This guest post comes from logistics guru Joseph Walsh of Aries Global Logistics. Here he has put together a helpful checklist of 5 things to know before you import.
1. The Terms of Sale: Know Your Responsibilities
FOB, CIF, EXW, DDP
The Terms of Sale document explains what you will pay for and what your supplier will pay for. In it, the most commonly used term is Freight on Board (FOB). Importing your product ‘FOB’ means the factory manages the product through export customs and delivers it to the port or airport in the country of origin. The importer is then responsible for freight, insurance, and customs charges from the port of origin until the product arrives in the United States. Another commonly used term is Ex Works (EXW). Importing your product ‘EXW’ means the importer is responsible for all fees including local pick-up and export customs charges in the country of origin.
2. HS Codes: Know Your Product
Duty rates and any special clearance charges
Choosing the HS code is the responsibility of the shipper and, at the end of the day, the importer (you) will be responsible if this is not done correctly. The Harmonized Code or HS Code is a 10-digit number that classifies your product and determines how much duty is to be paid on it. If you do not classify it correctly your shipment can be stopped by customs. It is also possible for customs to make a claim against you in future if a product was previously imported under an incorrect HS Code.
3. Bonds: Know if you can legally import
Is a yearly bond or single entry bond right for you?
In order to import, a company must have a current bond on file with US customs. Think of this as an insurance policy ensuring you will pay the government the duties that are owed. Depending on how often you plan to import you will either need to purchase a single entry bond or a yearly bond.
4. Documents: Know that you have all your paperwork in order
POA, Commercial invoice, packing list, other (FDA, COA, bank docs, export licenses)
In general, every importation will require a packing list, commercial invoice, and bill of lading. These documents need to be presented at least 48 hours before the shipment leaves the country of origin. Other documents may be required depending on the nature of your product.
5. Timing: Know that you can deliver on your promises
Build in time for delays
Begin with your ideal delivery date and work backwards. Can you meet your deadline with ocean freight or will you need to air ship? I have seen more companies get into trouble due to optimistic planning than any other issue. When you are told a product has a transit time of 14 days, it does not mean you will have the product in your warehouse in 14 days. You must allow time for customs clearance, pick-ups, deconsolidation, and countless other things that could pop up. My advice is to speak with your freight forwarder and work together to come up with a schedule that will keep your customers happy.
Joseph Walsh is Licensed Customs Broker and Freight Forwarder who has been offering his clients diverse transportation solutions for over a decade. He specializes in dealing with multiple government agencies such as the FDA, Fish and Wildlife, and US Customs. Services include air freight, ocean freight, import, export, customs clearance, HS Code consulting, domestic trucking, warehousing, and distribution. Joseph can be reached at firstname.lastname@example.org or 516-209-4517.