Demystifying International Shipping and Customs Clearance

Courtesy of Rush Order, Inc.
in cooperation with
World Asia Logistics, Inc.

Avoid customs clearance delays for inbound inventory
Avoid complaints from your international customers
Avoid the misconception that international shipping is too time consuming or costly

Attention to the following details may drastically reduce your shipments’ time in transit and related costs associated with import and export delays.

Through a mutual partnership, Rush Order, Inc. and World Asia Logistics, Inc. present an end to end supply chain solution. From the overseas manufacturer’s door, to the end customer’s door, Rush Order and World Asia Logistics have developed a seamless supply chain model.

If you have questions or would like assistance with any of the following items, please do not hesitate to contact us by replying to this email or calling (800) 522-5939.

Preparation

Commercial Invoice: Include three copies of the commercial invoice in any international shipment. Always use the purchase price of the goods in the currency in which they were purchased. If the goods are not for sale, use the value of the goods. Feel free to contact us anytime for a sample of a properly prepared commercial invoice or assistance on determining value.

Packing list: Make sure your packing list matches the data listed on the commercial invoice and outer shipping container (carton / pallet) markings.

Labeling: Make sure that any carton labels and pallet tags match the information on your commercial invoice.

Certificate of Origin: If available, include this document with your commercial invoice for customs review.

Harmonized Tariff Code: The Harmonized Tariff Schedule (HTS) is a numbering system currently used by over 145 countries that engage in international trade for the purpose of counting imports, exports, and application of duties. Individual duty rates are often politically driven and legally enforceable as a means of government revenue production and / or protection of selected domestic industries. Using the correct Harmonized Tariff Code is a major element of a properly prepared international shipment.

Export Control Classification Number (ECCN): An ECCN is an alpha-numeric classification used in the Commerce Control List to identify items for export control purposes. It is different from the HTS nomenclature, which is used to determine import duties. All ECCNs have 5 characters. Examples include 1A001, 4B994, and 8D001. There are 10 categories on the Commerce Control List. The first number of the ECCN identifies the category to which it belongs, for example, 1 = Nuclear Materials Facilities and Equipment, 4 = Computers, 9 = Propulsion Systems, Space Vehicles and Related Equipment.

National Motor Freight Classification (NMFC): The NMFC Guide is a list of all items, in theory, that could possibly be transported by a common truck carrier. Each item has a corresponding class determined by storability, density, handling characteristics, and value of the item being shipped. While customs officials may or may not require this information, almost all domestic and international truck carriers will require it on the BOL. Proper designation will ensure correct shipment pricing and avoid transit delays.

Avoid Common Mistakes

Expect Change: Changes in national security and foreign policy frequently lead to changes in regulations. Short supply is also a common catalyst for changes in regulations.

Hire the right brokers and agents: You are responsible for compliance with all US import and export laws including violations that your agents commit while carrying out import and export operations on your behalf. Hiring the right firm the first time may save you more than you could imagine.

Avoid unintentional violations of the Foreign Corrupt Practice Act: The FCPA prohibits American companies from making corrupt payments to foreign officials for the purpose of obtaining or keeping business. Both direct bribes and bribes paid on your behalf by an intermediary can jeopardize your standing.

Educate yourself on controls: Do your part to understand the import restrictions and controls on your product. For example, quotas, visas, and import licensing requirements are frequently established for encrypted software, clothing, food products, and chemicals. Other examples include prohibited goods, such as certain types of liquor, x-rated reading material, certain prescription medicines, endangered animal articles, and food products. Know these controls before you ship.

Verify any special country specific requirements with your customer and/or freight forwarder: These may include…

• Marking requirements
• Labeling requirements
• Product specifications, product testing requirements required to accompany shipment
• Packaging requirements
• Trade documentation requirements
• Foreign authentications and certification laws / regulations

Educate yourself on foreign parties:

• Know your Customer – Who is the "end user" and what is the "end use"?
• Proliferation Screening
• Sanctioned Parties (Denied Parties, Special Designated Nationals, etc.)
• Diversion Risk
• Embargoed Countries

Understand Incoterms: Fully understand the costs, responsibilities, and obligations that accompany the use of a specific Incoterm. Incoterms are internationally accepted commercial terms defining the respective roles of the buyer and seller in the arrangement of transportation and other responsibilities. They also clarify when the transfer of ownership of the merchandise takes place. Incorrectly defined incoterms could lead to overpayment or underpayment, as well as understated or overstated customs declarations thus leading to possible legal ramifications.

Retain your records: As a general rule of thumb, any and all documents, contracts, cancellations, etc. should be kept on file for a minimum of five years.

For additional assistance on customs clearance, freight forwarding, or regulatory compliance, please contact us at 1-800-522-5939 or 408-848-3525 or info@rushorder.com. Both Rush Order and World Asia Logistics are happy to assist you any way we can.

Subscribe to our RSS Feed to view new articles as they become available.