A Commercial Importer’s Guide to Clearing Customs: Advice from a Customs Broker

Clearing U.S. Customs for the first time can be a daunting experience for new importers. Between the countless regulations and costly fines, it can seem impossible not to feel overwhelmed. Fortunately, that’s where we can help.

Key Takeaways:

• The customs clearance process consists of four steps: 1. Submission of paperwork for inspection, 2. Payment of all import duties assessed on your shipment, 3. Inspection of your cargo by CBP officials, 4. Release of your cargo by CBP.
• The Importer of Record is responsible for ensuring a shipment is compliant with all federal rules and regulations, and that all duties, taxes, and fees are paid.
• A customs broker is not required in order to clear a shipment through customs, but hiring one is highly recommended.

Whether you plan on importing by air, land, or sea I’ll walk you through the customs clearance process and give you the confidence you need to import into the U.S. successfully.

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What is Customs Clearance?

Customs clearance in the United States is a crucial process that involves securing approval from the U.S. Customs and Border Protection (CBP) to bring your goods into the country.

CBP oversees all imports entering the U.S., so it’s essential to ensure every detail is properly addressed. Key elements importers must focus on include:

• Adhering to all applicable regulations
• Submitting all required documentation accurately and on time
• Paying any applicable duties, taxes, and fees

Navigating the complexities of U.S. Customs can be a significant responsibility, especially for new importers. Therefore, many choose to partner with a Licensed Customs Broker. These professionals are industry experts and can help ensure a smooth entry for your goods into the country.

“The import process can be a complex process with many moving parts. As a new importer, I would highly recommend that you work with a Customs Broker that is willing to hold your hand through your first import,” said Sarah Jeris, a Licensed Customs Broker at USA Customs Clearance. “You will avoid many headaches and potential costly delays if done ahead of time.” 

Do You Need a Customs Broker?

No, you are not required to hire a broker, but it is recommended by CBP. Clearing customs can be extremely complicated and confusing, and even the smallest mistake could be costly. 

Something as simple as missing a paperwork deadline can result in a $5,000 fine. If an important regulation is missed, that could result in more serious delays, or even the seizure of your shipment.

“The biggest mistake that new importers make when importing to the U.S. would be not doing their due diligence on the specific products they are looking to import,” said Jeris, who provides consultations for importers daily. “There are many surprise duties and regulatory requirements out there. If they are not reviewed prior to importing, you could be looking at costly delays when the goods arrive in the U.S.”

It’s worth noting that the importer of record is the party responsible for ensuring that an international shipment is cleared through customs. While that person is typically the purchaser of the goods, it doesn’t have to be. If you’re working with a customs broker, they can assume the role of importer of record and handle these services for you.

Related: Is a Power of Attorney Required for International Shipping?

Responsibilities include ensuring: 

• All fees are paid
• All paperwork is submitted
• All goods are in compliance with federal standards
• Transportation and ownership is arranged ahead of time

All of that being said, if you still want to clear customs without a broker and you’re up to the challenge, handling these duties yourself may save you money in the short term. However, it is likely to cost you much more in the time and effort it requires, and in the worst case scenarios, it could cost you much more in potential fines and delays.

The Customs Clearance Process Explained

As complex as the process seems, gaining entry into the U.S. can generally be broken down into four steps. I’ll explore each of them, step-by-step, below.

1. Submission of Paperwork for Inspection

The entry process starts with the submission of entry summary documentation, which includes the CBP Form 3461, CBP Form 7501 and other necessary invoices and documents. This paperwork is required in order to assess duties, collect statistics, and ensure compliance with all import regulations.

