I know you’re wondering how Chinese New Year will affect your import from China business.

That’s why I will answer all questions you have about Chinese New Year.

So if you want to learn more, read this guide.

What is Chinese New Year?

The Chinese new year is also popularly known as the Lunar New year.

It is a date in the Chinese traditional lunisolar calendar that marks the beginning of a new lunar year.

According to the traditional setting, the festive was meant to honour the ancestors of the Chinese culture.

However, with the evolving world, the Chinese New Year has become festive that serves to bring people together.

When is Chinese New Year?

Normally, the Chinese New Year falls in between January 21^st and February 20^th.

The actual dates usually vary from year to year. For 2021, the Chinese New Year fell in 12^th February on a Friday.

Nonetheless, these celebrations do not hinder the Chinese from celebrating the January 1^st global new year.

This is after the Chinese adoption of the normal global calendar back in 1912.

Why is CNY such a Big Deal?

The Chinese New Year is a symbol of unity and togetherness that is quite uncommon in the present era.

Thus the Chinese act of maintaining this festive season plays a majorly in terms of strengthening family bonds.

Initially, the Chinese New Year served traditional purposes.

The Chinese New Year originates from the ancient Shang dynasty people.

How long do the Chinese New Year Celebrations take?

Altogether, the Chinese New Year festivals last for 16 days including the eve of the New Year.

Usually, the festival is meant to last until the next full moon appears which is usually after 15 days.

The 15^th day marks the first full moon right after the spring festival.

The Chinese refer to this as the “Yuan Xiao Jie’”, which means the first day of the full moon.

The lantern day festival marks the end of the Chinese new year festivals.

What is the Impact of Chinese New Year on my Supply Chain?

The Chinese year celebrations are certainly one of a kind.

For the Chinese people, the New Year is a time where all the time and attention is redirected to family and friends.

This translates to businesses being shut down for the period.

China being a global supplier of products across the globe, this time of the year creates massive inconveniences in the market.

The shutdown is nationwide, except for extremely prioritized goods and perishable goods.

Even government offices and operations cumulatively join in to partake the celebrations.

The silence from the Chinese market lasts between two to four weeks.

This silence has an enormous impact on the supply chain of the market both internally and externally.

Impact of the Chinese New Year on Internal Supply Chain of the Country

The Chinese new year accounts for the largest ever migration in the country.

This is because most of the family members and relatives are situated in rural areas.

The main agenda of celebrating the New Year festival being mostly family reunions, most Chinese nationals are travelling.

Hence the transport industry is mostly flooded during this time.

Preparations for the events require a lot of materials.

From food ingredients all the way to the decorations such as fireworks, firecrackers and lanterns.

All these materials need to be put together.

Hence the factories and manufacturing agencies in charge are really experiencing a high demand which increases the supply of these products.

Impact of the Chinese New Year on the Supply Chain of the External Market

The external market in this category represents the global market.

China is the leading exporting country across the globe.

With China bagging more than 1.3 billion manufacturers, them being on a three-week break will affect the global market.

Therefore, the Chinese New Year can result to grave inconveniences to businesses dependent on the China supply.

Many people have become aware of this event and have taken up precautionary measures to counter the drawbacks.

Does China Shutdown during the Chinese New Year?

99% of factories in china close down during this time. In fact, closing up shops begins to take place 10 days prior to the actual event.

This is to allow for working staff ample time to make travel arrangements to the rural regions.

The time frame for normal resumption of work might take longer as the factories prepare to have received back their workers.

Majorly the shutdown is effective the first seven days into the festival. However, some businesses extend the days to accommodate a flexible re-opening time.

Compared to other national festivals like that of Vietnam and Tet holiday, China Shutdown period takes longer.

What Happens before the Chinese New Year Holiday?

Preparations towards the Chinese year usually begin long way before the day.

Businessmen are in fact the busiest with keeping their clients up to date on the upcoming event.

Follow ups on ordered goods are keenly taken into consideration months before the Chinese Year begins.

This entails sending invoices to clients to give an early notice on the incoming Chinese New Year.

