Can the Freight Forwarder Be the Importer of Record? Here’s What You Need to Know

Global trade continues to skyrocket. As of 2025, the global logistics market was valued at USD 11.23 trillion. It is anticipated to reach USD 23.14 trillion by 2034, with e-commerce and international supply chains driving significant demand for efficient transport solutions.

When companies expand into global markets, logistics often becomes a tough challenge when dealing with compliance. This is where the importer of record (IOR) and freight forwarder roles ensure that goods move smoothly across borders and comply with local regulations.

While both have distinct functions, one question often arises: whether a freight forwarder can act as an IOR. Hence, understanding their functions, constraints, and edges is essential to picking the most effective partner for handling your transport and compliance needs.

Freight Forwarders vs. IOR: Understanding Their Difference

When shipping internationally, knowing the roles of freight forwarders and IOR is paramount. While they often collaborate, their tasks and responsibilities differ significantly.

Freight Forwarder as the Logistics Coordinator

International freight forwarding companies serve as logistics mediators between shippers and transportation providers, managing the physical conditioning of goods from origin to destination. They do not hold the goods or bear legal responsibility but deliver vital coordination and support services.

Key responsibilities include:

  • Organizing transportation by air, sea, or land
  • Booking cargo areas
  • Consolidating shipments
  • Handling shipping documentation
  • Coordinating pickup and delivery schedules
  • Tracking visibility of shipments
  • Assisting in customs clearance

IOR as the Legal Accountable Party

IOR is the legally identified entity liable for ensuring all imported goods comply with local import laws and regulations. This role is necessary for regulated industries and destinations with intricate compliance requirements.

Their tasks include:

  • Paying import duties, taxes, and fees
  • Customs declaration
  • Upholding import compliance documentation
  • Ensuring goods meet local standards or certifications
  • Bearing legal risks, liability for compliance errors
  • Recordkeeping

Can a Freight Forwarder Also Act as the IOR?

While a freight forwarder can sometimes act as the IOR, this depends on several factors and the forwarder’s willingness to take on legal and compliance tasks. While possible, acting as the IOR is not the norm but a solution best suited for businesses needing market access.

Whether to take IOR’s role or not, forwarders are highly dependent on the following factors:

  • Destination Country Regulations. Some countries allow freight forwarders to operate as the IOR. Meanwhile, others require the IOR to be the only entity taking ownership of the goods.
  • Freight Forwarders’ Capabilities. Only select forwarders offering IOR services. These are typically extensive, global firms with the necessary infrastructure, compliance teams, and local presence in key markets.
  • Industry-Specific Demand. Freight forwarders are more likely to offer IOR services in industries with complex import requirements like IT, medical devices, or telecom, which are governed by distinct contracts and outside standard freight forwarding operations.
  • Separate Service Agreements. IOR services, when offered, are usually provided under a distinct agreement, not as part of standard forwarding services.

When to Appoint a Freight Forwarder or IOR?

Appointing a freight forwarder and IOR relies on the nature of shipments, industry, and compliance requirements. Here is a quick guide to help you decide:

  • Regulatory Complexity. Employ a professional IOR when importing to countries with strict rules to manage compliance and avoid penalties.
  • InCountry Presence. An IOR can be the legal importer if you lack a local entity.
  • Shipment Volume and Frequency. A freight forwarder with IOR services can streamline operations and reduce admin work for regular, high-volume shipments.
  • Industry Specific Needs. Select a provider who is familiar with your sector’s necessities.
  • Speed and Efficacy. A freight forwarder can optimize routes and manage documentation for faster clearance.
  • Risk and Liability. An IOR takes legal responsibility and compliance.

Final Thoughts

While international forwarding is critical in global logistics, its capacity to serve as IOR is conditional. The option to delegate the IOR function to them should be made carefully, weighing legal implications, industry standards, and the company’s operational efficiency. Partnering with a logistics provider like Excelsior Philippines is better to streamline operations and reduce non-compliance risk. We guarantee your goods are transported using suitable freight solutions aligned with efficiency goals and regulatory standards. We help businesses attain smooth operations by managing the logistics process end-to-end, ensuring speed, accuracy, and full compliance from origin to destination.

Importer of Record vs Consignee: Key Differences You Need to Know

Successful cross-border transactions are crucial in today’s international shipping market. They allow businesses to expand their client base, penetrate new markets, or streamline their supply chain. However, a common mistake that many enterprises fail to realize is not clearly understanding the role of different entities in ensuring a smooth shipping process.

One common confusion is about the roles of the Importer of Record (IOR) and the Consignee. Although the terms are often used in numerous logistics paperwork, many tend to mistake one for the other, creating legal and operational risks to the operations.

Understanding the distinction between IOR and Consignee and how a logistics company in the Philippines can help is crucial to determining who is responsible for the different parts of the shipping process.

Core Responsibilities of IOR and Consignee

·      Who is the Importer of Record?

The IOR is the legal entity or person responsible for ensuring that the imported products comply with all the laws and regulations of the destination country. They need to submit necessary documents, accurately classify imported goods, pay the financial obligations, and acquire all the required permits.

·      Who is the Consignee?

On the other hand, the Consignee is the entity to which the products are shipped. This usually includes the end customer, a distributor, or a warehouse that will receive the shipment once it clears customs. Even if they assume physical possession of the goods after delivery, they are not responsible for regulatory compliance or customs duties (unless they are also assigned as IOR).

Key Differences Between IOR and Consignee You Should Know

While the two crucial roles can overlap depending on the situation, certain differences distinguish them.

·      Legal Accountability

The IOR is mainly responsible for ensuring that the shipment complies with all customs and import regulations. They are accountable for any incorrect declaration, missing permit, or misclassified goods and will face the penalties associated with non-compliance.

Meanwhile, the Consignee has no legal burden regarding the shipments. Their role is limited to taking delivery of goods and focusing on the operational aspects of the shipping process. However, if they are also assigned as the IOR, they will also be accountable for any non-compliance.

·      Customs Clearance Role

The IOR actively engages in the customs clearance process. They are responsible for preparing and submitting entry declarations, coordinating with brokers, and responding to queries by customs agents. They should resolve any documentation issues and other flags from customs to have the shipment released.

The Consignee does not participate in customer procedures as they only receive the goods once they’ve cleared customs. Making them responsible for import requirements might lead to significant delays in clearing the customs process.

·      Financial Responsibility

Apart from managing customs paperwork and compliance, the IOR is also responsible for paying financial obligations for the payment. If the shipment is flagged for non-compliance and penalties or fines are imposed, it is the IOR’s responsibility to cover the costs.

Meanwhile, the Consignee only pays the agreed purchase price or shipping costs outlined in the contract. They are not liable for compliance-related fees or taxes incurred during the import process. However, if they are obliged to handle these fees, it must be explicitly stated in writing to prevent disputes and additional costs.

Importer of Record vs Consignee: Key Differences You Need to Know! Cover Image 002675

How a Logistics Company in the Philippines Can Help

Partnering with a logistics company would benefit importers looking to grow in the Philippine market. They can serve as your Importer of Record in Manila, Philippines, taking on the legal and compliance responsibilities for shipments entering the country. The top logistics companies have professionals who can handle customs documentation, secure necessary permits, and coordinate with customs authorities. Are you looking to simplify your import process and and ensure compliance with Philippine customs laws? Partnering with Excelsior Philippines can give your business a competitive advantage in the market. We offer strategic insights and customs expertise that can help our clients ensure a smooth import process and that shipments arrive legally and on time.

Excelsior Worldwide Logistics Corp.