The current trend of outsourcing has encouraged the activities of clearing and forwarding agents in Nigeria. Recently, many businesses have found it most convenient to outsource the activities of clearing their imported goods to clearing and forwarding agents. Due to the increase in patronage, the clearing agency business has grown manifold in the last few decades. By outsourcing the responsibility of clearing and forwarding activities to a responsible third party to handle, a business or organization can comfortably focus on its core business.
Who is a clearing agent?
A clearing agent is one who completes all port and customs formalities on behalf of the receiver of the goods, also known as consignee at the destination port. Importation and exportation are thriving businesses because they are both global activities, there is no country that does not engage in both. However, we cannot talk about importation and exportation business without referring to clearing and forwarding business. In this article, we will cover how to get into the business of being a clearing agent in Nigeria. Read on below:
Profitability of the business
Many business people involved in importation and exportation do not know how to go about the procedures of clearing their goods. Therefore, going into the clearing business makes you an important factor in all businesses. It grants you a connection to successful merchants in the country and overseas. Below are the basic requirements to become a clearing agent in Nigeria
Gain the Knowledge Required
To be a good clearing agent, whether, at a seaport or airport, you need to know and understand the procedures and formalities involved. Some of these include negotiation with custom agents, shipping companies, clients, etc. You can get familiar with the exact procedures involved in the clearing business through research from other creditable clearing companies. It is also advisable that you enroll in a clearing and forwarding course in Nigeria in order to equip yourself with the knowledge needed for the business. Knowledge of clearing procedures is a must if you want to succeed in this business.
Organizational skills
Knowledge and skill in business management and logistics are vital to your success as a clearing agent. When goods are waiting to be cleared and are being inspected by customs authorities, a clearing agent must show operational and organizational skills so that the complicated process does not tamper with the goods of the client(s)
Business plan
As you should know already, you cannot start any business without a detailed business plan. Your business plan must entail your details such as capital, investment, equipment and facilities, management, implementation, and marketing strategy. You can always get ahead in your business by having a strategic plan.
Identify a niche
It is important you decide the niche of business you want to serve with your clearing business. There are many facets to the clearing business that you cannot handle all. For example, you can concentrate on the agricultural industry, car industry, or chemical industry. Your niche will depend on your immediate environment or other accessible areas.
Business Registration
It is essential that you register your business with the Corporate Affairs Commission of Nigeria (CAC). This is the only way you will be allowed to go through with the necessary registrations and clearance with the Nigeria Customs Service without problems.
Source for funds/capital
Clearing business is a major part of the import and export business in today’s world. Hence, you will need a huge amount of money to venture into this business and run it effectively.
Get a Lawyer or Attorney
You will need the services of a reliable lawyer to handle the projecting of business contracts of your clients. The lawyer has to always be available to handle all legal matters your business is involved in.
Clearing and forwarding business requirements
Vehicles
You need at least one vehicle to transport goods and your staff to the destination, whether a storage facility in or out of the country.
Storage Facility
An important facility to have as a clearing agent is a storage facility to keep the freight of your customers. Remember that the goods of your clients may not be cleared or forwarded in a day. This storage facility must be safe and easily accessible for easy transportation.
Clearing and forwarding agent license
Before you begin the clearing business, you need to obtain your clearing and forwarding agent license from the appropriate authorities. This is the only way you can operate without legal problems with the law as well as other regulatory bodies.
Below are the documents required to obtain a license with the Nigeria Customs Authority:
- Form Sale 135.
- Form Sale 158.
- Certificate of Incorporation of Company.
- Memo & Article of Association (Customs Agent)
- Share Capital of N1,000,000.00- fully paid.
- Certified List of Directors Form C.07.
- Qualification/ Vocational Experience Of Director(S)
- Sworn Declaration of Directors – Noninvolvement in fraud.
- Evidence of Title of Office
- Scale of Charges
- Three years Tax Clearance
- Bank recommendation
- Vehicle particulars
- Sketch Diagram/Office plan
- Letter of Appointment/Acceptance of Custom Representative
- Sworn Affidavit of non-involvement of Custom Official
- Four Passport Photographs of Customs Representative
- Audited Account of the company
Network with the shipping companies
To grow your clearing business, you need to have a network of shippers and potential clients who may need your services as a clearing and forwarding company.
Source for clients
For you to be successful as a clearing agent, you need to have a viable marketing strategy on how to advertise to prospective clients. You can source for clients by advertising or simply networking with people.
Staffing
As your business starts to expand, you will need to employ some competent staffs that you can delegate work to. You will need to train this staff so they become familiar with the procedures of clearing business. Below is a list of staff you will need in the business:
- Motor carrier(s)
- Import-Export broker(s)
- Freight Monitor(s)
The clearing business is a highly competitive one but through strategic planning, hard work, and competence, you are sure to be successful.