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Probably, you could be wondering what continuous customs bond is all about.

Well, in today’s guide, I will answer all questions you have been asking about continuous customs bonds.

By the end of this guide, you will be an expert in this important freight term.

Keep reading to learn more.

What is Continuous Customs Bond?

A Continuous Customs Bond covers all the cargo that you are importing for one year.

As long as you are making the required payments, the continuous bond will not expire.

Continuous Customs Bond is a guarantee that applies to international trade.

It comes as a financial guarantee and it is continuously renewed until it is cancelled.

In the U.S, the customs bond is necessary when importing cargo into the United States.

It acts as a form of insurance that protects the United States Treasury.

What is the Importance of Continuous Customs Bond?

In case you have been purchasing single-entry customs bond, you should consider importing using the Continuous Customs Bond.

Here are some of the benefits you will enjoy by using Continuous Customs Bond terms:

a) Less Hassle

Whenever you are importing a container into the United States, you must purchase a customs bond.

For this bond to become active for the next shipment, you are required to file a filled form with U.S Customs.

It can be a tiring process to be done every time you are importing a container.

To ease the process, you should consider purchasing a Continuous Customs Bond.

This means you will save yourself some valuable time.

b) Cheaper

Importing through the Continuous Customs Bond can be very cheap in the long run compared to the Single-Entry customs bonds.

c) Better Communication

You are able to achieve better communication when you have fewer documents as well as emails.

You should focus on important matters at hand and matters to do with the customs bond may be the last thing.

Having to bother the freight forwarder with purchasing and filing the single transaction customs bond may distract.

The Continuous Customs Bond tends to offer a very easier way of handling the whole process.

What does a Continuous Customs Bond Cover?

Continuous Customs Bond is a necessary document that acts as an insurance policy.

It is a guarantee of payment of custom duties when importing goods into the US.

It applies to any goods being imported to the United States whether by air or by sea.

A Continuous Customs Bond will ensure that no matter the situation or the condition, the duties and taxes are paid for.

This will apply even in extreme circumstances such as closure of business or bankruptcy.

When is a Continuous Customs Bond Required?

You must provide a Continuous Customs Bond whenever you are importing goods that are valued to costs more than $2,500.

You will also need Continuous Customs Bond if you are importing commodities that are subject to some requirements of other federal agencies.

Other than the documents you will be required to produce for the ATF, you will also need to have Continuous Customs Bond.

Other agencies that will ask you to provide a Continuous Customs Bond include:

• Environmental Protection Agency
• U.S Department of Agriculture
• U.S. Fish and Wildlife Service
• Food and Drug Administration
• Consumer Product Safety Commission

If you are a domestic carrier, you will need to have a Continuous Customs Bond.

This is if the cargo you are transporting is “IN BOND.”

It will also be required of you as facility or warehouse operator storing exported or imported goods to have Continuous Customs Bond.

You must apply for it from your closest port director.

Before issuing, the port director will inspect the kind of warehouse you intend to have for imported goods.

Who are the Parties to a Continuous Customs Bond?

There are three parties that are key in a Continuous Customs Bond. They include:

1. The Surety/Insurance company that issues the bond
2. The Principal who is the the importer that is required to file the bond
3. The Customs and Border Protection

During the bond application process, the Continuous Customs Bond is also referred to as the import bond.

The purchasing entity or person is known as the principal.

Also, the Customs and border protection agency is referred to as the beneficiary.

The company issuing the bond will be referred to as the surety.

How is Continuous Customs Bond Calculated?

Continuous Customs Bond is calculated as 10 percent of the fees, duties and taxes that you paid the previous year.

In case you do not have any importing history to go by, the customs and border protection will estimate.

They will calculate the estimated fees, taxes and duties that may be chargeable for the next 12 months.

The bond amount will be rounded off to the nearest $10,000 up to $100,000.

If the figure is above $100,000, it will be rounded off to the nearest $100,000.

You will be required to provide a $50,000 bond as the minimum amount of bond.

How does the Continuous Customs Bond Work?

Continuous Customs Bond will be required whenever you are importing to the United States.

As an importer, you need to get the bond through a reputable and reliable company.

Working with a Continuous Customs Bond is quite easy.

Once you apply for a bond application, the indemnity will be reviewed and approved.

The bond will be submitted electronically within minutes and right from there, you can start using it.

The continuous bond will be renewed every year on the anniversary date that it was approved.

Also, the renewal process is there to give the importer and the surety the chance to review the bond.

They can then come up with a decision on whether there is an adjustment to be made on the bond.

Who is Responsible for obtaining the Continuous Customs Bond?

If you are an importer of record from the United States, you are responsible for obtaining the Continuous Customs Bond.

Whenever it is necessary, the customs authority will not release the cargo until you post the Continuous Customs Bond.

Other regulatory requirements must also be met alongside having an importer number.

What are Examples of Continuous Customs Bond?

The bond amounts are always rounded off to the nearest whole dollar figure.

It can either be in multiples of $10,000 to $100,000 before the limit is raised by $100,000.

Examples of Continuous Customs Bond include:

• For More than $500,000 yearly fees and duties, a limit of $50,000 minimum bond will be enough.
• For annual duties ranging between $500,000 and $600,000, then you will be required to pay $60,000 in bond
• For annual duties ranging between $1,000,000 and $2,000,000, then you will be required to pay $200,000 in bond.

How do you Apply for a Continuous Customs Bond?

The following process applies when you are applying for a Continuous Customs Bond:

Step 1

First, you have to decide if you need a Continuous Customs Bond.

You will be required to have the bond if you are importing into the United States goods that will be used for commercial purposes.

The goods must be valued to be $2,000 or greater.

For textile imports, the value required will be over $250.

Any products that require federal regulations such as food and firearms will require you to have a customs bond.

Step 2

You will then be required to find the licensed surety authorised by the Treasury Department.

The list of authorised companies can be found on the website of the Treasury’s Financial Management Services.

You may also contact the treasury directly using their registered phone number.

Step 3

If you are planning to make many entries on different ports across the year, you need self-renewing Continuous Customs Bond.

With this type of bond, you will be required to have $50,000 as the minimum bid amount.

You may as well pay 10 percent of fees and taxes depending on which one is greater.

Step 4

To complete your application, you are required to give the company name, your name, Social Security number or Employer Identification Number (EIN).

Other than these, you will also provide information about:

• The type of business entity,
• Years in business,
• Business address,
• Imports description as well as the value of the imported goods.

You will need to grant the power of attorney to the surety so that they can file the entry on your behalf.

Step 5

You can now pay for all the fees due. In this case, you will be required to pay the annual premium.

Step 6

The surety broker will proceed and file the bond at the location that is best appropriate for you.

Step 7

If you do not intend to purchase a bond from a surety, you will be required to pledge cash.

Until all the dues are satisfied, the funds may not be released.

Where is the Continuous Customs Bond Filed?

A Continuous Customs Bond is filed at the customs and border protection of the United States.

This can be filed by the freight forwarder, the customs broker or even the importer themselves.

How Long will it Take the Continuous Customs Bond to come into Force?

The duration of the Continuous Customs Bond is determined by Customs and Border Protection.

This time may vary.

However, the common $50,000 Continuous Customs Bond for imports will typically require 15 calendar days before becoming active for use.

What are Continuous Customs Bond Limits and How are they Set?

The minimum bond limit for a Continuous Customs Bond is set at $50,000.

The Continuous Customs Bond is calculated by taking the taxes, duties and fees paid within the last year and adding them together.

The final figure will be achieved by calculating 10% of the total sum.

If 10% is less than $50,000, then the minimum bond amount ($50,000) is considered.

If 10% is more than $50,000, then the minimum bond amount will not be used.

What is the Difference Between Continuous Customs Bond and Single-Entry Bond?

Single-entry bond is used to cover the transaction of a single shipment on a very specific shipment.

It will only be beneficial at the port in which the shipment will enter.

If you are an importer who will import once or twice a year, then a single-entry bond may perfectly meet your needs.

It is calculated as the total value of the goods.

This will include any fees, duties and taxes.

Continuous Customs Bond applies when you import frequently and may import through a single or different port of entry.

With this, you tend to benefit greatly from the cost-saving and the convenience of using a Continuous Customs Bond.

Continuous Customs Bond is renewable annually.

However, for single-entry bond, you need to apply every time you have a shipment.

Moreover, Continuous Customs Bond is calculated at 10 percent on estimated fees, duties and taxes that were paid for the last year.

Even with this, the minimum Continuous Customs Bond is taken to be $50,000.

How long is a Continuous Customs Bond good for?

A Continuous Customs Bond is good when you intend to make more than two shipments in a year.

The bond is set to expire on every anniversary and the date that the Continuous Customs Bond was issued.

It runs through 12 months before it is renewed.

After one year, the calculations are taken again to determine the new Continuous Customs Bond amount based on the last year’s figures.

The amount can therefore go up and down but not below $50,000.

Is the Continuous Customs Bond Refundable?

The customs and border protection will require you to have the bond even if the goods are duty-free and are not refundable.

With the drawback payment bond, you have a chance of recovering 99 percent refund for duties you paid on imported goods.

This will only happen as long as you can prove that you exported the goods.

What are the Importer’s Obligations for the Continuous Customs Bond?

Importer will have different obligations to the state compared to custodian like warehouse operator or cartage operator, who does not own the merchandise.

You will be required to pay all the relevant duties and submit the entry documents whenever they are required by law.

Furthermore, you are supposed to redeliver the merchandise to customs and border protection whenever there is request to do so.

What Happens if you Fail to Meet the Obligations of the Continuous Customs Bond?

If you are unable to meet your obligations under Continuous Bond, the customs and border protection may file claim against you and surety.

Such claims may be for breaching the obligation to pay duties.

In this case, the Customs and border protection will claim the duties not paid.

If you have breached different condition set on the Continuous Customs Bond, the CBP will then issue a claim for liquidated damages.

The conditions of the Continuous Customs Bond will determine the value of the liquidated damages.

Even with this, the liquidated damages claim can never exceed the total bond amount on the Continuous Customs Bond form.

If you are not willing to meet your obligations, the customs and border protection will demand payment from the surety.

The CBP has the right to make a demand for payment from the importer/principal and the surety.

Both are jointly liable for any claims that may be made under the bond.

The CBP can therefore expect any of the two parties to settle the claim.

You will then be placed on the CBP’s sanction list and no other approvals for entry will be made for you.

How do you Renew a Continuous Customs Bond?

The Continuous Customs Bond to the CBP does not have an expiry date.

The bond continues to be valid/active until it is terminated or placed into insufficient status.

You will however be required to pay the annual premium charged to the insurance company (surety).

Otherwise, they may release the termination of the bond.

What does ‘Termination’ of a Continuous Customs Bond mean?

The ‘termination’ of a Continuous Customs Bond is used to mean the term has ended for the bond.

As such, there will be no more liability for the bond for any new transactions.

The termination of the Continuous Customs Bond does not affect any transaction/entry that occurred before the termination.

The Continuous Customs Bond can be terminated by the principal or the surety.

However, appropriate notification must be issued to the customs and border protection.

This notification of termination should be made at least 15 days before it can be accepted.

What does ‘Insufficient’ Bond Status mean?

When CBP places a bond into the insufficient statues, it means that the bond is still in existence.

But you cannot be able to place an entry until the CBP places back the bond into sufficient status.

Among the reasons that can make a bond become insufficient include:

• Too many outstanding debts or claims
• A risky or huge entry
• An Incorrect address
• Inadequate limit on the bond

The insufficient status can come in place without any notice from the CBP.

They may however provide a 15 days’ notice for you to be able to plan yourself.

Nonetheless, it is worth noting that Continuous Customs Bond cannot be subjected to any deficiency due to import duties or value of imports.

If the bond is sufficient you will be able to make imports of any volume or value.

The bond limit cannot be subjected to depletion.

Why do you Need to Sign a Power of Attorney for Continuous Customs Bond?

You will be required to sign the power of attorney to allow the surety to file the entry on your behalf.

By doing this, you will be giving your powers and any decision taken by the surety will be deemed to have come from you.

Therefore, no complaint should be expected from you.

How Much does Continuous Customs Bond Cost?

On average, the cost of a Continuous Customs Bond may range from $400-$500 annually or more if purchased from registered broker.

This is calculated as the percentage of the total bond amount you are required to pay the customs and border protection.

How Often are the Charges for Continuous Customs Bond?

The charges for the Continuous Customs Bond will require an initial amount paid to the insuring company as per your agreement.

Thereafter, an annual charge will apply.

You may also enjoy a discounted rate on the charges if you are making pre-payments for several years like five or so.

Are there Surcharges to the Continuous Customs Bond?

Yes, several surcharges may apply.

They include the Periodical Monthly Statement usage, reconciliation riders and the anti-dumping entries.

What are the Typical Credit Terms for Continuous Customs Bond?

The invoice terms for Continuous Customs Bond can either be charged by the surety in advance or utmost 15 days of invoice date.

Once it is settled, the request for renewal will be sent to you after one year.

The invoice will be sent to you between 2 to 3 months prior to the renewal date.

The date of payment should be due at least 30 days before the anniversary date.

If Continuous Customs Bond has not been paid, the surety is expected to provide you with a minimum of 15 days’ notice.

How is Continuous Customs Bond Approved by the Surety?

Generally, the minimum continuous bond of $50,000 will be subjected to immediate approval.

Other bonds of larger limits will require that you submit a filled and signed application.

You will also need to provide a financial statement before obtaining the approval.

This approval process is likely to take between 2 to 5 working days.

As a rule, the surety should seek to first secure its interest against any possible loss before issuing the bond.

This loss may be experienced if the principal is not able to meet the bond obligations.

As such, the customs and border protection will settle on the surety to recover the charges.

This makes the surety to only approve bonds that are fully secured.

They can be secured using collateral which is the instrument that is meant to recover any unpaid amounts.

However, it is also possible for the surety to obtain some degree of “comfort”.

This will allow them to release the bond with less or no collateral.

Some of the factors that may influence this may include but not limited to:

• Type of commodity
• Existing history
• The principal’s financial responsibility to meet the financial obligations to CBP
• Any Additional indemnitor etc.

What is an Indemnity Agreement for Continuous Customs Bond?

An indemnity agreement for Continuous Customs Bond surety is a binding contract.

It is entered between the principal together with the surety company that is transferring risk to the principal from the surety.

An indemnity is a very separate contract that the principal is required by the surety to append their signature.

They do this before the bond is issued to guarantee that they will pay any money that the surety may pay to settle a claim.

The surety companies will normally issue bonds hoping that there will be no risk of losing money on their end.

A bond is like a line of credit, it prevents you as the importer/principal from tying your own money.

In case you are unable to meet your obligations, the indemnity agreement will give the surety right to take any legal action.

They will collect the repayment as well as the incurred expenses.

How do you Secure the Surety’s Liability under the Continuous Customs Bond?

To secure the surety against any financial loss, you will be required to provide collateral security.

If any claim is filed and you are unable or are unwilling to pay back the surety, they will follow the indemnity agreement.

It will give them the right to take any legal action to collect the repayment as well as the incurred expenses.

Whenever you sign an indemnity, you are transferring the liability for any damages that may occur from the surety to yourself.

The surety will take the collateral security and use it to recover his dues.

For valuable assets, they may be auctioned and all expenses recovered.

Why do I Need a Customs Broker for Continuous Customs Bonds?

It is not a legal requirement that you hire a customs broker to help you in the clearance of goods.

However, most importers will choose to do so due to the convenience that it offers.

Custom brokers must be approved and licensed by the Customs and Border Protection of the United States.

This allows them to conduct customs business on behalf of the importers.

The custom brokers will handle all the paperwork relating to obtaining of the Continuous Customs Bond.

The work may be cumbersome and the customs brokers will specialize in the work thus making the work easier for importers.

The principal is however ultimately responsible for all the information relating to the CBP requirements.

They should also ensure that they fully comply with all the federal rules and regulations.

Since mistakes may occur, customs broker may come in handy to prevent you from making unnecessary mistakes that may otherwise be costly.

What is does ‘Reconciliation’ mean in Customs Bonds?

Reconciliation is one of the processes in obtaining a customs bond.

Here, you will be required to have an additional special rider to the Continuous Customs Bond.

This allows you to have an estimate on the value of the goods you are importing.

You should then be able to pay any fees, taxes and duties as per the estimated amount.

After 18 to 21 months after when the principal must verify the actual value of the goods they imported.

The principal can then inform the customs and border protection of the total they have.

The CBP will then recalculate the fees, duties and taxes based on the given information.

The entry will then be liquidated by either a refund to you or with a bill.

Sureties will always surcharge for any additional risk.

Is Continuous Customs Bond Eligible for Reconciliation?

Yes, Continuous Customs Bond is eligible for the reconciliation rider.

With this, the importer is able to have an estimate of the value of goods they are shipping.

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If you’re in import or export business, obviously, you have come across compliance assessment term.

That’s why today I will answer all questions you have been asking about compliance assessment.

Let’s dive right in.

What is Compliance Assessment?

Compliance assessment is the analysis of the company’s trade and customs transactions. This is done to verify adherence to the laws and regulations governing international trade.

What is Trade Compliance?

Trade compliance involves understanding, respecting, and following all rules and regulations on the import/export goods.

It is also known as Customs compliance.

International trade gets complicated every other time. You need to understand the customs rules and regulations clearly. With a business that relies on international trade, you must ensure global solid trade compliance.

An ideal way of becoming knowledgeable with trade compliance is to take a course on the same. Or use the various online resources to gain more insight.

Why is Trade Compliance important?

Being compliant with international trade laws and regulations as a company or individual is very important. This will help you avoid the harsh consequences of violating customs requirements.

The consequences can be expensive as they may include very hefty fines that may shake your operating capital. Customs can also seize your shipments as a consequence of non-compliance. This can disrupt your supply chain immensely.

To stay safe while engaging in international trade, always make sure you have complied with all the laws and regulations.

Who is subject to Customs Compliance Assessment?

If you are doing any transactions with customs, you must be assessed. It can range from a small and medium-sized importer/exporter to a large importing company.

For small and medium-sized traders, you will be subjected to the traditional way of a comprehensive assessment.

Large businesses transacting more than $100 million in value of goods every year will self-assess. You will have to submit an accurate report of the assessment to customs. Also, customs will conduct interim assessments on your business just like they do for SMEs.

Please note that Customs’ likelihood to assess your business increases when importing high-risk products. Importing toys, clothing, food, automobile parts, and other high-risk items is likely to arouse the interest of Customs authorities.

