If you’re looking for any information about bonded goods, you will find it right here.

From definition, customs process, to examples of bonded goods – you will find everything you’re looking for in this guide.

Keep reading to learn more.

What are Bonded Goods?

Bonded goods are imported shipments that have not yet been cleared of taxes, duties, and other penalties.

These goods are stored in a warehouse location controlled by customs authorities, otherwise known as a custom bonded warehouse.

The goods are issued out only after the full payment has been made to customs authorities.

If the cost has not been met after a specified period, the goods must be destroyed or disposed of.

What is the Difference Between Bonded Goods and Non-Bonded Goods?

Some of the differences between bonded goods and non bonded goods include:

• Bonded goods refer to imported cargo for which duties, taxes, and customs charges have not been paid.
• Non bonded goods, on the other hand, refer to a shipment that has been cleared of all taxes, duties, and customs or any other penalties.
• Bonded goods are stored in a warehouse controlled by customs authorities, known as a custom bonded warehouse.
• Non bonded goods, on the other hand, tend to be held in third party warehouses or the importer’s warehouse.
• Bonded goods are issued only after payment has been made wholly to the customs authorities.

This might be disposed of if no charge has been made after a specified period.

Non bonded goods are also released after meeting all custom clearance procedures.

What are Some Bonded Goods Examples?

Some of the examples of bonded goods include:

• Raw materials.
• Acids for trade and business.
• Chalk
• Ammunition for trade and business.
• Fireworks.
• Dried fish.
• Flammable or inflammable goods apart from petroleum products may be stored in places that are approved.
• Packaging materials.
• Spare parts.
• Agricultural components or finished agricultural products.
• Manufacturing components.
• Production components.
• Alcohol.
• Tabacco.
• Perishable goods.

What is a Bonded Warehouse?

A bonded warehouse is a place where goods are stored to undergo processing before they are delivered.

This warehouse can be owned either privately or by the government.

The distinguishing factor about bonded warehouses is that the goods are retained until they are cleared of customs duty.

These goods that are bonded are stored for a specified period, and taxes and responsibilities must be paid as required, failure to which they might be confiscated.

What are the Different Classes of Bonded Warehouses?

The different classes of bonded warehouses include:

• Private warehouses of importers: these may be used to store cargo for the proprietor or consigned to them.
• Owned or leased premises by the Government
• Public bonded warehouse: this is used for storing merchandise that has been imported.
• Bonded bins or elevators, or parts of buildings: these are used for keeping grain.
• Bonded yards or sheds: mainly used to keep bulky and heavy cargo.
• Bonded warehouses are put in place for manufacture in bond: they are mainly used for cargo requiring exportation.
• Bonded warehouses constructed for refining and smelting metal-bearing materials for either domestic consumption or to be exported.
• Bonded warehouses are referred to as “duty-free stores”: they are used to sell duty-free items and need to be used outside the customs’ territory.
• Bonded warehouses constructed for cleaning, repacking, sorting, or changing the condition of the cargo.
• Bonded warehouses constructed for storage of General Order cargo.
• Bonded warehouse for international travel cargo.

Who Manages a Bonded Warehouse?

A bonded warehouse may be managed by either the state or a private enterprise.

A bonded warehouse is a warehouse operated by a private company in a foreign country under the regulatory supervision of that country’s customs agency.

These warehouses can be government-owned or privately owned by large enterprises.

How Does Bonded Warehousing Work?

Bonded warehouse grants you the chance to defer paying for taxes and duties until the goods imported are distributed to be sold.

The bonded warehouse also allows a period whereby modifications such as sorting and packaging can be made to the goods while not paying tax or duty.

When the goods are dispatched from the bonded warehouse, duty and taxes need to be paid unless they are moved to another bonded warehouse.

What are the Benefits of Using a Bonded Warehouse?

Benefits of bonded warehouse include:

• Grants full payment control to importer: it requires no payment of duty when the item is dispatched for delivery to the buyer.
• Storage of restricted items: a bonded warehouse allows a prohibited item to be stored in it until they are ready for dispatch.
• Versatile: bonded warehouse facilities are exceptionally equipped to handle different storage needs.
• Protection: when you store your goods in a bonded warehouse, the warehouse’s authority gives you a bond.

This protects you from money loss when your shipment is released once you have paid the required taxes.

• Additional logistics solutions: a bonded warehouse may provide a one-stop service for all logistics solutions because they come to include freight forwarders.
• Proximity to ports: most of the bonded warehouses are situated near ports.

This will allow you to store the goods at the port of entry until ready for distribution.

• Safety and security: they have security measures such as CCTV, accurate record documentation, and regular auditing, certifying.

This are reputable organizations.

• Improved customer service: bonded warehouses offer a better customer experience as they can be ordered and stored in advance while anticipating demand.

Are there Alternatives to Bonded Warehousing?

Yes, there are alternatives to the bonded warehouse.

Some countries tend to have restrictions on the bonded warehouse, for example, lack of reliable postal solutions or express couriers.

In this case, a better solution would be using a warehouse situated in a free port.

Fulfillment centers might also be an alternative solution due to the following benefits:

• They will help you save on duties and taxes.
• Assist in easier shipping globally.
• Well established and very connected.

When Does Customs Release Bonded Goods?

Customs release goods from a bonded warehouse once all the duties and taxes due are cleared.

The importer will need to make a customs declaration to remove the goods.

What is a Non-Bonded Warehouse?

A non-bonded warehouse is a place where goods whose duty has already been cleared are stored.

They are supervised by the authorities of the port rather than custom clearance authority.

They can be selected over bonded warehouses if the importers need to use the goods domestically rather than exporting them.

Once the non-bonded warehouse goods have been inspected and approved by customs, they can be delivered to a preferred location.

When Should You Choose a Bonded Warehouse vs. a Non-Bonded Warehouse?

Different situations will need additional storage measures as elaborated below:

• Deferred duties: bonded warehouses tend to save money as the goods are stored in them while deferring responsibilities until released to their destination.

Compared to the non-bonded warehouse, the importer may cut up to thirty percent concerning taxes differed.

• Storing restricted goods: non-bonded warehouses tend to have a restricted time limit within which local interests should be held, and paperwork approved.

Bonded warehouses, on the other hand, do not limit the probation period for storing restricted goods.

• International shipping: for ease of shipping internationally, bonded warehouses are the best to import goods and store them without advance duty payment.
• Stress-free option: bonded warehouses are very friendly to the importer as they allow easier storage and transportation of goods.

The environment also has security measures in place, and importers can defer taxes until the goods are delivered.

What is the Difference Between FTZ and Bonded Warehouse?

Foreign Trade Zone (FTZ) refers to secure areas situated in or near the entry ports and is legally outside the assessment by customs for entry purposes.

Bonded warehouses, on the other hand, are controlled and supervised directly by the customs officials.

In FTZ, there is no collection of duties until when the goods are withdrawn to be consumed, and the items have duty free exportation.

On the other hand, Bonded warehouses required duties and taxes to be cleared before the goods can be delivered.

Bonded warehouses only have permission to store foreign goods, and manufacturing is not permitted.

FTZ, on the other hand, has unlimited access and lacks control over the movement of items within the zone.

How Long Can Goods stay in a Bonded Warehouse?

Goods are only allowed to remain in a bonded warehouse for two to five years, depending on the county’s requirements.

Failure to be exported to another bonded warehouse or entered to be consumed before the time elapses.

What are the Advantages of Operating Bonded Cargo?

Some of the advantages of operating bonded cargo include:

• Storage is often long term: in some countries, storage of bonded cargo is unlimited when there is increased demand.
• Save haven for restricted goods: importing goods that are restricted can be quite a hustle. With the presence of bonded warehouses, importers can store prohibited goods until they obtain permission to enter the country.

What is Bonded Transport?

Bonded transport refers to vehicles that can carry shipments that have not yet been paid for through customs and have an authorizing license.

It makes it possible to transport your unbonded cargo to an official bonded warehouse for cargo awaiting payment of duties and taxes.

How Do You Transport Bonded Goods?

Transporting goods that are bonded is strictly controlled by customs, with considerations being made to:

• Export the goods across borders.
• Move the goods to a different bonded warehouse.

Depending on the situation, you will need to register at customs for any of the following to ensure transporting of your bonded goods:

Remover of Goods in Bond

If you would like to transport goods kept in a bonded warehouse and you would prefer using your means of transport, you may register with the remover of goods in bond.

This license for the remover of goods in bond may be obtained at customs by opening a bond.

Possessing a bond grants you the ability to move bonded goods even across borders, and it is an advantageous way of transport.

Transporter/Remover of Goods/Road Hauler

This refers to a third party hired to move bonded goods from one point to another on the client’s behalf.

It is a requirement for the goods to possess a bond.

The transporter must be issued with a document to certify the transporter has permission to use the bond for goods transportation.

This way of transporting bonded goods is advantageous when you have a bond and lack the means to personally.

Foreign Remover of Goods

Transportation of bonded goods can also be met by foreign road cargo transporters that wish to transport shipments that are bonded.

This foreign entity does not have the permission to register its bond, but the country’s agent should undertake this on their behalf.

This type of bond is referred to as a consignor bond.

Carrier

In case you would like to cross national borders, you may need to register as a carrier or transport bonded goods using a carrier.

Carrier registration must submit the necessary documents needed to cross custom borders.

What is Bonded Shipment?

Bonded shipment refers to a load that is being shipped through the United States but not to the United States.

This type of shipment will not require clearance with the customs or payment of duties and taxes during the import process as it is only passing through the country.

What is the Difference Between Bonded Goods and Bonded Shipment?

Bonded goods are imported shipments that have not yet been cleared of taxes, duties, and other penalties.

On the other hand, bonded cargo refers to a load that does not require clearance for customs or payment of duties and taxes as it is only passing through the United States.

Bonded goods are stored in a warehouse location, which is controlled by customs authorities, otherwise known as a custom bonded warehouse.

On the other hand, the bonded shipment does not require being stored in a warehouse as they are only passing through the country to another location.

The bonded goods are only issued out only after the full payment has been made to customs authorities.

If the payment has not been met after a specified period, the goods must be destroyed or disposed of.

What is in the Bonded Shipping?

An in bonded shipment is an extraordinary document that allows you to move and store cargo without being commercialized in a specific country.

In bonded shipment permits the bonded carrier to move cargo and store it without paying duties and taxes.

It is important to note that bonded shipment is only eligible for transportation by bonded carriers, and storage should be in warehouses that are authorized.

Do you Need Shipping for Bonded Shipments?

You will require your bonded shipments to be transported by a bonded carrier and, where necessary, kept in a bonded warehouse.

How do you Choose a Shipping Partner for Bonded Shipments?

When choosing a shipping partner for bonded shipments, it is essential to find a well-experienced company licensed in custom regulations.

These companies will be able to guide you in every step required in passing international shipping requirements.

Due to transportation, it is essential to find a shipping partner who has a facility for bonded cargo and can offer bonded transport.

Obtaining all the above options in a single stop will prove to be very convenient for your company.

Shipping partners who contain accredited warehouses can also assist in repackaging your bonded cargo and any other shipment needs.

Having in place shipping partners who are licensed also puts your business in a better place as they may accept payments on the Government’s behalf.

This will put them in a better position of serving as intermediaries between customs and your business.

Can you Modify Goods Stored in a Bonded Warehouse?

Yes, goods stored in a bonded warehouse can be modified. Some of the modifications which can be done on these goods include:

• Marking.
• Testing.
• Labelling.
• Packaging.
• Grading.
• Dilution
• Inspection.
• Service maintenance.

How do you Inspect Bonded Goods?

Once goods arrive at any bonded warehouse, the officer in charge must:

• Checkmarks and numbers: the officer should inspect and verify the marks and numbers compared to the numbers indicated on the packages.
• Ascertain quantity: the package quantities should be confirmed to verify that they tall with the number indicated in the accompanying documentation.
• Examine damaged packages: an examination of any packets suspected to be tampered with should be conducted if possible in the presence of the transport agent.
• Once all this is done, and the goods are verified to be okay, they should then be appropriately stacked in the bonded warehouse and stock record.

How do you Determine Shipping Duty tax for Bonded Goods?

Duty tax refers to the tax imposed by countries on foreign goods.

This must be paid to the Government before the importer receives their goods.

For bonded goods, the goods enter the country as part of its transportation, and thus, the importer is required to post a bond to customs.

This bond is used as collateral for the duty tax imposed on the goods.

In case the importer of the bonded goods moves them to another country, it is possible to redeem the bond paid to customs and be refunded the customs deposit.

When do you Pay Import Duty and taxes for Bonded Goods?

Import duty and taxes for bonded goods are paid when goods are dispatched from the bonded warehouse and issued to the market.

Who is a Bonded Carrier?

Bonded carriers are individuals or organizations who can bring cargo past the entry port into an authorized location without customs release.

What is the In-Bond Process?

The inbound process follows a series of steps, which include:

• First, the bonded carrier reports the shipment as an inbound shipment to the customs authorities.

The airline should report the load as in on the manifest, and the driver should write it on arrival at the border.

• Once this is done, a customs officer will then grant authorization for the shipment to be moved.
• After this, the carrier will deliver the cargo to a specified warehouse or another customs officer to wait for release by customs.
• Before the goods are taken out of the warehouse, the carrier needs to wait for an official entry filing issued by the importer or customs broker.

What are the Benefits of using a Bonded Carrier?

Bonded carriers can:

• Move goods to an inland office that is not located at the border to release the shipment.
• Advance goods “in transit” from one destination to another.
• Streamline the process of import or export, and this will save you both time and finances.
• Give you peace of mind as they will ensure that all your shipments meet all customs protocol.

What is the Difference Between a Bonded Carrier and a Non-Bonded Carrier?

Non bonded carrier must give way the shipment at the point of receipt, which can be a frontier.

On the other hand, a bonded carrier can move freight away from the boundary for carrying out customs and for the goods to be released.

On the other hand, bonded carriers help to speed up the importation or exportation process of cargo to cut down on costs.

Can a Non-Bonded Carrier Carry Bonded Goods?

Yes, a non-bonded carrier may carry bonded goods because they should purchase a bond for a single trip.

It is important to note that only bonded carriers are permitted to use the in-bond process.

Non-bonded carriers have a carrier code beginning with one or seven, and they must post a single trip bond before moving goods inbound.

The single trip bond can be obtained either through paying the customs authority by cash or certified cheque or receiving it through a customs broker.

Can you Remove Goods in Bond through Any Port of your Choice?

No, you cannot remove goods in bond through a port of your choice.

This is because customs grant permission to interests in a bind to pass via land custom-designated at the border ports of exit and entry.

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I know you’re probably wondering what a bonded warehouse is.

Or, you’d like to learn more about bonded warehouse.

Whichever the case, this guide has all information you’re looking for about bonded warehouse.

Let’s dive right in.

What is a Bonded Warehouse?

A bonded warehouse is a building set aside for storage purposes for goods in particular imports and exports.

The goods enjoy a free import duty and taxes as they await to be transported to designated location.

In other words, your goods are considered to have not yet arrived.

However, there are costs that are accountable to both the importer and warehouse owner settled in bond terms.

How do Bonded Warehouses Operate?

Goods are stored in a warehouse where a payment schedule enacts upon removal of the goods.

Thus all import duty and tax fees on your goods are applicable when the goods are out of the warehouse.

 Moreover, just like any other warehouse, there are a number of activities that incorporate the operations of a warehouse.

They include:

Receiving

This activity involves getting hold of your shipment from the port.

Afterwards the goods go through a system confirmation just for assurance purposes.

Put-away

After the goods are put into the warehouse system, the staff is ready to make transportation to the warehouse.

Through the system, your get is fit into their space.

Nonetheless, manual assignment of storage pace can as well be arranged.

Picking

There are two main types of picking, the primary and secondary picking.

Primary picking ends up to a final process of picking.

Thus there is no other picking needs to be done.

Secondary picking involves a second time of picking.

It is more convenient to companies with voluminous sales.

The goods are released on the basis of real time and waves.

For the real time, goods are received once downloaded.

For waves, goods accumulate for specific times then later transported.

As a result, the picking may be discrete, in clusters or in batches.

Moreover, companies can put in place the following apparatus to help deal with goods of large volumes:

• put walls
• put-to-light systems,
• goods-to-person systems
• cross-belt sortation systems

Packing

Here goods undergo a preparation procedure ready for dispatch.

Dispatch

Being the last activity to be carried out, the Warehouse management ensure the goods are loaded in time.

Transportation means is organized to deliver the goods in the specific location.

What is the Purpose of a Bonded Warehouse?

Just like any other warehouse, a bonded warehouse carries out the following functions;

Storage Functions

Basically that is what most warehouses are meant to do.

Provide spaces to store goods for imports and exports.

Grading and Parking

In the event you are ready to remove your goods, the management will be ready to offer packing services.

The bond warehouses are flexible enough to cater for your packing and grading preferences.

Provide Transportation Means

You do not have to worry about the transportation of your merchandise.

From small to bulky goods, the warehouse serves to cater for this need.

For Price Stabilization Purposes

A bonded warehouse offers the chance to exploit the time utility for your goods.

Hence once you get your goods for use in the market, the prices are manageable and maybe in your favor.

Promote Risk Aversive Conditions

The warehouse bears a structure that can reduce the risks of theft, fire, damage, exploration as well as deterioration.

How can I Purchase a Bonded Warehouse?

You can opt to purchase one from an owner who is auctioning one.

In this case you will just need to be in agreement with the owner on the price.

Thereafter as the buyer, you should seek to ensure you have all the legal requirements as per by the authority.

Moreover, it is also important to double check with the authorities about the warehouse you are purchasing.

Ensure that the location is well laid out. The necessary transfer documents from your seller to you should also be carefully executed.

How Many Types of Bonded Warehouses are Available in the Market Today?

Bonded warehouse offer a number of packages to their clients to choose from.

Hence this results to the establishment of the different types of bonded warehouses.

There are two main types bonded warehouses, that is;

Private Bonded Warehouse

From the name, these warehouses are privately owned by either a firm or an individual.

Public Bonded Warehouse

These type of bond warehouses are state owned.

They are under the control of the government in which the warehouse resides in.

They are further subdivided into the following sub types;

Temporary Storage Areas

Fit space areas for your goods as they await documentation and further approvals for them to move to next destination.

Public Bonded Warehouses

In the event you wish to have customs control for your goods, these bonded warehouses are available.

They are usually under the control of the local port authority or the government.

Private Bonded Warehouses Type 1

These type of bonded warehouse is under the control of the owner.

The goods in the warehouse mostly belong to the owner.

However, the owner is free to extend the services to other clients.

Private Bonded Warehouses Type 2

This type differs from the first type in that, it strictly houses goods that belong to the owner of the warehouse only.

Free Warehouses

Anybody can access storage services from this type of warehouses.

The premises are under lock and key and are under the authority of customs officials.

Bonded logistics Parks

These are more of a location than a building set aside for warehousing.

They have expanded to incorporate logistics on top of their warehousing services.

They are also known as special economic zones.

What is the Difference Between Custom Bond and Non-Bond Warehouses?

A custom bond warehouse requires custom officials to help oversee the imports and exports.

Duty fee and tax fees are not payable in this case.

Anon-bonded warehouse offers storage services for import and export goods.

However, the concerned parties are liable to pay duty and tax fees.

What are the Rules and Regulations Governing Custom Bond Warehouses?

Below is a list of rules and regulations to adhere to when working with or in a custom bonded warehouse;

• A bonded warehouse should refrain from housing goods restricted by the customs authority. Clearance should be sought before then.
• The establishment should fully fulfill the requirements from the customs authority. Necessary approvals should be adhered to.
• All documents required from an importer for the bonded warehouses services should be filled appropriately.
• A well-defined management structure should follow suit. A custom official should be incorporated for regular checkups purposes.
• A custom bonded warehouse is liable to penalty rates in the event of averting from the custom authority requirements.

