How to Clear U.S. Customs with Cargo

If you want to know how to clear U.S. customs with cargo, you probably don’t know where to start. There is so much information out there that it can be difficult to make sense of it all. The Customs and Border Protection (CBP) regulates every piece of cargo that comes into the U.S., and they have created a strict set of regulations to follow. The customs clearance process might seem daunting now, but in time you can become an import professional.

If you want to clear U.S. customs with cargo, you’ll need to submit documentation like CBP Form 3461 and CBP Form 7501. If your cargo is coming in on an ocean carrier, you will also need to submit an ISF Filing. A customs broker is not required for importing, but they can make the process easier even for experienced importers.

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Documents Required for Import Customs Clearance in USA

Getting your cargo through customs can be a long, confusing process. There are so many things to keep track of, specific regulations, and dozens of documents to fill out—and on top of that, mistakes could cost you thousands! How can you prepare to clear us customs with cargo, and avoid running into trouble with the CBP? 

Well, there are a number of different documents that you’re going to need to know about to get your shipment through customs safely. Here are the most important ones:

• Commercial Invoice
• Packing List
• Bill of Lading
• Customs Bond
• CBP Form 3461
• CBP Form 7501
• Arrival Notice
• Commodity Specific Documentation
• Importer Security Filing

If you're working with a Customs Broker, you'll also need to complete a Power of Attorney (POA) for them. Many importers are surprised by this requirement. To learn more about this, check out our article Is a Power of Attorney Required For International Shipping?

Commercial Invoice

A commercial invoice is a document given to the importer from the supplier, in order to receive payment for the product. It lists each item included in the shipment, and what the individual and total costs of the transaction were. It serves as evidence of the transaction, and it is one of the primary documents that the CBP uses to determine the value of the shipment. 

The commercial invoice also contains other important information that is valuable to the CBP, like the size and weight of the cargo, the country of origin, and the contact information of the shipper and consignee.

Packing List

Like the commercial invoice, the packing list is also a list of the items being shipped, but it does not disclose the cost of each item. It is also created by the importer instead of the supplier, to inform anyone that needs to know about what the shipment contains.

Many copies of the packing list should be printed out, to distribute to your bank, your broker, your transportation agents, and any other individuals that may need a record of your shipment. A packing list will also need to be attached to each individual shipping container, to inform the customs agents about the contents of the container, the weight of the products, and any other important information. 

A packing list is required in order to get issued a Bill of Lading, which is another important customs document.

Bill of Lading

A Bill of Lading, often abbreviated as BOL, is a document that serves many purposes in the customs clearance process. It serves as proof of the contract established between the shipper and consignee, evidence of responsible parties, and a receipt of the shipment. In addition to that, it is a record of all the most important information, all in one place.

This document contains:

• The consignee’s phone number and address
• The shipper’s phone number and address
• Third party billing information
• Delivery instructions
• Any special instructions
• A list of the products and their descriptions
• A record of any hazardous materials in the shipment
• COD amount due

Customs Bond 

A customs bond is essentially like an insurance policy, that guarantees the CBP that all duties and taxes will be paid. If the importer suddenly does not pay all or some of the duties, then the third party surety company that issued the bond would step in to pay on their behalf. Customs bonds protect the CBP and ensure that they get paid no matter what.

Some shipments can get away with not having a customs bond, but only if they are worth less than $2,500 USD. Anything more expensive than that must have a customs bond to cover it. In addition to that, if your particular import falls under the jurisdiction of another government agency, like food, medicine, or electronics, then you will need a customs bond regardless of what the shipment is worth.

There are two main types of customs bonds that you can get.

1. A single entry bond covers only a single shipment at only one port of entry, designated by the importer. The value of the coverage must be at least equal in value to the cost of the shipment, but if the product is regulated by another agency, then the coverage will need to be worth three times the value of the shipment. 
2. A continuous bond covers multiple shipments over the course of a year, at any of the U.S. ports of entry. The coverage of a continuous bond is always $50,000, so if you plan to import more than a few times, it ends up being a much better deal than the single entry bonds. 