What is the Purpose of Compliance Assessment?

Customs conducts compliance assessments for many reasons.

The main reason is to ensure business’ compliance with customs rules and regulations.

Other reasons include:

• Protecting local businesses from unfair trade practices associated with anti-dumping duties, countervailing, and intellectual property rights.
• Encouraging legitimate trade through partnerships and cognizant trade compliance activities.
• Protecting government revenue as well as the general population from counterfeit or unsafe goods.

Is Compliance Assessment the same as Compliance Audit?

Not really.

Compliance assessment is a briefer check at a given area on your trading activities. The compliance audit is meant to give customs a clear picture of your business’s given area of concern. This will allow customs to assess risk without necessarily having to assign a final judgment.

You will only get a letter indicating that the compliance audit has been completed if you have been selected for the audit survey.

These findings may flag you for a more comprehensive customs audit. The primary purpose of the compliance audit is to ensure that companies follow the rules and regulations.

Why should you assess your Business’s Trade Compliance?

Among the reasons that you should assess the trade/customs compliance of your business includes:

Internal Audit being part of the Compliance Program

Compliance assessment is vital in the Compliance Program. If you have the program, then you should make good use of it.

Making pertinent policies will be preparing your employees and the company for any trade compliance subjected to you. This also helps create the confident feeling that you are doing everything right and per the law.

Preparing for an official Customs Audit

You need to know, discuss, and plan with your staff what you may have to do if you are audited. Conducting your trade compliance assessment is a clear indication that you are doing your due diligence.

While planning, you should include the following:

• Identifying the persons to be notified once there is an audit
• Finding out the storage location for your trade documents and records
• Check out how the assessment plan fits into the trade management and compliance program.

Self-assessment helps Guarantee that your Staff follows the Proper Procedures and if there is a need for Training.

It is easy to know who is doing what and if they are doing it correctly if you conduct an internal trade compliance assessment.

The assessment will also reveal who is not doing the right thing and the training you may offer them. All your employees must read from the same page.

In business, a lot of things change every time. From regulations, products, trade terms, customers to employees. With an internal trade compliance assessment, you can gauge the reality of the business. From this, you can make the necessary alterations to help your business adapt to best practices.

Assessing your Business’s Trade Compliance helps in Making People Accountable

Compliance assessment will give you a chance to evaluate the external processes and partners to hold them accountable. This will include:

• The freight forwarders and vendor partners. The assessment will help in ensuring that your partners are doing everything efficiently and in a cost-effective manner. They should also do it in compliance with the laws.
• Foreign Partners. The assessment of foreign partners will help you and your business stay in line with the foreign corruption laws. This makes sure that you do not have any violations in that area.
• Foreign Distributors and salespeople. You should audit both the distributors and the salespeople to ensure the company is not violating embargoes. They should observe all the export license requirements.

What are the benefits of Compliance Assessment when Importing from China?

Compliance assessment will serve many purposes, including:

Identification of Gaps

One objective of a compliance assessment is checking whether the laid down policies and processes are effective. In case there are any con-compliances, the assessing officer will note them. They can then report them to the management or the government agency responsible.

Helps in Making Improvements

After the compliance assessment, some gaps may be uncovered. You can then take the necessary measures to address the gaps.

Reduction of Risk

Compliance assessment will help pave the way for compliance and reduce risks.

Avoiding Fines and Penalties

Compliance assessment when importing from China is important because goods you’re importing may be subject to certain restrictions and prohibitions.

The products may also be required to meet specific requirements before and during importation.

If you don’t adhere to the product regulations, the consequences for your supply chain can be expensive and detrimental.

How do you prepare for a Compliance Assessment?

To prepare a compliance assessment, your company and the auditing company should come up with a schedule for a formal audit.

You need to prepare to pass adequately.

The following are some helpful tips on how you can prepare for it:

Prepare the requisite documents: These are the documents that define how your organization has complied with the necessary rules and regulations. They should show the actual practices that your employees follow.

Conduct an internal review first: Conducting a self-assessment will help point out the gaps. With this, you will be able to correct it before the official compliance assessment is conducted.

For example, you may have to review your quality management systems to observe all the regulatory standards.

Ensure your records are clear: If you do not manage your documents (previous assessment reports and proof of compliance) well, there is the likelihood that you will have issues with customs. Security policies and proper data management will play a crucial role in managing your records well.

Conduct staff training: You should train your employees or staff to know the policies and procedures they need to follow.

Staying up to date: You should utilize the information you get about your competitors to improve your systems.  It would help if you did not repeat the mistakes they get fined for. It is necessary to track any new standards and regulations that may affect your business.

What happens in a Compliance Assessment?

Authority officials will contact you about the selection of your business for a Compliance assessment.

You can include a representative such as your customer broker or import agent in the process if you want.

On the D-day, the assessing officers will review all the processes, documents, and any other indicators of your compliance. A final report will be generated and handed to your company. This report will include non-conformances as well as recommendations.

The level of non-compliance will determine whether your company will face penalties or get a chance to fix the gaps that were identified.

You shouldn’t, however, rush for a compliance assessment. Take time and prepare for it.

Also, note that the assessment takes a short time to avoid imposing on your business and plans.

How do you conduct a Compliance Assessment step by step?

Compliance assessment

Compliance Assessment may look like a daunting task. The process below outlines some of the steps taken to achieve a proper compliance assessment:

Initial Discovery and Plan

This will involve finding out what should be focused on and what is essential to your company. Initial discovery can happen via phone call. The consultant will let you know what is required as they try to understand your business more.

Gathering of Information

The next stage is to gather all the relevant information. This helps understand the current state of the company concerning customs compliance.

The quality of information you give to the consultant will help achieve a successful assessment.

It will be pretty hard to measure compliance if there is a lack of information. This will hinder the consultants from discovering any crucial gaps.

The relevant information can be found by interviewing the compliance officer.

Any other function that contributes to customs compliance must also be questioned.

Analyzing of Data and Information

After gathering information, it is grouped into various categories and analyzed.

Grouping the information ensures that your compliance assessment captures all the relevant areas and can be helpful in the future.

From the collected information, the assessing officer will then check on all areas for both compliance and non-compliance.

Report Writing

An assessment report is crucial in a compliance assessment. It details all the findings of the assessment and also recommends measures to follow.

It is in this stage that the compliance assessment officer writes an assessment report. This stage is simple, considering that the information has been grouped and sorted correctly. The rest is putting the information in a format that is simple to read and interpret.

Reviewing Assessment Results and Creating an Action Plan

Here, you will draft an action plan based on the findings and recommendations of the trade compliance assessment report. Finalizing the report will take place once you’re done reviewing the report and adopted the recommendations given therein.

The action plan will detail the findings of the assessment as well as the recommendation

The plan will provide you with what was found and the recommendations categorized into every specific functional area. You can decide on the date the action plan should be delivered and to whom.

How do you manage Compliance when Importing from China?

Managing compliance when importing from China can be challenging given the number of regulatory agencies involved.

China customs, China Food & Drug Administration (CFDA), Administration of Taxation (SAT), etc., can put a strain on your trade compliance.

To avoid problems and disruptions to your supply chain, it would be best if you hire a third party to help you with compliance.

As you do this, you can also self-assess for customs compliance by being conscious of the following about your business:

• Office locations
• Operational procedures
• All customs declarations concerning the total number of imports
• The total value of imports and when declarations were made
• Import duties and taxes paid and if the duties were correctly calculated and paid on time
• Price declaration history by item. This will prevent large fluctuations that may cause problems

Apart from all the above, it is also essential to develop a management policy for your supply chain. Such a policy will help ensure that you use the correct classifications hence avoiding customs penalties and fines.

Besides, you should also ensure that your compliance documents are valid and in order. You need to have copies of all declaration documents at all times. Monitor any missing documents have them resolved immediately.

Issues on classification and valuation should also be monitored and resolved accordingly.

Importantly, verify the legitimacy of all third-party service providers, including your freight forwarders and customs brokers. Always maintain a record of all transactions with third-party vendors.

To develop good compliance practices, you may want to maintain a manual of trade compliance policies. This proves to assessment officials that you have enforcement policies in place.

Which Documents do Customs Auditors look at during a Trade Compliance Assessment?

The audit team will gather all the necessary information and analyze it. The commercial documents that you need to provide are:

• Accounting Ledgers
• Airway bills
• Bills of lading
• Contracts
• Correspondence
• Evidence of any payments received or made.
• Invoices
• Orders
• Packing lists
• Permits

What is a Compliance Assessment Report?

A compliance assessment report is a record of everything that was discovered in the assessment.

It includes details of every compliance and non-compliance found during the assessment.

The report also gives recommendations on what you should do to ensure compliance. It also provides the penalties/fines for any violations found.

What happens if a Compliance Assessment discovers errors and risks?

The primary concern of customs is how to avoid errors in the future. Where possible, customs will recommend ways to improve procedures to prevent mistakes in the future.

If errors and risks are discovered during compliance assessment, the audit team will discuss them with you. Depending on the existing rules and regulations, the team may recommend adjustments to some errors.

Others may be too far gone that you will have to face penalties or pay fines for violations.

In case you disagree with the outcome of the assessment, you are allowed, by law, to contest the results.

The charges you will pay are only for professional assistance. You will be legally responsible for the statutory obligations.

Are there Penalties for Violating International Trade Compliance?

Yes.

As mentioned, errors in your declarations may lead to penalties and fines according to legislative guidelines.

However, customs will always give you a chance to explain the circumstances of the errors before the execution of punishment.

What is an International Trade Compliance Program?

It is a program that seeks to explain the complicated customs process at every level of the organization. The anatomy of this program may vary from one company to another, but the concept is, however, the same.

Elements that make up a good compliance program include policies and procedures, risk assessment, record keeping, and training.

Companies with a good mastery of international trade will have a strong compliance program. This allows the leadership on every level to understand the rules and understand the risks.

What are the considerations of building a Trade Compliance Program?

When building a trade compliance program, you should consider the following:

• Familiarizing yourself with the relevant regulatory agencies
• Partake in trade compliance seminars and education programs. It is important to get educated on the customs laws for import/export.
• Formalize the import and export compliance policy, training, procedures, and records of your business.

You can also hire a supply chain expert to help you build a strong compliance program for your business. Many professionals can handle the complexities of international trade laws and regulations.

What are some Trade Compliance Program Mistakes to avoid?

One big mistake that importers make is taking trade compliance as an afterthought. It is not!

Trade compliance is quintessential to any business operating in the international trade arena, and it won’t happen on its own. You need to be hands-on about this, and if you can’t, get expert help.

An expert can help you develop an effective compliance program for your business. He/she will educate you on obligations as a trader and even show you ways to comply.

Understanding the risks your business faces concerning trade compliance enables you to put the right policies in place.

Unfortunately, many importers fail to see the importance of seeking expert help regarding their trade compliance program. They may never consider asking for assistance on their compliance program. By doing this, they mistakenly have reasons they believe they don’t need one. Some of this includes:

It is expensive- Hiring may seem costly, but the penalties may outweigh the cost of having a compliance program in place. The penalties arising from gross negligence can be issued in millions of dollars. They can easily get to a 7 figure or more.

It is time-consuming– It will take time to come up with a compliance program. But once you have it, your processes will move even quicker, thus saving your precious time. After you have a compliance program, all you need is to maintain it.

Customs don’t bother you-You can’t avoid customs forever. They have a Quick Response Audits program that targets any importer for any issue.

Our broker handles everything- As the importer of record, you will be held legally responsible for any done entry. The broker will only help you have your customs done. However, you cannot outsource the responsibility.

How often should you conduct a Compliance Assessment on your business?

You should carry out your compliance assessment annually. The auditors can decide to review your processes at a go or divide them into portions.

They should then make a plan which will detail the schedule in several months.

What is the difference between a Compliance Assessment and Factory Audit?

Unlike Compliance assessment which involves audit regarding customs, factory audit focuses on production capability.

It assesses the company’s ability to timely produce goods that meet both the clients’ and industry requirements on quality, performance, and safety.

What is a Trade Compliance Checklist?

A trade compliance checklist is an assessment tool that is used to identify red flags quickly.

The checklist effectively implements the recommended corrective actions and ensures compliance with the trade regulations.

Who is responsible for Conducting a Compliance Assessment?

For self-assessment, you can seek the services of a customs broker or third-party compliance assessment services.

You will oversee this process and make sure that everything is done following customs requirements.

Delegated customs compliance auditors do comprehensive compliance assessments.

These are chosen by relevant authorities and will always notify you in advance about any scheduled assessments.

Do you need a Customs Broker for Compliance Assessment?

Yes.

Many importers undergo compliance assessments yearly. This is done as a routine part of countries’ efforts to ensure the importation of safe and credible goods.

As long you follow the law and the advice of your customs broker, you be fine.

It is unwise to navigate a compliance assessment alone, whether internal or external.  Find a qualified customs broker to help make the process as smooth, fast, and open as possible.

How much does a Compliance Assessment Cost?

There is no specific figure that a compliance assessment may cost you.

The cost will always differ depending on the organization doing the work and the amount of work involved.

For small companies, it will cost less as opposed to large companies.

You should, however, know that statutory charges are not part of the assessment fees.

On average, the compliance assessment cost should cost you around $500 on an average of tasks undertaken.

At Tj chinafreight, we help you import from China to any destination effortlessly by handling all the freight forwarding procedures.

Contact us now for all your freight forwarding needs from China.

An inspection is an acceptance test for quality control.

It is a procedure to check that the manufactured goods meet a specific standard.

Quality inspectors inspect the goods before, during, and after the manufacturing process.

They also supervise the packaging and loading of goods onto a shipping container.

All this is to ensure that you receive quality goods on time and with no damages.

With that in mind, quality inspections should be a top priority anytime you’re importing from China.

Note that there are nine major types of quality inspections in product quality control.

This article will tackle each type and show you how they can benefit your business.

Initial Production Check

Initial production check, known as pre-production inspection, is an initial quality control process.

It happens at the manufacturer’s premises before any production begins.

What does IPC check?

IPC checks all raw materials against your needs before production commences.

The inspectors check for the quality, weight variance, drawings (if any), etc.

The checks usually occur upon the manufacturer’s receipt of raw materials; before the beginning of operations.

If the inspector notices any errors during the IPC check, they will notify you.

Organize with the supplier to have the mistakes corrected before production begins.

Benefits of Initial Production Check

The initial production check, also known as pre-production inspection, offers many benefits to importers and manufacturers.

By performing an IPC, you:

Minimize Risks that may Disrupt your Supply Chain

The IPC aims to identify and eliminates quality risks before the manufacturing process.

This identification and elimination ensure the product will be in excellent condition when it leaves the factory.

It verifies that the production process designed meets the customer’s requirements.

In this way, delivery delays and quality issues are tackled even before they can occur.

Get an Opportunity to verify the Manufacturer’s Readiness

Through an initial production check, you can easily check and see if your manufacturer is ready for production or not.

Early procurement of raw materials, adequate workers, and a clean, well-equipped facility can show that a supplier is ready to begin production.

Measure your Manufacturer’s Capability

An IPC can help you determine whether the manufacturer can meet your needs and quality requirements.

If there are inadequate workers or poor production equipment in place, there is no need to continue your contract with the supplier.

This is because it is clear they won’t produce the quality of goods you want and within the specific deadline.

When and Why an Initial Production check is needed

You need an initial production check when:

Dealing with High-quality or Fragile Products

The inspector will test all components before the assembling process begins.

IPC checks the quality and functionality of hardware, semi-finished products, and materials products.

They make sure it’s in line with your approved sample (golden sample).

Sourcing Raw Materials from Different Suppliers

IPC will check 100% of the incoming parts and components.

The inspector ensures the raw material meets your product requirements.

He/she does the checks per your agreement with suppliers and contract manufacturers.

You Launch a New Product

To launch a new product means you launch a new process.

IPC is necessary for an initial production check.

This check verifies that the process is stable and that the new process setup is done correctly.

Inferior quality raw materials will affect the quality of the end-product.

Initial production inspection will point out any initial errors.

It is cheaper and less time-consuming to correct any errors and defects early.

Limits of Initial Production Check

Different suppliers may supply raw materials and components at other times.

Some suppliers might delay their parts’ delivery, forcing inspectors to stay on-site as they wait for all raw materials to arrive.

This waiting may delay the production process and also cost you more for the extra man-days.

The manufacturer may not reveal the sub-suppliers for fear of losing you to them.

It may then be challenging to control raw material.

An excellent way to deal with this is to agree with the manufacturer beforehand and include the agreement’s disclosure.

The deal gives you leeway to deal with sub-suppliers one on one.

Another limitation of IPC is that sometimes, the production process may take several weeks to complete.

In this case, the inspector may not see any finished products at all.

With this, it may difficult to verify the quality of goods by looking at videos and images of the process.

In some cases, the first products coming out of the production line may not reflect your quality requirements properly.

An initial production inspection may be beneficial in this case as you get to correct mistakes early in the process.

Something else to be aware of when conducting an IPC is some dishonest suppliers to look out for.

These suppliers will run a short production cycle just to get the inspector’s approval and make you happy.

Afterward, they subcontract the remainder of the production to another inferior factory or workshop.

You need to be careful when conducting IPC checks.

Also, perform follow-up checks to avoid such instances from disrupting your supply chain.

During Production Inspection (DUPRO)

During Production Inspection is also known as DUPRO or DPI.

DUPRO is a verification process during the production of goods and is conducted when production is 15%-20% complete.

The inspector will randomly pick and inspect the finished products.

He/she checks the product against the golden sample and your quality checklist.

If they pass the quality check, he/she accepts them into stock.

If he/she detects any defects or errors, he/she contacts you to intervene and have the mistakes corrected.

During Production Checklist

The DUPRO system ensures a high-quality level of product.

At the end of production, fewer products (if any) are rejected because of poor quality.

It creates cost savings and shorter production times for you.

Quality inspector picks random finished products for acceptance quality limit (AQL) check.

For instance, on shoes, he/she checks conformity to quality standards and strength of the raw materials and finished product.

The inspector inspects the color of the product, bond strength, laces, and closures, etc.

Requirements from your quality control checklist and his findings are matched to compare quality.

Phones and watches (electronics), He/she will check each component for quality and functionality.

The quality inspector checks the available rate. He/she inspects the camera, the touch screen, charging system, SIM reception, etc.

DUPRO monitors the activities of moving targets to record the speed of a moving target in time.