How Much do I Need to Purchase a Bonded Warehouse?

It all depends with the auction price and the condition of the warehouse.

However, purchasing bonded warehouses can be costly.

However, if you are looking for an investment, bonded warehousing proves to be quite profitable.

Renting the storage spaces can prove to be profitable hence easily get back your capital.

Provided you adhere to all requirements and all the fees required by the authorities and custom officials are paid.

Is it Safe to Store Goods with Bonded Warehouses?

If you are in the shipping business, bonded warehouses are a safe haven for your goods.

Setting up a bonded warehouse requires one to have passed all the security protocol requirements by authority in charge.

Security is keenly taken into consideration.

Furthermore, most of this bonded warehouses have insurances.

Your goods are more than safe when it comes to a bonded warehouse.

How Can Someone Benefit from Bond Warehouses Services?

Below are some of the benefits you can enjoy from bond warehouse services;

• You can hold your goods for a long time, thus save you the stock holding cost.
• You will also be able to optimize your cash flow since you will evade the import duty and tax fees.
• In case you have illegal merchandise, the warehouse gives you enough time for the government to legalize.
• Bonded warehouse guarantee no theft for your goods. Safety is paramount for a bonded warehouse.
• Your goods are in the best care as the warehouse is customized to maintain the quality of your goods.
• You can sort for a ready market for your goods without incurring a lot of storage costs.
• You can sell your goods while still in the warehouse. Hence transferring the costs to the buyer.
• The warehouse offers you ample time to sought for payment ways in the event you want to remove the goods. No costs attached.

What are the Disadvantages of Bonded Warehouses?

Below are a number of demerits you are like to encounter when working with a bonded warehouse;

• This usually extends to the warehouse owner, under customs authority, thus a private bonded warehouse.

No other goods can be allowed in the warehouse even in the presence of space.

• Some goods usually end up staying for long. The warehousing and insurance charges accrue to an extend of the owner abandoning the goods.

By this time the warehouse auctions the goods at a price not equal to the debt. Hence incur losses.

• As much as you can evade the duty charges, once the goods are out of the warehouse, as the importer all duty and tax fees will be payable.
• As an importer, your goods will not receive storage facilities in a bonded warehouse if your goods are not taxable.

Hence your goods must be liable to taxes. Making it harder for a business person to easily move the cargo due to costs.

• Also as an importer, due to time lapse, you are required need to remove your goods from the warehouse.

This might work against you in the event that the value of your goods has extensively diminished, hence offering you no profits.

• The processes involved in bonded warehouses both during entry and exit is somewhat long for some clients.

As a result, clients get discouraged to seek bonded warehouse services.

• Running a bonded warehouse is tedious especially with custom officials involved. Custom officials expect all requirements are followed to the latter.

What is an FTZ?

The initials in full are Free Trading Zones.

This is a type of warehouse usually near the ports.

A customs authority is not mandated to control the activities in a free trade zone.

An FTZ provides a flexible timeline for easier operation of these goods without paying duty fees Hence no defined maximum timeline.

How is FTZ Different from Bonded Warehouses?

An FTZ differs from a common bonded warehouse in the following ways;

An FTZ completely barres their clients from being liable to tax and duty fees.

Even in the event that their goods reach a point of leaving the warehouse.

As the owner of the goods, you can decide to resell the goods internationally, thus export without incurring these expenses.

However, a bonded warehouse expects the client to be accountable for duty and import fee once the goods leave the premises.

An FTZ offers a 24-hour watch and control of your goods.

A bonded warehouse can go as far as offering you the primary safety precaution for your goods.

A bonded warehouse come with restrictions.

Goods can only be moved in and out within the stipulated working hours.

In the case of FTZs, anytime is efficient.

Goods can easily move in and out of FTZs of course under a supervision.

FTZs allow for all non-prohibited goods, while this is different for a bonded warehouse.

For goods to be acceptable in a bonded warehouse they must be dutiable.

 How Can You Choose Between FTZ and Bonded Warehouse?

It all comes down to the client’s preference.

As much as others enjoy the privileges of a bonded warehouse, others would go for an FTZ.

Simply because an FTZ efficiently supports their business endeavors compared to a bonded ware house.

If you wish to have more control on your cargo and enjoy flexibility during transfers, an FTZ would best suit you.

An FTZ also gives you geographical flexibility advantages.

This is majorly because they are free from the countries custom regulations.

What are the Benefits of Sorting for FTZ Services?

Free trade zones come with a number of benefits to exporters and importers.

Some of them include;

FTZs allow their clients to defer from complying to import duty fee completely.

With FTZs, clients can easily eliminate such fees.

FTZs are quite advantageous to business persons who engage in international trading.

They can easily sell their goods with being held back by duty fees.

FTZs also allow you to manipulate your goods however you wish.

After all, it is part of the services a warehouse should comfortably extend to its clients.

However, a customs official should be present.

What are the Documents Required when Applying for a Bonded Warehouse?

The following documents are mandatory for every client seeking warehouse services to be in possession with.

An application form

It is designed to give more information about the client.

It is mostly designed by the warehouse management to highlight the requirements needed from you.

The client’s identity and the type of goods to be stored are as well specified.

Additionally, the client should provide information on the person in charge.

As a client, you should also provide information on business registration of your enterprise.

Clients in possession of prohibited goods are expected to present consent forms from the rightful authorities.

Any other additional documents will be outlined by the bonded warehouse management.

What are the Requirements for Operating a Private Bonded Warehouse?

• First of all, the interested party must make an application to own a private bonded warehouse to liable authorities.
• Afterwards, the location should meet satisfactory conditions by the customs authorities. Once your application is approved, as the new owner, you should ensure:
• Your house provides ultimate security to the goods to be entrusted in the warehouse.
• The locks to your warehouse guarantee a level of security as well.
• Ensure that you keep records and receipts of the goods to be kept in your warehouse.
• Ensure that the goods or cargo you admit to your warehouse are securely packaged to avoid damage.
• Ensure you do not admit illegal goods to your warehouse.
• Ensure you have an insurance.
• Adhere to the rules and regulations outlined by the customs in charge.

What are the Type of Goods that Can Be Stored in a Bonded Warehouse?

The following goods can be stored in a bonded warehouse;
1. General goods.
2. Materials and cabin goods used in transport vehicles for international trade.
3. Fuels for transport vehicles in international trade.
4. Materials and equipment for repairing ships or airplanes.
5. Mineral oils.
6. Hazardous goods under an approval.
7. Goods for inspection, test, sorting, classification, segmentation, assembly, or reloading.
8. Materials for repairing containers or pallets.
9. Exhibition goods.
10. Goods for sale in duty-free shops or offshore Islands Duty-free shops.
11. Other goods approved for storage by the Customs.

How Does a Bonded Warehouse Owner Earn Profit?

Mostly as a warehouse owner, the most probable way of earning profits is through renting out the spaces.

The more you rent, the higher your return on investment.

You also need to ensure that your client satisfactory is at a high level to attract more investors to invest in your businesses.

What Other Businesses can a Bond Warehouse Serve?

Here is a list of businesses you can set up for your warehouse space other than storage services;

• A furniture store
• Electronic store
• Pet store
• Subscription box business
• Food truck business
• Clothing manufacturing business
• Beverage company
• Personalized gift store
• A gym
• A recording studio
• Construction equipment rentals company
• A rental party venue
• Dry cleaner business

A warehouse can offer you enough space to help you even venture into other profitable businesses.

This is most preferable especially if you are not able to meet up with a warehouse logistics.

What are the Rates for Storage in a Bonded Warehouse?

As a bonded warehouse client, you ought to prepare yourself to incur the following costs;

• The storage area for your goods. It all depends on the amount of space your goods will occupy.
• Also custom duty of handling your cargo.
• Also the type of accommodation you choose also accounts for the costs. The accommodation might be open or covered.

All these factors contribute to the way bonded warehouses rent out their spaces.

Different bonded warehouses have different costs.

It is important to ensure that you consult with the warehouse management for their prices.

What are the Entry Procedures for a Bonded Warehouse?

Entry procedures are important because they help for easier picking of your cargo to the warehouse from the port.

As a result, as the importer;

1. Ensure you prepare an invoice for your cargo. Also, any other relevant documents from the warehouse.
2. The Customs Inventory Audit Unit then confirms the legibility of the documents. Upon acceptance, a signature and a stamp are put on the documents.
3. The warehouse then accompanies the documents to the port for the shipment to be released to the staff.
4. A customs office accompanies the owner of the warehouse to where the goods are to be stored. An account is taken, examination and tallying procedures as well.
5. Later, the packages are assigned their identification rotation numbers, ready for storage

In addition, the importer should specify the purpose for which the goods are in the warehouse.

This might be in either of the following;

• Delivering for local consumption.
• Delivering for Export.
• Transfer from one Warehouse to another.

Are there Special Procedures in Service Providence for Bonded Warehouses?

Yes, there are special procedures that bonded warehouses offer on how a client wishes to manipulate their goods.

These are;

Inward Processing (IPR)

The warehouse offers the client enough space and time for manipulation of the cargo.

The client enjoys a free import duty, taxes that could be levied on the imports, and commercial policy measures.

With Inward processing, you are allowed to alter your goods to standard forms of preserving your goods.

You can also change your goods to allow them to be ready for marketing.

Afterwards, you can choose to re-export or distribute your goods to the market.

Once your goods are out of the warehouse, then and only then will you be liable to pay taxes and import duties.

Outward Processing

It’s the opposite of inward processing.

Your goods can be processed from outside.

Hence they can just go through storage procedures as they await to be released to the market for consumption.

How Long can you Store your Goods in a Custom Bonded Warehouse and a Bonded Warehouse?

The two types of bonded warehouses on average can store your cargo for up to five years.

In other instances, some custom bonded warehouses do not have a definite timeline.

The only difference comes in with the costs.

The non-bonded warehouse will require you to oblige to the tax and import duty fees.

A custom bonded warehouse gives you the privilege to defer these payments.

Your goods will still be given space.

What are the Advantages of a Custom Bonded Warehouse Over Non-Bond Warehouse?

There are certain privileges you will be able to enjoy when you choose a custom bonded warehouse.

They include;

Long-Term Storage Services.

A custom bonded warehouse allows you to store your goods for up to five years.

In fact, other custom bonded warehouses have indefinite timelines.

Hence you can keep your goods for as long as you want.

Saves you Money

Working with a customs bonded warehouse is the most financially efficient way of storing your goods.

Here your goods will not be able to pay for import and tax fees.

They payments are applicable only when the goods leave the warehouse.

Non-bonded warehouses will require you to account for all import duties.

They can Store Restricted Goods

Unlike non-bonded warehouses, a custom bonded warehouse gives room for your restricted goods.

As much as countries have put restrictions on the type of goods not to import, there is always a certain in some of the goods.

But they are acceptable upon meeting certain clearance procedures.

A custom bonded warehouse will be able to grant space as you seek for necessary clearance for your goods.

Nonetheless, sometimes there is revision on restricted goods.

You can as well keep your goods here until they are legal.

Facilitates International Shipping

A custom bonded warehouse allows one to conduct international shipping easily.

As a business owner, you don’t have to incur costs of paying duty fee for each stop over you make.

With custom bonded warehouses available, you evade such costs ship your cargo across different countries duty free.

The importer can decide on one of the two routes:

For your imports, you can store them until there is an increase on demand of the goods.

After which, you will pay import duty fee once your goods are ready to be delivered to preferred destination.

As for your exports, you can wait until your goods consolidate to assets.

You are not liable to pay duty fee since your goods are under surveillance of customs.

Hence evading double taxation.

Something that is unavoidable in the case of non-bonded warehouses.

Less Stressful Event

Arranging for a space that will ensure that your goods are in perfect shape before serving their purpose is easy now.

With custom bonded warehouses being accommodative, you are in no rush to do your paperwork.

You have space, you don’t incur duty and tax fees and most of all your cargo is safe and sound awaiting your next move.

What are Some of the Goods Restricted in a Bonded Warehouse?

A bonded warehouse is not allowed to store the following goods;

• Narcotics and all forms of controlled drugs.
  Firearms, weapon &armaments, ammunition and explosives
• Parts and components of used vehicles, scrap iron, scrap metal, hazardous industrial wastes, medical wastes and other wastes.
• Animals, plants or their products that fail to pass the quarantine inspection.
• All other goods under the imports control of a country.

Additionally, here is a list of goods that can be allowed with the correct legal documentation. Ensure you have permits and certifications from the customs authority for these goods:
(1) Controlled chemicals, such as  hydro chlorofluorocarbon (HCFCs ).
(2) Radioactive substances.
(3) Strategic high-tech commodities destinating to export control areas.
(4) Goods that are likely to produce a public hazard or environmental pollution during the period of storage.
(5) Protected wildlife or their products.
(6) Rough diamonds.
(7) Other goods requiring prior approval, as announced by relevant competent authorities.
Also goods announced by the Ministry of Finance as unsuitable for being stored in bonded warehouses.

What is a Bonded Carrier?

A bonded carrier helps to transport bonded goods through ports without being charged import duties or any taxes.

They have been given the mandate to do so on behalf of bonded warehouses.

How Effective Are Bonded Carriers?

Bonded carriers are the only ones allowed to move freight goods in and out of a bonded warehouse without charge.

They come in handy for most bonded warehouses clients to help evade such duties in the event transportation is needed.

What is the Difference Between a Bonded Carrier and a Non-Bonded Carrier?

A non-bonded carrier must have the cargo released at the first point of arrival.

A bonded carrier transports the goods to a customs office in order for the goods to be officially released.

You can easily apply to be a non-bonded carrier provided you poses the necessary documents.

To be a bonded courier, it might take a longer process due to the nature of service providence.

Afterwards, barcodes are given to each courier to enable each carrier to obtain the goods from the port.

Can Couriers Be Bonded?

Yes, couriers can be bonded. They are referred to as bonded couriers.

However, the concerned party must apply for the bond.

It helps to insure the goods in the courier in case of any unavoidable damaging circumstances.

The bond covers the cost of the item in the courier.

It also covers late delivery fees.

Bonded couriers are very efficient when it comes to time.

Compared to other shipping agencies, bonded couriers are convenient if you are looking forward to beat a deadline.

Moreover, and individualized pick up can be quickly arranged.

Now, in case you have any additional questions or inquiry, Tj chinafreight team is here to help – contact us now.

Before shipping bulk cargo, read this guide.

It has all the useful information you need to know about bulk cargo.

Let’s dive right in.

What is Bulk Cargo?

Bulk cargo is effective when your shipment is large and cannot fit in a container or package.

In such a case, the shipment is loaded onto the holding vessel the way it is.

Bulk cargo, therefore, refers to shipments that are loaded directly to the vessel without being packaged.

They are shipped loosely without packing, and the carrier charges them based on volume and mass.

What is the Difference Between General Cargo and Bulk Cargo?

Whether you are shipping a bulk cargo or general cargo, the process is pretty the same.

The difference arises when handling and charging for the shipments.

While general cargo is shipped in defined loads, Bulk cargo is loose and shipped in any quantity as it is.

General cargo is grouped into three categories depending on the packing units used.

Containerized- this is a standard shipping method where the cargo being shipped is loaded on designated shipping container units.

Break-bulk- the term is used to refer to general cargo shipped while in bags, pallets, and boxes.

Neo bulk This category of general cargo might confuse you with Bulk cargo.

However, there is a difference because the units are pre-packaged.

Examples include vehicles and paper rolls.

How does Bulk Shipping Work?

Bulk shipping involves three core steps: loading, unloading, and storage.

When you are importing, you will require a customs broker to handle the documentation process both at the origin and destination ports.

After booking a slot with your carrier, the next step involves delivering your shipment to the loading yard.

Specialists do the loading of Bulk shipment, and your shipping incoterm will define who is responsible for paying the charges.

Storage can be either at the exporting country before the scheduled departure or at the importing country after offloading.

Storage is essential as it helps you plan your business activities.

Offloading involves getting the shipment out of the vessel.

It should be done by specialists to prevent damages to the shipment.

Hiring different specialists’ services to handle loading, offloading, and storage of Bulk cargo is essential.

It helps you save time and achieve efficiency in your business.

How is Bulk Cargo Loaded onto Ships?

The compartment of the ship is first cleaned to ensure no traces of previous cargo.

Loading is done by either the dockside cranes or the ship’s gear.

For loading, cargo is first brought to the quay.

Next, the larger-sized solid cargoes are lifted individually on to the ship.

Small-sized Bulk cargo can be loaded onto trays before being loaded on board.

Each loaded Bulk cargo is stowed separately to prevent toppling over when the ship is in transit.

What does Break Bulk Cargo mean?

The term break Bulk cargo goes back to the 1960s before the emergence of containers.

It refers to large and oddly shaped goods that can’t fit into a standard shipping container or cargo bin.

Due to their abnormal shape and size, breakbulk cargo is shipped separately as they are without packing.

These goods are sent using general cargo ships and are loaded in boxes, bags, or barrels.

What are the Major Bulk Cargoes?

Major bulk cargoes include:

• Grain
• Oil
• Coal
• Gravel
• Hydrocarbon products such as LPG and LNG
• Freshwater
• Wine
• molasses

Is Unpacked Cargo the same as Bulk Cargo?

Yes.

Unpacked cargo and Bulk cargo both refer to shipments that are transported as they are, without containers.

However, Bulk cargo has higher volumes and mass than unpacked cargo that can include pre-packaged products that do not require containers for shipping.

What are the Two Types of Bulk Cargo?

Bulk cargoes are shipped in large quantities and grouped into two categories depending on the content matter.

There is dry Bulk cargo and liquid Bulk cargo.

• Dry Bulk cargo – they are solid and are shipped using a Bulk carrier. Examples of Dry Bulk cargo include iron ore, coal, grain, gravel, timber, etc.
• Liquid Bulk cargo – they are in liquid or gaseous form. These are loaded and unloaded using pumps and pipelines and are shipped in tankers or deposits.

Examples of liquid Bulk cargo include, petroleum, gasoline, natural gas, wine, liquid chemicals, juice, etc.

What is a Bulk Ship?

A Bulk ship is a sea vessel with the capacity to transport bulk cargoes.

The ship is modified to have waterproof cargo compartments.

These ships are designed to transport different types of Bulk cargo.

They have a wide mouth for loading and unloading and are designed to withhold high pressure exerted by the heavy-loaded cargoes.

What Kind of Bulk Carriers are there?

Bulk carriers constitute more than 20% of the global merchant fleet.

They are classified in terms of their sizes and the regions they operate.

They include:

• Panamax-The name originates from their location area, Panama. The Panamax are limited by the Panama Canal lock chambers and cannot exceed a beam of 32.31 m, a length of 294.13m, and a draft of 12.04m
• CapeSize – CapeSize are larger ships than the Panamax and operate between the pacific and the Atlantic Ocean. They specialize in shipping coal and iron ore.
• Handles – these ships are available in two types, namely, HandySize and HandyMax.

The ships are the most commonly used to ship Bulk cargo as they serve general purpose shipping.

Also, they have the highest rate of growth representing over 71% of bulk carriers.

Their sizes range from 150-200m in length and have five cargo holds with four cranes

What is the Difference Between a Bulk Carrier and a Tanker?

Both bulk carriers and tankers are used to ship bulk cargoes.

However, Bulk carriers mostly focus on solid shipments and tankers on liquid cargoes.

Bulk Carriers

Bulk carriers, as the name suggests, carry majorly dry products in large quantities.

The commodities range from raw materials to finished ones.

They are made with a single or double hull and can either have cargo gear or lack.

Their cargo hold is strong and wide open to allow cargo grabs and bulldozers to collect cargo in the holds.