Months before the CNY, most of the supply factories halt their production procedures.

Additionally, any pending orders for clients are ensured that they get to them before the beginning of the CNY.

Meanwhile the employers and employees in the factories are winding up to get ready for the festivals.

During this time is when most of the employees get most of the work done in order to receive enough incentive to serve the holiday.

Hence deliveries will be hastened in order to receive more incentives.

This is possible because during this time the demand of products is usually high hence the incentives will be on the high.

Chances of experiencing quality hitches are very high during this time.

This is because of the hurriedness from the suppliers to deliver and get as much incentive as possible before the festivities begin.

Travel arrangements need also to be put in place following the expected massive migration.

The travel industry in China is thus at a boom during this time.

Consequently, decor activities are put in place to avoid any inconveniences at that time.

Factories that specialize can date their customers back in the ancient times when the new year began.

Do Factories Outside Mainland China also close during Chinese New Year?

For countries like Malaysia, Indonesia, North Korea, Singapore, Vietnam, and Brunei, they have similar festivities like China.

However, they differ in the time length.

The shutdown from mainland china during the festivities affects neighboring countries.

As a result, these countries as well go for a break although it takes a shorter period for them.

Most Chinese factories will reopen after the official days for taking a break.

Hence the short break from factories outside mainland china.

Which Industries get Affected by the Chinese New Year?

Nearly the entire market suffers the impact of the Chinese New Year.

However, some industries experience a positive impact.

Siting the Travel industry in China, following the massive number of people migrating into the rural region, the industry income is good.

Moreover, the manufacturing and supply industries take the advantage of providing these supplies.

However, when it comes to the imports and exports industry, most of the factories are unable to deliver.

Without the laborers, the production and supply cannot go on.

Hence for those clients waiting from imports from china, they will experience delays in delivery.

Usually up to the time when the festival is over.

Overall, the manufacturing industry stands to be the most affected industry by the Chinese New Year festivals.

Do Freight prices increase during CNY?

For the very obvious reasons, freight rates usually go up towards the dawn of the Chinese New Year and partly after.

For any businessman, this is an opportunity that is there for grabs.

Due to the nature of the festival, that is, the almost month-long vacation, apparently demand is high.

This is both in the country and outcasts.

Ahead of the celebrations which usually occur towards end of January and mid-February suppliers receive massive orders.

This serves the business people, who mostly make the orders, the advantage of having enough stock at the time of the holiday.

Following the high demand, freight rates tend to also be high.

Remember the laborers are looking forward to earn as much incentive as possible to last them the festive season.

Do all Countries in Asia Celebrate the Chinese New Year?

Asia houses a number of Chinese nationals. As a result, the country is subject to celebrate the occasion like fellow Chinese members.

The East Asia especially the south east part of Asia is very active during the Chinese New Year.

Countries such as Thailand, Indonesia, Malaysia and even the Philippines actively engage in the Chinese New Year celebrations.

Why does Shipping from China Cost more during Chinese New Year?

Price changes are subject to the change in demand in the market.

As earlier outlined, the Chinese New Year is accompanied by more demand of products as china still stands as the world’s top exporter.

The need for importers to have enough stock during the vacation creates a demand in the market.

Consequently, the suppliers who are getting ready for the festive season will need to pocket enough to last the almost month-long vacay.

The chaotic rise in demand bombarding with the festive season serves as an opportunity for most suppliers in China.

Hence the rise in shipping freights during this period.

How can I Beat CNY Season Prices?

The CNY season prices always get most of the importers unaware.

This is because the dates to the actual festivals usually differ from year to year.

The price changes during the CNY season are hard to adjust.

The price increase usually increases by 50%.

According to the Chinese, the price increase usually serves as compensation for the long vacations that most workers attend to.

The only way to beat the prices will be to make purchases to cover your stock needs earlier in advance.

However, change being an inevitable factor, you might end up pilling a stock that might not meet your customer needs.

However, there are preparations you can undertake to help you during the price changes in the CNY season.

First and foremost, ensure you are working with a credible and trusting manufacturer.

This goes a long way in ensuring your goods arrive on time and are of good quality.