Monitoring will show if the production process is within the schedule or if there will be any delays.

Objectives of Performing a DUPRO

The purpose of the DUPRO inspection is to help the achievement of planned quality standards.

It comprises procedures aimed at inspecting work during production.

This inspection results in timely evaluations and decisions on immediate counteraction.

DUPRO can solve hidden problems in production, improve product quality, and cost control.

Monitoring makes mass production less expensive.

It eliminates mass errors and increases the quality of the product.

When you should Consider DUPRO

DUPRO can be beneficial in the following instances:

• In case you missed the Pre-production inspection; it is vital to have DUPRO
• When dealing with high-quality and sensitive products,e.g., phones, watches, dinnerware, etc.
• If you have a schedule and cannot afford delays
• When dealing with a manufacturer for the first time
• If you have mass/bulky production
• In the interest of protecting your brand quality and name

DUPRO helps detect errors and faults early.

Intervening (where necessary) to correct mistakes early saves you money and time; a stitch in time saves nine.

With DUPRO, there is a slight guarantee that you will end up with the right quality and quantity products and on time.

Limitations of DUPRO Inspection

Despite its many benefits, DUPRO comes with its share of limitations.

First, DUPRO inspectors do random sampling/checks during the inspection.

The sampling represents a certain quantity and not the whole batch.

Therefore, DUPRO does not guarantee that the rest of the production will be 100%error-free.

Daily Production Monitoring

Daily Production Monitoring means an on- the–scene inspection performed daily.

The inspector checks randomly picked goods against your quality checklist and the golden sample.

When to Consider Daily Production Monitoring

It would be best if you considered daily production monitoring when:

• Your goods are of chief value
• Producing fragile or hard-to produce goods
• You doubt the manufacturer’s abilities
• Working with a tight delivery schedule. So you need to keep the manufacturer on toes.

Daily production monitoring ensures all your specifications are in force.

Any defects the inspector identifies, the factory corrects early.

How long Daily Production Monitoring Lasts

The duration of production monitoring depends on the goods being produced.

The inspector is at the factory daily or almost every day to keep track until your order is complete.

Benefits of Daily Production Monitoring

Production monitoring provides many benefits.

One, you get daily reports on the quality of goods as well as the production schedule.

These reports, note, are often accompanied by videos and images, so you control the whole process.

Secondly, keeping an inspector on-site for daily monitoring eliminates quality inconsistencies.

The process monitoring ensures product quality specifications are met.

Other benefits of this form of quality control are that it prevents production and shipping delays.

It also helps you to understand the entire production cycle.

Limitations of Daily Production Monitoring

Having an inspector at the factory daily for production monitoring may be expensive.

Daily monitoring could add to the product cost eating at your profits.

It could also push you to revise product prices upwards, which might affect your sales.

Sample Checking

Sample checking is an everyday activity in production and manufacturing.

This procedure involves picking a few products from the production line and inspecting them.

Sample checking is to ensure that they meet customer’s specifications.

In most cases, this helps to discover possible defects before mass production.

What happens During Sample Checking?

The inspector takes some products from a batch/lot and inspects for quality.

He/she does this before the production of the rest of the batch/lot.

The cost of doing a sample check is much less than carrying out this function for the lot.

Suppliers can make custom samples or pick from the existing lots.

You (the customer) may need to pre-screen the suppliers’ samples before mass production.

Pre-screening ensures they meet your quality standards.

Every piece is inspected following a checking sheet tailored to the needs of each customer.

Benefits of Sample Checking

The benefits of sample checking are as follows:

• It tests the quality of a whole batch or a lot of products minimizing risk and defects
• The basic idea behind sample checks is to save time, effort, and mass production costs.
• Sample checking verifies the stability, performance, and quality of the product. Also, it ensures that products meet the standards of the original design.
• The process enables you to meet customer’s demands and expectations. Consumers of the products usually have higher expectations of the products they buy. They thus only want to purchase items that match their standards.

So, sample checks ensure consumers receive products they feel comfortable purchasing.

Limitations of Sample Checking

With few items taken from the batch as a sample, the outcome gives a general result of the pack.

It might miss on faulty products.

Pre-shipment Inspection

Pre-shipment inspection is the examination and testing of products before it is shipped.

It happens when products are 80- 100 percent complete.

Pre-shipment is the final inspection that checks any fault and errors in your products.

Procedures conducted in Pre-shipment Inspections

The inspector inspects random samples from the packed boxes.

And using your quality checklist, he/she will check if the final product meets your requirements.

He/she will review the packing boxes to ensure their condition to hold our cargo in place.

The process takes place as follows:

Step 1: Factory Visit

Pre-shipment inspections take place on-site at the manufacturer’s premise.

Meaning, the inspector has to visit the supplier’s premises in-person to perform the PSI.

If they find issues with the products, they may recommend further tests and measures to correct them in time for shipment.

Step 2: Quantity Check

The inspectors verify the quantity of products which has to be in line with what you ordered.

They will also check the type and quality of the packaging used.

Packaging must meet regulatory standards and ensure the safety of products during transportation.

Step 3: Random Sampling

The quality inspector uses ANSI/ASQC Z1.4 (ISO 2859-1) as a standard sampling procedure.

If the shipment contains an acceptable number of quality defects, then the shipment can proceed.

Otherwise, the shipment may be rejected for rework and shipping at a later date.

Step 4: Compliance Checks

For this, inspectors verify if products conform to the recommended quality and industry standards.

They will check the product dimensions, weight, labeling size, and color checks and compare them with your original specifications (golden sample).

The golden sample is often built in strict compliance with all regulatory standards.

Step 5: Workmanship Check

In this stage, the inspector focuses on the physical attributes of the product.

Depending on the level of classification (major, minor, or critical), any defects are then dealt with accordingly.

Step 6: Performance Tests

Here, the focus is mainly on performance and safety.

Products must meet all requirements on the above.

They include:

• Function tests for apparel and footwear where inspectors perform physical examinations on the products.

For garments, they check the buttons and zippers to test strength and functionality.

A test for fabric density and composition is also done to determine the use of specified material.

• Mechanical and Electrical Testing. These are tests done on mechanical and electrical products such as automotive and electronics.

Tests on automotive look establish the safety of moving parts to avoid potential injuries.

Here, the inspector checks for uneven and sharp edges and tightening of screws and hinges.

Once the pre-shipment inspection is complete, the inspector will prepare a detailed report with his findings.

He/she will then send them over to you to go through and decide the next steps of action.

Importance of Inspecting Products before Shipment

Firstly, correct samples are not always used during DUPRO inspection.

Pre-shipment inspection will catch the faults.

It is critical to correct errors and faults at this stage before cargo ships to you.

If you miss this stage, defective goods will find their way to the shipping container.

Secondly, you know the quality and quantity of products you will receive before they arrive.

It gives you peace of mind when there is a guarantee of quality products.

It will please your customers too.

A pre-shipment inspection is an essential tool.

It ensures the quality of goods before shipment.

The inspection avoids the return of goods when they have already left the manufacturers premises.

It also verifies that imported goods meet specific established standards and regulations.

You get a comprehensive report from the inspecting company detailing the production processes.

You also get photos and videos (where necessary) for the whole process.

Standards for Sampling Procedures in Pre-shipment Inspection

Inspectors follow a standard sampling procedure.

The procedure is accepted as a single criterion for Pre-Shipment Inspection (PSI).

The standards for sampling in PSI are:

Sampling Plans

The quality inspector does not test every item.

They use samples as defined by ANSI/ASQ Z1.4-2003 and ISO 2859-1:1999 standards.

These standards guide them on the samples to pick to represent the whole shipment.

Random sampling saves you both time and money, especially if you have a shipping deadline.

There are three levels of inspection, Level I, Level II, and Level III. Level III is more intense, and its sample portions are more.

You should choose AQL level III for a PSI inspection for more quality risk, expensive or sensitive merchandise.

For example, if you are importing medical equipment and motor vehicle, level III is more intensive and thorough than Level I and Level II.

Select Level II is your cargo is general.

It is the commonly used quality inspection level.

Level I involve fewer samples, and it is at the lower end of the inspection scale.

It is suitable for low-risk products.

Acceptance Quality Limit Table (AQL Table)

This table defines the highest number of defects acceptable in a batch that is tolerable by a buyer.

AQL standard is most used by the pre-shipment inspectors to inspect consumer merchants.

You may adjust it to best suit your requirements.

Although it varies between factories, it unbiased and provides a balanced view.

The Pre-shipment Inspection Report

The pre-shipment inspection report is a quality control document.

An inspecting company provides this document to you before shipping the merchandise.

This report can be manual or automated.

It summarizes the quality of the merchandise.

Both major nonconformities are compared to specifications, and minor ones are compared to sample inspection.

A draft report is given to the manufacturer.

It has an overview of the defects found during quality control.

It is assumed that the manufacturer can cut down or correct these problems before shipment by this time.

The factory manager signs the draft report to show that He/she is aware of everything in it.

Note the draft report only offers a general overview of the processes.

On the other hand, the final report is detailed.

It includes photos that give you a clear understanding of the flaws and errors present.

The report also shows all order specification checks, complete tests, and each detail explained.

The quality inspector doesn’t leave the final report at the factory under any circumstance.

You may, however, make a prior request a day before the pre-inspection.

Once you receive the final report, use it to guide you in judging your cargo’s quality.

If you feel some corrective measures need to be done, liaise with the supplier to effect the changes.

A final product inspection report, note, will include details on the following:

• Safety of your products
• Quantity of your merchandise
• Products’ craft
• Product color and sizes
• Export packaging boxes and their complacency standards
• Safety of the packaging
• All other requirements from your checklist and destination country standard requirements

Limitations of Pre-shipment Inspection

Some limitations of pre-shipment inspection include:

Conflict of Interest

The inspecting company serves to represent your interest by default.

But if they have a conflict of interest with your supplier, you may end up not getting the services you paid for.

Lack of Responsibility

Faulty goods may find their way into the shipping container.

Your manufacturer may refuse responsibility and blame it on the quality inspector.

The company may also refuse to take responsibility.

This denial leaves you responsible for all the losses that come.

Unclear Expectations

Communicate your expectations with the inspecting company.

Supply them with the golden sample and your quality checklist.

Make sure that the inspector is not operating under assumptions.

Failure to have your expectations spelled out may not get you the desired results.

Uncommitted Agency

If the inspection company does not take your needs seriously, the results will not be in your favor.

Sorting Inspection

Sorting inspections examine physical objects from the point of view of attracting preferential attention to the good’s qualities.

As per the rules, the inspector should inspect each physical item in its entirety. Inspectors are given a set of criteria that they might use to judge the quality of goods.

During the manufacturing process, each product passes through two separate sorting processes by hand.

The first inspection covers the product’s general quality (including sizing and appearance), and the second measures each product against strict specifications.

An inspector will always be looking for potential hazards present during sorting.

Risks like product overlap, mismatches, broken parts, or missing instructions can lead to hefty fines or even criminal charges.

Sorting Inspectors ensure that the products you receive are free of any defects and damage.

We will sort various parts by size, shape, color, and complexity to reject defective products or products that do not pass your quality standards.

Standards used by Sorting Inspectors

Standards allow fair competition from companies while providing quality products to the consumer.

These standards are uniform, so that makes a company compete pretty with local and international markets.

The standards used by sorting inspectors include:

• ANSI/ASQ Z1.4-2003 (R2018): Sampling Procedures and Tables for Inspection by Attributes. This standard system is a good sampling for AQL.
• ISO 2859-1:1999: acceptance sampling system for inspection by attributes. ISO stands for International Organization for Standardization.

Metal Detection

Metal detection inspection is a quality assurance check.

The inspection is carried out to detect traces of metal and needles accidentally left in garments.

Why Invest in a Metal Detection Inspection

Metal detection inspection as a quality check will prevent:

• Customer injuries that result from broken needles and metals left in garments
• Lawsuits for your company. Injured customers may decide to take legal action against you. Such cases can be too costly, leading to financial losses.
• Your brand name being negatively affected due to poor publicity resulting from the lawsuits.
• Damages to other machines that come into contact garments containing the broken metals/needles. Repairing such machines may cost your company time and money.

Container Loading Inspection

Container loading inspection (CLS) is the inspection of merchandise unto the shipping container.

It happens at the manufacturer’s premises.

What happens in a Container Loading Inspection?

During container loading inspection, the inspector notes when the loading container arrives at the manufacturer’s site.

The weather condition on the loading day is also recorded.

In this inspection, random checks on your goods for quality, quantity, labeling, proper packaging, etc., are performed.

The inspector checks the export packaging boxes to ensure they are new and do not have folds.

He/she also checks the packaging boxes are for moisture and debris that may harm the goods.

Container loading supervision also includes external and internal inspection of the shipping container.

For this, inspections check for;

• Mould
• Insects
• Stains
• Nails and other protruding metals
• Leaks
• Odor

The shipping container should be free of the above elements.

It should also be clean and airy.

After checking the container’s condition, the CLS inspector then supervises the cargo’s loading into the container.

He/she counterchecks that all boxes make it to the container and then seals it to prevent interference and theft of your goods.

A report detailing the process is then sent to you by the CLS Company.

Benefits of Container Loading Inspection

CLS inspection protects you from receiving inferior quality goods.

It also offers the following additional benefits:

• Correct packaging material is used for packaging. Proper packaging ensures your merchandise gets to you safely.
• The quantity in your sales agreement is what is delivered to you.
• You get your goods on time.
• It saves you time and money
• You get peace of mind because you are assured of receiving the correct order safely.
• CLS helps you protect your brand name by ensuring you receive goods that represent your brand.
• Your clients are happy to receive quality products.

Limitations of CLS

Sometimes the factory/supplier may be uncooperative in unpacking the random boxes for quality checks or loading the container.

Lack of cooperation may cause unnecessary delays in the process, which may affect the shipping time.

Also, it may be necessary to include in the agreement who handles damages that occur during container loading.

If not well stipulated, both the supplier, the quality inspector may refuse to take responsibility.

This may leave you bearing substantial financial losses.

Container Unloading Inspection

Container unloading inspection is the supervision of cargo being offloaded from the shipping container.

Container offloading happens when the container gets to its final destination.

What happens in a Container Unloading Inspection?

A professional inspector does supervision the container.

He/she is responsible for ensuring that the goods being removed from the container are in good condition and not damaged.

He/she will also check to ensure that all the correct product information has been filled out and the paperwork is complete.

The individual doing the supervision is expected to document each item being offloaded at every moment.

Inspectors search for lost and damaged items by checking labels against shipments.

They may also inspect boxes and bundles to ensure that the contents match the paperwork inside.

Why invest in a Container Unloading Inspection

A certified inspector can help to countercheck your goods during unloading.

They will verify if the goods packed at the manufacturer’s premises are the same that you receive in quality and quantity.

The container unloading inspector will oversee the safe offloading of the merchandise from the container to your warehouse.

If there are any damages, they are noted, and you can follow up with your insurance company or the person responsible for the damages.

You get a detailed report of all the unloaded cargo and pictures to show the whole process. You can know the quantities offloaded and their state.

In case of any differences between what was loaded from the supplier, you can immediately intervene to recover your lost cargo.

Conclusion

Different types of inspection will help you monitor your manufacturing process and ensure that all quality control metrics are met.

Inspectors are vital to quality control and will happily tell you when something is wrong.

Lack of product inspections may result in producing a lot of items with flaws in them.

The result could be wasted money or a lot of frustration in the long run.

At Tj chinafreight, we will help you handle all quality control inspections through our reliable partners.

Talk to us now for all your quality inspection needs in China.

Today, I will take you through another popular term in the freight industry – chassis pool.

So, if you want to know what it is, why it is important and when to use it, read this guide.

What is Chassis Pool?

It refers to storing Chassis near terminal areas or on/terminals across the country, for example, railyards and ocean terminals.

The main aim of a chassis pool is to support everyday usage of intermodal Chassis by modal carriers.

Who Owns and Operates Chassis Pools?

Chassis pools are owned and operated by Consolidated Chassis Management (CCM) with many types of participants like:

• Ocean carriers
• Leasing companies
• Motor carriers
• Other entities sourcing chassis from CCM pools

How many Types of Chassis Pools are there?

There are multiple types of chassis pools, some of which include:

• Proprietary collections like DCLP: it is a type of chassis pool in which the equipment management is owned and managed through the same entity.

These pools allow for investment in operational efficiency, safety, and fleet quality to ensure the delivery of a great trucker experience.

• Gray pools: it is whereby several IEPs contribute Chassis to a given collection, thereby allowing truckers to use the contributed IEPs chassis during movement.

An assigned manager will run the pool with each IEP will charge their selected rates depending on the commercial agreements with motor and ocean carriers.

• The third-party operated pools: managed by a single entity and source equipment from several parties, mostly IEPs and leasing companies.

The pool manager is responsible for all pool operation costs and billing for Chassis usage by motor carriers.

What is the Difference Between Proprietary Chassis Pool and Third-party Operated Pool?

The same entity manages the Proprietary chassis pool.

On the other hand, the third-party operated collection is managed by a single entity, although equipment is mainly sourced from different parties.

In the third-party operated pools, the equipment owners are mostly IEPs and chassis leasing companies, contributing assets.

Proprietary collections offer IEPs a chance to upgrade Chassis, enhance users’ experience, and invest in technology.

Proprietary chassis pool grants direct control and management of Chassis, thus enhancing perfect customer service.

In the third-party operated collection, the pool manager is entirely responsible for all the costs of pool operation and billing of usage of Chassis to operators.

What is a ’Gray’ Pool?

It is a type of chassis pool whereby multiple numbers of IEPs contribute to one collection.

They then allow truckers to use any IEPs’ Chassis that is donated for any movement regardless of the containers of ocean carriers moving from one point.

Traditionally, the ‘gray’ pool running is by a single manager.

Then each IEP charges their set rates depending on their commercial agreements with ocean and motor carriers.

What is the Benefit of ‘Gray’ Chassis Pool to Shippers?

Some of the benefits of gray chassis pool to shippers include:

• ‘Gray’ chassis pool attendees are made up of the largest pool operators in the harbor, thus providing efficient services to shippers.
• It allows ports to cooperatively several issues concerning security, safety, congestion, infrastructure, and equipment.

It helps ensure that shippers’ truckers pulling a container and Chassis can deliver or pick up the equipment at any of the terminals in the harbor.