These documents include, but are not limited to:

1. Commercial Invoice
2. Packing List
3. Bill of Lading
4. Customs Bond
5. CBP Form 3461 
6. CBP Form 7501
7. Arrival Notice
8. Certificates
9. Importer Security Filing

2. Assessment and Payment of Duties and Taxes

CBP determines the dutiable status of merchandise based on the entry documentation that you submit. The duties and taxes owed on your shipment can vary depending on:

• The value of your goods
• The number of products being imported
• The makeup of the goods
• The country of origin
• Free trade agreements

Any commercial freight will also require payment of a Merchandise Processing Fee, which is 0.3464% of the value listed on the commercial invoice. If imported into an ocean port of entry, you’ll also owe a Harbor Maintenance Fee of 0.125% of the shipment’s value.

CBP requires all duty payments be paid using U.S. currency in the form of a personal check in the exact amount, a government check, money order, or traveler’s check, or, at some ports of entry, a credit card. 

Related: Taxes on Imported Goods: A Guide to Tariffs, Duties, and More

3. Inspection of Your Cargo by CBP Officials

The shipment may be selected for examination to verify numerous aspects, such as the value of goods for customs purposes, their dutiable status, correct invoicing, and compliance with marking or labeling requirements. This step is crucial to determine if the goods meet legal standards, such as those set by other partner government agencies.

An intensive inspection, though less likely, may be conducted to check for prohibited items and narcotics, especially since cargo shipments are commonly used for smuggling. CBP officers thoroughly examine containers, pallets, boxes, and the actual products.

Related: Understanding Customs Examinations

4. Release of Your Cargo by CBP

If the goods meet all regulatory and legal standards without any violations, and after the necessary duties have been paid, the shipment will be released to you, your broker, or an authorized agent.

It’s worth noting that while these steps generally hold true for most international shipments, every import is unique, and the customs clearance process is not the same for everyone.

Documents Required to Clear Customs

There are a number of different documents required to import your commercial shipment. I’ve listed some of the most common and important paperwork below.

Related: What Documents Do I Need To Import and Export?

1. Commercial Invoice

A commercial invoice is provided by the supplier to the importer, detailing the payment required for the products shipped. It itemizes each product, their individual and total costs, and serves as proof of the transaction. 

This document is crucial for CBP to assess the value of the goods and includes additional details like cargo size, weight, country of origin, and contact information of both the shipper and consignee.

2. Packing List

Unlike the commercial invoice, the packing list details the items in the shipment without showing costs. This list is created by the importer, and informs parties such as banks, brokers, and transport agents about the shipment’s contents. 

This list is attached to each shipping container, providing customs agents with information about the contents and weight of the products. It’s also essential for issuing a Bill of Lading, another critical customs document.

3. Bill of Lading

The Bill of Lading serves multiple functions, including acting as a contract between the shipper and consignee and serving as a receipt of the shipment. This document contains: 

• The consignee’s contact details
• The and shipper’s contact details
• Third-party billing information
• Delivery and special instructions
• Description of the products
• Record of any hazardous materials present
• Cash-on-delivery (COD) amount due

4. Customs Bond 

A customs bond guarantees that all duties and taxes will be paid to CBP, with a surety company covering any missed payments. It’s required for imports over $2,500 USD or regulated items, regardless of value. 

There are two main types: single entry bonds cover one shipment at a designated port, and continuous bonds cover multiple shipments for a year across any U.S. ports of entry.

Related: The Complete Guide to U.S. Import Bonds

5. CBP Form 3461

CBP Form 3461, also known as the Entry/Immediate Delivery form, is used to allow the importation of goods into the United States under formal entry procedures before the final determination of classification and duty rates. 

This form is submitted to CBP electronically and crucial for facilitating the swift release of the cargo upon arrival, pending a more detailed review and final duty assessment.

6. CBP Form 7501

CBP Form 7501, also known as the Entry Summary, is used to determine the final customs duties, taxes, and fees applicable to imported goods entering the United States. 

This includes the classification and valuation of the merchandise according to the Harmonized Tariff Schedule of the United States (HTSUS). It also finalizes the customs clearance process by summarizing the total entry information after the goods have been reviewed and classification decisions have been made.

7. Arrival Notice

This notice is issued to inform the consignee of the shipment’s arrival at the port of entry, including any additional fees and special pick-up instructions, which helps streamline the pickup process and port operations.