Bulk carriers have pontoons covering the cargo hold and vary in shapes, size and purpose depending on the manufacturer.

Anybody can enter the cargo hold of a bulk carrier without permission.

Also, cleaning the cargo hold is easy because of the enormous space and easy accessibility.

Tankers

Tankers specialize in carrying liquid bulk cargoes.

These ships can be used to ship crude oil, flammable gases, and liquid chemicals.

They can also be used to import wine and juices.

The size and number of cargo tanks in each ship vary from manufacturer to manufacturer and the carrier’s preference.

Larger tankers are majorly used to carry crude oil, while the smaller tankers deliver products to the bigger vessels.

Tankers are fitted with bulkheads that reduce racking and prevent fire and flooding.

In terms of structural appearance, tankers have a small opening to their cargo hold and are fitted with one or two ship cranes.

You must seek permission to gain entry into the tank’s cargo hold due to the risks involved.

Also, cleaning the cargo hold is practically difficult compared to bulk carriers.

How much does Bulk Shipping Cost?

Knowing the Bulk shipping cost will help you, especially when you are planning your budgets and choosing to import.

The freight cost for bulk cargoes is calculated in dollars per tonne of the shipment.

However, the rates are not fixed but controlled by several factors like the shipping season and the carrier.

The Bulk shipping costs averagely ranges between $2,000 and $3,000 for an FCL shipment.

If you opt for LCL shipment, the cost may be lower.

What are the Factors that Affect Bulk Shipping Prices?

As mentioned above, the cost of shipping Bulk cargo varies with several factors.

For example, carrier choice dramatically affects the prices, with some carriers charging higher than standard industry rates.

The main factors that affect the bulk shipping prices include:

Shipping Distance

Usually, the transportation prices are always proportional to the distance covered in many modes of transport.

But when it comes to Bulk shipping, the rates per mile covered usually do not increase.

Instead, different considerations are always put in place to determine the price per mile.

Depending on the transportation mode, prices are often determined by charges relating to line-haul and terminal costs.

Freight Class

Carriers usually charge their shipping prices depending on the type of Bulk goods you ship.

If your cargoes require precision during shipping, are valuable or precious, the costs will be high.

Size and Weight

Like standard cargoes, the shipment’s size and gross weight have a higher impact on the shipping prices.

As such, you must provide accurate details about your shipment’s weight and size.

Dimensional Weight

The space your cargo occupies in the shipping vessel plays a vital role in determining the prices you pay.

Bulk cargoes that are light but still occupy a lot of space because of their dimensional weight will always attract higher shipping fees.

What Documents are required for Bulk Cargo Shipping?

Documentation is an essential aspect of shipping that every shipper and importer must have in mind.

Shippers must have the right freight forwarding documents to ensure smooth and fast shipping.

Note that Bulk cargo, just like other cargoes; require nearly the same kinds of documents that include:

Commercial Invoice

The commercial invoice is a detailed document that provides information about the export/import transaction.

Certificate of Origin

Depending on your shipment destination, you should provide a certificate of origin that indicates where cargo is exported from.

Bill of Lading

The three bills of lading are vital in ensuring the smooth shipping of your Bulk cargo.

The Bill of lading provides information about your Bulk cargo, where it is shipped from, and the destination.

Hazardous/Dangerous Goods Documentation

If your Bulk cargo is considered HAZMAT, such as gasoline, you must provide dangerous goods documentation.

This shows how the cargo is to be handled to ensure safety during shipping.

It is important to seek clarification from your shipper or freight forwarder on other documents that may be required to enable smooth shipping.

Can you Ship Bulk Cargo by Air?

The answer is yes, though with certain limitations.

Although air transport can be expensive in terms of costs, it is beneficial when you need your goods delivered in time.

The maximum weight a cargo plane can lift varies from one plane to another, with the highest ever recorded being 187.6 tonnes.

This means that the weight of your cargo matters in air freight.

Additionally, the dimension of your cargo should meet the scheduled plane limit.

Therefore, you can ship Bulk freight by air but up to a specific limit.

If your cargo doesn’t meet your carrier requirement, you can opt for break Bulk shipping.

Do you need Insurance for Bulk Cargo?

Shipping of goods from one country to the other involves a lot of eventualities.

To reduce losses when such eventualities occur, you need goods insurance.

When losses occur, even if your shipper is liable, they usually pay a maximum of $500 per customary shipping unit.

This compensation is less as compared to the value of significant bulk cargos.

Though marine cargo insurance is not a mandatory requirement for Bulk shipping, it can be advantageous.

It ensures you get compensated in the event of damage or loss of Bulk cargo during shipping.

Are there Special Clearance Procedures for Bulk Cargo?

Bulk cargo requires proper handling, and to make the whole process as swift as possible, you should provide all necessary documents.

The Bulk Cargo clearance procedure is the same when the Bulk cargo does not require inspection before being released.

For goods that contain hazardous chemicals and explosives, the clearance procedure differs.

In this case, goods must undergo inspection to prove their safety before being allowed to ship.

How Long does it Take for Bulk Cargo to Clear through Customs?

Clearing through customs can be hectic depending on many factors.

There is no guaranteed fixed time that every shipment takes to clear through customs.

The following factors determine how long it will take your Bulk cargo to clear through customs:

• The importation country
• nature and type of the Bulk goods
• Presence of a customs bond
• The port of importation
• Mode of transport used (air or sea)

However, if all your shipping and import paperwork is in order, customs clearance should only take a few hours to complete.

What Duty do you have to Pay for Bulk Cargo?

Duty refers to the government-imposed taxes that are charged on imported goods.

Depending on your importing country, Bulk cargo, like all other cargo, attract:

• Basic duty
• Additional Customs duty
• Anti-dumping duties
• True countervailing duty

However, when you are shipping from a Free Trade Area, your Bulk cargo can be duty-free.

How is the Tariff for Bulk Cargo Calculated?

When in the international business, when you import goods, you must pay tariffs before being allowed to pick your goods.

Therefore, it is essential to understand how import/export tariffs are calculated on your Bulk cargo for easy budgeting.

The following procedure is commonly used:

Currency Conversion

Start by converting all the currencies into your local currency (The currencies, in this case, include the value of the goods and freight charges). Add all the costs together.

Add any other costs associated with delivering the product to your warehouse.

Calculate Tariffs

After converting foreign currencies to the importation country’s currency, the next step is understanding the rates applicable in that particular country.

The next step is knowing your shipping terms.

If you are shipping through Free Onboard (FOB), your tariffs will be a ratio of the value of goods imported.

For Cost, Insurance, and Freight (CIF), the tariffs are charged on the cost of products, transportation costs, and insurance costs if available.

Certain countries have a compulsory charge value that is added to the computed rate.

It would be best if you liaised with your freight forwarder to be on the safer side.

Is Intermodal Shipping Possible for Bulk Cargo?

Intermodal transportation involves using more than one transportation method before receiving your goods.

It can involve the use of trucks, ships, aircraft, and then trucks.

Due to the many handling and changing of your goods, intermodal shipping is practical when you use a container.

Your goods should be less than 25 tons.

Though convenient and cheap, intermodal shipping is impractical for Bulk cargo.

Your Bulk cargo has a wider volume and weight, and using containers and trucks is impossible.

What are the Risk Factors for Transporting Bulk Cargo?

Solid bulk cargoes involve many risks, which must be managed carefully to safeguard the ship and the crew.

The risks range from fire to explosions due to flammable substances onboard.

Other risks that may be experienced include shipping vessel instability due to cargo weight and volume.

Capsizing is also possible for the same reason.

Ships can also get damaged when shipping Bulk cargo.

IMO (international maritime organization) provides numerous guidelines for safe shipping for Bulk cargo.

You can visit their website under the following publications and resources for more information about this.

For liquid Bulk cargo:

• Tank cleaning guides
• International Code for the construction and equipment of ships carrying dangerous chemicals in Bulk
• MARPOL

For dry Bulk cargo:

• FEDIOL Code of Practice
• FOSFA documentation and CODEX standards
• The code of practice for the Storage and Transport of Edible Fats and Oils in Bulk
• MARPOL

How do you Determine the Weight and Volume of Bulk Cargo?

Cargo weight and volume are essential when costing your cargo’s shipping price and knowing how it is done.

Carriers use the highest between the volume and weight of your cargo in determining the shipping cost.

The weight of Bulk cargo is the actual weight of the goods.

This is determined by weighing the shipment.

Volume, on the other hand, is the total space your shipment will occupy in the vessel.

And usually, large items with a lighter weight are charged based on the shipping space they occupy, which is volume.

The formula for calculating Bulk cargo CBM is as follows:

(Length X Width X Height) cm / 5000 = Volumetric Weight in kilograms.

• First, you multiply the shipment’s length by width and height in centimeters.
• Then, divide the result by 5000 to get the volume weight in kilograms.

When determining the shipping, carriers compare the actual weight of cargo vs. the volumetric weight.

Whichever is higher is used to charge the freight cost.

You can also try using online CBM calculators to determine the weight and volume of your Bulk cargo.

These calculators are resources when trying to average your freight costs.

They are also fast, efficient, and easy to use.

Do you need a Freight Forwarder when Shipping Bulk Cargo?

Yes, it would help if you had a freight forwarder for your bulky goods to help you get a carrier and hasten the shipping process.

The process of importation is overwhelming, and sometimes so many risks are involved.

To make things easier, start by finding a capable freight forwarding agent who can meet your shipping requirements.

You have to arrange for delivery to the port where you find a suitable carrier with low transportation charges and faster delivery.

It doesn’t stop there; you must handle processing documents at the delivery port and arrange transportation of the goods to your desired warehouse.

All this is a headache, and before you know it, you receive a call that informs you of customs putting a hold on your goods, or you have made a mistake and you are fined.

Having someone who can save your business and help swiftly deliver your goods is life-saving.

That person is a reliable ad trustworthy freight forwarder.

How do you Choose a Reliable Freight Forwarder for Bulk Cargo?

A freight forwarder forms a closer linkage between sellers, carriers, and even you.

The following checklists should provide you with a perfect freight forwarder who suits your needs:

• Uses of latest technology-With the right freight forwarder, you should be able to track your bulk shipment from the supplier until they reach you.
• Presence in many countries– Your shipment can dock in many ports before reaching you. A good freight forwarder should have outlets in as many countries as possible.
• A perfect mastery of shipping logistics– the right freight forwarder should portray professionalism in what they do. They should understand all the laws of the countries along the path of your shipment.
• Should have customer service as a number one priority– you are the boss, and your needs require addressing whenever they arise. The freight forwarder must work to fulfill your shipment at the appropriate time and cost.

Getting a perfect freight forwarder to handle your Bulk cargo is close to impossible.

Lucky for you, you are in the right place.

At Tj chinafreight, we put our customers’ satisfaction first and ensure you receive your goods as early as possible.

We have a good reputation with many shipping companies and airline companies guaranteeing your Bulk cargo a carrier at any time of the season.

Our team of professionals is online 24/7 to help steer your business to the next level.

Reach out today for your Bulk Cargo shipment!

If you’re looking for any information about customs and border protection (CBP), you will find it right here.

In fact, if you’re importing from China to USA or exporting to the United States from any country, this is a-must-read guide for you.

Keep reading to learn more.

What CBP in International Shipping?

U.S. Customs and Border Protection is an agency of the American Department of Justice tasked with regulating international travel and trade into America.

CBP was formed in 2003.

What Does Customs and Border Protection Do?

• CBP gathers all export and import data for the main purpose of collecting international trade statistics
• CBP processes mail, cargo, luggage and people
• It seizes contraband together with narcotics and illegal drugs.
• They then arrest any person involved in any fraudulent or smuggling behavior with the drive to get around custom laws.
• It also does customs exams.
• CBP looks into the different paperwork like packing lists and commercial invoices.
• They ensure that every import and export is legal and complies with the American regulations and rules.
• CBP collects import duties associated with the enforcement of the above laws.
• The laws that are enforced by CBP to prevent illegal trade practices mainly protect American intellectual property and businesses.
• Some of the laws that CBP enforce deal with quality life such as health and pollution.
• CBP protects the general security and welfare of America by enforcing export and import restrictions and prohibition. They protect from money laundering as well as export of data key to the production of mass weapons of warfare.

What is the Difference Between CBP and Border Patrol?

Border patrol is basically uniformed presence between the ports of entry while CBP has a uniformed presence at ports of entry.

As CBP does inspections at the border, Border Patrol detects and prevents illegal entry into the nation.

Who are CBP Agents?

Customs Border Protection agents are the individuals working for the CBP agency at the points of entry.

What do CBP Agents Do?

CBP agents are responsible for the valuation, admissibility requirements, classification, entry procedures, and the applicable taxes, fees, and rates of duty for imported products.

They also process paperwork and inspect luggage at ports of entry such as airports.

They interact with other agencies, carriers, and other foreign agencies to provide guidance on admissibility and compliance as well as exchange information.

They take part in intelligence analysis, law enforcement and examination regarding the arrival as well as departure at entry ports of vehicles, people and products.

They enforce immigration, customs and agricultural regulations and laws at American ports of entry as well as preclearance locations globally.

What are CBP Agent’s Priority Trade Issues?

Typically, CBP agents are more concerned with Priority Trade Issues.

PTIs are high-risk places that can cause massive revenue loss to the American businesses.

This threatens the safety and health of the American people as well as harm the American economy.

The present PTIs are:

• Trade Agreements
• Agriculture and Quota
• Import safety
• Revenue
• Antidumping and Countervailing Duty
• Intellectual Property Rights
• Wearing Apparel/Textiles

What Role do Customs Brokers Play when Dealing with CBP Agents?

If a customer decides to use custom brokers, they are the ones who work directly with the custom agents.

Custom brokers eliminate the stress involving dealing with custom officials.

They also learn shipping regulations hence customers focus their time on managing their businesses.

In general, custom brokers function as translators communicating with governments and agencies all through the shipping process.

As such, they ensure that all the right procedures are followed.

CBP agents educates import-export businesses on how to deal with streamlining enforcement processes, custom agents.

This improves collection of data and levering enforcement partnerships with organizations internationally.

They educate exporters and importers that there are same agents and agencies on the other side of the world.

Do CBP Officers Chose Where they are Stationed?

It depends on a number of factors.

CBP officers are often stationed in areas based on mission need.

However, after a period of time a CBP officer can ask for a change in station.

A CBP officer can apply for a position in a specific point of entry, but they are assigned a station by the CBP body.

Do CBP Agents Carry Guns?

CBP agents can carry guns at their stations to perform their duties and exercise authority.

They make seizures, conduct searches and make arrest, hence, they need guns to perform their roles.

What can you Not Bring Through US Customs?

There are restricted and prohibited products that you cannot bring through the US customs.

They majorly include counterfeit products, illegal products (considered illegal in America), and drug/medications (unless one has medical permission for its use).

Restricted products are:

i. Drug and Medications

FDA does not allow the importation of devices, narcotics or drugs that have not been approved for use in America.

Also, they cannot be imported unless they are approved for use by a doctor’s prescription.

Some of these non-traditional treatments are arthritis, AIDs, cancer treatments, and other medical diseases.

Even if you acquire these medications through a foreign doctors prescription, they are still confiscated.

ii. Plants or Plant Products

Each cutting, seed or plant has to be declared and presented for inspection no matter how pest-free or clean they are. While some require export/import permits, some are fully forbidden.

iii. Wildlife, Fish and Products Made from them

These products are subject to quarantine requirements, certificates, permits, export-import restrictions, prohibitions and state laws.

American Fish and Wildlife Service has to be made aware of products made out of endangered species and it has to issue permits to import them.

An ivory product made from a warthog can be imported as long as there is documentation/it is at least 100 years old.

Such items are dealt with specifically at some custom entry ports.

That said, you have to contact your CBP to give you a list of the products.

iv. Food Products

Some cheese and bakery products are allowed into America.

There are some American foods that are equally subject to requirements of the American FDA.

Note: American law also prohibits Americans from bringing in goods from nations on which travel restrictions have been enforced.

However, informational materials such as books, films, recordings or tapes are allowed even with travel restrictions.

What Must Be Declared at Customs?

At the customs, you have to declare every time you purchase and is carrying as you return to America.

These can be items you bought yourself or are gifts for other people.

They can be duty free items purchased abroad and all the merchandise you intend to use/sell in your business.

What are CBP Import Requirements?

CBP import requirements include:

Entry Documents

They have to be filed at specific places identified by the director of the port within 15 calendar days of the time a cargo gets to America.

Some of the documents include:

• Packing lists, if right
• Merchandise release forms needed by the director of the port such as application, special permit or entry manifest for Immediate Delivery.
• Commercial invoice or a pro-forma invoice when the latter cannot function
• Evidence showing shipment has a right to make entry
• All documents needed to determine the admissibility of merchandise

Note: if you want to release your goods from CBP during the time of entry, you need to file an entry summary for consumption.

Following the entry of your shipment at the port of entry within 10 working days, you can deposit the approximated duties.

Entry Summary Documentation

Customs examines the shipment after presenting the entry.

This activity can be waived or not. Your shipments are released if no regulatory or legal violations are violated.

You file the entry documentation summary, followed by a deposit of the estimated duties within a period of 10 working days after the entry of the merchandise in a particular location.

Entry documentation summary entails:

• Entry summary CBP Form 7501
• Giving back of the entry package to the authorized agents, broker, or importer, following the permission to release products
• Documents and invoices needed to collect statistics, examine duties, or determines that every import requirement has been fulfilled.

Surety

When entering the port of entry, you must show adequate evidence that you have paid a bond with CBP to cover possible taxes, charges and duties that can arise.

You can secure bonds through an American resident surety company.

First, you have to post it in the form of some American government obligations or United States currency.

When using a customs broker for making entry, the individual should allow bond use to avail the needed coverage.

Immediate Delivery

Using CBP Form 3461, you can apply for a special permit for the delivery before products’ arrival, if you want the immediate release of your merchandise upon shipment.

Carriers taking part in Automated Manifest System are capable of getting a conditional release authorization.

This is followed by the exit of a foreign nation and around 5 days before getting to America.

Upon the arrival of the merchandise together with the approval of application, the shipment is released very quickly.

As such, you have to file an entry summary in a good form electronically or on paper.

Also, you must deposit the approximate duties within 10 working days following release of shipment.

Only specific types of merchandise can use the immediate-delivery release by utilizing the Form 3451.

Exporting

Times, when you have to file for the Electronic Export Information, are:

• A validated export license is needed to export a product
• The merchandise value under every schedule B number is more than $2500

While the carrier files the EEI at the American CBP via the AES direct and AES, an exporter prepares the EEI.

Before exporting, an exporter acquires the individual schedule B number for the export product.

In the AES there has to be a schedule B number to identify the products being exported.

You can alternatively collect the schedule B number from the Census Bureau at a specified number.

For instance, if an exporter is shipping containers and a luggage with household and individual goods valued more than $2500 abroad;

They then have to file the EEI or present an ITN to the carrier.

How Much is Customs Duty in the USA?

The customs duty in America is the amount you pay on goods moving from other countries via the American border.

If your goods are from API, an estimated $1600 in merchandise will be duty free under the personal exemption.

If your goods are from an Andean country or CBI, then around $800 in goods will be duty free.

If there is additional amount of $1000 in goods, it will be dutiable at a flat rate of 3%.

What Happens When You Don’t Declare at Customs?

If you don’t declare at customs, you are more likely to face serious consequences.

You may lose the products as CBP can seize them.

As a result, you either lose the products permanently or you are forced to pay a penalty to have them back.

How Much does CBP Make in a Year?

The average salary for a CBP officer in a year is around $85, 991.

How Long has the CBP Been Around?

CBP was created in 2003 and has been in operation for close to two decades.

However, the initial body the US Customs Service was created centuries ago.

What Does the CBP Investigate?