Always plan ahead. This is one sure way of evading the surging prices in supplies as a result of the Chinese New Year.

Take an account for your inventory.

Comparing it with the previous serves a long way in ascertaining what you require and make earlier preparations as a result.

Prepare a solid plan to help you counter the CNY prices.

This majorly depends on the manufacturer and supplier you will be working with.

Some manufacturers can give biased information to take advantage of the profits that come with increased prices.

How do I Prepare my Shipments for Chinese New Year?

There is every reason for an importer to be worried on how his shipment will arrive amidst the Chinese New Year season.

Spaces are limited and delays are bound to happen due to congestion.

However, there are few guidelines that can help you prepare your shipment during the spring festival season in china.

Keep in Touch with your Manufacturer

This allows you to easily get updates on the production activities in the factory.

As you are now aware, it reaches a point that production processes in china halt in preparation of the festival.

Most workers take an early leave to make travel arrangements for the occasion.

With no workers in the factory, production halts.

Make Early Bookings for your Shipment

Freight forwarder come in handy during such times.

They can easily give you a schedule on reserved spaces.

It is advisable if possible to make arrangements a month earlier to the Chinese New Year.

Opt for the Multimodal Mode of Transport

A lot of importers will certainly opt for transport means offering faster transit time.

Choosing multimodal transport, where you incorporate several modes of transport from air, sea, road and rail.

This is because as multimodal transit is less likely to be full.

You can confirm this with your freight forwarder.

However, it might take longer for your goods to arrive.

Nonetheless, it is more cost-efficient, especially during this season.

Incorporate Partial Truck Load in your Bookings

Not only will this save you from truck fees, but will also save you from the effects of congestion as well as long transit time.

With the partial truck load, you easily evade the stops ate the terminals.

Be keen to Receive the Cargo Earlier than Expected

With the early bookings you have sought for, then there is a possibility for your cargo to arrive early.

This is quite possible especially with the Chinese new year is around the corner.

Do China Customs Work during the Chinese New Year Holidays?

China port customs are available regardless of the holidays.

However, for this particular season, some customs regulators also take a break from their duties.

Majorly there are three known days as off days.

Nonetheless, in accordance with a defined holiday procedure, the customs maintain a few workers to help during the holidays.

Hence this explains the long processing times.

For the small ports, they take a week’s day off while the freight forwarders take a two week leave for the vacation.

What is the impact of Chinese New year on Customs clearance, and freight forwarding?

Customs clearance and freight forwarding agencies experience disruptions as well.

The Chinese new year`s impact is one that cuts across a lot of companies.

Freight forwarders experience a high demand of their services right before and after the Chinese New Year.

The same applies to the custom clearance offices.

How do I Ensure my Shipment Gets through Customs Standstill during CNY?

There are a few guidelines that will make it easier for your shipment to get through customs standstill during the festive season.

1. Ensure you are not shipping restricted goods. They suffer the consequence of delays due to approvals.
2. Ensure you package your items correctly. Wrong packages usually suffer being set aside hence more delays.

The above factors depend on both the parties involved.

What are the Chances that My Order will be Finished before CNY?

It all depends with the production process of your manufacturers and how big your order is.

However, time is a factor considering its towards the CNY.

However, detailed information can be assessed from your manufacturer.

It is important to maintain communications to be aware.

What Can I do if My Order is not Finished before the Chinese New Year?

Making a follow up with your manufacturer is highly recommended.

Thereafter, clear guidelines will be put forward.

However, you should be ready to probably receive your cargo post the CNY festivities.

Which factors Influence Factory Production Lead-times during Chinese New Year?

Experience and Production Planning Skills of the Factory

This one of the major factors that gets to differentiate regular factories from top notch factories.

With proper planning of the materials for production, the menace caused by the CNY can easily be evaded.

Factory Order Books

This is usually well known to the factory.

The number of orders received by a factory directly affect the ability of the factory to deliver.

A factory with a load of orders is bound to experience delays in terms of delivery, especially if it’s during the CNY season.

Number of Components/Raw Materials

It all depends on how complex your product is.