8. Importer Security Filing ISF

For ocean freight, an Importer Security Filing (ISF), or “10+2”, must be submitted to CBP 24 hours before the cargo leaves the originating country, detailing information about the cargo. This requirement is specific to ocean vessel shipments.

9. Additional Documentation

Depending on what’s being imported, various permits, certificates, and other entry documents may be required. For example, importing food products necessitates a prior notice form filed with the FDA, and electronics may require product testing and FCC certifications.

How to Clear Customs with Air and Ground Freight

While ocean transport remains the most popular method of shipping for commercial imports into the U.S., containers can also enter by way of land or air. The procedures required for air and ground cargo are similar to those at an ocean port of entry, with some minor differences.

Air Cargo

Clearing air cargo works similarly to shipments imported by sea or land. Obviously, transit times will be shorter due to the higher speed of air travel, so that will need to be kept in mind when submitting timely paperwork and arranging for pickup once your shipment clears.

As opposed to ocean freight, shipments imported by air freight do not require an ISF Filing. Otherwise, many of the same aspects of the process remain the same, with minor changes to some of the documentation (i.e. airway bill instead of bill of lading, or air pre-alert instead of an arrival notice).

Additionally, air freight may also have stricter regulations on the shipment of hazardous materials. Participating carriers must also submit required pre-arrival cargo data as part of the Air Cargo Advance Screening Program.

Ground Freight

As with air freight, ground shipments do not require the importer to submit an ISF to clear U.S. Customs.

When a truck or trailer reaches the U.S. border, customs officers will inspect the cargo just as if the shipment had arrived at a port, ensuring compliance with rules and regulations, and payment of any duties and taxes. Once a Customs official provides approval, your ground shipment will be allowed entry.

Get Help Clearing Customs with USA Customs Clearance

Clearing U.S. Customs with cargo is not a part of the import process that you want to leave to chance. Minimize delays, gain peace of mind, and get the assistance you need to make your mission a success.

“Find a customs broker who prides themselves on their service. The right customs broker can simplify and streamline the complex import process into terms that the first time importer can understand,” said Jeris.

No matter what step of the import journey you’re at, USA Customs Clearance is here to help. Fill out our brokerage request form to help us determine how best to serve you. Already know what you need? Choose from our products and services to start your import journey:

• Schedule a 1-on-1 Consulting Session
• Register as an Importer of Record
• Obtain a Customs Bond

Still have questions? Give our team a call at (855) 912-0406 and get the help you need to get started today.

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Frequently Asked Questions (FAQ)

How Long Does it Take to Clear Customs?

Your cargo will typically be released within 24 hours, but depending on the circumstances, it might take a week or even longer. Delays often occur if the cargo requires a detailed customs examination, or if there are issues with the paperwork being incomplete or incorrect. Additionally, items like pharmaceuticals or firearms face more stringent checks, which can prolong the clearance process.

How Much Does Customs Clearance Cost? 

In addition to the duties and tariffs owed on your shipment, CBP charges a Merchandise Processing Fee (MPF) on all formal entries. This fee is equal to 0.3464% of the value of your goods, however, it cannot be less than $31.67, or greater than $614.35. A Harbor Maintenance Fee (HMF) will be charged if imported via ship. You’ll also need to account for the cost of a customs bond, and any additional permits or certificates.

What Happens After You Clear Customs?

Once all relevant authorities, including CBP and other PGAs, have cleared your cargo, it will be released to the importer of record. After clearance, the goods are free to move on to their next destination, which could range from a local distribution center or directly to the final consumer.

What Happens if Cargo is Not Cleared by the Importer?

Once the cargo reaches the port of entry, the importer has 30 days to clear it. If not cleared within this period, CBP will deem the cargo unclaimed or abandoned. Various issues such as disputes among the shipper, importer, and consignee, insufficient funds for clearance, or damage to the cargo might prevent it from being cleared. CBP disposes of abandoned cargo to conserve space, money, and time.