Updated on March 31, 2023
In today's globalized economy, international trade is critical to business success. However, importers often face numerous challenges while transporting their goods across borders due to the intricacies of customs clearance.
This article delves into the customs clearance process, highlighting its importance and the common challenges importers face. Furthermore, it explores the revolutionary role of ocean freight marketplaces in simplifying the customs clearance process, transforming the international trade landscape, and ensuring businesses have a seamless and cost-effective shipping experience.
Customs clearance refers to submitting declarations for goods to the Customs authorities upon their entry or exit from a country. This process can be undertaken by individuals or businesses alike. The scope of customs clearance encompasses imported or exported items, personal belongings, and commercial consignments.
The objective of customs clearance is to confirm that all relevant import duties and taxes have been settled and that the goods adhere to all applicable regulations. To complete the customs clearance process, businesses or individuals must supply comprehensive information about the shipment, encompassing its value, origin, destination, and contents.
Additionally, they may need to provide supplementary documentation, such as invoices or bills of lading. After the customs officers have successfully cleared the shipment, it becomes eligible for delivery.
Given the numerous regulations and required documentation for importers to transport their goods from one location to another, certain aspects may be inadvertently neglected.
Below are six frequent customs clearance challenges encountered by importers:
Understanding your Harmonized System (HS) codes is crucial for accurately classifying your imports.
The Harmonized System is an internationally standardized system for classifying and identifying traded products. It is crucial to understand HS codes to classify your imports accurately.
For novel goods, research may be necessary to pinpoint the appropriate classification. Partner with a customs broker if you're uncertain about applicable HS codes for your imports. This will help you avoid costly penalties and delays by ensuring proper classification on documentation.
Quick Tip: Utilize HS Code Lookup for speedy HS code identification.
U.S. regulators enforce Anti-Dumping (AD) and Countervailing Duties (CVD) to maintain a fair market for subsidized or below-market value goods.
These are trade enforcement mechanisms that protect domestic industries from unfair trade practices by foreign companies. Anti-dumping duties counteract the import of goods priced below their normal value, while countervailing duties offset the effects of foreign government subsidies on imported goods. Import-related documents should be retained for at least five years, but AD/CVD compliance records may require a longer storage period. This ensures that businesses can provide necessary documentation if authorities request, thus avoiding fines, duties, and penalties.
Double-check your goods' AD/CVD compliance to prevent severe misclassification penalties.
Abide by partner government agencies' regulations for imports concerning American consumer health and safety. Compliance with PGA licensing and regulation is mandatory, as customs and PGAs must approve all imports.
These agencies include:
For imports featuring logos or trademarks, provide commercial licensing documentation proving your supplier's legal use of those elements. Non-compliance with intellectual property (IP) laws may result in the seizure, destruction, or forced return of goods at your expense.
For labeling, it is critical to label goods clearly in English. Include specific labels for certain goods, such as PPE-related or medical products, clear usage directions, licensing info, or expiration dates.
For packaging, the majority of carton shipments are assembled on pallets at the source due to the following reasons:
Palletizing shipments at the origin is more cost-effective for imports into the U.S.
Palletized cargo is simpler to manage, as loose cartons can cause product loss or damage during transportation.
Selecting the appropriate pallet type is crucial for customs clearance. Ensure your goods are correctly palletized using either plastic or heat-treated, ISPM-15 certified wood pallets, which are accepted in the U.S. (to prevent potential harm to the American forestry industry from wood-borne fungus). Failure to comply may lead to goods being returned at your expense.
Retain all import-related documents for at least five years, with AD/CVD records requiring longer storage. Fines, duties, and penalties may arise from failure to provide documentation, so keep your files organized and accessible.
Non-compliance costs escalate based on severity, from negligence to gross negligence to intentional fraud. Additional expenses associated with non-compliance include:
Delays and storage fees
Hindered market entry for products
Expenses for returning or destroying goods
Stay informed and confident in minimizing risks and ensuring smooth importation into the U.S. or work with an ocean freight marketplace to simplify customs clearance and related compliance requirements.
An ocean freight marketplace is a game-changer in the international logistics shipping industry.
It connects shippers and buyers, breaking down inefficiencies and improving transparency while allowing real-time comparison of options and prices. Ocean freight marketplaces have become a one-stop solution for businesses by integrating auxiliary services like trade finance, insurance, and customs clearance.
These marketplaces have transformed international trade by offering a seamless shipping process while simplifying the once-complex, time-consuming customs clearance process, making it more efficient and user-friendly for businesses involved in international trade. These innovative capabilities streamline the process, help avoid delays, and ensure a smoother shipping experience.
Manually searching for trusted and reliable customs brokers can be daunting and time-consuming. Ocean freight marketplaces alleviate this burden by offering customs clearance services directly within their platforms. By doing so, businesses can rest assured that their shipments are handled by highly qualified, thoroughly vetted brokers. Often, the chosen freight forwarder will either manage customs themselves if they are a certified broker or collaborate with a trusted partner with whom they have an established working relationship.
Customs clearance involves a considerable amount of paperwork being exchanged between multiple parties, which can be overwhelming for new or infrequent shippers, as evidenced by the aforementioned customs clearance challenges list.
Ocean freight marketplaces address this challenge by digitizing documents and automating information sharing between relevant parties. Real-time updates are provided, ensuring all required paperwork is filed promptly to minimize potential delays upon the shipment's arrival.
An ocean freight marketplace also serves as an additional layer of monitoring for customs documentation. Although not legally responsible for customs filings, these platforms keep a close eye on documentation progress and can identify potential issues that may cause delays.
By working proactively with forwarders and customs brokers, freight marketplaces help address these concerns before they escalate into more significant problems.
By integrating these valuable features, ocean freight marketplaces, like FreightMango, are revolutionizing the customs clearance process. Businesses can now navigate international trade more easily and efficiently by simplifying broker selection, streamlining processes, and offering improved oversight.
FreightMango is a valuable partner for businesses seeking streamlined customs clearance processes without acting as licensed customs brokers. The marketplace expertly connects shippers to customs brokers and assists in the process. With its comprehensive services, flexible system, and user-friendly platform, FreightMango ensures a hassle-free experience, making international shipping more efficient while maintaining compliance with customs regulations.
Sign up with FreightMango today for a seamless and cost-effective solution to your shipping needs.