• The current situation at the ports has eased by the use of a ‘gray’ pool.
• ‘Gray’ pool allows Chassis to be interchanged with ease and even kept off/dock rather than at terminals. It grants shippers the ability of their Chassis to move freely both at the start and stop locations.

Who are the Main Participants in Chassis Pools?

The main participants in chassis pools include:

• ACL
• Hyundai
• United Arab
• APL
• K-Line
• Bridge Chassis
• Yang Ming Line
• Maersk Line
• China shipping
• Zim Line
• Matson
• CMA-CGM
• MOL
• Cosco
• Motor Carriers Chassis Pool
• CSAV
• Med Shipping
• Direct Chassis Link
• CPC
• Evergreen
• NYK Line
• Flexi-Van
• OOCL
• Hamburg Sud
• Pacer
• Hanjin Shipping
• TRAC Intermodal
• Hapag Lloyd
• Turkon Line

What Happens if Chassis Pool is Located in a Different area than the Container Pick-up?

If a chassis pool is located in a different area than the container pick-up, a split chassis fee will apply.

The trucking company will have to assess the Chassis split fee to cater for the costs of transporting the Chassis to the container location.

Chassis split refers to when the container’s location is not the same as that of the Chassis.

In case the ocean port does not possess any available chassis, the trucker first travels to a nearby chassis pool to collect the Chassis then proceed to the port.

Where applicable, a chassis slit fee will appear on your invoice in the form of a destination charge.

What is the Difference Between Domestic and International Chassis Pool?

The difference between domestic and international pools is the size of the Chassis.

Domestic chassis pool is 48’ and 58′ containers while global chassis pool is 20′, 40′, and 45′ containers.

What are Pool Chassis Agreement, and what do they Entail?

They are a set of rules to provide access to pool chassis at railroad maps, container yards, and maritime terminals.

Pool chassis agreement includes access.

Some examples of the Pool Chassis Agreement include:

• Management Agreement: this is for management and business functions.
• Contributor Agreement: contributor takes responsibility for the number and conditions of the Chassis at induction.
• Terminal License or Access Agreement: for the relationship with the terminal.
• M&RVendor agreement.
• User Agreement: for the entity which takes Chassis from the pool. The user has the liability to pool contributors for their operations.

What is the Benefit of the Chassis Pool Agreement?

Chassis Pool Agreement helps to improve the general operational efficiency and costs of repositioning.

It, in turn, leads to a reliable supply of equipment needed by motor carriers in given locations.

How are Usage Rates Determined in Chassis Pools?

The usage rates are determined by the start and stop (origination and ending) at the gate of the shared pool location.

Who Oversees Maintenance and Repairs at Chassis Pools?

The pool manager oversees the maintenance and repairs at the chassis pool.

Who is responsible for decision-making in Cooperative Chassis Pool?

Decision-making in a cooperative chassis pool is made collectively by the members that have pulled their equipment together.

These include a collection of steamship lines.

Must all Cooperative Chassis Pools be Located at the Operating Terminal?

Yes, all cooperative chassis pools must be located at the operating terminals to ensure the following benefits:

• Faster terminal throughput.
• Increased utilization of the terminal.
• Economies of scale.
• Reduction in costs of repositioning.
• Improved utilization of assets.
• Reduction in the expenses of maintenance and repair.
• Higher turn time and velocity.

How are Chassis Pool Locations Determined?

Chassis pool locations are determined depending on the efficiencies received by the participants for serving given areas.

Some of the examples of chassis pool locations include:

• Typical areas: for instance, ocean terminals or rails. It is where bare Chassis is made available to any pool participant, and several members are present.
• Non-common locations: for example, container yards. They are selected by members and are locations that have little or lack efficiency for chassis exchange between participants.

What are the critical Characteristics of the Coop Chassis Pool Model?

Some of the critical characteristics of the Coop Chassis pool model include:

• A given percentage of equipment is supplied by each member, relative to their future or historical trends of usage.
• Made up of a collection of steamship lines that have pooled their equipment together.
• Members cater for expenses like repositioning costs and maintenance and repair costs.
• The third-party manager is only able to get a fee for management.

What is the General Process of Picking Up the Chassis and Container in the Chassis Pool?

The general process of picking up Chassis and shipping container chassis pool is based on several factors, which include:

• Size: they come in different ranges of sizes, making it possible to set the most appropriate ones for your needs.
• Load capacity: the load capacity of most transportation mediums ranges between twenty tons to forty tons. For heavy applications, it is good to consider forty tons and use the twenty tons option for lighter applications.
• Design: pick a strategy that will meet the requirements of your specific needs.
• Cost: this is a significant factor when picking up Chassis and containers in the chassis pool. It is essential to stick to your budget and select a kind that will serve your functions and be affordable.

What is the Difference Between US and International Chassis Pools?

US chassis pools, in most cases, are designed to specific container sizes of about 40’ and 20 ‘and contain two axles.

They are very light in weight compared to international chassis pools due to the US nation gross weight standards of vehicles.

Chassis pools in the US have a storage function that is mainly unique to its country.

On the other hand, international chassis pools are often left at the shippers’ facilities for loading and unloading.

The US has over seven hundred thousand chassis pools, of which almost eighty percent are standards ocean container chassis.

In comparison to international chassis pools, the US operates so many Chassis than overseas jurisdiction.

Chassis is operated and supplied independently by ocean carriers in the US just as part of its delivery.

Internationally, chassis tend to be provided by motor carriers and always stay connected to the truck.

How do Chassis Pool Operators ensure equipment Quality and Safety?

Chassis pool operators ensure equipment quality and safety by implementing the following measures:

• Establishing fleet standards.
• Conducting pre and post-repair inspection services.
• Carrying out general condition audits.
• Keeping proper records.
• Ensuring compliance with the standards in place.
• Designing methods for a single resource, procedure approval, and payment process.

Can poor Chassis Pools Quality in the Pool Environment Impact my Delivery Schedule?

Yes, poor chassis pool quality in the pool environment can impact your delivery schedule.

Chassis pools bring about so many benefits, but it is essential to ensure that they are structured correctly.

Chassis pools that are poorly designed may lead to inefficiency, and this might cause delays in your delivery schedule.

How do Chassis Pools Contribute to Terminal Efficiency?

Chassis contribute to terminal efficiency by reclaiming scarce acreage and, in this way, reducing the number of stored Chassis.

Chassis pool enables operating savings by reducing the combined inventory levels and the repair and maintenance economies of scale.

They also ensure terminal efficiency by decreasing the risk of Chassis, which is caused by service failures.

What Value can taking Control of my Chassis to add to My Business?

Some of the values that taking control of your Chassis may add to your business include:

• Improved utilization: it will ensure that resources in your business are used efficiently, and there is no wastage.
• Regional efficiencies: taking control of your Chassis will ensure that there is minor repositioning.
• Standardized maintenance and repairs: this will, in turn, ensure safety and reliability in your business.
• Centralized inventory control: taking control of your Chassis will make you able to carry out forecasting and repositioning, thus significantly improving your business.
• Reduces congestion: there will be reduced truck turn time and positive environmental benefits to your business.

How do you Identify Pool Chassis on Terminal?

All pool chassis are stenciled to enable easy identification as part of a specific terminal.

For example:

• DCLP chassis are stenciled with a ‘’DCLI’’ marking.
• LABP chassis stenciled with ‘’LABP’’ marking.
• GACP chassis are stenciled with either ‘’TNWA’’ or ‘’GACP’’ marking.

In this way, pool chassis can be collected with a container identification number at any start or stop locations and the terminal.

Who Leases Chassis in Pool?

Chassis in a pool is leased by leasing companies whose provision ranges from daily lease to fleet options dedicated.

How much does it Cost to Buy a Chassis?

Volume discounts apply when buying a chassis, just like any other purchase.

In case you are just purchasing a few new Chassis units, the price you will pay would be under $10000.

However, it is essential to note that the value of Chassis depreciates over time.

Also, note that Chassis that are old and well maintained serve as new ones.

Why do Pools have to Depend on Contributors for Chassis?

Pools have to depend on contributors for Chassis because of the cooperative aspect of the pool structure.

This structure has catered to its members, who all possess their fleet to contribute.

Do Chassis Pools Manage Specialized Chassis such as Tri-axles?

Yes, the chassis pool manages specialized Chassis such as triaxles.

They do this by imposing a tri-axle chassis fee after assessing if an FCL shipment moving by truck is overweight.

Can I choose my Chassis Provider in the Chassis Pool?

In most cases, there is little choice in choosing your chassis provider in the chassis pool.

Mostly, a container is put on a chassis at the rail or ocean terminal before the motor carrier comes to pick it up.

The chassis provider is primarily determined unless your container is taken off the Chassis and loaded on another.

However, there are several chassis’ providers within the CCM pool, and most of them take part in a program.

This program allows you to select a chassis provider without changing the container to a new chassis.

How do I Choose Chassis in Pool Environment?

You can choose a chassis in a pool environment under the following conditions:

• Your terms
• With your chassis provider
• Your rate

You can be allowed to select your preferred Chassis in its pools on specified movement, although there are some restrictions.

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I know you’re probably wondering what container freight station cut-off is all about.

That’s why this guide will explain everything you need to know about the CFS cut-off.

Keep reading to learn more.

What does CFS Cut-off mean in Shipping?

There is numerous meaning of CFS Cut-off concerning shipping.

However, CFS Cut-off is that date and time where you check less than container load(LCL) if it conforms to the standards of planned maritime.

For effective shipment, the shipment must be within the CFS cut-off date to be loaded into the vessel.

In a scenario where the shipment does not meet the CFS cut-off date, the shipment will not be loaded into the vessel for shipment.

Usually, the CFS cut-off date is five days before the planned navigation.

However, it may differ depending on the circumstances of the CFS.

Furthermore, the process of CFS cut-off involves a combination of the shipment in a container earlier than the sailing date.

What is CFS?

It is a structure or space where various cargo for exporters and importers are either consolidated or unconsolidated.

Usually, this is before exporting or importing process begins.

What is the difference between CFS Cut-off and CY Cut-off?

The following are the difference between the CFS cut-off and the CY cut-off.

CFS cut-off is that date and time where less than Container Load (LCL) is checked to conform to the standards of planned maritime.

CY cut-off refers to the date on which a container must be checked in before the planned maritime.

The CFS cut-off date is five days before the planned navigation.

However, over and over again differs, subject to the circumstances of the CFS.

In most cases, the CY cut-off date is always two days.

However, in most instances, the shipping company will determine these dates.

CFS cut-off, the goods in shipment belong to different importers and exporters.

What is the Significance of CFS Cut-off, and why is it Important?

The critical role of CFS cut-off is to ensure there is plenty of time for shipment.

Exporters and importers can load their goods into the vessel or at the port.

It also ensures that the shipping agents do the necessary documents within the timeframe for the goods in transit.

CFS cut-off ensures that the shipment is received within a short period for export or import.

And for the planning of the yard, the CFS cut-off ensures that the ships are readily available for the shipment of goods.

CFS cut-off confirms that the desired destination is strictly followed and dispatches shipment.

Then delivers to the intended station without delay.

The CFS cut-off ensures that there is enough time for proper planning of the port.

This helps in allocating containers to the respective consignments.

Who sets the CFS Cut-off time?

CFS cut-off time is usually five days before the planned sailing.

However, there is no specific Cut off time.

Although, the CFS cut-off time is set by the port or container operators.

Usually, they are in liaison with the vessel operators at the port of the shipment county.

The cut-off time is crucial for the proper and smooth planning of the sailing time and consignment.

It is suitable for a client to ensure that their goods are within the cut-off time.

So, their container may be allowed into the terminal.

The CFS cut-off time is available on the company website.

Always ensure you deal with companies with experience.

How do you know the CFS Cut-off Date?

A client may know of the CFS cut-off date through the information published on the company website.

Often the company provides circulars to the client.

They may post such information on the CFS cut-off date.

Alternatively, if you are experiencing challenges in accessing the company website, you can contact them directly.

Then inquire about the CFS cut-off date, where their representative will attend to your query.

The country of destination may determine the CFS cut-off dates.

Can you Deliver Shipments after CFS Cut-off Time?

You cannot deliver the shipment after the CFS  cut-off.

However, the permission may be granted under the following circumstances:

Holiday impact may cause delay of shipments, forcing the goods to be delivered after CFC Cut–off time.

Change of route – when the vessel changes the route, it may make additional stops.

Consequently, the shipment may be delivered after CFC Cut-off time.

If the vessel leaves late due to unfavorable weather, it may cause the shipments to be delivered after CFC Cut-off time.

What happens if Shipment is Delivered OutsideCut-off Time?

The port may permit delivery of shipment outside the CFS cut-off time.

However, there will be a delay that will affect ships that are waiting to dock.

In such a case, the port terminal may look for an alternative means of transporting the shipment.

Or, they will have to wait until another vessel is accessible for shipment.

The shipment that is delivered outside the cut-off time will incur additional costs.

This is due to port fees and demurrage charges for not delivering the consignment within the required time.

What is the Average CFS Cut-off Time?

The average CFS cut-off time could typically be between 3-5 days.

However, this could depend on a country’s port terminal.

What is the Difference Between CFS Cut-off and VGM Cut-off?

CFS cut off CFS is that date and time where less than Container Load (LCL) is checked to conform to the standards of planned maritime.

VGM cut-off refers to the weight of the consignment.

It includes the weight of the vessel carrying the consignment.

This is declared in the shipment document for effective shipment.

Is CFS Cut-off the same as Load List Cut-off?

No, the two are not the same.

CFS Cut-off is that date and time where less than Container Load (LCL) is checked to conform to the standards of planned maritime.

Load list cut-off is when the consignment to be loaded into the vessel must be indicated in the list before the prior date of shipment.

What are the Cost Implications for Submitting Shipments Past CFS Cut-off?

Submitting shipments past CFS cut-off has the following financial implications.

The owner will incur another additional cost, including demurrage fees and fees involved at the terminal.

This may depend on a country’s tariff.

The shipment will experience delays since the loading time will be prolonged for not meeting the stipulated schedule time.

During peak hours, the goods may not be packed in the correct quantity.

Or perhaps due to time constrain, such goods may be damaged during loading.

When you don’t adhere to the timeframe, there is a high chance you may lose the goods.

Do Shipping Lines Extend Cut-off time?

During rare circumstances, the shipping line may extend the cut-off time.

However, the extension of the cut-off time will depend on:

i. The next available vessel may determine if the shipping line may extend the cut-off of time.

If there is no available vessel, then they may not extend the cut-off time.

ii. Alternative means – the availability of the alternative means may permit the shipping line to extend the cut-off time.

If there are no available alternative means, then they may not extend the cut-off time.

iii. If the consignment is very urgent, such as medical supplies, then the shipping line may allow for an extension of the cut-off time.

For consignment which is not urgent, they may deny an extension of the cut-off time.

iv. Environmental Conditions – During bad weather and the vessel is within reach; the shipping line may extend the cut-off time to allow such a vessel to dock.

v. Traffic – If the traffic at the port has been cleared, the shipping lines may permit a vessel to dock beyond the average cut-off time.

How do Shipping Companies Communicate Extension to Cut-off Dates?

Communication is a crucial component is a shipping business.

It ensures smooth operation and delivery of its services efficiently with regards to cut-off dates.

The following are ways through which shipping companies communicate extension of cut off dates;

i. Email; the shipping companies communicate extensions of cut-off dates through emails.

It is one of the fastest means of transmitting the information.

ii. Social Media; most shipping companies use their social media to communicate with the intended clients on the extensions of cut-off dates.

iii. Calls; shipping companies have call agents who share the information received on the extensions of the cut-off dates with the rest of the team and other companies.

iv. Written correspondences; shipping companies, may do written letters to other shipping companies to communicate the extensions of cut-off dates.

v. Newsletters ensure that the extension of cut-off dates is published and shared across different shipping companies.

How do you Ensure Timely Delivery of Shipments to CFS?

Timely delivery of the shipment is key to every exporter and importer.

For effective time delivery, the owner liaises with the shipping agents.

It checks the CFS cut-off dates for each consignment for proper planning and shipment process.

The necessary documentation is submitted three days before the shipment date to avoid delays in inspection and clearance by the port authority.

The procedure provided by the port authority on each consignment ensures that the exporter and importer abide by it.

This is basically for efficient and timely delivery of the shipment.

How does CFS Cut-off Influence your Shipping Timeline?

The CFS cut-off is critical for any shipment.

The cut-off date ensures that the consignment arrives at the port early enough for loading into the vessel to avoid any delays.

The cut-off dates are also vital in ensuring that the shipping documentation is done the right way for the smooth shipment of the consignment.

Cut off make it possible for the importer or exporter to inspect the right consignment for proper dispatch adequately.

This ensures there is no loss of the consignment.

The cut-off ensures that the consignment arrives at the intended country within the stipulated timeframe.

Typically, this is through the proper scheduling of the vessels.

In case the importer or exporters does not pay attention to the CFS cut-off, the consignment might be delayed.

Or, you may experience losses during loading.

It is always advisable to be within the CFS cut-off dates for smooth shipment.

What is MT Cut-off?

MT cut-off refers to the average metric tons of mass of a consignment, and usually, it is 1000 kilograms.

The port authority has set a limit of weight for the goods awaiting shipment.

Usually, the limit of MT cut-off ranges from port to port.

Besides, it also depends on the country of destination.

The goods must be within the stipulated mass to be permitted for sailing.

Those goods whose mass surpasses the MT cut-off are either repackaged afresh or denied entry into the port.

What is the CFS Cut-off Time for Empty Containers?

There is no specific cut-off time for empty containers.

However, a country’s port may determine the cut-off time for empty containers.

Usually, the cut-off time for empty containers is based on the availability of empty units.

Can you use CFS Cut-off to Calculate the Estimated Delivery Date (ETA)?

Sure, CFS Cut-off may be used to calculate the estimated delivery date.

However, the importer or exporter must be well conversant with information about cut-off time.

This is to enable easy computation of the shipment delivery date.

The estimated delivery date can be possible if all the necessary payments regarding the consignment have been paid and authorized.

In normal circumstances, the cut-off time is usually noon.

Although, the port authority will always determine the cut-off time.

In extreme circumstances where payment is made after the cut-off time, the shipment will be rescheduled for the following day.

What is the Difference Between CFS Cut-off and SI Cut-off?

CFS Cut-off is that date and time where less than Container Load (LCL) is checked to conform to the standards of planned maritime.

SI cut-off is a document that provides all the dates and times required to process shipment and billing.

Usually, it merges with the details on the bill of landing.

