Your shop is ready to take off. Your customers across the globe are filling up their e-carts with your one-of-a-kind products. However, getting those products from your HQ to your customer’s doorstep is a bit more complicated than licking a stamp and slapping it on a package. You’ve got to go through customs.
If you’re ready to sell your products to buyers outside your home country, the customs clearance process is an important concept to understand. No matter your destination, customs clearance refers to the successful movement of goods through a customs office or border authority.
Often, people use “customs clearance” to refer to the arrival of goods into a country (import), but customs officials and processes exist before the cargo can leave its home country (export) as well.
The question of “What does customs clearance mean?” can be summed up as follows: the government has given you the green light for your shipment to enter the country and for you to move your parcel down the line to the final destination—the warehouse facility.
Customs Clearance For Imported Goods
So, what is the customs clearance process and what can a seller expect at this point in the shipping journey?
The customs procedure breaks down into four steps:
- Arrival at the port,
- Inspection of documentation,
- Inspection of cargo,
- And calculation and payment of duties, tariffs, and taxes.
The importance of having correct customs paperwork for your specific goods completed correctly can’t be understated. So, we’re going to state it again—completing the right customs paperwork filled out properly is extremely important. (See? It really can’t be understated).
What Does Customs Cleared Mean?
Now that we have a handle on customs clearance, let’s talk about the next question in this process: what does customs cleared mean? There is a distinct difference between the two terms. Having customs clearance means that your international shipment has successfully passed the steps outlined above in either the export or import country and been released by the customs authority. Customs cleared is the stamp of approval assigned to a package once it has been released by the customs department.
Your package is now free to proceed to the next stage of its journey or delivery.
Just to recap:
- Customs clearance is a process a parcel has to undergo once it arrives into a country.
- Customs cleared means your parcel has undergone the necessary customs inspections and the duty fees have been paid and calculated. The international shipment is then free and clear to move on to its next destination.
Does Customs Check Every Package?
In short, yes. Although the exact process differs from country to county, it is always best to be properly prepared.
For example, at the John F. Kennedy International Airport, the U.S. Customs and Border Protection (CBP) has a multi-tier process to tag which packages to open and fully inspect.
Their inspection to-do list includes:1
- Cross-check shipment data with Homeland Security, the FBI, and the DEA,
- Have detection dogs sniff out drugs,
- And visually review all packages with an x-ray scanner.
If your shipment arrives damaged, that may also signal full inspection before clearing customs. A good rule of thumb is to package and document your shipments with the expectation that they will be thoroughly inspected during the customs process.
How Long Does Customs Clearance Take?
As with any process that deals with safety and regulations, customs clearance can take some time. The entire process can take anywhere from a few hours to a few weeks. The amount of time depends on several factors, including:2
- The regulations of the “from” and “to” countries,
- The type of cargo,
- Whether or not the imported goods are controlled substances,
- And how efficient your customs broker is.
Some countries have agreements with others that allow for quicker clearance times. Meanwhile, others have quite the opposite.
For example, did you know that if you’re importing something from China to the United States, it’ll take longer than importing something from Canada to the United States? You might think, “Sure, that makes sense, China is on an entirely different continent!” But geography isn’t the only thing that comes into play here.
Due to China’s stricter regulations and an ongoing trade war with the United States, clearance times are much longer than they would be if you were importing something from Canada.
What Duties Have To Be Paid To Clear A Shipment At Customs?
If you’re shipping products across the world, you’re probably familiar with the long list of taxes and fees you have to pay to get your product from point A to point B. Included on that list is something called duties. Most countries require that the importer pay duties (also called tariffs) and taxes on their imports.
Rates vary from zero to 20% or more, depending on the type of cargo and the country’s policies. Different types of goods are subject to different rates, with the cost usually calculated by weight, volume, or a combination of both.
The best way to estimate duties is by understanding and using the Harmonized Tariff Schedule (HTS) for the country in question. 3 But your focus should be on creating and selling your wares—not on learning facts and figures outside your wheelhouse. Give your business its best chance by focusing on your strengths and letting an advocate and an expert handle the duties estimate. If you’re shipping with Zee, we can provide you with extremely accurate duty and tax calculations thanks to our years of experience.
Who Handles Paperwork and Payments Needed For Customs Clearance?
Usually, it is the responsibility of the Importer of Record to handle the paperwork and payments during the import process. However, this can depend on the incoterms used.
An Importer Of Record (IOR) must be present to declare the paperwork, pay the fees, and receive the shipment. But what is an Importer Of Record (IOR)? An IOR is the temporary legal owner of the goods during this process and can either be the manufacturer/shipper of the goods or a legal individual or entity appointed to represent them.
Challenges Of Shipping To A Foreign Amazon Warehouse
Shipping to a foreign Amazon warehouse may be the perfect way to grow your business, but there are various factors that influence FBA in new markets. The process comes with customs challenges that include:
- IOR designation – A knowledgeable and trustworthy Importer Of Record (IOR) is the key to getting your products through customs and into the country of import. Poor, or incorrectly completed customs documentation and even bad communication could result in a shipment being refused, delayed, or charged higher fees.
- Shipping costs – For newer and smaller businesses, choosing a reliable freight provider and negotiating good rates can be difficult. Every penny counts and wasting any of your pennies on unreliable freight providers may slow down your business’s growth in the long run.
- Packaging – Your imports have quite a road ahead of them, so make sure your goods are ready for a long, rocky journey to the destination country. They’ll be handled many times as they make their way to a new home. Balancing protection with appearance can be difficult, but it is an important detail to master.
Work With The Right Import Partner To Grow Your Market
Growing your business internationally is a daunting task already without having to worry about import compliance. Just as Amazon provides you with a partner in fulfillment and marketplace, you need a partner you can trust for import logistics –one that understands the difference between FBM and FBA when it comes to shipping products internationally.
Zee has the answers to all of your international shipping questions. Zee experts act as the Amazon Importer Of Record and can help you navigate the choppy waters of customs entry. We can help keep international shipping costs low while making the shipment process easy and efficient. And if any questions arise, our customer care team is always just a phone call away.
Contact us when you’re ready to learn more about connecting your Amazon FBA business to the world.
- Insider. How JFK customs searches 1 million packages a day for illegal items. https://www.businessinsider.com/jfk-customs-searches-million-mail-packages-drugs-counterfeit-2019-9
- Crowley Logistics. All About Customs Clearance. https://www.crowley.com/all-about-customs-clearance/
- U.S. International Trade Commission. About Harmonized Tariff Schedule (HTS). https://www.usitc.gov/tariff_affairs/about_hts.htm
- CSA Transportation. Customs Clearance: A Complete Guide. https://www.csatransportation.com/blog/customs-clearance