Customs Forms

When your shipment arrives at the port of entry, you should have a completed customs release form, CBP Form 3461, to electronically submit to the CBP. This document contains a lot of information like the HTSUS codes for your products, your BOL number, and much more. It is intended to give the customs agents inspecting your cargo as much information as possible about your particular shipment. This allows them to decide whether to release your shipment or designate it for further inspection.

Once the customs agents decide to release your shipment, you will have only ten days to submit the next document: the customs entry form. This form, CBP Form 7501, is a much longer form that must be included with the payment to cover the duties and taxes on the import.

Arrival Notice

An arrival notice is a document that is issued by the shipper, to notify the consignee that their cargo has arrived at the port of entry. It may contain information about additional fees or any special pick-up instructions, to ensure that the consignee is prepared for everything upon arrival.  

This document also helps to speed up the customs clearance process, by informing the consignee of exactly when their shipment can be picked up. It ensures that unclaimed cargo is not taking up space in the port of entry, and the whole operation can continue to move smoothly and quickly. 

Additional Documentation

Depending on the product you intend to import, you may have a multitude of additional permits and documents to apply for. For example, if you want to import food products, you will need to file a prior notice form with the FDA, and provide documentation to prove that the food facilities utilized in manufacture and storage are registered. Electronics will require product testing and approval from the FDA, and certifications from the FCC. 

If you aren’t sure whether your import requires additional documentation, open the chat at the bottom right side of the screen, and we can give you the answers you need. 

Importer Security Filing ISF

If your cargo is coming in on an ocean vessel, you’re going to need to submit information about your shipment to the CBP 24 hours before the shipment departs from its country of origin. This does not apply to other carrier modes. This is known as the Importer Security Filing (ISF), or “10+2.” 

The 10+2 comes from the full name of the process, which is “Importer Security Filing and Additional Carrier Requirements.” There are 10 importer security filing requirements, and 2 additional carrier requirements.

The things that need to be recorded in the ISF are:

1. Seller
2. Buyer
3. Importer of Record Number
4. Consignee Number
5. Manufacturer or Supplier
6. Ship to Party
7. Country of Origin
8. HTSUS Number
9. Container Stuffing Location
10. Consolidator

The additional carrier requirements are:

1. Vessel Stow Plan
2. Container Status Messages

Failure to comply or submit an accurate ISF will result in serious delays, monetary penalties of $5,000 per violation, and increased inspections on your shipment. 

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How Do I File ISF with U.S. Customs?

When submitting an ISF, most importers choose to utilize the assistance of a customs broker. The broker can access either the Automated Broker Interface (ABI) or the Vessel Automated Manifest System (AMS) to input the information and make any necessary modifications to the documents. 

You can, however, submit your ISF yourself, without the assistance of a customs broker. In order to do this, you must first make sure you have an Automated Commercial Environment (ACE) Secure Data Portal Account, which you can apply for on the CBP Website. Once you have an ACE account, you must register your Importer ID number with the CBP, by filling out the CBP Form 5106, or going in person to a U.S. port of entry. 

When everything is in order and you are deemed eligible for the ISF portal, you will be able to manually input your information into the ACE portal. However, importers can submit no more than 12 ISF forms in a single year this way. If you need to import more than that, a professional customs broker may be your only option. 

What Happens if Cargo is Not Cleared by Importer?

Once the cargo has arrived at the port of entry, the importer must clear it for release within 30 days. If the cargo is not cleared by the importer within that time frame, it will be considered unclaimed or abandoned cargo by the CBP. 

There are many reasons why cargo may go uncleared by the importer. There could be a disagreement between the shipper, importer, and consignee, or there might not be enough funds to complete the clearance process. If the cargo was damaged, there would also be little incentive to try to get it cleared and picked up. Regardless, customs has to get rid of the abandoned cargo in order to save space, money, and time. 

Once the 30 days are up and the importer or consignee has not come forward to claim the import, they lose the rights to the cargo. Customs then has the right to auction the cargo off, and use the sales to cover the costs incurred by storing and inspecting the abandoned cargo. 

If the cargo is unsellable because of some violation, the shipment could be re-exported back to its country of origin instead. If the cargo is damaged, customs will most likely destroy it completely or dispose of it in a landfill.