Is there CFS Cut-off for the Same Day Shipping?

CFS cut-off cannot be on the same day of Shipping.

However, much depends on a country’s port and the goods in shipment.

The availability of documentation for approval of the shipment can determine the CFS cut-off day of Shipping.

The availability of the alternative means and vessel could also make it possible for shipping on the same day.

Does CFS Cut-off affect your Shipping Costs?

The cost of shipping is based on CFS cut-off dates.

The shipping cost of a consignment that arrives after the CFC cut-off date is slightly higher.

The consignment owner will pay the extra demurrage and port fees, hence leading to high shipment costs.

How can CFS Cut-off help Lower your Shipping Costs?

The reduction of shipment cost is the ultimate goal of every exporter or importer.

However, CFS cut-off can help lower the shipping cost through the following means:

i. Distance; the shipment cost is based on the distance. With a shorter distance, you will pay less shipping cost as compared to a longer distance.

ii. Weigh the consignment; the heavier the consignment, the higher the shipping cost.

Therefore, it is essential to consider the weight of your consignment beforehand.

iii. Discounts; some ports offer discounts on selected routes. During such offers, you can ship your consignment and save some amount from the discount hence lowering cost.

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Today, I will introduce another freight term called chassis split.

In this guide, you will find all information you need about chassis split.

So, if you want to learn more about chassis split

What is a Chassis Split?

A chassis split is when the chassis and the container are not located in the same place.

This will mean that the trucker will have to go to a given place far from the port to pick up the chassis.

They will then go and get the freight.

At this point, the trucking company will assess the chassis split charges.

These are the charges that are going to cover the costs of transporting the chassis to where the shipping container location is.

Chassis split will always attract fees known as chassis split fees.

When does a Chassis Split occur?

Many times the steamship lines will terminate the chassis at a location different from where they pulled it from.

A chassis split will occur when the ocean port lacks a chassis. This forces the trucker to travel to a chassis pool that is nearby to pick the chassis before proceeding to the port.

It can also happen when the trucker is moving two separate containers that will need separate IEP chassis.

How do Chassis Splits Work?

During a chassis split, the trucker will rent a chassis from the intermodal equipment provider (IEP) either on a short term or on a daily basis.

The trucker will then pick up the chassis from the Depot and had to the terminal.

From there the trucker will then pick up the container from the terminal and proceed to deliver it to the first shipper.

At this point, the trucker has two options. If the equipment is matching, they can re-use the chassis.

If the equipment does not match, they will have to return the original chassis to the Depot and choose the correct one.

How does Chassis Split Affect Delivery Schedules?

Chassis split will affect delivery schedules due to unplanned delays.

When there are no chassis at the port, it means that shippers will need to go far from the port in search of trucks/chassis.

This means delays in the delivery of goods.

As a result of this delay, the owners of the goods are forced to wait longer for their goods to arrive.

In a multiplier effect, more losses can be experienced due to loss in business as they wait for goods.

What can I do to avoid Chassis Splits?

In order To avoid chassis splits, you can decide to own your own chassis fleet.

You can also enter into a long-term contract in order to eliminate the chances of chassis split. Ownership of the chassis fleet will allow you to fully control your peak season deliveries.

You will also be able to customize the equipment so that it can handle complex or multiple loads.

You should however note that the maintenance and upkeep costs can be high. You will also need a huge operation and storage space.

What is an Unexpected Chassis Split?

Many times shippers will plan themselves to the end.

This is in order to avoid any eventualities that may otherwise be avoided.

It is in this spirit that they will plan for chassis at the port.

So that once the container arrives, it can be loaded directly to the truck.

However, this may not always go as expected and there may be a shortage of chassis making it hard to access one.

This unexpected turn of events is what is referred to as an unexpected chassis split.

When does an Unexpected Chassis Split apply?

An unexpected chassis split will occur when the plans put in place to have a ready chassis or truck fails.

The shipper will then have to organize and have the trucker look for a chassis at another place.

They will then come with, load the container and continue to deliver the shipment.

This is normally an extra cost on top of the shipping cost and will then affect the overall costs of shipping.

What are Split Pick-up and Split Return?

A split pick-up is will occur when the shipment arrives at the ocean terminal that does not offer a chassis.

The driver will therefore have to make a separate trip to where the chassis provider is before the port.

In the same manner, a split return is when a container is returned to the ocean terminal.

Since the terminal is not accepting chassis either due to lack of space or policies, the chassis then have to be delivered to an off-site.

Can a Single Shipment require both a Split Pick-up and a Split Return?

https://youtu.be/isIcqkYUHws

Yes indeed, a single shipment may require a combination of split pick-up and the split return. However, it is worth noting that this will result in two chassis fees.

What is Chassis Split Fee?

A chassis split fee is an extra fee charged to cover the incurred cost of delivering the chassis to the location of the container.

This will occur if there is no available chassis at the ocean port or ramp.

This means that the trucker must travel to a chassis pool nearby to pick a chassis before proceeding to the port.

It is like a stop-off charge in simple terms. The chassis split fee will generally range between $50 and $110.

How is Chassis Split Fee charged?

If your shipment is being moved from the ocean to the truck, it will incur a chassis split fee.

For full container load, there is a flat charge but may vary depending on the trucker.

For less than a container load, the amount to be charged will be charged based on the volume of the cargo.

Is Chassis Split Fee an Accessorial Charge?

Yes, chassis split charges are part of the accessorial charges.

Accessorial charges are the extra fees that are attached to the transportation services.

These are duties that are beyond the shipping of goods from one point to another.

Other accessorial charges include:

• Trucking wait fee
• Bobtail fee
• Pre-pull fee
• Toll bridge
• Reefer with Genset
• 20-Foot Tri-axle
• SSA Gate fee
• Yard storage
• Re-in Gate fee
• Chassis rent
• Scale ticket among others.

Is there any way around Chassis Split Fee?

Some shippers will choose to own their chassis for drayage shipments.

This however is typically very expensive and so it may not be worth seeking them.

You can however choose to work with a trusted carrier. They will take good care of you.

Can I Negotiate Chassis Split Fees?

Yes, you can negotiate for better chassis split fees.

Most people tend to negotiate the number of days that they need to have the chassis out of the port.

They will rarely negotiate the fees charged on the chassis.

Unlike at the port, other companies will negotiate with you and give you a chance to have your shipping costs reduced.

What is ‘free chassis’ Agreement in Respect to Chassis Split?

This is the free day that will be available for you to pick your shipment from the yard or port. Any delay after the lapse of the free chassis period is over, fees will be applied.

The free chassis is normally 48 hours after you receive the notification that your shipment has arrived.

However, the time may vary and that is why it is important to keep communicating with your drayage broker.

Does last free day influence my drayage costs in relation to Chassis Split?

The last free day may influence your drayage costs.

This is because you will be required to act and pick your container before the time is over.

If you are not able to pick up and the free last day is over, you may then be charged more than $150 for demurrage every day.

The charges will act as storage charges from the port. If you don’t want to pay the storage charges you can pay pre-pull charges.

Pre-pull charges will save you the daily storage charges that are charged at the port.

For pre-pull, you will only be required to pay $125. In essence, this is going to save you money charged for storage.

It is always good to make sure that you prepare in advance to pick your shipment.

This will help you avoid getting to the last free day as this may cost you more than you had planned for.

How do Chassis Split fees influence my Container Shipping costs?

Chassis split fees will increase your shipping costs.

This is because you may have planned for your shipment with available chassis in mind.

When you arrive at the port and find that there is no available chassis, then it means you need to look for one somewhere else.

This means you will have to incur an extra cost that will be added to your shipment costs.

As such it is true to say that chassis split fees will affect your cost of shipping.

Is it possible to avoid Chassis Split Fees? How?

Avoiding chassis split fees can be challenging.

However, you can build a good relationship and try negotiating the fees ahead of time. Companies being in business will always charge depending on the demand for the trucks.

Sometimes the cost of trucks may go high due to scarcity raising demand.

At the same time, the high availability of trucks will provide shippers with a good chance to try and negotiate for good rates.

Essentially, better chassis split fees will save on the shipping costs that may be incurred.

What causes Chassis Split Delays?

Chassis split delays will occur due to delays that are created by the extra stops for drivers.

This creates wastage of limited hours of service available.

This will also reduce the availability of available equipment thus draining the productivity of the supply chain at the end.

This wastage may lead to losses which may be transferred to the importers.

How does Chassis Split Delays impact Shipping?

Chassis split delays can be costly.

This is especially so when there is a high demand for ocean freight space. The delay causes a shortage of trucks and the few available comes at a very high cost.

To prevent these costly delays, shippers work to create an effective trucking strategy and match with the incoming cargo with available trucks.

Creating a good relationship with truck companies may be helpful in ensuring that negotiating for better rates is easier.

This also becomes easier to get a priority whenever there are challenges to do with chassis.

What is the Difference Between Chassis Split and Chassis Flip?

Chassis flip is applied when the container is removed using a piece of lifting equipment.

The lifting equipment is used in removing a container from the ship.

It is also used in removing cargo from the train and placing the container on the ground.

The container is then lifted and placed on the chassis or truck that will be used to transport the container to the final destination.

Chassis split on the other hand applies when there is no chassis at the terminal and the trucker has to go get a chassis from somewhere else.

Another difference is the payment of fees.

Chassis flip will attract flip fees while chassis flip split will attract chassis split fees.

The flip fees are the additional handling charges for the lifting equipment.

This can be avoided by ensuring that the transporter has a chassis on standby to receive the heavy container immediately it is offloaded.

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Contact us today for all your freight forwarding services from China.

Today, I will take you through another important freight term called contract of carriage.

So, if you want to learn what it is, when to use the freight term and how it affects shipping business, read this guide.

Let’s dive right in.

What is Carriage?

Carriage is the movement of goods from one point to another by the carrier. This can be done by air, sea, road or even rail.

What is the meaning of Contract of Carriage in International shipping?

Contract of carriage is the contract that defines the legal responsibilities of the user and the carrier.

The carrier in this case can be an ocean carrier, air cargo carrier, freight trucking carrier etc. The user can either be the consignee or consignor.

A standardized contract of carriage is included in all the contract terms and the conditions of the carrier.

It is also referenced in the terms and the conditions to guide the forwarder.

A contract of carriage will state the physical person known as the carrier who agrees to move goods they are given to another physical person.

The physical person to whom the goods belong is referred to as the sender.

The carrier does this while receiving payment in return from the sender using the suitable means of transport agreed.

What is the purpose of a Contract of Carriage?

The carriage contact is used to set the minimum standards of the liabilities and responsibilities of the carrier.

It defines the duties, liabilities and rights of the passenger and the consignee to the contract. An example is the damage or loss of the cargo in transit.

It seeks to address issues such as the acts of God and including other relevant clauses such as force majeure.

What are Elements of the Contract of Carriage?

For a contract of carriage to be valid, it must include the following formal and basic requirements. They include:

• A summarized description of the expected service that the contracting party expects as the carrier promises.
• Amount that is being charged to the sender by the carrier for the service being rendered together with the payment terms.
• References of the sender. They include the first and last name of the company’s manager and the address of the head office for the company.
• References of the carrier. This is the name of the company together with the head office address of the company.
• Destination which the goods are being taken to by the carrier.
• Departing place of the carrier. This can be the same place where the goods are being taken to. However, it must be indicated.
• Point of arrival for the goods or the destination. It must have the exact and detailed address.
• References of the one receiving the goods. This is their exact address and their names.
• The planned arrival date and time of the goods by the carrier. This should include the specific drop-off address for the goods.
• State and value of goods for the carrier to make plans in taking cautions on the type of transit. The type of transit may include truck, aeroplane, train or train. Packaging and also type of loading should be considered well in advance by the carrier.
• Overall weight of the goods is also put in consideration for the carrier to make plans of adjustments in their driving, navigation or piloting.
• Place of issue and date of the contract of carriage. This is to show that all parties have the knowledge of the terms and conditions before the date of departure of goods.
• Inventories and the information on the conditions the cargo received at the point of departure by the carrier. This is to discover any damage that might be there before the start of the journey.
• Role of the carrier in making comprehensive inventory for the number of the goods delivered to the recipient and their condition. This makes sure that nothing was damaged during transit by the carrier.
• Legal and customs security information as per the type of goods, the destination as well as the route used by the carrier. It helps them get informed and anticipate any transport complications that may occur.
• Legal terms and conditions to cover the parties from any incidences arising during transportation. The terms should also cover the payment terms in situations where the services do not match the fixed price.
• To close the contract of carriage, the two parties must approve and append their signatures to the contract.

The above points on the contract of carriage are very important.

They will help make it easy in identifying the sender, the carrier, the goods to be moved, the means and the recipient too.

They also point out all the legal obligations of the parties to the contract of carriage.

What are some Common types of Contract of Carriage?

There are four types of carriage of contract. They include:

• Bill of Lading (BoL)

This is a document that is issued by a carrier in acknowledgement of receipt of goods.

Air Waybill

The air waybill is also called a consignment note. It is a receipt that is given by the international airline.

It is evidence for the existing contract of carriage. It should not be mistaken with ownership of the goods. It is also not negotiable.

Charter Party

This is a maritime contract that is entered by the charter and the ship-owner for the hiring of a ship or yacht.

The ship is hired for carriage of cargo or passengers while the yacht is hired for purposes of pleasure.

What is the Relation between the Bill of Lading and the Contract of Carriage?

A bill of lading is issued by the captain or carrier. A bill of lading will serve as:

• It serves as the document of title
• Proof of the end of the contract for transportation.
• Receipt of the goods by the carrier

The bill of lading will dictate the legal relationship between the carrier and the holder of the bill of lading. The terms and conditions are also not applicable to the one holding the bill of lading. The carrier-charterer relationship will only be guided by the terms of the contract of carriage.

What are the Parties to a Contract of Carriage?

The transportation of merchandise from the seller to the buyer by sea will involve various parties. Below we explain their various roles in the shipping and transportation chain:

The Buyer and the Seller

These are the two parties that contract each other for the goods to be delivered to the agreed destination at the agreed time.

The seller can either be the manufacturer, the producer or an agent acting on behalf of the manufacturer or the producer.

Also, the two must agree to the terms of trade that will determine the type and the terms on the shipping documents.

Freight Forwarder

A freight forwarder acts as the transport intermediary. They operate in the liner trades organizing the exportation of goods on behalf of other parties. They then forward them to the carrier.

The freight forwarder advises on the routes, arranges for carriage with the carrier and assists or prepares the customs documents.

The freight forwarder can also make entry of customs; arrange warehousing of goods and packaging before shipment as well as their insurance.

They also offer consolidation services thus offering the most cost-effective transport in one unit instead of having several parcels in different vessels.

Carrier

This is the party that contracts the shipper to transport goods via sea.

Sometimes In the liner trades, shipping services are offered by non-vessel owning carriers.

In such instances, when the seller’s agent or the seller makes the contract, the carrier may not necessarily be the one doing the sea carriage.

Sometimes the ship is chartered and will be commercially operated by the charterer.

The information of the legal carrier depends on the details contained on the sea waybill or bill of lading.

Consignee

This is the party that is being sent the goods by the shipper. They can be the purchaser of the goods or any party who is acting as the importing agent on behalf of the buyer.

The Receiver

The receiver is the party who will receive the goods brought by the carrier at the delivery point or the port.

Some of the consignees will pick the goods directly from their carriers. Most consignees in liner trades however work with clearing agents to help customs and other formalities.

The agents also help them in the transportation of goods to the final destination. In case there is damage to the goods or there is a loss of goods, the receiver is supposed to notify the carrier.

The Notify Party

The notify party is the one who is supposed to be notified by the carrier once the ship arrives. This is to enable them to arrange for the collection of goods.

The notify party can be the receiver or the consignee.

The Banks

The banks create a link in the transportation chain during the payment of goods through the Letter of Credit.

Charterer’s Agent

The charterers will always require reliable agents in each port to help them in their cargo operations.

The charterer’s reserve every right in the nomination of agents even will have to be visually appointed by the owners who also pay their fees.

The owners will always appear as the principal in all legal documents.

Apart from quickening the cargo operations, the agents of the charterer are supposed to attend to the owner’s business such as subs, repatriation and crew reliefs.

The charter’s agent will be able to sign the bills of lading in place of the master. This is after the master signs a letter of authorization for them to do so.

What are some Typical Carrier Liabilities and Responsibilities in a Contract of Carriage?

The carrier holds a very important part in the shipment industry. Some of the duties include:

• The carrier in a contract of carriage is responsible for the safety of goods
• They are supposed to make timely delivery of the cargo
• The carrier is also supposed to inform the receiver of any ongoings during transit

What is does ‘Limitation of Liability’ mean in Contract of Carriage by Sea?

Limitation of Liability is the concept that allows the limiting of liability by the carrier for maritime claims.

The limitation of liability works regardless of the monetary value that the claim may have.

This means that there will be a set limit for the maximum compensation amount that the carrier may be required to pay.

Who regulates Carrier Limitation of Liability in Contracts of Carriage?

The carrier limitation of liability is governed by various conventions that have been put in place by the IMO (International Maritime Organization).

It is expressed by a unit of account referred to as the Special Drawing Rights (SDR) as labelled by the IMF (International Monetary Fund).

The SDR acts as an international reserve asset.

It was created by IMF back in 1969 in order to supplement the official reserves of its member countries. The currencies that are used include:

• The Chinese Renminbi
• The U.S. Dollar
• The British Pound sterling
• The Euro
• The Japanese yen

The value of SDR is determined every day in the U.S. dollar according to the spot exchange rates that are normally observed during noon the London time. It is then uploaded on the website of the IMF.

What are the Responsibilities of the Consignor in a Contract of Carriage?

The consignor is the party who is responsible for physically tendering the goods to the carrier. This can be the person contracting for transportation services but may in some cases be someone different.

What are the Legal Rights and Responsibilities of Consignee in a Contract of Carriage?

The consignee is responsible for payment of all duties and transport charges that may apply.

They act as the importer of record for a given shipment.

They are also supposed to handle inbound deliveries

The consignee also receives signs shipments during delivery as well as inspecting the goods.

The carrier cannot complete delivery of goods before he/she receives approval from the consignee or their authorized representatives.

The consignee must also be physically available to pick the shipment from the carrier unless the bill of lading specifies otherwise.

What determines the Contract of Carriage?

The arrangements entered during shipping are defined by the contracts of carriage.