CBP investigates the following crimes/issues:

• Commercial fraud
• Exodus cases such as export of weapons system and technology as well as arms
• Money laundering
• Child pornography
• Drug smuggling

What Does Duty Free Mean for CBP?

Duty free means exemption from paying custom duties.

When importing goods, businesses do not have to pay custom bodies.

What is CBP’s Criterion for Duty Exemption?

You are eligible for duty exemption if you meet the following criteria:

• Merchandise is physically with your
• You have never used your exemption or even a part of it in the last 30 days
• Merchandise is for home or personal use
• You are eligible for $200 duty exemption if you have been out of America for 2 days
• You have declared every merchandise that you did not have when you left America even if you wore it

What Happens if You Violate CBP Laws?

If you violate CBP laws, the CBP agents will stop and detain then frisk you as well as your luggage.

You can get breaks if you fail to declare a product unknowingly.

What is Export Customs Clearance?

Export customs clearance entails formalities and procedures that a business may comply with when exporting a specific merchandise from the nation exporting the said product.

It involves getting any export license or another formal authorization and handling the protocol required for goods export.

How Do You Complete CBP’s Export Customs Clearance?

Export customs clearance differ from product to product and nation to nation.

A basic export clearance process work flow should be as shown below:

• Finishing product production, followed by their package in readiness for export.
• Organization of shipping and this includes container booking
• Use domestic carriage to transport the container to the factory.
• From the factory the goods are loaded and then delivered to the port of loading or carrier’s warehouse.
• They prepare the needed documents to align with the laws of the exporting nation
• There is custom’s declaration of the shipment through accepted channel
• You inspect both the goods and documents as it is key for the exporting nation’s customs office to carry out this activity
• The time when an importer’s products leave the territory of the exporting nation
• The export customs declaration closure

Which Other Agencies Does CBP Partner with to Regulate Imports/Exports?

CBP partners with several other agencies to regulate exports/imports.

Some of the agencies include:

• National Highway Traffic Safety Administration
• National Marine Fisheries Service
• Fish and Wildlife Service
• Animal and Plant Health Inspection Service
• Food and Drug Administration

What is CBP Form 7501?

CBP Form 7501 is also referred to as entry summary.

It is a document that one has to file with entry of their goods into America.

CBP often uses Form 7501 to find important information on the imported good.

Who Fills out CBP Form 7501?

CBP Form 7501 is often filled by a customs broker although a business owner has to be familiar with the form.

What is the CBP Clearance Fee for Customs?

The CBP custom clearance fee is fees charged by the package carrier or the customs service for filling in the needed paperwork and the processing of the imported goods.

The CBP clearance fee for customs can range between 10 – 20 Euros per package.

It includes the storage costs, administrative fees, clearance fees and others.

Note: every shipping company uses different rates.

What Documents Do You Need for Customs Clearance?

Authorities are likely to ask for the below documents for customs clearance:

• Commercial invoice
• Packing list
• Certificate of Origin
• Letter of Credit
• Airway Bill/Bill of Lading
• Inspection certificates
• Import and export licenses
• Permits
• Dangerous goods declarations

How Long Does it Take to Clear Customs with CBP?

Due to diversity in protocols and systems globally, it is impossible to predict the exact length of time to clear customs with CBP.

Even so, customs clearance can take place in less than 24 hours.

Import custom clearance begins when the shipment is on transit and before arrival in the destination country.

All these happen as long the necessary documents are in place.

In the event that there are concerns, authorities can take more days before clearing the products.

What is a CBP Entry Number?

CBP entry number is a seven-digit number typically assigned by a filer.

This number can be assigned in any way convenient as long as this one number is not assigned to over one CBP entry summary.

Does CBP Allow Tracking of Customs Clearance?

Of course, yes.

CBP allows the tracking of customs clearance through a customs broker.

The customs broker keeps you informed of the status of your clearance whether there are delays or holdups.

There is real-time tracking of shipment on an online platform hence a client is aware of the shipment’s progress.

What is a CBP Form 5106?

CBP Form 5106 is a document utilized by importers to change or establish their address or number, surety bonds when filing a bond or custom brokers for clients.

CBP Form 5106 is equally used to establish the importer of record to CBP.

How do You File a CBP Form 5106?

You can file a CBP Form 5106 by including all the needed information regarding the merchandise and importer.

You then submit it to the physical office or to an Entry Team situated at the port of entry.

Or

Self-filers and brokers can present Form 5106 electronically via the ACE Portal or Automated Broker Interface.

Does CBP Charge Duty for Pallets?

Of course, yes.

CBP charges duty for any pallets used by importers.

How Long can CBP Hold Your International Shipments?

CBP can hold your international shipments for days, weeks or even months.

Some of the issues which can make CBP hold your international shipments are:

• Wrongly declared goods
• The shipment is more than value required
• Improper paperwork
• Custom fees outstanding
• Prohibited items
• Problems reaching the recipient

How long CBP holds your international shipments, therefore, depends on the issue.

For instance, if the shipment is more than the value allowed or there are custom fees outstanding then you will be contacted to clear the balance.

How Does CBP Calculate Import Duty?

The import duty varies according to the goods you are importing, the country they are from and where they were made.

CBP calculates duties owing based on the products/goods value in American funds.

Customs Duty Rate X Total Customs Value of Goods = Import Duty

CBP gives an import duty calculator to calculate this amount.

On the calculator, indicate exporting and importing country of your merchandise.

Identify your duty rate by keying in the products HS Cde.

Include the HTS Code of the merchandise then determine the duty applicable.

Multiply the applicable duty rate by the commercial value of the merchandise.

What is a CBP Filer Code?

A CBP filer code is a special identification number of allowed companies/persons used to file customs entries.

How do You get a CBP Filer Code?

First, you have to request for a filer code from CBP.

Secondly, you present a letter to CBP asking for participation in ABI.

The letter includes information such as importer number/federal tax ID, address and name of the company.

It also includes the information of the contact person, and the role of the entity looking for a filer code.

After CBP approves, they assign a filer code.

The entity whether an importer/exporter/carrier can then use this filer code whether exporting/importing/transporting goods from one port to the other.

What is Formal vs Informal Entry According to CBP?

Here are some of the aspects you need to know:

Definition

Formal entry is mainly for goods that have to be covered by a surety bond/entry bond as its summative total is more than $2000.

The bond ensures the compliance of the custom requirements and payment of duties.

Informal entry, on the other hand, are goods at the border entry that do not require entry bond since their value is below $2000.

These goods are often imported for personal consumption.

Custom Broker

There has to be a customs broker to clear this formal entry shipment.

If a consignee arrives at the port of entry to collect a shipment/if an exporter accompanies the shipment, then a broker is not required in informal entry.

Documentation

Documentation for informal entry is very strict.

You have to fill certificate of origin, commercial invoice, importer ID, Bill of Lading, Entry Delivery, Entry Manifest, Harmonized System Tariff Classification and other license/permits.

In informal entry, you only need a commercial invoice and probably a Certificate of Origin.

Documentation is not strict in this case.

What is CBP Duty Deferral?

CBP duty deferral is when the agency allows an importer/business to import products without paying custom duties/taxes/fees.

It takes place only as long as the businesses plan to export the goods after importing them.

CBP has a 90-day duty deferral for importers.

What are the Components of CBPs Duty Deferral Program?

CBP duty deferral program has the following components:

• Temporary importations under bond
• Foreign trade zones
• Bonded warehouses
• Inward processing programs
• Maquiladoras
• Drawback program
• Duty relief program

What are CBP Custom Penalties and Seizures?

CBP custom seizures is the acquisition of imported goods by CBP for individual or institution violation of custom laws or any other laws enforced by CBP.

False valuation of your shipment can lead to the seizure of the whole shipment.

Penalties, on the other hand, are the legal action and fines applied to importers by US CBP when goods imported into America violates the laws.

CBP levies penalties for negligence or fraud.

Note: you will not be penalized for omissions or clerical errors.

If you notice such errors, it is imperative to notify the CBP so they do not hold the shipment.

What are CBP Acceptable Payment Methods?

• Credit card
• Debit cards
• Paypal
• ACH Credit

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In fact, we can also connect you with our partners who will make the entire customs clearance process easy and simple.

In case you have any questions or inquiry about customs and border protection, Tj chinafreight can help – talk to us now.

In this guide, you’re going to learn everything about customs assigned importer number (CAIN).

From basic definition, why you need it, uses to validity period, among other vital aspects about CAIN.

So, before you acquire customs assigned importer number, read this guide.

What is a Customs Assigned Importer Number?

Custom Assigned Importer Number (CAIN) is a type of identification used by foreign importers in the United States.

It is an essential requirement for foreign importers importing into the United States without an Employer Identification Number (E.I.N.).

Do you Need CAIN to Import?

Yes, you need a Custom Assigned Importer Number (CAIN) to import to be established as a foreign importer possessing a record.

To achieve this, you will need a Custom Assigned Importer Number and a Customs bond.

What is the Customs Assigned Importer Number format?

Custom Assigned Importer Number format has fifteen digits: nine numbers are used to identify the business; two letters and four numbers define the program and each account.

CAIN system includes various types of Revenue agencies and border services agency programs which many businesses maybe register for the following:

• S.T.
• Corporate income tax.
• Import or export as identified by R.M.

An example of Customs Importer Number may be:

123456789RM0001

This number is mostly found in tax documents, and it is in the form of letters and numbers.

Why is a CAIN (Customs Assigned Importer Number) Important?

Custom Assigned Importer Number is essential due to the following reasons:

• CAIN protects your business from costly violations, which results from the negative consequences of not complying.
• It protects national security due to countries’ need to protect information about critical products and technology from the wrong hands.
• It helps foreigners in safeguarding competitive advantage in a very competitive marketplace.
• Ensures that the records of goods are well maintained for all import transactions.

Who Should Apply for CAIN?

Foreign-based businesses should apply a custom Assigned Import Number (CAIN).

This documentation is designed explicitly for importers that lack the United States Social Security Number (SSN) or Employer Identification Number (E.I.N.).

Which Entities Require a Customs Assigned Importer Number?

Entities that require a Custom Assigned Importer Number should have the following features:

i. Foreign importers who would like to import to the United States.

ii. Entities that lack I.R.S. business tax Numbers.

iii. Those that do not have a social security number.

iv. Corporations that do not have an Employer Identification Number.

What is the Difference Between CAIN and E.I.N.?

Employer Identification Number (E.I.N.) is a type of documentation given by the United States Internal Revenue Service to assist in tax administration.

On the other hand, Custom Assigned Importer Number (CAIN) is a document that is issued to foreign importers who do not have an Employer Identification Number.

It is a requirement for any United States-based Corporation or partnership to have an Employer Identification Number.

On the other hand, the Custom Assigned Identification Number is assigned to foreign importers in the United States when the Customs bond is put in place.

How do You get CAIN?

The Custom Assigned Importer Number, which is requested by Customs and Border Protection’s paperwork of entry, is got in the form of a tax number for the business.

This number is issued to businesses.

In case you do not have this tax number, you may be required to use the number of your social security in the paperwork that requires CAIN.

If you lack either a business tax number or a security number, you will be required to get your Custom Assigned Importer Number by filling a form.

This form is known as Customs Border and Protection form 5106, and it must be available at the port of entry where you are required to fill customs entries.

It is essential to know that there are regulations to govern and control issuing of Custom Assigned Importer Number.

What is the Cost of Acquiring CAIN?

The cost of acquiring a Custom Assigned Importer Number varies among various licensed brokers available in the market.

However, this price is mostly controlled by the department of homeland security.

How Long Does it take to Get CAIN?

Custom Assigned Identification Number submissions can be processed and approved in about two business days.

CAIN remains on file for one year from the date of the last usage on its equivalent, the Customs Form 7501, a request for services.

If it is not used for one year, CAIN will not be associated with any outstanding transactions.

At this point, the Custom Assigned Identification Number is removed from the files of Customs.

Can Foreign Importers with CAIN Import Freely to the U.S.?

No, foreigners cannot import freely in the U.S. as the final recipient of a shipment must have a U.S. address and tax identification number.

The U.S.-based business will need to act as your consignee if you have an E.I.N. and your business is registered in another country that is not the U.S.

The final consignee will be the individual or entity which is receiving the cargo at the destination.

If you are a foreign importer who lacks a presence in the United States entity, you will need to have a Custom Assigned Identification Number.

In this case, you must name a business that is U.S. based to act as your shipment’s consignee, and they will receive the goods at the destination.

What is the Importer of Record in Shipping?

An importer of record refers to a non-resident corporation that acts as an importer for merchandise or shipments from a given company to the United States.

All importers of records have the same duties and responsibilities regardless of the type of company or individual.

The primary purpose of the importer of record is to make sure that their shipments meet the government’s custom requirements and any required regulations.

They should also finance all the necessary import fees and duties.

Few entities can fill the role of importer of record, and these include:

• A company that is based in the U.S. and has a Tax Identification Number.
• United States Citizen with Social Security Number.
• Licensed Custom Broker of United States.
• A foreign company that possesses a Customs Assigned Importer Number.
• Freight forwarder.

Can a Foreign Company be an Importer of Record?

Yes, a foreign company can be an importer of record.

Requirements that grant permission to a non-resident company to serve as an importer of record are straightforward and like residential companies in the U.S.

Most importers use services provided by custom brokers licensed in preparation and filing forms of entry.

Similarly, non-resident companies may also hire a licensed customs broker to help in filling the entry forms.

The non-resident company is also required to obtain an import bond, as all importers do.

This bond’s primary function is to repay the Government of the U.S. in case the importer fails to pay due to increased duties or obligations specified under the bond’s terms.

Apart from the entry bond, a foreign company must have an agent that resides in the state where the port is situated or where the entry is filed in case of remote filing.

This agent will not take care of any liability but will just overseas and accept service of process on the foreign company’s behalf.

This function is met effectively by engaging a licensed customs broker to conduct all the required procedures on behalf of the foreign company.

To become a foreign importer of record, you should provide the following:

• Copy of Certificate of Incorporation.
• Identification of the company’s two authorized officers.
• Completion and submission of C.B.P. form 5106.

For Custom brokers, they will need to submit the following to complete the process:

• Filled and completed Customs Power of Attorney (P.O.A.)
• A document certifying the authority of representatives authorized by your company.

Importer of Record submissions can be processed and approved in about two business days.

It is essential to know that there are given incoterms of shipments that establish the party as an importer of record.

Some of the advantages of becoming a foreign importer of record include:

• Improved relationships between supplier and buyer.
• Negotiation tool: when you are an importer of record, you are better positioned to give buyers valuable options.
• Reduced custom issues: taking full charge of importing goods will prevent the scenario of processes halting or slowing down.

What is the Difference Between SSN and CAIN?

Social Security Number (SSN) refers to a number used for customs and tax for sole proprietors and Unites States individuals.

On the other hand, Custom Assigned Import Number refers to a number issued to Foreign importers who do not have SSN or E.I.N.

Social Security Number is only used in imports made to the United States and does not serve exports from the United States.

On the other hand, the Custom Assigned Identification Number is issued only to foreign importers who would like to import to the United States.

Can a Customs Broker Apply for CAIN on Your Behalf?

Yes, your Customs broker is the one who should help in obtaining Custom Assigned Number.

Before obtaining a Custom Assigned Importer Number, you will need to provide:

• Customs Power of Attorney should be signed by two officers belonging to the company.
• This document will be given to you by your broker.
• Copy of Articles of Incorporation.
• If the document that empowers officers with authority to sign a power of attorney is not provided in the Articles of Incorporation, it must be provided.
• Pictures or scans of the identification of two officials.

Once all this information is provided and any other additional details, then the Customs broker will be able to apply for CAIN on your behalf.

Under the Customs Identification Number, you will also get a Customs bond alongside the required documents required for importing your goods.

Does CAIN Expire?

Yes, Custom Assigned Importer Number expires after a specific time as it is not issued for a lifetime. Each country has a given period of expiration established for CAIN.

For example, in the United States, the customs authorities can keep the Custom Assigned Importer. Number valid for 12 months after the last time the number was used for importation.

It is essential to clarify with the relevant authorities if your Custom Assigned Importer Number is present in Customs books before proceeding with any procedure.

Can you Have More than one CAIN?

No, you cannot have more than one CAIN as the number issued can be used in all future custom transactions.

The duplicate copy of the Custom Assigned Identification Number is returned to the party that filed it.

When can You File for a New Importer Number?

Businesses or individuals may file for new importer numbers in the following cases:

• When the previous importer number has been declared void.
• There is a need for an additional importer number.

When Does a Custom Deactivate CAIN?

Customs can deactivate your CAIN for the following reasons:

• If you do not use the CAIN for importation within twelve months.
• If you have not updated your current address or general information for a given amount of time.
• If you are using the CAIN for fraudulent transactions.
• If your CAIN number does not match with your bond number.

Can you Reactivate a Voided Customs Assigned Importer Number?

Yes, you can reactivate a voided custom assigned importer number, and though it is advisable to follow all the procedures in getting the CAIN to avoided it being voided.

A voided CAIN number may lead to extra charges for your shipment. Some of the costs that you might get due to avoided CAIN include:

• Demurrage costs.
• Per diem charges.
• Detention charges.
• Damage charges.

How can a Voided CAIN Affect your Shipments?

A voided CAIN can affect your shipments in the following ways:

• Long waiting times for customs to cancel your bond.
• Refund of your unused bond due to a voided CAIN also takes time.
• You will have to buy a new body after correcting or replacing the voided CAIN.
• You will have to lose the previous bong bought together with the voided CAIN.
• The importer number is deactivated, and you will have to reapply all over again; this will subsequently cause delays with your shipment.
• Your shipment will be held until the voided CAIN is replaced; holding shipments will result in higher costs, especially from warehouse storage.

Other problems that you might encounter that a voided CAIN directly or indirectly causes may include:

• Random custom exams and inspections to verify your knowledge and compliance with the customer specifications.

• One of the common problems you may encounter is custom clearance, and this occurs mainly when you are not familiar with the various customs requirements.
• Another major problem is delay costs associated with late freight release.
• Some of the delay charges that you might encounter include per diem, demurrage, and detention charges.
• Taxes and duties missing in your documentation are among the most common shipping problems encountered by first-time importers.
• It is prudent to pick shipping agents with experience in handling shipments.
• This is to avoid problems that arise from missing details on your CAIN.
• Sometimes you might be tempted to exceed the allowed weight capacity/limit.
•  It might result in your cargo not meeting road weigh limits or I.M.O.’S Verified Gross Mass Regulation.
• Penalties such as Importer Security Filing (ISF) are common occurrences for shippers.
• Unexpected closures of ports due to unavoidable circumstances are also some of the problems you might encounter in shipping.
• It is not uncommon to hear of lost containers while on transit.

How do You avoid Shipment Delays to CAIN Problems?

To avoid shipment delays resulting from CAIN problems; you can do the following:

• Ensure that you complete a bond application and power of attorney, especially if you are using a broker in importing.
• If you are a foreigner or a foreign-based company importing into the U.S.A.;
• Ensure that you get a Custom Assigned Importer Number (CAIN). It is a required document for any shipments into the U.S.A.
• Ensure that you provide your customs Tax ID to your broker. It is used in associating your customs bond with your CAIN.
• Ensure that you do not get a CAIN without a Tax ID on it; this is to avoid a situation where your bond number and CAIN do not match.
• Ensure that you use the right channels to get your CAIN number; using shortcuts will lead to inconsistencies in your document and may cause delays.
• Before ordering for imports, ensure that you communicate the same to your customs broker.
• It will help them in advising you on the procedures to follow.
• Always check with your broker that your CAIN is up to date, active, and in customs’ importer records.
• In case of long periods without using your CAIN, ensure that you liaise with a broker to update your customs importer records to keep it active.
• Always be proactive and provide documentation for your CAIN to your broker to file entry of your shipment on time.