For a very complex product, the raw materials required will determine on how fast it can be made available.

The process of production is a great determinant when it comes to how fast your product can be completed and made available.

Defect Rate and Factory’s Attitude towards Defects

One of the very reasons as to why products come with warranties is to assure of the quality of product. However, defects are sometimes inevitable.

During the CNY, due to large demand in the market, Chinese suppliers do things hurriedly in order to be on the same timeline as the buyer.

As they strive to achieve these, defects are bound to happen.

In fact, it is during the CNY season, that the defect rate shoots.

Usually factories with good credibility on the production sector welcome defects and are willing to fix.

Size of Factory/Warehouse

Size matters especially for the futuristic factories.

Factories with an accommodative and large warehouse space are able to offer storage spaces for their products.

This comes in handy especially when the factory decides to make a massive production for a certain product which is expected to be in demand.

Size does matter when it comes to offering space to the products from the supplier.

Financial Strength/Cash Flow of the Factory

Last but not least, the cash flow in a factory has an impact on the production.

For a factory that has sufficient cash flow, purchasing raw materials for next production is made easy.

Moreover, it becomes easy for the factory to easily pick up from where it left after the CNY festivities.

Does CNY affect small quantity importers?

Yes. If you make an order that is of small quantity, best assured that your cargo will delay.

This is because most factories around this time work with the orders in bulk as a priority.

Not only do they come with more incentives, but they help reduce the workload following post CNY festivities.

How do Factories in China Prioritize Orders in Preparation for Chinese New Year?

A number of factors affect whether your product will among the priorities or not for production;

The Volume of Order

Simply highlights the buying power of a client. Clients with a high volume of order tend to receive first priorities compared to the latter for obvious reasons

Relationship with the Manufacturer

This is where the dinners and good rapport pay off. You are at an advantage of the relationship with your manufacturer is solid.

Physical Presence in China

This just makes it easier since you as a client, can make physical visits to the manufacturers office and mount pressure for the production.

It works wonders since the factory will want to maintain its credibility to its customers.

How do I Choose the right Shipping Partner to avoid Frustrations during CNY?

The right shipping partner especially during the CNY season will go a long way to delivering your goods.

So for this less stressful shipping, it is best to opt for the big shipping companies in the market.

Shipping agencies that have made strides to grow come with great service delivery to their clients although a bit pricy.

Foregoing the cost to the safety of your goods will be a better choice, rather than cheap and later losing your cargo.

International shipping partners serve best due to their vast range of resources.

Local shipping agencies are yet to help you during this strenuous Chinese new year season.

Is it Advisable to Pay Suppliers just before CNY?

No.

Avoid making payments for your products days to the CNY.

Most factories once they go on holiday usually close down and do not come back.

Hence the risk of losing money.

Further, there is no guarantee that you will be given priority once business resumes just because you have made a deposit.

Why is the risk of Quality issues higher during CNY?

One of the major drawbacks of making an order during the Chinese new year is the possibility of low quality.

This is true following the below factors;

Lax Internal Quality Control

This is caused by the rising need for the factory to make deliveries on time, and the need for workers to increase the pay.

Both these priorities lead to the result of quality issues

Subcontracting

With the high demand for goods, some factories just do not accept nos.

As a result, they look for another factory to help out under certain terms.

The problem is the company with the subcontract might not be fully aware of the procedures to follow hence possible defects.

New Workers

Post the CNY celebrations, most workers do not report back to their original work stations.

This prompts the factory to make use of new workers.

With the high demand in place, the factories do not have quality time to train their workers.

Hence with the unprofessional labour in place, defects are quite inevitable at this point.

Unfixed Quality Defects

During shipments, the products usually go through detection at the ports.

The buyers are made know of the defects and due to the rising need, prefer to take the goods as they are.

Can Samples, Prototypes and Negotiations still be Conducted as Normal during CNY?

Yes. This allows the manufacturer to give you details on whether they can deliver the product within the CNY datelines.

Negotiations allow room for clearer and more honest feedbacks concerning your product and how soon you can get it.