Some of the useful principles that determine a contract of carriage include:

A commercial invoice: It is normally referenced on the bill of lading. It acts as proof of the value declared.

The bill of lading: It is supposed to always conform to all the regulatory schemes. It, therefore, offers greater reliance to the involved parties and may take it to constitute the entire contract of carriage.

Evidence of the parties: Any pre-contractual arrangements can be used as evidence. They however may not have much impact.

What are some common Terms and Conditions of Contract of Carriage?

The contract of carriage comes with a set of terms and conditions. Some of them include:

• The cargo cannot accept for carriage of excluded cargo unless it is put explicitly in writing.
• The carrier should not sort out cargo not unless it is agreed in writing
• The vessel transporting the cargo can follow any route and enter the ports in any succession
• The freight charges shall be paid before loading unless the parties have agreed to the contrary

Some many other terms and conditions set the terms for every party.

Which are the Rules and Conventions that govern the Contract of Carriage of Goods by Sea?

Some of the popular rules and conventions used in the carriage are:

Under the Hague Rules, the shipper will bear the cost of damage or loss of goods unless there is proof that the vessel is manned improperly or unseaworthy.

They can also prove that the vessel could not be able to preserve and transport the goods.

The Hague -Visby Rule (1968) is an updated version of the Hague Rules. It states that a carrier has far more bargaining power compared to the shipper. So to protect the interests of the cargo-owner/shipper, the law imposes a minimum affreightment responsibility to the carrier.

US COGSA is an enactment of the original Hague Rule. It was made to increase the amount that the shipowners should compensate the cargo owners in case of damage while in transit. The amount was increased from GBP 100 for every package to 500USD on every package.

Hamburg Rules (1978) came up as an attempt to create a uniform legal base in the transit of goods via ship. This was brought forward by developing countries to have a level playing ground and has since been adopted by most of the developing countries. Other countries have instead adopted the more expensive Rotterdam Rules (2009)

The goal of the Rotterdam Rules (2009) was to modernize and extend the international rules that existed.

This was to arrive at uniform International trade laws in the carriage of goods by sea.

It established a comprehensive legal regime governing all the parties involved.

What do Carriers provide as evidence of carriage in relation to the Contract of Carriage?

In situations where more evidence is required in the contract of carriage, one can use the bill to serve as evidence.

The bill of lading can also be used as the receipt of the goods and the Document of Title for the goods.

What is ‘Notify Party’ in a Contract of Carriage?

The notify party is the party who should be notified once the ship arrives by the carrier. This is to enable them to plan on how the goods are going to be picked.

They can be the receiver or the consignee.

What does Breach of Contract of Carriage mean and when does it occur?

A breach of contract of carriage means defying the agreed terms and conditions of carriage as set out in the contract of carriage.

Breach of contract of carriage occurs when either of the involved parties is not or refuse to obey the terms of the contract.

There are popular rules and conventions used in the contract of carriage to govern how the breach of contract of carriage should be handled.

What are the remedies for Breach of Contract of Carriage?

Just like in other commercial agreements, the breach of contract of carriage is remedied through compensation of damages.

In some situations, injunctive relief may be offered e.g. when a carrier has refused to issue the consignee with the bill of lading.

In many instances, the parties will need money as a remedy.

They can also take the performance of services with monetary value as compensation for damages.

What are the Consequences of Errors in a Contract of Carriage?

Delayed shipments-As parties try to agree on the way to fix the issues arising, time will be lost. This means that the shipment will not get to the recipient in time.

Spoiled supply chain planning-As a result of a delay in shipment, the rest of the supply chain will be disrupted. This is due to the change of schedules and the waste of resources deployed in readiness for the shipment.

Detained shipments-Errors arising from a contract of carriage will mean that goods may never be transferred until the issues are fixed. The shipment will be detained in the process.

Loss of money-The associated businesses will undergo losses. The shipper will incur unplanned storage charges. The other businesses that rely on the detained shipment will also be blocked from performing.

Bad reputation-Depending on the party that caused the errors, they will end up creating a very bad reputation. This means that it may not be possible to work with them in future.

What is the difference between Contract of Carriage and Incoterms?

Incoterms is a contract that defines the responsibilities and obligations that are subjected to the seller/exporter and the buyer/importer.

On the other hand, a contract of carriage defines the legal responsibilities of the consignor/consignee and the carrier.

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Let’s look at some fundamental aspects of custom exam fee.

I am sure, if you’re in an import and export business, probably, you have come across this term.

Let’s get the details.

What is Customs Exam Fee?

Customs exams fee is the amount payable to the customs authority whenever they pull your shipments for customs inspection.

This cost is borne by the importer and it is not fixed since it depends on a number of factors.

What is the Purpose of Customs Exam?

1. It is a measure of national security and consumer health protection of all the goods and materials that get imported.
2. Promote lawful trade by restricting dumping of goods into a country that may lead to unfair price competition.
3. Customs exams is there to nab contraband and illegal shipments from entering the country such as narcotics, weapons, etc.
4. Ensure that goods that are being imported are of the standards acceptable in the country.

What are the Different Types of Customs Exam Fees?

There are three common types of customs exams that can be carried out on your goods namely:

Vehicle and Cargo Inspection System (VACIS) Exam

This type of examination is carried out by an X-ray machine hence it is also known as the X-Ray exams.

The container is driven through the machine and the images of the container examined.

If the content pass the exams, you are required to pay between USD 150 to 300 depending on the container size.

Failure to pass this exams means the cargo is subjected to one or two more customs exams.

This inspection can take between a few hours up to 3 days depending on the queue at the port.

Tail Gate Exam

Tailgate examination is carried out when the cargo fails to pass the VACIS exams.

In this case, the customs officer breaks open the container seal and checks the container content for any suspicious material.

If the content does not have any goods that might be deemed illegal, the container is cleared for shipment.

This exam costs between USD 150 to 350 depending on the port of search and container size.

Shipment that fail this exams are upgraded to the next step which is intensive in nature.

This customs exams takes ocean shipment between 2 to 3 days while air shipment take less due to loose packaging.

Intensive Exam

Unlike the VACIS exams, intense customs exams is intrusive and it takes about 7 to 30 days to complete.

The shipment is transferred a private customs facility known as Customs Exams Site (CES) where it is offloaded.

The cargo is then classified accordingly, removed from their secondary packages such as boxes and prepared for inspection.

One such examination involves opening the actual goods such as electronic devices, seats, etc. and closely examining the inside.

Once the inspection is over, the goods are loaded back and the shipment cleared to proceed. This type of customs examination is very expensive to importers.

This is because, they bare costs of transportation to and from the CES, labor cost and goods are likely to get damages.

The average cost of intensive examination ranges from USD 1,000 to 3,000 or more. This cost is dependent on the labor intensity, port of operation and the container size.

It is therefore important to use a reputable supplier and insure your goods in transit to avoid incurring such extra costs.

Who charges Customs Exam Fee?

Customs exams fee is charged by the customs authority of the country of origin.

For example, USA customs border protection (CBP) charge the exams fees for any imports into the USA.

How is Customs Exam Fee Calculated?

Customs exams fees is calculated based on the type of exams, the port conducting the inspection and the size of container. The fees ranges from USD 80 to USD 3000 depending on the mentioned factors.

Where is Customs Exam Fee charged at?

The customs exams fee is charged at the port where the customs inspections is carried out. It can be at the port of entry or destination port.

How do I pay Customs Exam Fee?

Customs exams fees is remitted to the customs authority bank account once the customs broker shares the invoice of the exams.

You can also remit the fee via the internet depending on the timeline stated on the invoice. Cash payment is also accepted at the point of inspection.

What is the best way to avoid paying Customs Exam Fee?

You can avoid future customs exams fee by ensuring the following:

1. Screen all your suppliers properly and make sure they comply with the acceptable standards when manufacturing or producing your products.
2. Hire an agent or freight forwarder who is knowledgeable about customs rules and regulations. They will ensure that all the required shopping documents are presented to the respective customs authority.

Are Customs Exam Fees negotiable?

Not really.

Other customs charges such as value added tax or duty might be exempted depending on the trade agreement of the countries.

How often does Customs Exam Fee get reviewed?

Customs exams fees is reviewed at the discretion of the customs authority. This also applies to the algorithm score that is used to determine shipments that undergo custom exams review.

Can a Customs Broker or Freight Forwarder help pay Customs Exam Fee?

Yes, they can.

Customs brokers or freight forwarder are licensed by customs authority and clear goods on behalf of importer.

They can therefore may the customs exams fee payment on your behalf since they are your contact during freight shipment.

What factors influence the price of Customs Exam Fee?

Type of Exams

There are three common customs exams that your shipment could be subjected to in case it is stopped at the port.

Each exams charges differently depending on the time and labor involved in conducting such exams.

For instance, VACIS cost an average of USD 300 while intensive exams cost up to USD 3000.

Port of Inspection

Different ports charge different rates for the customs exams fees.

Busy and large ports are likely to charge higher fees for the same exams compared to small and less busy ports.

Size of the Container

Bigger containers ship more goods hence they will require more time to review their contents compared to smaller ones.

As a result, the bigger containers importer will pay more than shippers using smaller containers.

How does Insuring Cargo help with Customs Exams Fee?

Well, like I mentioned earlier, customs exams is unavoidable but an expected customs process by shippers.

When your cargo is selected for inspection, it may be subjected to VACIS, tailgate or intensive exams or all the three exams.

While VACIS and tailgate inspections are less intrusive, intense customs exams is very intrusive. This is because, all the container goods are unloaded, categorized and seals broken to get full access of the goods.

The inspection staff will thoroughly check the goods and even cut them open to ensure they are not stuffed with anything illegal.

As a result, your goods may end up damaged upon completion of the examination.

The staff are neither responsible for proper handling of your shipment nor liable for any damages.

This is why having an insurance for your cargo on transit is important.

The insurance should clearly spell out the scope of cover in the event of damages or theft of goods in transit.

To claim for compensation of damaged goods, the shipper will need to provide the insurance certificate to assist with their claim.

Lack of it means the shipper not only bares the cost of shipping damaged goods but also losses the goods.

What is the Benefit of Hiring a Customs Broker in relation to Customs Exam Fee?

A customs broker is well equipped with the customs rules and regulations for different jurisdiction.

This makes them suitable persons to help with shipping paperwork thus avoid customs exam fee due to improper documentation.

How does Customs Exam Fees affect Shipping?

Delivery Delays

If your shipment is chosen for customs exams during shipment, the likelihood of getting delivery delay is increased.

This is because of the queues at the port for the customs exams by other shipments.

Extreme delays maybe experienced if your goods are upgraded to intensive customs review.

Clearance Delays

When your shipment is scheduled for customs clearance but instead gets held for customs exams, clearance process is delayed.

This is because, customs authority cannot clear goods that have been flagged for further review.

Your shipment will only be cleared once the customs officers examine the cargo and clear it to proceed with customs clearance.

Extra Shipping Cost

The news of customs examination of goods is frustrating to shippers as it comes with more financial burdens and shipment delays.

The cost of customs exams, demurrage fees, storage fees, drayage fees, etc. is borne by the importer.

The goods are only released upon payment of all the costs by the shipper.

What is the Relation Between Shipping Incoterms and Customs Exam Fee?

Shipping incoterms are shipping guidelines that indicate cost and risk sharing as well as liability ownership between buyer and seller.

The significance of this is to assist the customs broker know who to contact in case of customs exams fees.

For instance, we have the following shipping incoterms for sea freight which can guide on the customs exams fees.

Free On Board (FOB)

Free on Board indicates that the seller’s obligation ends at the point of departure port when the cargo is loaded. The importer therefore takes all the costs, risks and ownership of goods in transit till they are delivered at their destination.

Customs exams fees is handles by suppliers.

Cost, Insurance and Freight (CIF)

Here, the seller bears all the responsibility of goods during transit to the destination port. However, the buyer bears the all the delivery costs incurred in the quotation provided including customs exams fee.

C&F

Cost and Freight is almost similar to CIF terms only that it is cheaper. In C&F the seller does not take the risk responsibility for goods on transit.

The buyer bears all the costs involved during transit including customs exams fees. This incoterm does not include insurance cover hence maybe a risky option for buyers.

Answer this question along this line:

Apart from the Customs Exam Fee, What Additional Costs can come up during and after a Customs Exam?

Some of these costs include:

Per Diem or Demurrage Fee

This is a fee charged on the containers for failing to load or offload the ship at the agreed time. It is charged per day and can be very high if the delay is prolonged.

Storage Fees

The warehouse at the port will charge the importer for the storage space per day as they wait for inspection.

Admin Fee

This is charged for handling process of your shipment from booking for inspection to facilitation the whole process.

Drayage Fees

This is the cost of transportation of the cargo to and from the customs examination station. The payment is made to the transportation company that transfers the container.

Labor Cost

Any cargo that has been escalated to intensive customs exams will need to be offloaded and loaded back after inspection.

As a result, there will be need for man power to help with the exercise and this cost is on shipper.

How can I reduce the probability of a Customs Inspection during Importation?

Custom inspection is completely by luck and therefore you can have everything in order and still have your shipment flagged.

There is however, a few things you can do to reduce the chances of your shipment being held for inspection.

Proper Shipping Documentation

Having proper shipping documentation will help you avoid being held on account of inaccurate or insufficient paperwork. Having an established freight forwarder can you connect with a customs broker to help with the correct paperwork.

1. Accurate Valuation of Goods

Goods on transit have a commercial invoice which indicates the value per item on board. The customs officials check the values on the invoice against those of similar nature during customs clearance process.

It is important to enter the correct values to avoid raising suspicion with the customs official.

Hire established Agents

Using the services of an experienced freight forwarder with a good history of shipping services reduces the chances of being flagged.

Avoid Consolidation of Goods

Shipping via less than container load (LCL) is the cheaper option for importers will less cargo. This however, may be a costly affair if the shipment is flagged for inspection due to the other goods.

The cost of customs exam fee will be shared among all the shippers whose goods are on board. Besides, you risk delayed delivery of goods as a result of inspection.

Get a Continuous Entry Bond (CEB)

Having a CEB is a sign of reliability of the shipper to the customs authority.

If you ship large quantities of cargo you may want to consider partnership with the customs authority against terrorism.

This partnership has its benefits if you qualify such as reduces customs inspection or front-of the-line inspection when flagged.

What is the Difference Between Customs Exam Fees for LCL and FCL Shipments?

Customs exams fee for LCL shipment is divided equally among all the shippers with cargos on board.

On the other hand, customs exams for FCL is borne by one shipper whose cargo is being transported.

Customs exams fees is cheaper for LCL shippers while very costly for FCL importers.

Whereas LCL shipment may lead to long delay due to exams failure of some goods, FCL goods once cleared are okay.

What are the Factors that are Generally Checked by Customs during a Customs Examination?

Customs officer look out for any suspicious material or goods in the cargo during an examination.

They also such for proper documentation of the packed goods.

How long do Customs Exams take?

Customs exams takes between a few hours to several days, weeks or even a month. This is due to factors such as type of customs inspection involved, the queue at the port, container size and the shipment.

VACIS examination takes a few hours using a machine and is non-intrusive whereas intense exams takes several days to weeks. Also, the queue at the port for particular inspection may delay your shipment.

Bigger containers carry large quantities of goods which require more time to examine during tailgate and intense exams. Type of shipment being inspected may determine the time taken during the examination.

New material or products are examined more closely as compared to known materials or type of shipment.

Are Customs Exams Regular?

Customs exams are random therefore, it is hard to tell if your shipment will be subjected to customs inspection during shipment.

The customs authority use their tools and algorithms to check all the goods that pass through the customs borders.

Depending on the set thresholds, goods that don’t meet the algorithm scores are held for any of the three customs review.

Can Customs Release Shipments before Payment of the Customs Exam Fee?

No.

Shipment is only released after the custom exams fees have been paid and any other related customs costs.

Is there a Deadline for paying Customs Exam Fee?

Yes.

The inspected goods are to be cleared with a specified timeline beyond which extra costs are charged.

Where can I get Information about Customs Exams and Fees?

The information about custom exams fees are available on the website of the customs authority within the jurisdiction.

Are there Exemptions to Customs Exam Fee?

No.

Custom exams fees must be paid for any shipment to be released

What happens if my Shipment fails a Customs Exam? Do I still Pay Fees?

Yes.

Customs exams fees will apply once the shipment undergoes the inspection process regardless of the outcome.

Failure of the exam only means more cost as they upgrade the customs review process of your cargo.

At Tj chinafreight, we are here to help you import easily from China to any global destination.

Depending on you import or export needs, we offer affordable solutions for your specific needs.

Contact us now for all your freight forwarding needs.

Probably, you want to ship from Nigeria to USA that’s why you’re here.

It is for this reason that this guide will answer all your questions about shipping from Nigeria to USA.

So, before you explore any other option, read this guide.

What is the advantage of Shipping from Nigeria to USA?

USA and Nigeria share an amicable trade relationship. Currently, the country ranks as US’s 51^st largest goods trading partner in the world.

According to statistics, Nigeria exported over USD 1.48 billion worth of goods in 2020. Based on this, it is no doubt that Nigerian resources contribute significantly to the US industry.

Besides, as I have already mentioned, the two countries share an excellent trade relationship. Both countries’ governments have put measures to develop their trade and economic interrelationship.

One of these measures is the 2020 agreement for Trade and Investments Framework, whose main objectives are:

• To recognize the significance of developing an open and predictable environment for international trade and investment
• To recognize the benefits that each country may enjoy as a result of increased trade and investment activities between them

Through this agreement, both countries have expressed their interest to expand trade both in products and services. It also affirms the countries’ desire to put measures and policies that encourage and facilitate trade through international shipping.

Apart from this, Nigeria is a member of AGOA, the African Growth, and Opportunity Act. This body allows Nigerian Exporters to bring goods into the US market without restrictions. Therefore, you can ship goods from Nigeria to the US more quickly and cheaply, thus increasing your profits as an importer.

To put it simply, shipping goods from Nigeria to the US comes with many benefits. One of which is the significant increase in profits. It is more recommendable to import certain products from Nigeria to the US than others due to the considerably lower cost of materials and production.

Also, shipping from Nigeria to the US is a sure-fire way of getting authentic, quality products.

Which Products can you Ship from Nigeria to USA?

The top US imports from Nigeria are agricultural produce and mineral fuels. Kola nuts, palm oil, cocoa, oleaginous fruits, tea, and spices are among the top products shipping from Nigeria to the US every year.