With CAIN, do you still Need a License to Import into the U.S.?

Yes, with CAIN, you will still need to show a tax I.D. and other licenses necessary to import your shipment.

The CAIN is just a permit for you to import, but you must comply with other regulations.

How can You Update your CAIN Information?

CAIN is also the I.R.S. business registration number.

So, to update it, you will have to update your I.R.S. business registration.

The three significant requests allowed in requesting for CAIN information update include:

• Notification of identification number
• Change of name
• Change of address.

Some of the information that you can change in your CAIN include:

• Legal and mailing address information.
• Update responsible party.
• Update owners and members mainly for limited liability companies.
• Update contact information.
• Update cease tax accounts.

You can update your CAIN number through the Department of Homeland Security, U.S. Customs, and Border Protection.

You will have to fill the importer Identity Form.

The data required in the importer identity form may include:

• Importer/Business/Private Party Name.
• Internal Revenue Service (I.R.S.) Employer Identification Number (E.I.N.)
• Social Security Number (SSN)
• CBP-Assigned Number
• Mailing address
• Physical location address
• Phone number
• Email address
• Company information
• Bank routing number
• Certificate or Articles of Incorporation – (Locater I.D.)
• Certificate or Articles of Incorporation– (Reference Number)
• Business Structure/Beneficial Owner/Company Officers
• Provide certification.

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No matter your location, you can easily import anything that you need through different means from China.

It is important to look at mode of shipping from China and period it takes for the cargo to reach your destination.

In this guide, you will learn more about the period of shipping cargo from China.

Which Products can you Ship from China?

China is the leading manufacturer of different products that you may need for different purposes.

Implying that, you can get different products that you will use for different purposes from China.

Here are some of the products that you can comfortably import from China.

• Home Furniture and Decorations
• Children Toys
• Pet Supplies
• Clothing and Other Fashion Accessories
• Electronic Devices such as Televisions, Phones, and Radios among others.
• Office Equipment such as Computers, Pens, Papers, Files and other accessories
• Cars and Automobile Parts
• Lighting Accessories
• Kitchen Ware
• Manufacturing Machines
• Travel and Outdoor Products
• Shoes and Other Sporting Equipment

In other words, the list is endless as there are numerous products that you can get from China.

You should, however, know if the products you are importing from China will be accepted in your country.

Which Incoterms do you use to Ship from China?

The importation process of cargo from China to anywhere in the world requires proper sharing of responsibilities.

In other words, you have to know the party that is responsible for taking care of different responsibilities.

In that case, you will have to look at the incoterms that will spell different responsibilities to different parties.

Here are the main incoterms that you can consider when shipping cargo from China.

EXW (EX Works) Incoterms

In this case, most of the work will be on the head of the buyer who will have to take care of transporting the cargo.

Your supplier will cease responsibility after availing the cargo at the floor of the factory for you to pick.

FCA- Free Carrier

Here, your supplier can supply the cargo to a particular place that you will name free of charge.

After that, you will assume the responsibility of transporting the cargo from China to your final destination.

CPT – Carriage Paid To

Here, your supplier will deliver the cargo to another carrier to whom you will decide at his or her expense.

After that, you will pay for the rest of the shipping requirements all the way to your country.

CIP – Carriage and Insurance Paid To

Your supplier will include the cost of insuring the goods and transporting them all the way to your shipping carrier.

You will take responsibility after your carrier receives the goods and pay for all the other expenses.

DAP – Delivered at Place

As a seller, you will deliver the goods at the point of destination and transfer responsibility to buyer before unloading.

As the buyer will proceed with paying for the unloading of the cargo and proceeding with other key cargo processes.

DPU – Delivered at Place Unloaded

In this case, the seller will bear the responsibility of delivering the cargo at agreed terming and then unload it.

As soon as the cargo is unloaded, you will proceed with the rest of the shipping and pay for every other expense.

DDP – Delivered Duty Paid

The unique aspect in this incoterm is that your seller will have to pay for the import and export duty of delivering the cargo.

You will proceed to the agreed destination and assume responsibility of the cargo from that point onwards.

FAS – Free Alongside Ship

Your seller will make sure that he or she pays for the cargo shipping up to the port where a particular vessel awaits.

You will assume responsibility for the cargo as soon as it arrives alongside the shipping vessel all the way home.

FOB – Free on Board

The seller pays for cost of shipping up to the point where your cargo is safely loaded on the shipping vessel.

After that, you will assume responsibility for the cargo by paying all the other shipping expenses to the final destination.

CFR – Cost and Freight

Your buyer will pay for every expense of transporting cargo to final port of destination and necessary obtaining documents.

In this case, you will use the documents to obtain your cargo from the shipping carrier and proceed with other responsibilities.

CIF – Cost Insurance and Freight

Your supplier will pay for every cost including insurance to the final arrival place in the country of destination.

You will assume minimal responsibility of receiving the cargo once it arrives at the final destination in your country.

Which Modes of Transport can you use to Ship from China?

You will use different means of transport depending on your location to transport cargo from China.

The choice of transporting your cargo from China will depend on the destination and time you expect the cargo.

In other words, the faster you want your cargo to arrive, the faster the mode of transport.

Here are the main modes of transport that you will use in shipping your cargo from China.

Road Transport

You can opt to ship your cargo via road transport on trucks and trailers depending on the size of the cargo.

This is the best means of transport for moving cargo from China to closer or neighbouring countries.

It also the cheapest means of transport for moving cargo to the neighbouring countries in China.

You will, however, take longer on the road if the destination of the cargo is stretched.

Railway Transport

You can also opt for railway transport if the destination has a railway connection with China.

It involves loading the containers on a train which will transport them all the way to the nearest train station.

It is a very economical mode of transporting your cargo from China since it does not cost much.

You will also wait for some time before you receive the cargo because the shipping time is quite slow.

Sea Transport

You will use sea transport when shipping cargo via sea vessels to countries connected via the sea or oceans.

In this case, you can either book space within a container or use the whole container depending on the size of cargo.

Apart from that, it is the best mode of transport that you can use to safely transport cargo that is very huge and bulky.

In terms of time, it is slow as you will have to wait for days or weeks depending on the distance.

It is also a cheaper means of transporting cargo in comparison to air lifting the cargo to final destination.

Air Transport

You can also decide to transport your cargo via aeroplanes which will fly the goods to the nearest airport.

It is the fastest means of transport that you can opt for as you can receive the cargo within hours.

Apart from that, air transport is quite costly and you will pay a lot more in comparison to other means.

Which Factors Determine the Shipping Time from China?

There are quite a number of factors that you should consider looking at when looking at the shipping period from China.

Here are the main factors that you should have a look at when shipping your cargo from China.

Distance

First, you have to know the final destination of the cargo and the source of the cargo.

You should know that China is a vast country and you may get the goods you need from different parts.

The further the location of the source of goods, the longer the time you will wait for your goods.

Apart from that, the further your final destination for the goods, the longer the waiting period.

Mode of Transport

You should also pay close attention to the means of transporting your cargo from China to final destination.

In conjunction with the distance, you will transport your cargo faster via aeroplanes than through the sea.

In other words, the faster the means of transport, the lesser the shipping period of goods from China.

Custom Clearance

You must also look at the custom clearance period and how long the department takes to clear your cargo.

It is important to have all your documents at hand to facilitate faster custom clearance of cargo.

You can also call upfront and inform the customs department about the arrival of certain goods with relevant documentation.

The faster you clear your goods with the relevant customs departments, the shorter the shipping period.

Which is a Faster Way to Ship from China?

The fastest way that you can use to ship cargo from China is by approaching all the details with experienced personnel.

In other words, you can hire freight forwarders who have more experience in clearing your cargo for export.

As soon as the clearance process is complete, you will proceed to loading the cargo on aeroplanes.

You can either charter a plane which will deliver the goods on an express route from China to your destination.

Apart from that, you can book space on the cargo plane and get the cargo within hours or a few days.

Which is the Slowest Mode of Shipping from China?

Well, in case you have no experience in customs clearance you might have to wait longer.

You may not have the knowledge that the freight forwarders have thus limiting your speed through custom clearance.

Apart from that, you will also wait longer if you use sea mode of transporting your cargo from China.

Here, you will have to wait for the loading of all the cargo on the ship.

In addition to that, the cargo ship might make stops along the way to offload cargo at various destinations.

Depending on how far the final destination is, you will have to wait for weeks since it is quite slow.

What is the Shipping Time from China to Various Destinations?

Well, shipping time to various destinations around the world will vary due to the distance and mode of transport.

Apart from that, the origin of the cargo in China may vary thus having a great impact on the shipping time.

Here are the approximate periods you will have to endure depending on origin and final destination.

· Time for Air Freight Shipping from China

Here is a table showing approximate time for shipping cargo from China to Europe

Shipping from various places in China to the United States of America

Shipping from various sources in China all the way to different destinations in Asia.

· Time for Sea Freight Shipping from China

Shipping from China to various destinations in Europe

Shipping from various sources in China to United States of America

Shipping from China to Oceania and Asia

· Time for Rail Freight Shipping from China

· Time for Road Shipping from China

Well, you can also op to ship from China to the neighboring countries and Europe through the road netwo

The international chamber of commerce has put in place Incoterms 2020, which took effect from 1^st January 2020.

Groups participating in the trade must know well the changes and how they influence global supply chains.

The purpose of this outline is to grant an understanding of Incoterms 2020, how they work, their benefits, and their relation to Incoterms 2010.

What are Incoterms 2020?

Incoterms 2020 are an extension of the export contract as it does not mention price to be paid or methods of settling bill of payment.

2020 Incoterms lack focus on issues concerning ownership transfer, product liability, or breach of contract.

All these issues are established in the contract of sale.

Also, they cannot override any mandatory laws.

The latest revision changes made on incoterms 2020 include the following:

• Incoterms 2020 recognizes the use of personal means of transportation by sellers.

The clause highlights explicitly that sellers can arrange necessary transportation or makes a contract for carriage.

• The rules investigate export and import security determinants to ascertain who is responsible for meeting security requirements between the parties.
• Important alternative in the term Free Carrier (FCA) whereby the shipper can tell the carrier to give a bill of lading inclusive of a notation of onboard to the shipper.

It is to satisfy the Letter of credit regulations.

• Revision of the term CIP where the responsibilities of purchasing higher insurance cover levels lies with the seller.

For CIF, the insurance claim has not changed.

• Renaming Delivered at Terminal (DAT) to Delivered at Place Unloaded (DPU).

Origin and History of Incoterms

Trade deals and legal agreements between sellers and buyers of different nationalities raised the importance of a standard regulations.

The regulations were supposed for easy understanding by all the trade parties to mitigate conflicts, litigation, and misunderstanding.

Incoterms were first bought in 1922 by the ICC and the opening incoterms regulations were set up in 1936. The word incoterms were first coined in 1936.

Overtime, incoterms have mutated or morphed into contractual standards that are quantified all over the world.

They are updated periodically as improvements, and inter-country trade events assuming very close attention.

Additional amendments on incoterms were made in 1953, 1967, 1976, 1980, 2000, 2010 and 2020.

Who can use Incoterms 2020?

Incoterms 2020 are used by:

• Producers
• Buyers
• Traders
• Governments
• Banks
• Sellers

Importance of incoterms 2020

• Each incoterm grants importers and exporters essential rules which help them understand their responsibilities.
• Incoterms 2020 help in clarifying any issues that may be in the contract.
• When used correctly, incoterms 2020 can help in saving you from a lot of hustles.
• They limit the legal risks complications by granting sellers and buyers a one reference point as the basis of the conduction of trade.
• When used correctly, you will partner swiftly, transport and transport your goods efficiently, and get rewarded faster.
• The rules are universal and thus provide predictability and clarity to business.
• Responsibilities, risks incurrence, and costs of the parties involved are stated clearly and precisely in incoterms 2020.
• Guide buyers and sellers how to begin and complete transactions, including packaging and labeling for international transport.

Obligations of the parties under Incoterms 2020

Seller’s obligations include:

• Delivery.
• Export/ import clearance.
• Carriage.
• General obligations.
• Checking/ packaging/ marking.
• General Obligation.
• Allocation of costs.
• Delivery or transport document.
• Transfer of risks.

Buyer’s obligations include:

• General obligations.
• Allocation of costs.
• Insurance.
• Transfer of risks.
• Export or import clearance.
• Proof of delivery.
• Carriage.
• Taking delivery.
• Checking/ packaging/ marking.
• Notices.

Obligations governed by incoterms 2020 include:

• The seller shall make the goods available to the buyer or their carrier to be transported and delivered at an agreed destination.
• The breakdown of the ownership of risk between buyer and seller in the transportation process from the point of origin to the destination.
• Custom clearance obligations in import and export.
• Buyer’s obligation to take over the goods.

Aspects not governed by incoterms include:

• Transfer of sales rights or property.
• Breach of contract and consideration of the involved party in the violation.
• Financial conditions and liability concerning carrying out the principal legal transactions.

Main Differences Between Incoterms 2010 and Incoterms 2020.

Differences between incoterms 2010 and 2020 include the following:

• New incoterms DPU replaces DAT: Delivered at Terminal (DAT) incoterms now referred to as Delivered at Place unloaded (DPU).

The main aim of this change was to eliminate confusion encountered in the past.

• Bill of lading in the FCA incoterms rule provision in incoterms 2020 highlights that buyers must give carriers instructions.

This is to provide a transportation document establishing that the cargo possesses a bill of lading.

Previously on incoterms 2010, most parties were using FOB instead of using FCA.

• Different levels of insurance cover in CIP and CIF: these two rules are the only ones which need insurance in the buyer’s name.
• Incoterms 2010, both rules were required under institute Cargo Clause C, while in incoterms 2020, CIP needs insurance cover to comply with Institute Cargo Clause A.
• Clause A tends to take care of a more enhanced insurance level appropriate for manufactured goods, while Clause C applies mainly to commodities.
• In incoterms, 2020 CIP does not change as it was in Clause C regarding the insurance cover, subject itemized exclusions, and the number of risks listed.
• Updated costs and listings: in incoterms 2010, costs were a challenge for some parties, and price changes by carriers resulted in sellers incurring terminal handling costs.

Incoterms 2020 now gives enhanced details on each party’s specific costs under the rule’s A9/B9 sections.

• Buyers and seller’s transport: previous incoterms assumed that a third-party vehicle provider would carry out all transportation activities.

Incoterms 2020 give provisions for the sellers’ and buyers’ transportation means.

The FCA rule grants the buyers’ permission for their means of transport while DAP, DPU, and DDP for sellers; own transportation means.

• Increased security requirements and costs: incoterms 2020 rules have enhanced security allocations and expenses.

Each incoterm rule has its security allocations added on A4/A7 and associated costs added on A9/B9.

Divisions of Incoterms 2020

Incoterms 2020 are divided i9 n four groups: C, D, E, F.

The rules are divided according to risk, fees, issues related to export and import, and formalities responsibility.

Group C Incoterms

In this group (Main Carriage Paid), the seller completes a transport contract and bears responsibility for the costs.

It is the responsibility of the seller to carry out export clearance.

Besides, the risk of the goods is moved to the buyer at the time the goods have been posted.

The buyer is responsible for handling all matters that arise after loading, transportation costs, and any other events.

Group D Incoterms

Group D incoterms (Arrival) state that the seller can deliver the goods to a specific destination place or port.

Group E Incoterms

Under group E (Departure), the goods are made available to the buyer by the seller at the delivery point indicated by the seller.

The seller does not have the responsibility of export or custom clearance and does not take care of loading or risk costs.

The incoterm rule under group E is Ex Works (EXW).

Group F Incoterms

Group F incoterms (Main Carriage Unpaid) states that the seller should perform export clearance.

The seller will not cater for insurance and transport costs.

Overview of Incoterms 2020

Here is critical information you need to know:

Incoterms for any Mode of Transport

These include:

Ex Works (EXW)

This rule is when goods are placed at the buyer’s disposal by the seller at either the seller’s premises or at another named place like a warehouse, factory, works, etc.

It is not the seller’s responsibility to load the goods on the collecting vehicle or even clear them for export when required.

Free Carrier (FCA)

The seller can deliver the goods to the carrier or a person chosen by the buyer at the seller’s premises or another given place.

The buyer will bear the risk of damage or loss of goods when the goods are alongside the ship.

Carriage Paid TO (CPT)

In CPT, the seller’s responsibility is to deliver the goods to the carrier or another person the buyer has nominated at a place agreed by the parties.

The seller will cater the costs of transporting the cargo up to the named point of destination.

Carriage and Insurance Paid To (CIP)

In this rule, the seller’s responsibilities are like CPT, but the parties’ contract for insurance cover against loss or damage to the buyer’s cargo.

The buyer should be aware that the seller must only cater to insurance on the minimum cover under CIP.

If there is a need for more insurance protection, there will be a need to negotiate and develop a strategy of additional insurance incurrence.

Delivered at Place (DAP)

In the DAP rule, the seller has the responsibility to bring the goods at the buyer’s disposal on the arriving means of transport at the named port of destination and ready to be unloaded.

The seller covers all the risks incurred up to the named port of destination.

Delivered at Place Unloaded (DPU) (Replaces Incoterm 2010 DAT)

The goods are placed at the buyer’s disposal by the seller at the named point of destination once unloaded from the means used in transportation.

The seller covers all the risks in bringing the goods to the destination point and unloading them.

Delivered Duty Paid (DDP)

In the DDP rule, the goods are delivered to the buyer by the seller once they have arrived at their disposal, have been cleared for import, and are ready to be unloaded.

The risks in bringing the goods up to the destination point, conducting custom procedures, and payment of duty are taken care of by the seller.

Incoterms for Sea and Inland Waterway Transport

These include:

Free on Board (FOB)

In FOB, the seller can deliver the goods onto a vessel selected by the buyer at a named port.

The risk of loss or damage of the cargo takes place when the goods are on board.

Cost and Freight (CFR)

In CFR, the seller is responsible for delivering the goods on board the vessel or purchases the goods that have been given.

The risk of damage or loss transfers to the buyer when the goods are on the ship.

The seller should cater for all costs incurred in bringing the cargo to the named port of destination.

Cost Insurance and Freight (CIF)

CIF rule states that the seller should deliver the goods on board the vessel, and the risk of loss or damage will transfer after the goods are on board.

Costs incurred to bring the goods to the port of destination are incurred by the seller.

Insurance cover to protect the cargo against loss or damage during carriage is also paid by the seller.

As a buyer, it is essential to note that the seller must cater to insurance only on the minimum cover under CIF.

If you need more insurance protection, there will be a need to negotiate and develop a strategy of additional insurance incurrence.

Free Alongside Ship (FAS)

The goods are considered delivered when the seller places them alongside the vessel chosen by the buyer at the named port of shipment.

The buyer bears the costs and risk of loss or damage once the goods are alongside the ship.

Transfer of Risk in Incoterms 2020

Foreseeing risk transfer is an essential element when preparing a contract.

Through using incoterms 2020, the risk of loss and damage is transferred in different ways between the seller and the buyer.

It is essential that the seller and buyer not misunderstand the actual application of incoterms 2020, which relate to the sale contract and transport contract.

The parties should keep in mind that incoterms 2020 will not be treated as “laws” because this lies in the business’s parties’ agreement.

The parties must choose what is appropriate for their contract and, where necessary, modify incoterms to suit it.

CPT rule establishes that the seller will cater for the freight up to the destination port, but the risk will transfer to the buyer once the shipment is at the port.

CPT rule under incoterms 2020 states that cargo is delivered for risk transfer and the end agreed as the destination of goods is essential.

In case the parties do not find a firm agreement, then the risk is transferred once the goods are handed over to the first carrier.

When products are damaged at the seller’s risk, the seller may be preventing to deliver against the terms of the contract.

