs broker consistently submits data within required timeframes. The flow and timing of documentation between you, CBP, steamship lines, your Customs broker, and freight forwarder –when your forwarder is not your Customs broker--needs to be precise. 

    Are your importer security filings (ISF) transmitted to CBP in a timely manner? Importer Security Filings must be transmitted 24 hours prior to goods being laden on the vessel. You can use your ACE portal or request ISF filing data from your Customs broker to track this critical KPI. Though your customs broker may be filing the data on your behalf, the responsibility for the timely filing resides with the importer of record, and if your Customs broker does not transmit on time, you could be fined by CBP.

    Are your entries being submitted to CBP promptly?   When possible, the Customs broker should file entry before the vessel arrives to ensure the goods are available for pickup at the earliest opportunity.  If there are documentation issues, they should be proactively resolved to prevent holding up the freight pickup and delivery whenever possible. 

    Scheduling regular meetings with your Customs broker provides a format to review your partnership and seek further opportunities to optimize processes. During these sessions, you can review the timeliness of all documents. 

    Import Audits

    All audits are not created equal, and some audits can be preventative. An audit from CBP is a red flag.

    • Your company and your Customs broker should perform your own audits to look for and correct issues with the process, procedure, and entry data.
    • Ask your Customs broker if they routinely audit your entry data.
    • If CBP audits your business, they may suspect a problem or know there is a problem.  Proactively reviewing yourself or through your broker, can help you prepare for or prevent this.

    CBP has different methods of auditing with varying degrees of severity, including surveys, focused assessments, and investigations. Of these, an investigation is the most cause for concern as it indicates CBP has discovered a problem. Auditing yourself and in conjunction with your broker, can adequately prepare you to avoid this outcome.

    Prevention Is the Best Medicine

    Sometimes, you may find an entry mistake requiring a post-summary correction (PSC). This method of correction occurs when a summary has been finalized and any applicable fees have been paid, but the entry has not yet liquidated. Your Customs broker files the correction with CBP who will then review, and, if they agree, accept the changes.  

    Mistakes do happen, but partnering with a good Customs broker can help you reduce risk by minimizing errors and ensuring a high level of compliance. If CBP spots a pattern of post-summary corrections, they may suspect the business lacks an effective and robust compliance program. (queue survey, focused assessment, or investigation!)

    Detention, storage, and demurrage are unwelcome charges that can lead to hundreds of dollars per diem and erode profit.  While they are sometimes unavoidable, they can also occur due to preventable issues such as poor production planning, poor communication, or untimely coordination of payments or documents.

    A Customs broker can do their part to help avoid these charges by filing the entries on time. However, to do so, the importer must be sure to provide them with the necessary documents and correct, complete information.


    A good Customs broker will have tools and technology available to you to help your business ensure it is compliant. Utilizing online tools to access and review shipment documentation and detailed import data is an excellent way to demonstrate reasonable care to CBP.

    In addition to facilitating Customs compliance, these tools can also allow importers to identify supply chain trends, including analysis of duties and entry fees paid, products shipped, and ports of entry used.

    When an importer submits entry data electronically, it allows the importer to control the data submitted on their behalf, and avoid transcription errors. A good Customs broker can accept electronic feeds via EDI from your purchase order system or ERP to their software. If EDI is not a viable solution, some Customs brokers provide other online tools to facilitate the quick transmission of data.  

    When shipping internationally, a Customs broker is an essential partner that helps goods move efficiently across the globe. It’s important to regularly review whether your Customs broker is doing their due diligence. However, it is equally essential that your business examines what they can do to create a symbiotic relationship. Collaborating your business needs with your Customs broker’s expertise ensures the seamless flow of goods.

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    Topics: Customs Consulting, Freight Forwarding & Cargo Transportation, Freight Agents

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