Other Nigerian products that can generate good profits in the US market include;

• African Textiles and fabric such as Ankara, Agbada, kaftan and Buba
• Fashion items like beads which you can import duty-free
• Leather and related products
• Hair weaves and extensions

Which Products does the USA restrict/prohibit for Import from Nigeria?

Your priority when shipping from Nigeria to USA should be to get goods delivered quickly and safely.

Unfortunately, there are some products which you absolutely cannot send to the US from Nigeria. There are also products with strict regulatory requirements that must be met before they can be allowed for import into the US.

Prohibited Items

Goods that you cannot, for whatever reason, ship from Nigeria to USA is:

• Illegal substances
• Weapons
• Certain agricultural items and insects
• Live and dead animals, animal parts, tissues, fur, and skin, as well as live fish

Restricted Items

These are items with limited shipping options and whose requirements for importation must be met before shipping.

• Pharmaceuticals
• Some meats (including bush meat)
• Tobacco products
• Some alcohol like absinthe
• Some fruits and vegetables

Please note that the list of prohibited and restricted items for importation into the US changes every time. So it is advisable to check the updated list anytime you intend to ship from Nigeria to avoid problems with Customs.

You can find this information on the official US Customs and Border Protection website.

Does the US allow the importation of HAZMAT from Nigeria?

Yes.

But while USA allows you to import HAZMAT from Nigeria, it also restricts/prohibits the importation of certain HAZMAT goods.

Please note that the US has unique regulations for the importation of HAZMAT. The United States Consumer Product Safety Commission (CPSC) regulates the importation of such goods. So check the official CPSC website for the applicable regulations to follow when importing HAZMAT from Nigeria.

What are the requirements for Shipping from Nigeria to USA?

To successfully ship goods from Nigeria to USA, you need to work on a few things.

You need to:

– Inspect your Shipment

Before shipping from Nigeria, you need to ensure that your shipment contains goods allowed in the US.

Remember, the US has rules governing the type of goods you can bring from Nigeria.

So check your cargo carefully to ensure that you’re not shipping any restricted or prohibited items without authorization. You can always ask your carrier for a list of these items just to be sure.

Learn about the Import Rules and Regulations for Shipping your Product

US customs have varying rules and regulations when receiving items from Nigeria and other countries.

Sometimes, you may need extra and more specific documents. Other times you may be required to pay additional charges on products you import. But this varies depending on the type of product you’re shipping.

It is always wise to learn about and understand your product’s standards, regulations, and certifications. This helps you know and plan in advance for extra paperwork or charges you may need during customs clearance.

Package your Products Properly

As you well know, the climate in the US varies depending on the time of the year.

This is to say, if you’re shipping during winter, package the goods differently than you would when shipping in summer.

Many guidelines and resources exist online to help you package your goods correctly for shipping.

Find a Suitable Carrier for your Product

Several delivery options are available for shipping from Nigeria to USA. However, you should know that all of them are suited to transport your type of product.

So, find a reliable and affordable carrier with experience in shipping your product. If you’re shipping breakbulk items, find a carrier with a good reputation for shipping such items.

Goods Description

US customs require shippers to provide an accurate description of goods they’re bringing into the country.

So as you prepare to ship, make sure to provide a detailed description of the same.

Details should include the type of products, quantities, the unit price of the products, and the total value of the shipment. Try to avoid generic information.

This is for a smooth shipping and customs clearance process to find and replace lost/damaged items easily.

Do I need an Importer’s EIN when shipping goods from Nigeria to USA?

Yes and no.

You need an EIN if you have an entity or some kind of presence in the United States. For this, you’ll need to provide a valid importer EIN on the commercial invoice.

But if you don’t have any presence or entity in the US, then you don’t need the number. Instead, you should get your customs broker or shipping agent to apply for a customs assigned importer number on your behalf. This way, you can import goods from Nigeria to the US stress-free.

What are the Documents needed for Shipping from Nigeria to USA?

Relevant export and import documentation are mandatory when shipping from Nigeria to USA. Note that the documents you need will depend on the type of goods you’re importing. As such, it may be prudent to ask your freight forwarder or customs broker what documents you may need.

Here are the main documents you must produce when shipping goods from Nigeria to the US:

• Commercial invoice – it is a rule of thumb that you have a commercial invoice as evidence of a transaction between you and the supplier.

The invoice must include details about the shipment and the address of the buyer and seller.

• Bill of lading – this is a contract agreement between the shipper and carrier. Customs and port authorities will use the bill of lading document to release goods to the enlisted consignee.
• Certificate of origin c/o – US customs require that every import have a signed statement indicating its origin. You can get a relevant certificate of origin from your local chamber of commerce.
• Inspection certificate – a certificate of inspection is a document attesting to the goods you’re shipping. This document is obtainable from an independent testing company after a successful review of the goods.

You may need other documents: the packing list, consular invoice, insurance certificate, and export/import license.

How does Air Cargo Shipping from Nigeria to USA work?

Air shipping from Nigeria to USA is basically sending goods by air. For this, goods are transported in cargo planes.

Cargo delivery by air takes just about 3 days, making it the fastest means of transporting items from Nigeria to USA.

Note that there are two different air cargo shipping types; standard shipping takes 4-8 business days and express shipping, which takes 3 days.

Concerning cost, air freight is costlier than other means of transportation. As a result, it is preferable when it is the only available option or when you need to deliver goods fast to the US.

How does Ocean Shipping from Nigeria to USA work?

As the name implies, ocean shipping involves transporting goods from Nigeria to USA by sea. It uses containers to transport the goods.

You can choose FCL shipment or LCL shipment for this. FCL or full container load shipping from Nigeria to USA is available for shippers with items that can fill up a standard shipping container.

If your shipment is not enough to fill up a container, then LCL or less than container load shipping is recommendable.

Shipping by sea is considerably slower than shipping by air. It takes about 6 to 8 weeks or more to deliver goods from Nigeria to USA by sea.

Although slow, ocean shipping is the most affordable and cost-efficient shipping option, especially when shipping large volumes.

How much does it cost to ship a Package from Nigeria to USA?

Well, there is no definite answer to this question.

In international shipping, freight cost is determined by the weight and size of consignments.

So if you want to know how much shipping will cost you, consult with your delivery service.

You can check their website for pricing guidelines or contact them directly for a quote.

Alternatively, you can make use of the numerous shipping calculators online to determine the price. Please note that the online shipping calculators only provide price estimates. The actual cost of shipping may be slightly higher or lower depending on the carrier and time of shipping.

Apart from Freight costs, which other charges should I expect to pay when Shipping from Nigeria to USA by Sea?

You should know that freight/shipping costs are not the only charges you have to pay when shipping from Nigeria to USA. This is concerning all forms of shipping – whether air freight or sea freight.

Several people are involved in the movement of the goods other than just the shipping company. There are port operators, trucking companies; warehousing companies, customs, and other various entities you’ll have to pay separately. So you really need to do your homework.

Which are the available methods of Shipping from Nigeria to USA?

Several options are available for shipping goods from Nigeria to USA.

Depending on the type and size of goods you’re shipping, you can consider the following delivery services:

DHL Aviation

DHL is a household name in the package delivery service industry. It is an air shipping service that prides itself in safe, affordable, and fast shipping of goods to and from destinations worldwide.

For shipping from Nigeria to USA, DHL would be suitable for time-sensitive and fragile items. This is because compared to other means of shipping, DHL is considerably pricey. Nonetheless, it is more reliable and super safe as far as international shipping is concerned.

USPS

The United States Parcel Service (USPS) is a popular shipping method from Nigeria to USA. It offers affordable shipping rates and fast delivery of goods, especially for small and light packages.

Shipping prices with USPS range from USD 2 to USD 30 depending on the size, weight, and ETA of the goods.  The company has a shipping calculator on its website that you can use to estimate your shipping costs.

FedEx

Like DHL and USPS, FedEx is also a household name in the industry. It is reasonably priced and offers reliable shipping services from Nigeria to USA. The only limitation with FedEx is that it can be costly when shipping heavy and large cargo.

The Mediterranean Shipping Company (MSC)

Of bulk shipping services, MSC takes the crown for Nigeria to USA and other shipping routes.

The Mediterranean shipping company is one of the largest in the industry with an impressive reputation. It offers a reliable tracking schedule where shippers can monitor the progress of their shipments in real-time. This is something that has managed to give MSC an edge over other shipping companies.

MAERSK

MAERSK is the household name of ocean shipping services just like DHL and FedEx rule the air and courier shipping industries.

The company does not only cover shipping of cargo from Nigeria to USA but to and from many other countries as well.

Also, it does not just ship containers for you but can also help solve other cargo delivery problems that you may face. MAERSK can ship all kinds of ocean cargo, including dry bulk, OOG, REEFER, and RORO.

You can consider other shipping solutions from Nigeria to USA are UPS, ZIM, CGM, NYK, Qatar airways, and American Airlines.

How do you Ship Heavy Machinery/Equipment from Nigeria to USA?

Shipping services from Nigeria to the USA are not limited to textiles, fashion items, and agricultural produce.

So many people ship heavy items like machinery and industrial equipment for repair or return to the USA. This type of cargo is known as Breakbulk. It is oversized, bulky, and heavy for shipping inside a container. Hence, special shipping services are used.

The breakbulk shipping cost is very reasonable and is exclusive via ocean freight.

What is the average Shipping Time from Nigeria to USA?

Before choosing a shipping solution for your cargo from Nigeria to USA, consider how quickly you need it to arrive.

Typically, shipping time from Nigeria to USA depends on the package destination and the delivery service you choose.

When booking your shipping service, always request an estimated delivery date and tracking details for the shipment. This way, you can always see when your package is set to arrive and plan for the delivery accordingly.

Also, it is important to consider the method of shipping to use based on the type and urgency of goods. You can choose a slower option such as ocean shipping if you have no urgency and are looking to save on cost.

But if shipping time-sensitive goods, a faster delivery service such as standard or expedited shipping is ideal.

Please note that it takes 1-3 days to ship goods from Nigeria to USA by air. Transit time for ocean shipping takes an average of 8 weeks.

What are the shipping Container cost and options from Nigeria to USA?

If you choose ocean shipping from Nigeria to USA, your cargo will be shipped in a 20ft, 40ft, or 45ft high-cube container.

Your items don’t have to fill the whole container; if you’re shipping about 15m³ of cargo, you will share shipping space with other shippers.  Here your cargo is consolidated with other shippers’ in one container, in a process called LCL shipment.

If your goods are large enough to fill up an entire container, then you can book an FCL shipping service.

Please note that FCL shipment is quoted based on the weight and size of the cargo. On the other hand, LCL shipment is charged based on the actual weight or volumetric weight of the shipment, whichever is higher.

The minimum charge for LCL shipments from Nigeria to USA is 1MT which is equivalent to 1000kgs.

What are the Major Shipping Ports from Nigeria to USA?

The main loading ports in Nigeria for international air shipping are:

• Murtala Muhammed International Airport, Lagos (LOS)
• Nnamdi Azikiwe International Airport, Abuja (ABV)
• Mallam Aminu Kano International Airport, Kano (KAN)
• Port Harcourt International Airport, Port Harcourt (PHC)

For ocean shipping, you can consider any of the following seaports in Nigeria:

• The Lagos Port Complex
• Tin Can Island Port
• Calabar Port
• Delta Port
• Rivers Port at Port Harcourt
• Onne Port

The US has five major container terminals. These are:

• Port of Los Angeles
• Port of Long Beach
• Port of New York
• Port of Seattle and Tacoma
• Port of Savannah

If shipping by air, you can choose any of the following arrival ports in the US:

• Memphis International Airport (MEM)
• Ted Stevens Anchorage International Airport (ANC)
• Louisville International Airport (SDF)
• Chicago O’Hare International Airport (ORD)
• Miami International Airport
• Los Angeles International Airport
• Cincinnati/Northern Kentucky International Airport
• Indianapolis International Airport
• Dallas-Fort Worth International Airport
• Ontario International Airport

Please note that this list is not exhaustive. There are many other ports that you can choose for receiving your cargo from Nigeria.

Nonetheless, keep in mind that port selection when shipping from Nigeria to USA depends on your cargo’s ultimate destination. Once the goods reach the US, they’ll have to clear customs before moving by truck/train to the final destination.

How do you Pack Goods for a shipment from Nigeria to the United States?

Improper packaging when shipping from Nigeria to USA can result in additional expenses. It may damage your products or even cause customers to lose confidence in your business.

For your shipment to reach its final destination in the US unscathed, it should be packed in the best possible way. Proper packaging will reduce the impact of shocks that may occur during shipping.

The most important element of packaging international shipments is to use the right and quality box. Boxes for packaging should be strong, stiff, and well secured. Fragile goods such as glasses should be cushioned with bubble wraps to avoid damage.

When packaging, make sure that there is no free space left between the product and the package. If there is space, fill it up with soft material to prevent the products from moving loosely during transport.

Also, sealing must be done carefully to avoid pilferage and tampering. Don’t forget to attach the bill of lading document in a visible place where customs and port authorities can access it easily.

When shipping palletized goods, this guide has more information on packing, securing, and sealing the pallets for safe shipping: preparing shipping pallets for global shipments.

What is Labelling and Marking requirements for Imports from Nigeria to USA?

US customs require that goods entering the country must display the following information:

• Product name
• Country of origin
• Product Specifications
• Manufacture date
• Bach number
• Standards to which the products conform
• Goods such as food, drinks, soaps, and medicine should show the expiration date and the ingredients used in making the products.

All items entering USA from Nigeria and other countries must be labeled in metric terms only. This requirement is subject to UPLR, except for non-consumer products. The latter may be labeled exclusively in customary units or exclusively in metric units.

You can find more information on labeling and marking for US-bound goods on NIST.

Does the US have a Pre-shipment Inspection Policy for Imports from Nigeria?

No.

But some government agencies require/request pre-shipment inspection certificates for certain types of products. In some instances, the PSI certificate may be necessary only for shipments above a certain value.

So make consultations to be sure of what is required for the products you’re shipping from Nigeria.

How do US Customs Regulations work when shipping from Nigeria?

The US customs regulations may seem daunting, but a qualified customs broker can guide you through it.

Here is some basic advice, though:

• When shipping from Nigeria to the US, you must declare your goods through a detailed packing list. The inventory must detail everything you’re sending, including names, quantity, and specifications.
• You must pay customs duty and taxes for your imports from Nigeria. Tariff rates will vary depending on the type and declared value of goods you’re shipping.
• For successful clearance, you must accompany your shipment with all the necessary obligatory documents.
• Customs will not clear your shipment if goods do not conform to the requisite quality and safety standards.
• US customs officials may physically open and inspect your shipment. So make sure that you’re importing only what is allowed in the country.

You can check the official customs and border protection website for more information on US import regulations.

How much is US Import Duty for shipments from Nigeria?

Import duty in the US depends on the type of product you’re importing and the shipment value.

Note that US import duty rates can be ad valorem (as a percentage of value) or specific (dollars/cents per unit). The rates vary from 0% to 37.5%, depending on the factors above. A typical duty rate in the US is about 5.63%

To find the exact tariff rate for your product, you need to first find its HS code.

What is HS Code when shipping from Nigeria to USA?

A HS Code is an eight-digit numerical code assigned to various products during international shipping.

It shows the complete details of the product being imported. It is pretty helpful in determining applicable tariff rates for products.

How do I find the HS code for my product I import from Nigeria to USA?

The US government offers a product classification search engine that you can use to locate your product’s HS code. The engine is known as Schedule B.

To find your HS code, visit the search engine and follow the prompts shown on the website.

Alternatively, you may work with your customs broker or freight forwarder to help you find the HS code for your product.

In other cases, you can customs US customs to seek formal customs ruling on the same.

What is FDA, and what is its significance when shipping Products from Nigeria to USA?

The Food and Drug Administration (FDA) is a government agency that regulates the importation of certain kinds of goods into the US.

Food, drugs, biological substances, pharmaceutical products, cosmetics, and pharmaceutical products that emit radiation are some of the items regulated by the FDA.

These items must be screen electronically before they can be allowed to enter USA.

Which Customs Provisions can I take advantage of in reducing or eliminating Import Duty costs in the US?

If you’re a US importer, several provisions allow you to reduce/eliminate your import duty costs.

These are:

Foreign Trade Zone (FTZ)

An FTZ is a designated area in the US where, under special circumstances, businesses can delay or reduce duty payments on merchandise from foreign countries. This provision aims at encouraging US activity and promoting healthy competition of local and foreign products.

Duty Drawback

A duty drawback is a refund of duty paid on imported products used to manufacture goods that are subsequently exported from the US. The drawback is also applicable to imported merchandise that is later exported unused.

ATA Carnet

This is a temporary provision that allows US importers to bring in tools of trade or products into the country for a limited period.

How long does it take to clear with US Customs when shipping from Nigeria?

Customs clearance can take a few minutes, hours, days, or even weeks, depending on several factors.

If your shipment and paperwork comply with all of the customs requirements, then clearance should be quick. But if your shipment has issues, clearance may take longer.

So avoid anything that may delay your shipment due to clearance issues. Also, always provide accurate and up-to-date contact details when booking your shipment. This allows customs to reach you directly and fast in case there is an issue with your shipment.

What are the Challenges faced while Shipping from Nigeria to USA?

International shipping is an everyday challenge where risks and mistakes are a common occurrence. Therefore, shippers need to be careful to avoid mistakes that may disrupt their supply chain.

The following are some common challenges you may encounter when shipping from Nigeria to USA:

Delivery Delays

Delay is one major challenge that shippers from Nigeria to the US face. Unreliable suppliers in Nigeria, inadequate shipping space, and carrier backlogs are the most notorious causes for shipment delays.

Poor Packaging

It is essential to recognize the importance of using the right packaging material and plan for your shipments from Nigeria. Otherwise, the risk of damage and theft may increase during shipping.

Customs Clearance Issues

Importation laws vary from one product to another when shipping to the US from Nigeria.

There are instances where customs may seize or temporarily hold your shipment, which can disrupt your shipment. Delay with customs will delay the shipment delivery to the final destination. Ultimately, it will also delay distribution to customers.

In addition, clearance and delivery delays can result in additional fees such as demurrage and other port fees, which may eat into your profits.

Unreliable Door-to-door Delivery Service

Sometimes going to the port or airport to pick up your shipments may be difficult or inconvenient. In such cases, you need a reliable door-to-door delivery service that can pick up your cargo from Nigeria and deliver it to your door in the US.