In this case, the buyer may resolve legal remedies or not cater to the purchased price.

Incase destruction occurs when products are at the buyer’s risk, and they will have to bear the loss.

The buyer will just have to pay the seller the agreed cost.

It is up to the buyer to follow up on insurance companies or transport operators to claim damages.

In summary, incoterms 2020:

• They are not laws but optional rules.
• They relate to the sale contract and thus do not affect the transportation contract.
• Do not concern property transfer or any other sales right.
• The obligations undertaken by either party are not governed by incoterms 2020 because they are strictly confined to delivering goods.
• Incoterms 2020 does not concern the breach of the contract with relevant consequences of the party in violation.

How to Apply Incoterms 2020 in Sales Transactions?

The new incoterms 2020 came into effect on 1^st January 2020.

It is required that all parties elaborate clearly in their contracts the version of incoterms they refer to avoid confusion.

In trading agreements, different trading partners will implement incoterms at varying times.

Therefore, it is important to check existing contacts to ascertain that the incoterms’ year is included.

Effects of Incoterm 2020 on International shipping

Incoterms 2020 play a vital role in international trade.

According to International Commercial Terms (ICC), incoterms 2020 dictates globally accepted definitions and terms used in trading contracts.

When preparing price quotations and language, incoterms are the most important international shipping tool.

This is because they establish the agreement between the seller and the buyer on their roles, conditions, terms, and sale definition.

Incoterms 2020 state the boundary between a buyer and seller as they establish where a risk commences, the geographical point, and who owns what.

Limitations of Incoterms 2020

Incoterms 2020 do not:

• State liability for failure to make goods that conform to the contract available, measures to solve disputes, or delays in delivery.
• Notify the transfer of ownership of cargo from the buyer to the seller.
• Establish all the conditions required to carry out a sale.
• Give clarification of the documents to be made available by the seller to the buyer to help in customs at the country of the buyer.
• Establish the cargo that is being sold or the price.
• Refer to the method or time of payment agreed upon by the buyer and seller.

When to Adopt Incoterms 2020 vs Incoterms 2010

You may adopt incoterms 2010 when you would like all transportation to be undertaken by a third-party provider.

On the other hand, if you would like you or the buyer to use your means of transport, you may adopt incoterms 2020.

 How to Implement Incoterms 2020 in Your Business?

Incoterms 2010 can be adopted if the sellers still want to use Free on Board (FOB) when they want the contract

In case you want the insurance cover for CIF ana CIP to be under Institute Cargo Clause C, you may adopt incoterms 2010.

However, if you would a more comprehensive insurance cover, you may assume incoterms 2020 as CIP has an upgraded Institute Cargo Clause A.

It is essential to take time and assess how changes and upgrades in incoterms might impact your business.

Always engage professional legal advice before making any adjustments to your business.

To implement incoterms 2020 in your business, there are a few things that you may consider:

• Establish the incoterms that your business typically uses.
• Put in place tighter security for exports and imports.
• Audit any contacts which have extended into 2020 or need renew in 2020.
• Make changes and adjustments to any documents and contracts where necessary.
• In case you are buying or selling on credit, consider using FCA rather than FOB.
• Ensure that both parties are using the incoterms edition you are stating in the sales contract.
• Increase insurance cover level to meet CIP requirements.
• Analyze updated costs further and if they impact your landed cost calculations.
• Understand who is responsible for covering loading and unloading charges.
• Seek professional legal advice from legal analysts and experienced supply chain officers to audit the current procedures.
• Ascertain where the risk of loss is transferred.

Legal Effect of Incoterms 2020

Incoterms 2020 are not legally binding unless reference to a specific incoterm is incorporated into the contract.

Parties should note the following when adopting the formulation above:

• The correct “named port, point or place” must be correctly inserted by the parties, which may refer to the place of destination or delivery depending on the contract.
• Parties must consult article A2 (“Delivery”) to establish the appropriate incoterm section.
• It is essential to state the incoterm version used and not necessary to use the trademark symbol.

This will help avoid disputes which may arise due to misinterpretation of versions.

• Use of incoterm 2020 in trading will not govern any other contract or bind any third party.

Do Incoterms 2020 Work With Letters of Credit (L/Cs)

To obtain financial security, it is essential to choose the right combination of incoterm 2020 and Letter of credit conditions.

Individual consideration of incoterms 20202 and Letter of Credit conditions may lead to the incurrence of high costs and be contra-productive.

Therefore, it is essential to learn how to combine and choose the incoterms and contract terms, Letter of credit conditions, insurance, and transport from international professionals.

Banks need to understand underlying transactions to determine the risk of potential losses or eliminate breach of the law of financial crime possibilities.

This must be established even though banks will only deal with goods, contracts, and services.

When banks understand the parties’ incoterms and contractual agreements, they will establish the appropriate financial solution.

Corporates need to know arising opportunities and risks from the beginning of negotiations to the latter.

Basing on this, they should be able to select an appropriate incoterm 2020 while looking at:

• Payment securities
• Transport conditions
• Cost-conscious contracts
• Insurance

How Incoterms 2020 Can Affect Your Business

The main goal of incoterms 2020 is to make regulations easily accessible to users, prepare a digital version, and lower prices.

Changes in incoterms 2020 can be summarized as follows:

• Introduction of the incoterms is more detailed.
• Each rule has been updated with explanatory notes.
• The seller and the buyer have ten rules which have been reordered within each delivery term.
• There is a clear cost contribution between the seller and the buyer.
• Better capturing of the use of own means of transport.
• Delivery term DAP replaced by DPU (Delivered at Place Unloaded)
• CIP shipments are now covered by “All risk Cover.”
• FCA for on/board B/L (RULES A6 and B6)

In case your business involves transportation of purchased or sold goods, you should analyze the delivery terms used.

Establish factors that may influence the selection of delivery terms such as:

• Special needs.
• Critical situations for your business to be in control during transportation.
• Service level.
• Type of goods.
• Means of transport.
• Buyer and seller relationship.

After such analysis, most businesses will choose to change the delivery terms they have used over time.

This might be due to unknown risks or costs, or optimal term of delivery.

Some businesses may experience challenges when changing the delivery term as they may incur additional costs because of the wrong delivery term choice.

This may affect the business, and therefore, it is recommended to conduct comprehensive research and clearly understand incoterms 2020 to gain on delivery terms.

When will the Incoterms 2020 be Revised?

Incoterms 2020 was revised by an incoterm 2020 drafting group led by co-chairs David Lowe, Christoph Martina, and Radtke.

Experts form this group of personnel from several nations to recognize their contribution to ICC and International Commercial Law over the years.

The procedure followed to revise incoterm rules entails:

• Once the drafting group has carried out its revisions, the revised drafts are circulated internationally using the ICC’s national committees.
• The comments and suggestions resulting from the circulated draft are then directed back to the drafting group.
• Once the ICC Commission approves the final draft on Commercial Law and Practice, it is then submitted to the ICC Executive Board.
• The main aim of this broad consultation internationally is to make sure official ICC products have authority.

It also shows that the ICC products represent a right consensus point of view of the world business community.

How to get Incoterms 2020

Incoterms 2020 is got on ICC’s new eCommerce platform known as ICC Knowledge 2Go in digital and print formats.

It is essential to be aware that the incoterms 2020 edition is available in about 29 languages.

The ICC Committee has also organized more than 250 training seminars and launch events worldwide.

An online course and certificate program are also available in ICC’s educational arm known as the ICC Academy.

When shipping from China, Tj chinafreight will help you choose the right Incoterm.

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

If you’re wondering what breakbulk is, well this guide provides all information you need about this freight term.

From the basic definition, facts you should know to preparations when handling bulk cargo – you will definitely find all information you have been looking for right here.

Let’s dive fight in.

What is Break Bulk?

Breakbulk is also known as general cargo are goods that are not containerized during transportation by ocean freight and are loaded individually.

The shipping vessels used for transporting breakbulk are known as general cargo ships.

The lack of containerization can be attributed to excessive weight or extremely large size that cannot fit into a container.

Breakbulk cargos are transported in bags, boxes, drum, crates, barrels, etc.

In some case, it is because they cannot fill the container hence the individual loading.

What is the Origin of Break Bulk?

Breakbulk originates from the phrase ‘breaking bulk’ which means unloading of goods from ships.

Before the second world war, folks used to trade items such as jewellery, foods, materials, etc. across the globe by ship.

They would load the goods into the shipping vessels individually in sacks, drums, boxes, etc.

This was a cumbersome process involving loading, packing, unloading, sorting and repacking of several goods.

It would take so long loading and offloading the ships at the terminals making the transit times even longer.

The general cargo ship would transport all types of goods for one or various clients at the same time.

The cargo ships sizes were estimated from the capacity, time and cost of cargo handling per vessel.

As a result, it was hard to determine the general cargo ship capacity and translating it into the economy.

Breakbulk was also not without challenges such as damaged goods, loss and theft during the shipping process.

Post second world war II brought about specialized merchant vessels for certain types of goods such as bales of wools, woods, etc.

This resulted into the bundling of goods into manageable sizes, known as ‘man load’.

Man-loads were in units of 30, 50 and 80 kilograms (kg) that were easy for the labourers to carry.

As time passed by, a shift from man-load was observed to unit loads known as ‘containers.’

Containerization was brought about in late 1960s with the evolution of technology and the increase in goods to be shipped.

This led to a sharp decline in breakbulk shipping due to its efficiency and minimal loss and damage of cargos.

Breakbulk shipping is still present but in a specialized form for goods that cannot be transported in a shipping container.

What are the Different Types of Break Bulk Cargo?

Some of the most common examples include:

· Baled Goods

Baled goods such as clothing are stashed with padding in between them which is about 50 mm thick.

They can easily absorb oil and catch fire thus are kept away from new paintwork.

Only bales with intact bands and clean are accepted on board.

· Bagged or Sacked Cargo

These include coffee, sugar, rice, fertilizer etc. and are packed in sacks.

They are double padded and stowed away from the ship’s sides, pillars and bulkheads to avoid damage.

They are covered with water proof paper to keep them from getting damaged by water.

· Corrugated Boxes

Corrugated boxes come in different types and designs and are used to package various types of dry goods e.g., fruits, etc.

They are stacked on top of each other but with a cushioning in between them and away from moisture.

Some are placed in pallets as a unit during shipments and are attached to slings to facilitate loading and unloading.

· Barrels or Casks

Barrels are cylindrical containers with a bulging middle made from wood and bound by metal hoops.

They are commonly used to store and transport alcoholic beverages such as wine, whisky, beer, etc. such are referred as casks.

When shipping barrels, they are stowed on their sides on a good layer of cushioning bed.

Quoins-wedges are placed on top of the beds to prevent rolling over.

They are towards the front and end of the ship and not across from side to side of the ship.

The second tier is loaded ‘bilge and cant line’ which is the hollow part between the lower barrels.

· Steel Girders and Structural Steel

Steel girders are steel materials majorly used for construction.

They cannot be containerized due to their long length thus are transported break bulk.

They are stowed fore and aft in ship to prevent piercing the sides of the ship.

· Drums

Drums made from steel or plastics are used mostly to transport and store liquid or powdered goods.

They are stowed upright with the dunnage between the tiers.

· Paper Reels and Rolls

These are loaded on their sides and care is taken to prevent damaging them.

· Automobiles

Automobiles are wheeled cargoes such as motor vehicles, trucks, etc. which cannot fit into a container.

They can be wheeled into the ship or lifted by cranes during the loading and unloading process.

When using the lifting method, the automobiles are drained off the fuel such as petroleum and gasoline.

This is contrary to roll-on and roll-off (ro-ro) procedure where the automobile is driven on board and off the ship.

Automobiles are secured by lashing when stowed in cargo ship to prevent movement that could lead to damage.

· Wooden Shipping Containers

These are crates or wooden boxes which are placed within the holds or tween decks with double and single cushioning respectively.

· Project Cargo

These are goods mostly equipment meant for a specific task such as construction usually large, heavy and of high value.

This type of breakbulk cargo can be disassembled when shipping and assembled after delivery.

Such equipment include; turbines, mining equipment, building and construction equipment, brewery tanks, heavy machinery, etc.

· Heavy Lift Cargo

Heavy lift cargo are typically goods that weigh over 100 tons and are oversized in nature.

They include items such as turbines, cranes, blades, generators, locomotives, etc.

How is Break Bulk Cargo Transported?

Break bulk cargo is transported individually in sacks, bags, crates, barrels, or drums.

They can also be palletized or secured by skids when in units while on board.

What is Break Bulk Fee?

This is the cost of unpacking, sorting and stacking cargo that is charged at the break bulk depot.

It is calculated based on the time taken to handle one cargo.

What is Break Bulk Shipping?

Break bulk shipping is the movement of cargoes without loading them into shipping containers and in their loose form.

This method involves direct loading of goods into the shipping vessels in their individual units such as boxes, bags, drums, etc.

It is ideal for shipping irregular, oversized and very heavy goods such as windmills, mining drills, etc.

Why Should You Ship Break Bulk?

Shipping break bulk cargo can be done when the goods cannot be containerized.

Such goods are always out-of-gauge (OOG), very large and heavy.

They include plant machinery, vehicles, logs of woods, naval ships, etc.

To transport goods to large vessels that cannot dock in shallow water entryways.

Some ports and terminals are not modernized therefore, breakbulk shipping is the only to access such ports.

When shipping small quantities for trial market, breakbulk is preferred as opposed to containerization.

What is Break Bulk Freight Rates?

Breakbulk cargoes shipping costs is derived from the volume or weight of goods expressed in ‘freight tons’ whichever is greater.

The volume is in cubic meters (CBM) whereas the weight is measured in metric tons (Mt).

What is the Difference Between Bulk and Break Bulk?

Bulk is dry goods that is transported unpacked in a loose form such as granules, particles, etc. and in large quantities.

Break bulk is cargo that is transported packed in units of the pallet, bags, drums, etc. and also non-units for steel.

Bulk is poured directly on the shipping vessels and includes coal, sand, grains while break bulks are in units.

Besides, bulk is homogenous in nature whereas breakbulk can be a single or a combination of goods.

Bulk is charged on the capacity of the shipping vessel whereas breakbulk is charged on volume or weight.

Furthermore, bulk cargo is loaded and offloaded in specific ports i.e., coal terminals in South Africa, whereas break bulks use any port.

Also, bulk goods are transported by vessels knows as bulkers or bulk carriers whereas break bulks use general cargo.

Bulkers have single-decker with several cargo holds while breakbulk cargo have single-decker, tween decker and box hold.

Both bulk and breakbulk can be cargo for one or many customers at the same time.

What are the Advantages of Break Bulk?

• Heavy industrial and power generation businesses can easily move their bulky equipment using breakbulk shipping e.g., windmills, drills, plant generators.

They will do this without disassembling and assembling the equipment later.

• Smaller vessels are used thus they can easily access less developed ports that cannot accommodate larger and technologically advanced container ships.
• You can have your goods transported without mixing with other commodities to their final destination.

This is common with hazardous goods and materials.

• Break bulk shipping does not require several paperwork hence it is easier to handle.

One bill of lading is enough to handle the shipment compared to a container which needs paperwork per container.

How do you Calculate Break Bulk?

To calculate the volume of the breakbulk cargo the greatest length is multiplied by the width and height of the shipment.

Alternatively, the shipment is weighed and the dimension with higher revenue is used.

The volume is measured in cubic meters and the weight in metric ton with 1 cubic meter = 1 metric ton.

For example:

A bag of sugar which weighs 7metric ton has the following dimensions: length of 3m, 2.5m width and 1.7m height.

To get the volume; multiply 3m x 2.5m x 1.7m to get 12.75 cubic meters.

The shipper charges USD 300 per freight ton.

Therefore, the bag would cost USD 300 X 7Mt = USD 2,100 or 12.75 CBM X USD 300= USD 3,825. The latter would be quoted since it fetches more revenue.

What is a Break Bulk Warehouse?

A break-bulk warehouse is a storage facility located at the dock for holding goods before loading into the ship.

Goods to be transported as breakbulk are brought to the warehouse before the breakbulk ship arrives.

Upon arrival, the goods are then taken out of the warehouse and loaded unto the ship using manpower or cranes.

What is the Difference Between Break Bulk Vs Container?

Breakbulk are goods loaded in their individual units or pallets whereas container cargoes are packed in shipping containers during shipping.

The containers can either be 20 feet or 40 feet in size with different dimensions and designs.

Break bulk shipment use one bill of lading while container cargo requires different bills of lading for each container.

Break bulk cost is calculated on weight or volume whichever is higher whereas for container cargos depend on the shipping method.

Container cargo may be calculated per whole container for FCL or per space occupied in the container for LCL.

Break bulk does not need developed ports to dock while container cargo requires modernized ports and while deep waterways for docking.

Break bulk method requires more time to load and unload as well as several human labor.

Container on the other hand is more efficient since it uses cranes to load and unload and is much faster.

Break bulk does not need disassemble of goods when shipping, this is mandatory for containers for extra-large cargo.

Break bulk is prone to damage, theft and quality compromise whereas container ensure safety and guarantees quantity and quality upon arrival.

Break bulk cannot be used for perishable goods that require specialized temperatures while on transit.

This is possible with containers since they are available in various specialized designs such as refrigerated containers and also reefers.

Both can use geared or gearless ships for transportation of goods.

What is Break Bulk Cargo Handling Procedure?

The breakbulk goods handling process involves the below:

Cargo to be transported is brought to the breakbulk warehouse and stored waiting for the shipping vessel.

From the warehouse, the goods are moved to quay after they have been sorted and arranged according to type of goods.

The goods are loaded unto the general cargo from the quay by longshoremen or cranes for small and bulky goods respectively.

Once all the individual goods are on board, they are stowed separately and properly secured before the ship leaves.

Upon arrival at the terminal port, the longshoremen and heavy cranes offload the cargoes and store them at the warehouse.

The goods are later sorted before they can be transported to their final destination.

How do you Load/Unload Break Bulk Cargo?

Loading and unloading breakbulk cargo requires several stevedores as well as gears such as cranes to achieve it.

Before the goods are unloaded, the ship’s hold is cleared of any previous cargos, cleaned and repaired where necessary.

The goods to be shipped are transported to the breakbulk depot where they are sorted and stored ready for loading.

When the ship arrives, the goods are moved to the quay and then loaded individually into the ship.

Stevedores carry the man loads into the ship’s holds while the ship’s gears or dockside cranes lift heavy goods.

Roll-on and roll-off equipment are used where lifting is not done to load and unload respectively.

They are then stowed in their respective position and areas, with dunnage in between them and secured.

Upon arrival at the terminal port, the goods are unloaded at the quay the same way they were loaded.

Those that were loaded using batches of sacks using cargo nets are discharged using the same slings.

From the quay, goods are taken to the warehouse for storage before the customer collects and others to the break-of-bulk point.

What are the Precautions for Loading Break Bulk?

Several factors have to be considered before loading break bulk goods into the vessels for shipping.

• Ensure the previous cargoes have all been unloaded and the ship holds thoroughly cleaned.
• The ship’s holds should be checked for any damages and repaired beforehand. This will avoid unnecessary accidents or damage of goods.
• All the crew on board should stay away from the loading area to avoid injuries due to rolling goods.
• When shipping bulk cargo, caution should be exercised to prevent them from coming into contact with the deck’s moving parts.
• Areas such as cargo lighting, fire detectors and flood piping systems should be properly covered before loading.
• Accommodation ventilation areas should be well covered.
• Other areas to inspect and service include; Bilge well and strainer plates which help in drainage. Bilge wells and line, sounding pipes, etc. should be strengthened if loose.

Which Commodities Can you Ship Break Bulk?

