WHAT IS CUSTOMS CLEARANCE?
In customs clearance, exports, Freight Forwarder, import, International Shipping
What is customs clearance?
InvestorWords.com defines customs clearance as:
the act of passing goods through customs so that they can enter or leave the country
a document given by customs to a shipper to show that customs duty has been paid and the goods can be shipped
While basically correct, that definition is deceivingly simple.
Management Study Guide provides information that gives one a better idea of what customs clearance entails:
Customs clearance work involves preparation and submission of documentations required to facilitate export or imports into the country, representing client during customs examination, assessment, payment of duty and co taking delivery of cargo from customs after clearance along with documents.
Some of the documents involved in customs clearance are :
1. Exports Documentation: Purchase order from Buyer, Sales Invoice, Packing List, Shipping bill, Bill of Lading or air way bill, Certificate of Origin and any other specific documentation as specified by the buyer, or as required by financial institutions or LC terms or as per importing country regulations.
2. Imports Documentation: Purchase Order from Buyer, Sales Invoice of supplier, Bill of Entry, Bill of Lading or Air way bill, Packing List, Certificate of Origin, and any other specific documentation required by the buyer, or financial institution or the importing country regulation.
Of course, Management Study Guide doesn’t get into the intricacies of customs clearance. The above is still just skimming the surface.
Every port in every country around the world puts your cargo through a customs clearance process.
Description: Shipping Containers at Port
What’s more, the rules, regulations, and laws are a bit different from country to country, sometimes from port to port within a country, making someone who specializes in customs clearance very important to a shipper exporting and importing goods.
These specialists are called customs brokers and the work they do is called customs brokerage or sometimes customs broking.
Having the wrong person handle your customs brokerage can be very problematic. Shipping containers are warehoused as they go through customs clearance. Warehousing and storage fees can add up quickly. If there is a problem with your customs brokerage and your customs clearance does not happen smoothly, your shipping costs could go up by hundreds to thousands of dollars.
On top of these costs, the delay in getting your shipping containers released to you because of customs clearance problems could cost your business more money because the arrival of your shipment is delayed.
Your freight forwarder should also be able to handle your customs clearance, but you can choose to handle it separately with your own customs broker.
When choosing a freight forwarder, you want a company with the experience to handle your customs clearance well and who knows what to do should any issues arise.
For these reasons, going with the cheapest freight forwarder you can find to handle your international shipping can turn out to be much more expensive than hiring a freight forwarder with a little higher quote but who has much more experience in the business.
There are other things you can do to help ensure your shipping containers make it through customs smoothly.