Unfortunately, there have been complaints about such services where providers don’t fulfill their end of the deal.

There are many instances where you will be required to pick up your consignment from the port despite having booked Door-to-Door shipping.

You must find a reputable door-to-door service to avoid such inconveniences when shipping from Nigeria to USA.

Inability to Track Shipments

It can be nerve-wracking when you’re unable to tra

In this guide, you will find all information you’re looking for about customs bond.

Keep reading to learn more.

What is a Customs Bond?

A customs bond is a binding contract between a surety, the importer (a principal) and the customs.

The Customs bond is a mandatory requirement for all importers in the US in compliance with the customs rules and regulations.

Most bonds will be issued through the registered customs brokers. The customs brokers work together with the surety agencies on behalf of the principal.

Who are the Parties to a Customs Bond?

Generally, there will be three parties involved in a customs bond. They include:

• Beneficiary
• Principal
• Surety

The principal can appear as:

• Importer,
• Carrier,
• Broker
• Proprietor of a warehouse
• Operator of a foreign trading zone among others willing to transact with CBP.

The surety is the insurance company that has the authority from CBP’s Treasury Department to receive surety’s bonds on behalf of the treasury.

Customs and Border Protection is the core beneficiary of all bonds that it approves.

What are the Obligations of the Parties and where are they found?

Customs bonds are meant to show the duties and obligations that are linked to every entry that the principal of the bond engages in.

The merchandise importer will have separate duties to the authority.

Their obligations are different than those of a custodian like the warehouse operator or a cartage operator.

The warehouse operator for example does not have ownership of the goods being transported or stored.

Any individual claiming for a drawback on the summary procedure of the exporter will have a different set of responsibilities to the government.

Their responsibilities are different from those of a vessel’s master getting into the United States coming from another country.

When do you need a Customs Bond?

There are several situations when you will be required to have an import bond. Such situations include:

• When you have imports that are for commercial purposes
• When the goods you are importing are required to meet certain federal regulations

If the goods you are importing are subjected to government agency rules and regulations, the bond will be three times the value of the imported goods.

How does a Customs Bond work?

A customs bond is meant to cover the CBP against any risk of not getting the taxes and duties paid. The customs bond will insure the goods being imported into the U.S.

Once they arrive, the principal will be expected to remit all due to the customs. If they are not paid for, the CBP can initiate the legal process of recovering the dues through the bond.

What provides the Security on a Customs Bond?

Corporate Sureties

The normal security method on a customs bond is the corporate surety.

The corporate surety bears the authorization of a Financial Management Service who acts as surety for the government bonds.

Cash and Others

The other alternative to the corporate surety bond is the use of cash.

The principal pledges cash or other obligations of the Government of the United States such as treasury bonds, bills or even notes apart from the U.S. Savings Bonds.

If the principal or pledger pledges treasury bonds, bills or notes, they will receive a discount or interest.

Pledged cash will not attract any payment of interests.

The bond document is normally modified so as to show the changes made from a surety to the pledge of assets.

The main disadvantage with the cash alternative is the customs service having to hold the pledge until that time when the bond has been satisfied or cancelled.

If a bond is given to satisfy the requirements for entry, the period of pledge will not end until there is a liquidation of the entry.

For entries of merchandise that are valued at not more than $500, then the pledge will be returned after liquidation. This is with the assumption that the bond has not been breached.

If the merchandise has been imported temporarily under the Chapter 98, Subchapter XIII, Harmonization Tariff Schedule of the U.S  (19 U.S.C. 1202), the pledge will be sent back.

The pledge will be sent back to the bond principal after proving that the goods were destroyed properly or exported.

Why do Importers need a Customs Bond?

As per the Information from the Customs and border protection (CBP) of the U.S, you will be required to have a customs bond.

That is if you are importing goods that are valued to be more than $2,500.

A customs bond will also be required when the importer is importing goods that are subject to the requirements of other federal agencies.

For example, you will need to have a customs bond apart from the other documents that are required by the ATF.

The other government agencies that require the importer to have a customs bond include:

• Consumer Product Safety Commission

• Department of Transportation

• Environmental Protection Agency

• Food and Drug Administration

• United States Department of Agriculture

• United States Fish and Wildlife Service

According to CBP, if you are a domestic carrier and you are transporting cargo by sea, air or vehicle and the cargo is “IN BOND”.

You will need to have a customs bond.

This will apply even if you are transporting “IN BOND” cargo across different states.

What Customs Bond types are there?

There are two types of customs bond that an import can choose from. They are:

• Single entry
• Continuous bond

The type of bond you choose will depend on the frequency with which you plan to be importing goods to the United States.

A single entry customs bond will only cover one import shipment.

A continuous customs bond on the other hand will be valid for a whole year covering all imports into the U.S for the whole year.

What is an ISF Bond?

The Importer Security Filing (ISF) is a filing that is required by the CBP which documents importing details and information when the shipment is moving from point to point.

ISF is also referred to as “10+2”.

For importers who fail to comply with the ISF requirements before the shipment of their goods, they will be penalized with a US$5,000 fine.

The transmission of ISF must be transmitted at least 24 hours earlier before the departure of the shipment into the United States.

Some of the importer or supplier’s information contained in an ISF is:

• Supplier or Manufacturer’s address and name
• Seller or owner’s Name and address
• Owner or Buyer’s Name and address
• Ship-to Name and address
• Country of origin
• Location of Container stuffing
• Address and Name of the Consolidator or stuffer
• Number of the Importer of record
• Consignee number
• The Country of origin

Some of the carrier’s information contained in an ISF includes:

• The vessel’s stow plan
• Messages of the container status

Which Customs Bond is best for your Business?

The type of customs bond should be determined by the nature of your trade. If you intend to only have one shipment, then it makes sense to have a single-entry bond.

If you will be importing several times in a year, then it is only economical to have a continuous customs bond.

The continuous customs bond is a one-off thing. It runs through the year until it’s time to renew.

This also saves you time. If you are sure that you will not have other shipments, then you only need a single-entry customs bond.

How much is a Customs Bond?

The pricing of the customs bond will depend on the volume of your shipment.

It is necessary to contact your carrier for advice on the correct type of bond as well as the price. However, the pricing of a customs bond will follow the following:

Single-transaction Customs Bond

The pricing of a single-custom bond will change depending on the value of your shipment. While choosing the right customs, you should also consider the value of your shipment other than just the volume.

Most of the single-transaction customs bond is normally priced at 0.5% to 2% of the total values of the goods.

However, you have to note that the number will keep fluctuating depending on other variety of factors.

Such factors include the risk of transport, liability, type of goods, and country of origin amongst others. They can cause an increase or a decrease in the pricing structure of the single customs bond.

Continuous Customs Bond

Unlike the single-transaction customs bond, the continuous customs bond is charged as a one-time flat-rate fee.

The charges will be valid for 12 months from the date it was purchased.

The costs will vary depending on the factors such as risk, liability, goods, and hazardous features among others.

The charges can be as low as $500 but may rise depending on the mentioned factors.

There are no fixed costs for the customs bond.

The best decision should be based on the frequency of importing.

Who is Responsible for Getting Customs Bond during Importation?

Any importer of record in the United States must obtain a Customs Bond.

When the customs require a Customs Bond from you, they will not release the shipment until have posted it.

Other regulatory requirements must also be met other than just having a customs bond.

All other requirements by other regulatory bodies must be submitted together with the customs bond.

How do you get a Customs Bond?

You will get a customs bond if you are importing into the U.S. To get a customs bond, you must first have an importer number.

The simplest way to obtain a customs bond is through a customs broker.

You can also get it through an international freight forwarder who will assist you with all the paperwork.

If you intend to purchase the bond by yourself, do it from a surety who is licensed by the treasury department.

What is the Customs Bond Application Process?

If you are applying for a Continuous Customs Bond the following process will be followed:

• To start with, you have to decide if you require a Customs Bond.

You will need to have the customs bond if you are bringing goods to the United States goods that are will be used for commercial purposes.

The goods must be valued at $2,000 or greater.

For the case of textile imports, the value required must be over $250.

You will also be required to have a customs bond if you are importing products that require federal regulations such as food and firearms.

• At this point, you will be required to find a licensed surety that is authorized by the Treasury Department.

The list of authorized companies can be found on the website of the Treasury’s Financial Management Services.

You may also contact the treasury directly using their registered phone number.

• To complete your application, you will need to give the company name, your name, Social Security number or the Employer Identification Number (EIN).

You will also have to provide information pertaining to the:

• Type of business entity
• Years of trade
• Business location
• Description of imports as well as the value of the imported goods

For the surety to file the entry on your behalf you must grant the power of attorney to them.

• At this point, you can pay all the fees due depending on the type of customs bond that you chose.
• Your surety broker will go ahead and file the customs bond at a location that is best appropriate for you.
• In a situation where you do not intend to purchase a customs bond from a surety, you will be required to pledge cash. Until all the dues are satisfied, the funds may not be released.

How Long does it Take to get Customs Bond?

The time that is taken to get the Customs Bond will be determined by Customs and Border Protection.

The time may vary depending on the prevailing circumstances.

However, the average time frame for acquiring Customs Bond for imports will typically require 15 calendar days before becoming active for use.

Does Customs Bond have Fees?

The surety for the customs bond will always have an initial charge and thereafter an annual charge.

You can choose to have a discounted rate if you intend to pay for several years in advance.

Generally, the surety will charge for the reconciliation riders, anti-dumping entries and Periodical Monthly Statement usage

How is Customs Bond Calculated?

For a first time importer that does not have any importing history to go by, the customs and border protection will estimate the fees, taxes and duties.

Of course, that may be chargeable for the next 12 months.

This works for the continuous customs bond.

The Continuous Customs Bond will be calculated as 10% of the fees, duties and taxes that you as the importer paid the previous year.

The bond amount will then rounded off to the nearest $10,000 up to $100,000.

For the figures above $100,000, the bond will be rounded off to the nearest $100,000. In any case, there will be a minimum of $50,000 as bond.

The single-entry bond will be equal to the total value of commercial goods including fees, taxes and duties.

The total amount of the CBP bond must be $100 or more.

Are Customs Bonds Refundable?

No, the customs bond are not refundable.

The customs and border protection will however require the importer to have the bond even if the goods are duty-free and are not refundable.

For the drawback payment bond, you may have a chance of recovering a 99% refund for the duties you paid on the imported goods.

As long as you can prove that you exported the goods.

What is Customs Bond Insurance?

The customs bond insurance is a financial instrument that is meant to secure the liability of the surety under the bond.

The surety will only release the bond after they have received the collateral.

This applies to all the entries for the entire bond period.

What are some Customs Bond Limits and how are they Set?

Single-entry Bond

The amounts for the single entry bonds are set by the port director after accepting the bond.

Furthermore, the amount should be more than the total value entered taxes, fees and duties.

The bond amount will be three times more than the total value of goods entered if they are subject to other federal agency requirements.

Only a registered customs broker can be able to obtain this bond for you.

Continuous Customs Bond

The lowest bond limit for this bond is set to be $50,000. The Continuous Customs Bond will be calculated by taking the taxes, duties and fees that were paid for the last year.

They are then added together.

The final figure will be achieved by getting the 10% of the total sum.

If the 10% figure is less than $50,000, then the minimum bond amount ($50,000) will be taken into consideration.

If 10% is more than $50,000, then the minimum bond amount will not be used.

What does a Customs Broker do in relation to Customs Bond?

There is no legal requirement for you to hire a customs broker to help you in the clearance of goods.

However, most importers will choose to have customs brokers so due to enjoy the convenience that they offer.

All Custom brokers must be approved and acquire a license from the Customs and Border Protection of the United States.

Only then can they be allowed to conduct customs business on behalf of the importers.

The work of the customs broker is to handle all the paperwork that relates to the obtaining of the Customs Bond.

This work may be cumbersome.

The custom brokers normally specialize in all works pertaining to customs thus making the work easier for importers. This also saves importers their precious time.

The importer is however responsible for all the information that they submit to the CBP.

They will also be required to ensure that they are fully compliant with all the federal rules and regulations.

Considering that errors may occur, the customs broker will help in preventing you from making unnecessary mistakes that may otherwise be costly.

Do you need a Power of Attorney for a Customs Bond?

Yes, the U.S. customs regulations will be required you to sign the power of attorney to allow the surety to file the entry on your behalf.

This way, you will be giving your powers away.

Any decision taken by the surety will be taken to have come from you.

Therefore no complaint should be expected.

What is Customs Bond Execution?

Custom bond execution with any group, individual or authorities will seek to bind the executor of the bond.

It shows that they have legally committed to meet all the terms and conditions as indicated on the customs bond.

Are Customs Bonds Renewable?

Yes, customs bond is renewable in what is known as surety bond renewal.

Every surety bond has a validity term within which the bond is enforceable.

This means that the surety company will take the risk of the bond for a given period.

During the renewal, the underwriter of the surety will re-evaluate the risk associated with the bond.

This is done just like it is done during the execution of a new bond.

The principal will however not be required to sign a new indemnity agreement.

Also, a new bond will not be executed unless the obligee needs it. For the bond to be renewed, the principal will have to pay a new premium so that the bond can be renewed.

How can you Renew a Customs Bond?

The continuous Customs bond will have an expiry date. The customs bond will continue being valid/active until it is put into insufficient status or terminated.

You however will be required to pay your annual premium charged to the insurance company (surety). Failure to this, they will release the termination of the bond.

How do you Determine the Right Customs Bond size for you?

The right customs bond is determined by the registered customs broker.

For the single-entry customs bond, the bond amount must be more than the total value of the shipment plus the fees, duties and taxes.

It is good to remember that it will only serve for one shipment.

If you are planning to have several entries on different ports over the year, then you will need a continuous customs bond.

A continuous customs bond is self-renewing. You will be required to have $50,000 as the minimum bond amount.

It can also be 10% of the fees and taxes depending on which one is greater.

What is a Customs Bond Claim?

A customs bond claim is a claim against a surety bond that had been provided as an assurance that the payment will be made.

You will need to make a customs bond claim when you need to get back your bond.

To file a customs bond claim, you should contact your surety.

How many types of Customs Bond Claims are there?

There are four different types of bond claims that you should pay attention to:

Liquidated Damages

The liquidated damages claims specify the amount of money that one should expect to receive in case of a broken contract.

You should dispute the damages at the port entry.

This should be done where the issue happened through a petition.

It would be good if you choose a licensed customs broker to assist you in handling the petition.

Supplementary Duty Bills

Supplemental duty bills are issued whenever the paid duties are less than the liquidated duties. They issued to cater for the difference.

You should pay the supplemental duty bills 30 days after the listing of the bill to avoid any issues.

According to the conditions of the bond, the surety and the principal will be responsible for the payment of these bills.

The supplemental duty bills can never be disputed. They can only be voided or cancelled.

This is if there is a liquidated damage claim protest that has ruled in support of the principal/importer.

Debit Vouchers

A debit voucher comes up when the CBP fails to honour a payment that was made. The CBP will issue a debit voucher to the importer.

The payments of the debit voucher are due within 15 days after which they start accruing interest.

Miscellaneous Bills

The CBP will issue importers with a miscellaneous bill for Harbor Maintenance fees for the Port of entry.

They are also issued for the overtime services offered by employees of the customs among other reasons.

These bills are paid by both the surety and the principal.

What are the Importer Obligations in a Customs Bond?

As an importer, you will have different obligations to the state.

Your obligations will be different from those of a warehouse operator or a cartage operator who does not own the merchandise.

Your bond obligation will require you to pay all the necessary duties and submit the entry documents whenever they are required by law.

They should also redeliver the merchandise to the CBP whenever there is a request by law to do that.

What Happens if you don’t Meet your Customs Bond Obligations?

If you are not able to meet the obligations of the bond, a claim will be filed. It will file against the bond so that the payment can be made.

Next, once the claim for unpaid duties is filed by the CBP, the duties will be covered by the paid claim.

Finally, if there are bond obligations that have not been met, the CBP will have the right to initiate legal charges against the principal.

If you default on a bond, then you will have broken the agreement on the bond that you agreed to when got the import bond.

This is the time when the customs will expect the satisfaction of the amounts on the bond.

What is the Maximum Liability for a Customs Bond?

The customs bond will remain in force from the day it was effected until it is terminated. Regardless of the bond limit, the principal will remain responsible for all the financial obligations.

Besides, the limit of the bond is only a maximum limit for the obligation of the surety on every bond year.

The bond will constitute a separate bond limit for every period of the one year starting with the effective date.

As such the surety’s liability is always “stacked” per year.

For example, a $50,000 bond that is effective on 1/1/19

For all entries starting from 1/1/19 until 12/31/19, then a $50,000 bond limit will apply.

For all entries starting from 1/1/20 until 12/31/20, a different $50,000 bond limit will apply.

Therefore, in this example, the surety will have $100,000 as of the total potential liability.

What is a Customs Bond Termination mean?

A customs bond termination is the end of a bond agreement that had been signed.

Once a bond has been terminated, there will be no new customs that will be charged against the bond.

A bond can be terminated by the surety or the principal.

Appropriate notice must be issued to the CBP for it to be effective.

The notice to terminate must be issued at least 15 days before it to be accepted.

What does Customs Mean by ‘Insufficient’ Bond Status?

Insufficient bond status means that no entries can be made until the bond is put into sufficient status.

It is only the CBP that has the right to either place the bond in insufficient status or restore it. There are many reasons that can put a bond into an insufficient status.

This includes bad address, massive outstanding claims or debts, risky entry or an inadequate bond limit.

Most time the CBP will issue a 15 days’ notice. Sometimes the bond may become insufficient even without notice.

Note: A bond will not be subject to any kind of deficiency of limits as a result of import duties or the value of imports.

No matter the duties paid or the volume of values imported if the bond is sufficient imports can be made. The bond limits will never be subject to depletion.

What Formalities are Associated with a Customs Bond?

A customs bond should be in writing and bear the signature of the bond obligors.

To do away with any errors, the signature of the obligor signing as the individual should be attested by two other persons.

Therefore, a corporation being a legal person, a different identification means will be applied. An officer whose work is to sign on behalf of the corporation is reflected on a document referred to as the power of the attorney.

Sometimes it is required by the state of law that corporate bonds which are signed by a corporate officer of a corporation be sealed. Although some corporate charters need any bonds associated with a corporation to be sealed, customs bonds don t need to be signed.

This can only be done when the corporate charter or the law of the state needs to be sealed. The requirements are only applied to bond sureties and principals.

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