1. Sacks of coffee, sugar, rice, fertilizers, grains, etc.
2. Motor vehicles, submarines, small boats and ships.
3. Power plant equipment, mining drill, road construction equipment
4. Cement, coal, iron ore, grains, etc.
5. Paper rolls, wood, plywood, logs, etc.
6. Barrels of wine, whiskey, beer, etc.

What are the Challenges of Shipping Break Bulk?

Break bulk shipping is more expensive because the bulky and oversized goods take up more freight space than stacked containerized goods.

The cargoes are bundled on the ship hold where they can be easily damaged, stolen or even injure someone.

The process of loading and unloading of the individual goods is cumbersome and need more time to finish.

This leads to longer port turnaround time.

Uncovered break bulk is likely to be exposed to unfavorable weather and climatic conditions that may render it unfit for consumption.

The carrier vessels must be cleaned after every use to prevent unwanted mixing that may compromise on goods quality.

Is Break Bulk Shipping the Same as LCL Shipping?

Yes, it is.

Break bulk occupies a certain space on the shipping deck as the LCL occupies a certain space in a shipping container.

Both have their freight cost derived from their weight or volume whichever will give higher revenue.

What are the Different Types of Break Bulk ships?

There are various types of ships that are used to transport breakbulk goods such as:

· General Cargo Ships

These are also known as ‘multi-purpose cargo ship’ and are used for shipping breakbulk commodities.

They come in various sizes with either single decks, tween decks or box holds as cargo compartments.

· Bulk Carriers or Bulkers

Bulkers are vessels used for shipping loose cargoes such as dry bulk or liquid bulk in liquid, dry or gaseous form.

Dry bulk includes coal, iron ore, grains and sand while liquid bulk includes petroleum liquefied natural gas (LNG), oil, chemicals.

Liquid carriers are known as ‘tankers’ and can only be used for specific liquid bulk.

· Container Ships

These are available in two forms; small and large oversized heavy cargo.

The small cargo easily fit into the container thus are no longer breakbulk but container cargo.

The heavy lifts are loaded on special equipment such as flats and lifted on board the ships using gantry cranes.

· Heavy Lift and Project Carrier

These are special vessels used in the shipment of heavy equipment such as power plants, mining drills, factory equipment, etc.

They are commonly used in project cargo transportation and such cargos are loaded and unloaded by lift-on-lift-off (Lo-Lo) or Ro-Ro methods.

· Forest Product Carrier

These vessels are used in the transportation of wood and paper products both in their finished, semi-finished and raw forms.

The vessels can be open or enclosed depending on the needs of the client and cargo.

· Refrigerator Ships

A good example of a specialized ship vessel is the reefers which is used for banana storage and shipment.

Such shipping vessels are capable of controlling the atmospheric conditions in them hence are ideal for perishable foodstuff.

· Roll On/Roll-Off Vessels

Roll-on roll-off ships are majorly used for shipping wheeled cargo such as motor vehicles, trucks, trailers, etc.

The cargo to be transported is loaded by driving it into the vessel or lifted upon the ship using roll-on equipment.

Such vessels do not need dockside cargo handling equipment thus have a faster turnaround time.

What are the Different Flavors of Break Bulk Ships?

Break bulk ships are available in two different flavors:

· Geared

Geared general cargo vessels are vessels that are equipped with their own cargo handling equipment such as deck cranes and derricks.

Geared vessels can therefore dock in any port.

· Gearless

Unlike geared vessels, these ones do not have their own cargo handling equipment thus use dockside cranes and forklifts.

Gearless vessels can only use berths that have cargo handling equipment.

Which Factors Are Currently Affecting the Break Bulk Market?

Some of the main factors include:

· Long Port Turn-around Time

Breakbulk carriers need a long time to load and unload at the port for every ship that docks.

This is not economical as much time is taken by one ship at the port.

Containerization has greatly reduced the time taken in loading and unloading goods at the port.

This has seen an increase in revenue as more ships are able to dock and leave the port within a short time.

· Security of Goods

With breakbulk, goods are vulnerable to damage, loss and theft as their security is very minimal.

With the emergence of containerization, goods can be sealed at the departure port and opened by the owner at the destination port.

Besides, all goods in container cargo must be insured against theft, fire, loss or damage during transit.

· Undeveloped Ports

Breakbulk do not require modern ports for their operations hence they can dock even in undeveloped ports around the world.

Whereas this has given them an accessibility advantage, there are some goods that cannot be shipped to undeveloped ports.

This has seen a shift to containerization in order to access modern ports with advanced technology.

What is Broken Stowage?

Broken stowage is unoccupied space in the cargo compartment due to the varying shape or size of cargo or ship.

The irregular shape of the cargo does not allow for compacting or uniform stow of goods.

It can be caused by motor vehicles on decks or even frames in cargo holds such as stanchion.

This is expressed as a percentage figure of the total cargo compartment.

This lost space represents lost revenue therefore, it should be avoided by all means.

Broken stowage also allows cargo movement when the ship is in motion and can cause damage or accidents.

Smaller goods that can fit the broken stowage can be used to fill up the lost spaces and shipped as well.

They are charged much lower compared to when they occupy freight spaces, they include timber, wires, etc.

What is the Difference Between Break Bulk and Broken Stowage?

Break bulk are goods loaded into a ship in loose form and not in containers for shipping.

Broken stowage is the lost spaces within the cargo compartment or in containers due to irregular shapes.

Break bulk is calculated by its weight or volume and expressed in ‘freight tons’.

Broken stowage is calculated as a percentage of the total compartment space and the figure expressed as a percentage.

What is GRT NRT and DWT in Break Bulk Shipping?

· Gross Register Tonnage (GRT)

Gross register tonnage is the cubic capacity in a ship that is available for goods, stores, fuel, passengers and crew.

This volume of space is underneath the deck and in the enclosed space above the deck.

The gross register tonnage represents the size of a ship in volume measured in Moorsom tons.

· Net Register Tonnage (NRT)

Net register tonnage is the volume capacity of cargo that a ship can carry.

It is derived from GRT and expressed in ‘register tons.’

NRT definition was adopted from the Oslo convection but has since been replaced by a new universal definition from London convention.

The new definition of NRT is calculated independent of the gross register tonnage.

· Deadweight (DWT)

This is the weight of goods on board, the crew, fuel, water, etc. that can be safely carried by a vessel.

If the total weight carrier ship exceeds the DWT, the ship can easily sink or damage.

Deadweight is expressed in long tons; 1 long ton is equivalent to 1,016 kg.

What is Break-of-Bulk Point?

This is the point where the goods are transferred from one form of transport to another.

For instance, a container can be loaded from a ship, into a train then into a lorry for final destination.

This is because some forms of transport cannot be used in certain areas due to safety and cost implications.

What are the Disadvantages of Break Bulk?

The following are the disadvantages of break bulk:

· Not Cost-Effective

Occupies large space as compared to containers since more goods fit in a container for, they are stacked on each other.

· Labor Intensive

The loading and unloading of breakbulk cargo requires many employees as compared to containerized goods.

· Security and Safety Problems

Breakbulk goods are always bundled or strapped while being transported. This can lead to breakage, damage or stealing of the goods.

· Not Suitable for Perishable Goods

There are some perishable goods such as foodstuff and electronics that need to transport in a controlled temperature and safe condition.

How has the Break Bulk Market Changed Over the Years?

Break bulk shipping has been used for many decades in the shipping industry.

However, the introduction of containers in the late 1960’s drastically reduced the market share of break bulk shipping.

The containers provided a safer and convenient way of shipping goods.

It is estimated that 90% of all goods the world over are transported by sea with 70% being shipped in containers.

The maritime trade volume was 11 billion tons in the year 2019.

The projected growth rate between the years 2019-2024 is pegged at 3.4% due to the steady increase in global trade.

The breakbulk market has changed significantly over the last 15 years due to technological development in emerging countries.

Additionally, the multipurpose vessels (MMP) have been replaced with land and floating cranes that are less costly to maintain.

The Ro-Ro vessels have also taken a large share of the breakbulk market.

Going into the future, these trends provide a dwindling market for breakbulk shipping.

What is Break Bulk Bill of Lading?

Bill of lading is a legal document confirming that an agreement has been reached between the shipper and carrier of goods.

The transportation company issues the breakbulk bill of lading to the shipping firm.

It indicates the conditions of shipping the goods to their final destination and the carrier used for transportation.

The breakbulk bill of lading are normally used for land, ocean and air transport.

There are two types of breakbulk bill of lading namely non-negotiable and negotiable.

The non-negotiable bill of lading fixes the specific name of the receiver of goods.

Whereas in a negotiable bill of landing, the goods can be received by any person with original copy of bill.

Why Should You Choose Tj chinafreight China for Break Bulk Services?

You should choose to ship with Tj chinafreight China for the following reasons:

· Affordability

Tj chinafreight China has partnered with different shipping companies that offer them a discounted price.

This cuts down on the cost of transporting goods.

· Warehousing

They offer longtime free warehousing services to their customers.

Tj chinafreight has vast experience in container loading and safe handling of goods.

· Container Loading Supervision

They supervise on behalf of the customer while the supplier is loading the goods.

Once loading of goods is over, they send the videos and photos to the clients.

· Readily Available

They offer 24/7 online support to the customers who are searching for shipping solutions.

They have a highly responsive online customer care team that responds to raised questions promptly.

Additionally, Tj chinafreight China offers free quotation shipping for its customers all over the world.

· Professional Custom Clearance Services

Tj chinafreight China has a highly efficient professional team that ensures smooth custom clearance.

They are continuously up to date with the Chinese export policies and comply with them to avoid delays of shipping goods.

The firm’s employees present all the required product details to the custom officers for accurate paperwork.

If you’re looking for a freight forwarder in China who will help you handle all your bulk cargo needs, Tj chinafreight is here to help.

Whether you need customs clearance service, cargo loading supervisions or booking spaces in bulk carriers, Tj chinafreight will facilitate everything.

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

In this guide, you will find all information you’re looking for about cartage.

So if you want to learn more about this freight term, this is the right guide for you.

What does Cartage mean?

Cartage is the process of transporting goods (either by road or train) to a container freight station (CFS).

For goods to be shipped, they must be transported from the supplier to a CFS.

The cost incurred in transporting the product from the supplier to the holding dock is referred to as Cartage.

What is the Difference Between Freight and Cartage?

Freight refers to goods being transported, usually for commercial purposes.

Cartage is the process of transporting goods over short distances by either road or rail.

Is Cartage the same as Drayage?

In shipping, the terms Cartage and drayage are often used interchangeably, and sometimes a shipper may be confused about their meaning.

Drayage refers to the transportation of a container’s entire content over a short distance, usually within a metropolitan area.

Mostly, drayage involves picking up freight and delivering it to the shipping port or vice versa.

On the other hand, Cartage is transporting freight by rail or road from a supplier to a container freight station.

Cartage involves shipping all kinds of cargo in bulk – from food products, clothing, chemicals, etc.

It also consists of the removal of waste.

In this, goods are loaded into large trucks or carriages and hauled from one point to another.

What are Freight and Cartage Expenses?

Freight and Cartage expenses are generally the cost of shipping goods from the supplier to a customer’s final destination.

The expenses, in this case, are freight and Cartage expenses.

They include both local transportation at origin (Cartage) and international shipping expenses (freight).

Is Cartage a Direct Expense in International Shipping?

Understanding the kind of expenses you incur for international shipping can significantly help determine your profits.

Because Cartage expenses are directly attributed to the goods being shipped, they are therefore direct expenses.

Suppose you are importing, and you incur inward Cartage expenses.

You will record them on the expense side of the trading accounts.

However, if they are outward, then the recording will be as expenses on the profit and loss statement, which means that they are a direct shipping expense.

What is the Meaning of Paid Cartage?

When importing a product, you only budget with the product once it has reached your warehouse.

Paid Cartage refers to the Cartage passed to the customer.

When you purchase a product and deliver it to customers, Cartage cost is included in the product’s price.

And when the customer pays for the product, Cartage becomes an income rather than an expense.

What is the Cartage Fee in Logistics?

Depending on the incoterm and shipping term you use, you may encounter Cartage fee when moving your products once in a while.

Cartage fee in logistics is a sum charged by transporters for the service of delivering your products through rail or road.

In this case, the emphasis is on short inland distances.

How is Cartage Cost Calculated?

After understanding what the Cartage fee is, the next thing is to know how transporters arrive at it, lest they charge you heavily.

There are several factors in play when calculating the Cartage fee.

Your transport company can decide to combine several factors in determining the Cartage costs or use a single factor.

Nevertheless, some of the factors include;

· Mode of Transportation

Depending on the transporter, transportation by road can attract a higher Cartage cost than using a train.

· Distance

When it comes to logistics, distance is of the essence.

The Cartage costs increase with an increase in the delivery distance.

· Weight and Size

Weight and size also dictate the Cartage costs.

Heavy and bulky packages tend to attract higher Cartage fees than small and lighter loads.

· Type of Product

Type of products can be in terms of perishability, shape, value, or Hazmat products.

There is no fixed Cartage cost, and the amount due will depend on your transporters rate and the factors above.

HAZMAT and perishable goods often require special handling and transportation equipment.

Due to this, the cost of hauling them is usually higher than other products.

Who pays Cartage Fees?

Just like freight charges, incoterms tend to dictate Cartage fees and payments.

For instance, if you are shipping under CIF incoterm, your supplier pays all the transportation costs until you receive the goods.

Nevertheless, after receiving the goods and you want to deliver them at your doorstep, say from the port, you will be liable for the Cartage fees.

Can you Encounter Multiple Cartage Fees in a Single Shipment?

Yes.

The shipping process forms a long chain with numerous participants, including consignees, shipping agents, port operators, suppliers, inspectors, etc.

Therefore, instances of multiple Cartage fees exist depending on how many hands your package goes through.

For example, at the port (mostly busy ports), there are several processes that your goods must undergo, either before shipping or after.

During the movement of your goods from one place to the other within the port, you will incur Cartage fees.

If your products undergo an export inspection, you will also incur an additional charge.

What is the Difference Between Cartage and Wharfage Fees?

There is a distinction between Cartage and wharfage fees, and not necessarily must you pay both.

If you are shipping and you have chartered your vessel, you must encounter wharfage fees.

You are charged wharfage fees for using the port’s harbor in loading or unloading your consignment.

Conversely, Cartage fees are typical for moving products within the port and are charged by port operators.

What is Cartage Advice?

Usually, before having a transporter delivering your products from one point to another, there is a legal agreement.

This legal agreement is referred to as Cartage advice.

Cartage advice, therefore, is a legal document showing details of the product being transported.

It also serves as an acceptance letter at the destination affirming the receipt of goods.

Can Cartage Fee Documentations be Considered as Contract of Carriage?

Contracts of carriage contain information about the parties involved in this case;

• The consignee
• Logistics provider
• Consignor

The contract of carriage should also specify the nature of the product being transported.

Additionally, it should show the fulfilment of transportation as per the agreement.

When Cartage advice spells out all of the above aspects, it is considered a carriage contract.

What does a Cartage Agent do?

A Cartage agent picks up goods from point A and facilitates its haulage to point B.

They offer transport services.

And those who don’t, contract-specific Cartage companies to transport client’s products as advised.

In this case, during Cartage, the responsibility of goods always lies in the Cartage agent’s hands.

Also, note that these agents use their paperwork while transporting the goods.

How do you choose a Cartage Agent?

Every shipper desires convenience in the delivery of a product up to the selected delivery point.

However, specific reasons hinder shippers from fulfilling these desires.

Cartage agents come in handy to ensure no destination is unreachable.

Despite serving your business needs, it is essential working with a reliable Cartage agent.

This is because not all of them are worth serving your business.

To find a reliable Cartage agent, consider the following factor:

· Location

Location is an essential factor when choosing a Cartage agent as it determines how fast your shipment gets from point A to point B.

Agents who are much closer to major transportation hubs such as seaports and airports are considerably better suited.

Such agents are not limited by time or distance and thus can pick up and deliver your cargo without scruples.

When considering the location, always ask the agents about their location concerning the pickup point.

This way, you can rest easy knowing that your package will be transported on time.

· Experience

Not only does experience come in handy in navigating local routes, but it also saves you money.

A good Cartage agent should have positive reviews from their previous clients and mastery of the local laws.

Other than the experience of the company, the drivers too must be experienced.

Getting your goods from or to local areas can be challenging because of roads and hostility.

To be safe, the drivers must have adequate driving knowledge in any weather or terrain.

· Reliable Customer Service

Reliability is vital when choosing a Cartage partner and you can judge this from their customer service.

Quality customer service involves prompt communication, responses to concerns, dispute resolution, and adhering to the terms of the agreement.

Putting your products under the care of a Cartage agent requires more than trust.

It would help if you felt safe and relaxed because you are sure the Cartage agent will deliver.

A good agent should have an elaborate communication and tracking system.

You can check reviews, testimonials, and affirmations from those who have worked with the Cartage agent in the past.

· Warehousing Options

This is particularly important when importing products.

Other than offering transportation services, the Cartage agent should care for the goods while under their custody.

It will help to seek clarification from the Cartage agent if they have their warehouse.

This will save you a great deal in storage costs.

Do Freight Forwarders offer Cartage Services?

Freight forwarders’ role in international shipping is significant.

It goes beyond booking a vessel and presenting customs clearance documents.

Forwarding agents handle Cartage services, though only under special contracts.

They either use their means of transportation or hire from others.

To help save on costs and having many people handling your products, you can settle on a freight forwarding expert who arranges or offers Cartage services.

What is Cartage Outward?

Cartage outwards is the cost/expense of transporting products from your warehouse to the customer.

It is recorded on the profit and loss account when importing products.

What is the Difference Between Cartage Outward vs. Cartage Inward?

Both Cartage inward and Cartage outward refers to the costs of transporting products over shorter distances, usually within the same metropolitan areas.

Nonetheless, the two differ when it comes to making an entry in the books of accounts.

For Cartage outward, you make the entry in the profit and loss account.

While for the Cartage inward, you record the entry in the trading account.

What is the Difference Between LTL and FTL Freight in Cartage?

The choice between Less Than Truckload (LTL) and Full Truckload (FTL) can be confusing, especially when booking Cartage services.

The choice between LTL and FTL depends on the quantity of your cargo, price, and delivery time you desire.

· Less than Truckload

The LTL freight option offers an opportunity for low budget shippers with truckload weighing between 100 and 10 000 pounds.

Under this method, you only need to pay Cartage costs that equal the space your products occupy.

For example, if your shipment occupies only a quarter of the whole truck, your Cartage fee will be a quarter of the truck’s total Cartage fee.

Though economical and practical, under the LTL method, the delivery time is longer.

The truck will not depart if it’s not full, meaning that you have no control of the delivery time.

· Full Truckload

When shipping, the delivery time has more weight in ensuring you meet your customers’ demand.

The FTL means that you will hire the whole truck space for your transportation.

Regardless of whether your products occupy the whole truck space, you can still hire the truck.

In this case, your products stay undisturbed until they reach the delivery point.

Though the Cartage fee is high under the FTL method, your products are safe, and the delivery time is shorter.

Before settling on either LTL or FTL, consider your budget, shipment volume, and how fast you want your goods.

Otherwise, where Cartage cost is not an issue, FTL is your best choice.

Are Cartage Fees included in the Overall Shipping Fees?

When computing the overall shipping fees, you must include all the expenses used to deliver the product to the desired delivery point.

Cartage fees are significant, and when realized, it is impossible to ignore them as shipping fees.

Do you use Incoterms during Cartage?

Incoterms are important in shipping because they define both the buyer and the shipper’s obligations in settling shipping costs.

Because incoterms spell who is responsible for costs of delivering products, they apply for Cartage costs.

Depending on the incoterm in play, either the supplier or the buyer (importer) pays for the Cartage costs.

For example, under DDP incoterms, the seller is responsible for all transportation costs until they reach the buyer.

