June 7, 2018
A challenge is often shared by first time importers looking for the best importing tools for beginners. How do you best understand the process of an international shipment? There are many processes that it must go through before delivering to the door. It is common to wait until the shipment is already in transit.
Importing goods is a unique process and most people never need to understand the details. A little preparation in advance and using the best U.S. importing tools for beginners will go a long way to help your shipment clear and deliver as soon as possible.
Then begin thinking about the customs clearance. Sometimes there are no advanced plans made for the delivery charges or duties and taxes. Then the importer realizes the complexity needed to import the shipment. The excitement about the new commodity they have purchased can soon turn to concern.
The importer does not have to go through the process alone. The vast majority of importers use outside brokers or agents to work with U.S. Customs on their behalf. There are some fundamentals about importing that everyone needs to know.
Most commodities do not enter the country by courier service. We all enjoy the convenience of receiving envelopes and small packages overnight. In most cases we are not required to do anything except sign for the package when delivered. But commercial shipments do not enter the country the same way. Due to the size and value commercial shipments must clear U.S. Customs before they deliver. U.S. Customs requires the importer be responsible for complying with all U.S. laws and regulations. The importer is sometimes called the consignee, or importer of record. By law these requirements are not met by the shipper overseas or the freight forwarder. The importer is always responsible for these regulations. This does not change regardless of who is paying for the shipping charges. This is a serious need that demands serious attention. Importers are often tempted to look for shortcuts. Or only take part in a limited amount of the clearance process. U.S. Customs can, and often does, impose large fines and penalties for failure to meet every rule. Ignorance of the regulations is not an acceptable excuse.
Many commodities are also subject to tax or duty. The amount of tax is dependent on the actual commodity and value. These charges are besides the price paid for the commodity and the price paid for shipping the goods. The consignee will be responsible to arrange the payment of the tax before delivery.
Incoterms are the trade terms used to determine ownership of the goods. They define when the transfer from the shipper to the consignee occurs. They also identify who will be paying for each part of the transit. There are thirteen different incoterms that fall under these four basic categories.
E codes (Ex Works): The consignee pays all charges from the shipper’s door to the consignee’s door.
F codes (FCA, FAS, and FOB): The shipper pays only to a named point, usually within the origin country. The consignee pays the remaining charges.
C codes (CFR, CIF, CPT, and CIP): The shipper pays the charges to the destination port. The consignee pays the remaining charges.
D codes (DAT, DAP, DDP, DES, and DEQ): The shipper pays from door to the consignee’s door. This may or may not include duties and taxes.
The specific Incoterm used is very important. It requires both the shipper and consignee agreement before the shipment moves. Customs bond agents can help you determine which incoterm best fits your needs.
If you still need to know more about Incoterms, our team can help you. Check out our article "What Are Incoterms?" to learn more about this important importing detail.
There are many documents that may go with the shipment. U.S. Customs requires some documentation for all shipments. Some shipments need more. This depends on the commodity or where the shipment originates. There are other optional documents that contain useful information about the shipment. Here are a few of the most common.
Power of Attorney: A broker can process most of the interactions with U.S. Customs. But as already discussed the consignee is still the legal importer of the goods. A POA must be on file for us to act on your behalf.
Bills of Lading: These are the contracts for moving the shipment. The most common is the house bill of lading, or BOL. This is the contract between the shipper and consignee. The master bill of lading is the contract between the freight forwarder and the carrier. This could be an airline or cargo ship line.
Commercial Invoice: This is a common document for all commercial sales. It is often abbreviated CI. It is important that the information on the commercial invoice is complete. This is especially true for international shipments. The U.S. Government uses this information for security reasons. But it is also used for taxation purposes and trade statistics. Accuracy is essential. This document needs to show the shipper, manufacturer, importer, sold to party, country of origin, description of commodity, currency used, number of pieces, unit price and total price with the terms of sale.
Packing List: This document contains the same information as the commercial invoice. The primary difference is that it does not include the commercial value. Packing lists also sometimes contain more detailed information about the commodity. The commercial invoice may contain only a general description.
Other documents will go with certain shipments. A shipment of hazardous materials will need a dangerous goods declaration. Some commodities must have an import license. Customs bond agents will work with you. Together we will determine if your shipment will need more documentation.
Do you need a license to import into the United States? Importing a commercial shipment the first time can seem a bit overwhelming. As the many layers of the process become revealed it is easy to become frustrated. But with a little preparation in advance there is no need to panic, even when importing a dog. It is best to contact us today as soon as arrangements begin. We will coordinate with you and U.S. Customs to arrange the most efficient import possible.