What is Considered Commercial Merchandise for U.S. Customs?

There are many ways of determining if a shipment is going to be considered commercial merchandise for U.S. customs. Even if your shipment isn’t technically for commercial use, customs may require you to import it under the commercial merchandise regulations depending on several factors:

• Quantity: If you are importing a large number of the same kind of item, it’s going to look like commercial goods.
• Type: Depending on what your item is, customs may require that it be classified as commercial. For example, industrial machinery will always be classified this way.
• Cost: If the item is valued at over $2,500, it will need to be treated as commercial goods.
• End Use: Even if the product is going straight into the hands of its final customer, if it is used in a business, it has to be imported as commercial goods. 
• Intent to be Sold or Distributed: This shouldn’t come as a surprise, but if you import something with the intent to resell it, then it clearly must be considered commercial merchandise.

In the end, the CBP is the only party that gets to decide what is personal or commercial. They get the final say, and even if you claim your shipment should not be considered commercial, the CBP may require a formal entry anyway.

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Customs and Border Protection Cargo Examinations

The CBP is responsible for regularly inspecting cargo to ensure that all importers are compliant with all applicable regulations. They prevent unsafe, unlawful, defective, and fraudulent goods from entering the U.S., and protect the American people from foreign diseases. 

Customs Holds

If your shipment is randomly selected for inspection or examination, it is moved to a different location, called a Centralized Examination Station (CES), where the shipping containers will be unloaded for the product to be examined. Each item in the container is inspected to make sure it is not defective, it is what the invoice says it is, and that there are no illegal substances concealed within it. The shipment is reloaded again after the examination is complete, and it is returned to the port to be picked up by the importer or consignee. 

It can be a surprise when your shipment is selected for inspection. Not only are importers expected to pay for these random inspections and the transportation fees themselves, but they also must deal with the consequences of their shipment being delayed.

Container Security Initiative

As a result of the attacks on September 11, 2001, the CBP began what’s known as the Container Security Initiative (CSI) as part of their anti-terrorism efforts. The purpose of the program is to prevent terrorists from utilizing maritime containers to ship weapons into the United States. 

CBP officers get stationed at foreign locations around the world, in order to prescreen freight before it even departs for the U.S. In order to ensure that the trade process is not significantly slowed or interrupted, they utilize non-intrusive inspection and radiation detection technology, which allows them to detect if a shipment is dangerous without ever opening it.

As part of the CSI, now 80% of all incoming maritime shipments are prescreened by the CBP before reaching the U.S. port of entry.

U.S. Customs Inspection for Containers

A study in 1985 revealed that a shocking 25% of intermodal shipping containers were in violation of hazardous materials regulations. As a result, intermodal shipping containers coming into waterfront ports are now subject to inspection under the standard Container Inspection Program, to ensure that hazardous materials are handled safely and correctly. The U.S. Coast Guard and the CBP collaborate to ensure compliance for all intermodal shipping containers.

The inspection procedures include:

• Comparing the contents of the shipment to what the shipping papers say
• Ensuring the weight of the shipment does not exceed the maximum weight tested for on the Safety Approval Plate
• Inspecting the outside of the container for major or structural defects
• Ensuring the container is properly labeled with the appropriate hazardous materials placards
• Inspecting the interior of the container for major or structural defects
• Ensuring that there are no additional hazardous materials that are unaccounted for
• Ensuring all packages and products are labeled appropriately
• Ensuring all packages and products are securely stowed in the container so as not to shift around in transport
• Ensuring all incompatible materials are kept away from each other
• Ensuring the hazardous materials are contained appropriately according to their specific requirements

Unless there is an obvious violation, like a leaking or damaged shipping container, containers are selected at random for investigation.

Do I Need a Customs Broker?

Although a customs broker may be required for specific commodities, that is not the case for most imports. However, even when they are not required, they can be a huge asset. They can handle all of the paperwork on your behalf, and their years of experience can assure you that nothing will be filed incorrectly. 

If you want to learn more about our customs brokerage services and what a customs broker can do for you, we're here to help. Give our team a call at (855)912-0406 and we'll answer all of your questions.