This means that the seller will handle Cartage costs of delivering the goods at the port and the final delivery point.

Conversely, under EXW incoterms, the seller only avails the goods at the pickup location.

After that, the buyer handles all other costs, including Cartage costs.

Does Freight Weight Matter when Calculating Cartage Fees?

Yes, it does. Some products are too heavy for ordinary trucks to transport.

Therefore, the Cartage fee will increase with an increase in weight.

However, other factors also come in handy, like the size and shape of the product.

Your product’s freight weight can be higher, but the space it occupies is smaller.

Depending on your transporter, you can incur the same Cartage fee as another product with a lighter freight weight with the same size.

What is a Cartage Vehicle?

You have already known that Cartage is the process of moving products over short distances.

To do this, Cartage companies use special trucks or trains known as Cartage vehicles.

How do Cartage Companies Work?

Cartage falls under the service industry, and the whole operation can involve a single Cartage vehicle with one owner or many Cartage trucks owned by one company.

The Cartage companies’ purpose is to deliver products from one point to another (usually short distances).

Cartage companies require specific qualifications to operate.

· Licenses and Permit

By law, all companies have to pay taxes so do Cartage companies.

The drivers must have a Commercial driver’s license and permits.

For drivers hauling sensitive products such as corrosives, they must undergo special training.

· Office Operations

Because Cartage companies operate in the service industries, planning and scheduling are needed.

As an importer, you have to place your request, receive feedback, and make your delivery payments.

· Collection of Necessary Details

Drivers operate under special routines and specifications pegged on provided details.

You should give the needed details to reduce any mistakes.

· Specialization

A Cartage company can choose to specialize only in transporting specific products.

In such a case, the Cartage Company must have the right set of employees.

If, for example, it deals in Cartage of security products, it can hire armed guards to secure the product during transit.

How does Cartage Affect Shipping?

Cartage is responsible for the delivery of products at several stages of the shipping process.

It could be to a CFS for customs inspection, a shipping terminal, or the customer’s address.

Generally, timely Cartage ensures timely shipping, while Cartage delays can also lead to shipping time delays.

When it comes to the overall shipping costs, an increase in the Cartage fees increases the shipping fee.

As you can see, Cartage has a lot of impacts on your business.

It requires more than just a Cartage company.

At Tj chinafreight, we can help with your Cartage needs to give you a seamless delivery of goods – contact us now.

If you want to learn about centralized examination station, the information you’re looking for is right here.

You’re going to learn about what it is, why you need it and importance in importing from China business, among other critical aspects.

Keep reading to learn more.

What is CES in Shipping?

A Centralized Examination Station (CES) is inspection facility used by custom brokers and freight forwarders.

They use it to quicken the tedious custom inspection process involved in importing merchandise into the United States.

US Customs and Border Protection (CBP) majorly uses the hub to physically inspect and examine imports and exports freights or cargo.

CBP defines a CES system as a privately operated facility that avails merchandise for physical examination

Why do Customs Send Shipments into a CES?

Majorly, the CES facility acts as a convenient means, to both the importer and CBP, to ensure that cargo is examined within a short time frame.

Most merchandise are moved to the CES for intensive customs examination.

These examinations can last anywhere between a week to 30 days.

Due to its lengthy span, the CES tries to shorten the time for the custom examinations.

Notably, the intensive customs examination is the most crucial in the customs exam process.

This not only highlights the need for CES but also gives more reason for the need for an effective facility.

What is a CES Operator?

CES operators are persons who have made a written agreement with the US Customs to operate a Centralized Examination Station (CES).

Importantly, the person(s) must have met the eligibility criteria of the US Customs service.

What are the Responsibilities of a CES Operator?

Upon signing an agreement, a CES operator is mandated with:

• Maintenance of the CES designated facility as per the agreed-upon security standards
• Provide adequate staffing and equipment for efficient opening, inspection, and closing of all merchandise scheduled for inspection by the US Customs service
• Bills the users on the services rendered as outlined in the fee schedule
• Bears all the expenses of operating the CES – US Customs service does not operate the facility
• Maintain a US Customs Service custodial bond within an amount determined by the port director.

The bond is inclusive of the liability for transporting the cargo to the CES facility managed by the operator.

Also, the operator is obliged to increase the bond amount as instructed by the port director

• Having efficient liability insurance for his/her property/ facility, and the people using the facility
• Ensure timely and regular filing with the port director
• If the merchandise is within district boundaries, the operator can offer to transport the merchandise to the facility.

Importantly, the operator will assume the liability of the merchandise from the point the merchandise departs to the CES facility.

• Avail office space, sanitary facilities, water, and parking reserves for customs official for free or impose a charge of $1 per annum.
• Maintain and avail all examination records to customs for a period of five years or more.

What are the Qualifying Features of CES Operator?

Below are the key qualifying features or minimum requirements of a CES operator:

Proximity/ Distance

The operator must clearly give the distance of the CES facility to the: CBP Port Office, nearest direct ocean discharge, and nearest major highway.

Experience

The operator must avail information that shows their experience in international shipment operations, and an understanding of CBP procedures and select regulations, or show a commitment to acquire the understanding.

Availability of the Facility

The facility should be available for use at all times, 24hours 7 days.

The CES facility operation hours will be determined by the CBP.

Provisionally, operations in the CES facilities will start from 8:00 am through to 5:00 pm, as from Monday to Friday.

However, the days and hours of operations may increase depending on the workload.

Secure Facility

The facility should be secure and have a barrier that separates CES cargo from any other cargo that is not under CBP jurisdiction.

Also, an intrusion detector should be installed on the CES to monitor what goes in and out of the facility.

Additionally, separate intrusion detecting systems must be installed for reserved high-security storage areas and CBP office space.

Access to CBP designated areas must be restricted from the public and/or unauthorized personnel.

Lastly, the facility must be under 24-hour surveillance including the use of security cameras and patrol guards.

Computerized Tracking System

The CES facility should have a tracking system capable of providing information on past and current inspections.

Advisably, the tracking system should provide information on the examination type and status, container number, carrier, and bill of lading.

Container Storage Area

There ought to be a secure and fenced yard that surrounds the facility and the storage structures put in place.

The yard area should have a minimum space of 125’ by 55’.

Some requirements that the operator’s warehouse should meet include:

• Compliance with the Occupational Safety and Health (OSHA) standards.
• Not less than two outlets for refrigerated containers
• A minimum lighting intensity of 300 LUX at floor level for sufficient illumination in the examination area
• Proper ventilation, advisably two ceiling fans and/or one large wall fan
• Not less than 6 cargo doors which are the same height as the dock (or presence of specialized equipment for efficient handling of the cargo).
• Not less than 1,000 square feet of open floor between the doors and the examination area

Which Government Agencies use Central Examination Stations?

Government agencies that use CES include:

• The United States Department of Agriculture (USDA)
• S Department of Homeland Security
• The Food and Drug Administration (FDA)
• Environmental Protection Agency (EPA)
• The Bureau of Alcohol, Tobacco, and Firearms (ATF)

What is a Customs Exam?

Depending on the type of cargo, customs exams can either be in form of a Tailgate, X-ray, or Intensive exam.

The major purpose of custom exams is to confirm whether the merchandise meets the set standards.

How does CBP Select Shipments for Customs CES Exams?

Commonly, CBP uses a targeting system that ranks shipments according to scores.

If a shipment exceeds a specific score, then there is a high possibility of being selected for examination.

Importantly, the fact that the CBP keeps the details of the targeting system confidential makes it difficult to determine whether your shipment will meet or exceed the score.

It’s worth mentioning that first-time shippers are more prone to inspection and subsequent subjection to customs exams.

This is aimed at establishing the credibility of the shipper.

How do you know if your Shipment has been Flagged for Customs CES Examination?

Most shipments are transmitted to Customs through the Automated Broker Interface (ABI).

In such a scenario, your broker will receive a ‘manifest hold’ electronic notification.

A similar notification is also transmitted to the carrier and also anyone listed in the Bill of Lading under the ‘Notify Party’ section.

Also, the consignee can get a notification if the latter section was left blank.

Note: Before a cargo arrives in the US, its details are to be manifested with US Customs.

This means that manifestation is based on information and data.

Consequently, a manifest hold will arise when there is a problem or some omission in the data or information provided.

After the manifest hold, the CBP may want to physically inspect your cargo.

Consequently, they will order that the shipment be moved to the nearest CES facility for inspection.

What are the Different Types of Freight Exams and Tests?

Some of the main exams include:

Tailgate/Backdoor Exam

This is the most straight forward exam.

It entails a visual inspection by the CBP officials.

The container seal is cut, the container is opened, a visual check is done, the container is closed (if there is no further suspicion), and the container is released.

VACIS Exams/NII

Vehicle and Cargo Inspection System (VACIS) or the Non-Intrusive Inspection (NII) is a common exam that you will probably come across.

As the name suggests, there is no intrusion of the container or the cargo components.

The container is simply X-rayed using 3D imaging to enable the CBP officials to check for contrabands or unlisted materials.

Due to its unobtrusive approach, this exam takes a shorter period and it is less costly. On the high end, it will cost not more than $300.

CET Exam: Security and Contraband

Contraband Enforcement Team (CET) examination entails a thorough search of your cargo or container.

It is an intensive and quite expensive exam initiated after the VACIS exam.

For the CES exam, your freight will have to be moved to the CES.

The inspection will be conducted manually/physically.

This exam is aimed at protecting US consumers from illegal weapons, narcotics, and alcohol.

The information that will be checked includes trademark or copyright, safety standards, and valuation of the goods.

Also, the Harmonized Tariff Schedule of the United States (HTSUS) classification is confirmed.

CET exams can last between 7 days to 30 days.

Moreover, it is quite costly considering that you will have to pay for every cost of the exam including the transportation cost to the CES facility.

USDA Exams

This exam is conducted by the US Department of Agriculture (USDA) inspectors.

The cargo is physically inspected for pests or anything that could cause harm to the US environment.

Products subjected to USDA exams range from food products to wood products (including crating and shipping pallets used)

What is the Customs CES Examination Process?

• The CES is notified of the exam hold via the Automated Manifest System (AMS). For the CET exams, the CES is notified by the CBP whether a tailgate or full strip exam is required
• The CES confirms the container’s availability for CES pick up at the terminal. If available, the container will be picked up within 24-48 hours.

In a scenario where CES cannot make the pick-up, other means such as – Customs House Brokers, CBP, Freight forwarders, and Steamship line – will be used.

• Upon delivery of the container to the CES, it is moved to the cargo door
• Cargo is availed to the CBP as per the exam instructions requested (full strip or tailgate)
• CBP is provided with a list of containers picked up by the CES for inspection, including the stage a container is at.
• The respective team conducts specific exams. For example, Contraband Enforcement Team conducts the CET exams.
• Cargo may remain on Government hold awaiting further inspection or release
• You can check the release status of your container via the CES internet tracking system or CES customer service.
• Upon the release of hold, CES gets the agreed payment or credit to cover the exam costs. Also, the CES will check for line release if a Steamship line was used.
• The container is finally delivered

Who Bears the Cost of CES Exams?

The CES exam cost is solely covered by the shipper.

This includes the transportation cost to and from the CES facility.

How Long do Custom Exams take?

The time custom exams take vary depending on the intensity of the inspection.

Also, the mode of transport to and from the CES facility majorly affects the time frame.

Generally, the majority of examinations are completed within 24hrs of the shipment arriving at the CES facility.

However, some examinations that require laboratory analysis, review, and thorough investigation will take longer.

Presumably, a complete intense CES examination will take about 7-30 days.

Who Supervises the Loading and Unloading of Containers at CES?

The supervision of the loading and loading of containers at a CES facility is done by the US government officials/ CBP officials.

Who Pays for the Loading and Unloading of Goods at a CES Station?

Every logistics handled by the CES station staff is payable by the shipper (you).

Loading and unloading of the goods at the CES facility is not an exception.

How Long can CBP hold your Shipment in CES?

Legally, CBP has up to 35 days from the date of arrival of the shipment, to hold your shipment in CES for examination.

CBP is legally required to release or seize your merchandise after 35 days.

However, the CBP may hold your merchandise longer than the stipulated period in circumstances.

For example, an exam filled with a lot of bureaucracy may stipulate a lengthy examination process.

What are the Holding Charges for Shipments Held at CES?

Before the examinations, there are no holding charges.

However, after the examination, a free time of 2 days is allowed. Upon the lapse of the free time, a charge of approximately $ 50/Day is levied.

Below is an example of a fee schedule with the holding charges.

Who is Responsible for Moving goods to and from CES?

The CES operator is in charge of all logistics.

However, the merchandise should be able to be picked up by the specific CES transportation service.

If the CES cannot offer the transport services, CBP, Freight forwarders, Custom House Brokers and Steamship line, can be used.

Importantly, no matter the transport means used, you are legible to pay the entire cost to and from the CES facility.

What are the Conditions for Releasing Shipments from CES?

Importantly, your shipment ought to have passed the CES examinations before being released.

If your shipment breaches or goes against the set examination standards, it can be seized.

Also, you have to completely pay the fees levied by the CES facility for the entire examination process before your cargo is released.

Note: Your container may be released by CES but it might not still get to you.

Such a scenario may occur if you still owe certain persons involved in the shipping process.

Say for example you have not paid the shipping company for extended usage of their container.

The company can hold your cargo until you pay the added amount.

How can you Avoid a Customs Exam?

Even though no one can be exempted from customs exams do not warrant laxity.

You can put measures in place to cushion the cost of the customs, and to reduce the likelihood of being on the losing end when a customs exam is ordered.

Here are some suggestions to ensure this:

• Deal with people you know. Knowing your suppliers, manufacturers, and vendors will make it easy for you to provide the needed information when requested.
• Ensure your shipping documents are in order. Do not have your documents all over. Check and counter-check that the details on product description, product value, and country of origin are clear.
• Consider securing a continuous bond as opposed to a Single Entry bond when you are planning to have multiple shipments in a year.
• Go FCL rather than LCL /LTL. The latter entails sharing a container with other importers. This may make your shipment be delayed when the other shipments within the same container are being examined.
• Register for an ACE and ensure you make a regular audit of your Customs Entries
• Increase the legitimacy of your shipping by applying for Customs-Trade Partnership Against Terrorism (CTPAT).
• When sourcing from a potentially high-risk country, ensure a regular audit of your supply chain to point out possible loop-holes and put in place a corrective measure.
• Ensure timely filing of your Importer Security Filing (ISF), preferably 24hours before the shipment is loaded overseas.
• Know the Priority Trade Issues (PTIs) highlighted by the CBP. These will give you an idea of whether your cargo has a high probability of being subjected to a customs exam.
• Importantly, maintain a cordial relationship with your customs broker for a prompt response if need be. Your broker should have an effective communication channel.

Are Container Freight Stations insured?

Yes, almost all Container Freight Stations (CFS) have a general insurance cover for potential risks such as fire outbreaks.

However, you should have a cargo insurance cover that guarantees compensation when anything happens to your shipment at the CFS.

Who Pays for Damaged Goods and Losses Incurred at a CES?

Unfortunately, you will bear all the costs including losses.

The CBP and CES are not liable for the damage of any commodity during an inspection.

You might find some of your goods damaged after being released from the CES facility.

Consequently, this is the sole reason for you to acquire insurance or coverage for the complete transit of your cargo up to its final destination.

What happens if a Violation Occurs during Customs Exam?

In a case where your cargo violates the specified customs exam, your broker will be contacted by CBP officials. CBP will then give details on the nature of the violation.

Your broker will then discuss with the CES manager on the appropriate course of action to correct the violations.

However, some violations are punishable by law.

For example drug and firearms smuggling.

How is Secure are CES (Central Examinations Station)?

CBP regulations try to ensure that Central Examinations Stations (CES) are secure by putting in place mandatory requirements in the facilities such as:

• Creation of a barrier that separates CES cargo from any other cargo that is not under CBP jurisdiction.
• Installation of intrusion detector systems on the CES and the offices reserved from CBP officials to monitor what goes in and out of the facility.
• Restriction of access to CBP designated areas from the public and/or unauthorized personnel
• 24-hour surveillance including the use of security cameras and patrol guards.

What Other Value-added Services can you Find in a CES Facility?

• Transportation to the final destination
• Container Freight Station (CFS)
• Heavy Lifting/ Cross-Docking
• Warehousing
• Food and Drug Samplings
• Drayage services
• Making your cargo CBP compliant

How do you track the CES Examination Process?

CES facilities have computerized tracking systems that provide information on the examination type and status, container number, carrier, and bill of lading.

What Factors should you Consider when Choosing a CES Facility?

You should consider the following key aspects:

Location

The CES facility should be near the port of landing and the final destination.

This will save on the transport cost to and from the CES facility.

Track and Trace Facilities

An efficient track and trace system will enable you to know the examination status of your shipment.

Consequently, you will be able to handle the necessary logistics as you await the release of your shipment.

Personnel Skill

Skilled personnel will ensure the correct handling of your cargo.

Also, their experience will help in efficient and economic correction of any CES violation, if need be.

Facility Size and Capacity

Facility size will affect how fast the examination is conducted.

A larger CES facility is likely to be having more experienced personnel and machinery for a quick examination.

Security

You would not want the contents of your container going missing.

Being keen on the security measures put in place to ensure the safety of your cargo may help you prevent potential theft or the disappearance of your cargo.

Machinery and Infrastructure

The more modern and efficient the machinery and infrastructure, the lesser time your shipment will be held for examination.

Additionally, efficient cargo handling equipment will reduce the risk of damage to your merchandise.

Cost

Shipping in itself is a costly affair. Cutting costs by choosing an affordable CES facility is economically advisable.

What happens to Multiple Containers on a BOL when one is Selected for CES Examinations?

When one container is selected for CES examinations among multiple containers on a Bill of Lading; the rest of the containers can be transported with the selected container to the CES facility

Which Types of Cargo get Preferential Treatment at CES?

Some of these cargoes include:

CTPAT Cargo

The Customs-Trade Partnership Against Terrorism (CTPAT) is a pact where the CBP and trade members work hand in hand to counter-terrorism.

The partnership aims to make international trade legitimate and secure.

Consequently, members of CTPAT have their cargo exempted from most CBP exams, among other preferential treatments such as:

• Fast inspections
• Reduced wait times at the borders
• Business resumption priority following national disasters like terrorism
• Designation of a Supply Chain Security specialist
• Usage of Free and Secure (FAST) routes at land borders

How do you Request Permission to Transfer Cargo to CES?

You will require Customs Form 3461 or 3461 (ALT) or an electronic equivalent of either forms; to request permission to transfer the cargo to CES. Here is an example of the form.

Figure 8 Form

Who Assumes Liability during Cargo Transfer to CES Facility?

When the CES operator picks up the cargo from the port of landing, the operator assumes the liability of the cargo through the customs custodial bond.

If the shipment is transported to the CES facility by an importing carrier, the carrier continues to assume the liability of the shipment.

In case a bonded carrier is transporting the cargo to the CES facility, the bonded carrier is liable for the transfer.

Lastly, if the importer or his/her agent makes the transfer, then either of the two shall assume the liability of transfer.

Do you need a Customs Broker to help you Navigate Customs CES Exams?

The customs world is a rather rocky one.

Navigating the customs CES exams can be a hard nut to crack when you lack the expertise.

For these basic and outright reasons, you need a customs broker.

You need someone to advise you on the appropriate cause of action to hasten the CES exams process.

What happens to your Consolidated Shipments during Customs Examination?

When the container holding the shipments is flagged for a customs examination, then all the shipments will be taken to the CES facility.

Consequently, the delivery of your shipment may be delayed without having any violations.

At Tj chinafreight, we will help you with all your shipping needs – from free shipping container, warehousing, customs clearance to booking spaces in ship.

Tj chinafreight makes shipping from China easy and straight forward – Contact us now.