Further if it falls in the duration of the CNY the manufacturer enlightens you on the way forward.

Can there be Scenario where Production would not Conform to Samples Ordered before CNY?

Yes. The probability of having something different from the earlier sample is high.

This is due to the hurriedness of product delivery to clients and the need to attend the CNY celebrations.

How do I Ensure Quality Control before and after Chinese New Year?

Ensure the manufacturer you are working with is well certified and adheres to regulations of quality control

Another way is to look into the restrictions outlined by the manufacturer.

The stricter the restrictions the more efficient they are in quality control.

This entails tracking your goods to ensure they arrive on time and to the designated client.

What Can I do if I Need my Shipment to Leave China before CNY?

Earlier bookings go a long in ensuring you receive your shipment earlier in advance before the CNY.

This is made possible by liaising with your manufacturers to give you updates on their production.

Afterwards booking with a direct shipping allows you to receive your shipment earlier even before the CNY begins.

It all calls for a detailed planning on when you place your order and the time to receive it.

Do Ports also Close during Chinese New Year?

No. Ports remain operational during the CNY but little personnel on board.

Should I ship by Air or Ocean during CNY?

Air freight and ocean freights are not directly affected by the CNY.

However, the CNY freight forwarders usually take a leave for the holidays hence your cargo will remain at the warehouse.

Why should I Avoid Trans-shipments during Chinese New Year?

Trans-shipment is cheaper than direct shipping and it is bound for most shipping agencies to opt for this.

However, your cargo risks being rolled twice.

According to most people, this is sort of not worth it.

Opting for direct shipping is most advisable especially during this season.

Why is Cargo Insurance Particularly Important during CNY?

This is important especially if you are dealing with cargos in the Chinese New Year season.

With a lot of orders in place and a lot of them under shipment, chances of getting lost are high.

The congestion creates confusion which bring unforeseen drawbacks.

Having a cargo insurance on standby helps you reduce the damage and easily recover your money in case of such misfortunes.

Should I Avoid Importing Restricted Items from China during Chinese New Year? Why?

Yes.

You should definetley avoid purchasing restricted goods especially if you do not have the right certifications to cover you.

The delay during inspection takes longer hence delays in your goods.

It is most likely the approval will take place later as the priority will be more lenient on the legal goods.

When is the Best Time to Visit my Supplier in China before CNY?

Months before the eve of the CNY begins will be perfect to make a visit to your manufacturer.

However, if your schedule does not allow, it is best to await the CNY to be over.

What are the Consequences for not Preparing your Shipments for CNY?

Delays and even failure of delivery for your shipments are quite possible.

Most of the manufacturers will not be available to help you follow up hence the very reason you should make shipments arrangements.

What are the Other Chinese Holidays I should be aware of?

Other than the CNY, china has other six major public holidays.

These are

• The new year for January 1^st
• The Tomb sweeping day
• Labor day
• Dragon Boat festival
• Mid-Autumn festival
• The National day

The other major long holiday in mainland china is the Golden week which runs from 1^st to 7^th October.

What Should I do if I Run into Shipping Issues due to Chinese New Year?

Shipping issues are usually caused by the congestion in the shipments due to the massive orders.

Having an insurance on standby saves you a great deal.

Moreover, it is important to get in touch with the shipping agency you chose and get full details concerning your shipment.

What is the Usual CFS cut-off during Chinese New Year?

CFS

Today, I will answer questions on yet another freight and logistics term – clean truck fee.

So, if you have any question on clean truck fee, you will find the answer right here.

Keep reading.

What is Clean Truck Fee?

This is a fee that arises after assessment by Los Angeles and Long Beach marine terminals.

It is a component of the US Clean Air Action Plan, aimed at reducing air pollution.

It may be conjoined with or separate from the Pickup and Delivery Fee.

Clean truck fee might also appear on your Flex Port quote or invoice as a destination charge.

The fee is paid by drayage truck drivers that are either entering or leaving marine terminals of either Los Angeles or Long Beach.

The drivers that specifically pay this fee are those that employ the use of old, polluting trucks.

These do not conform to the heavy-duty truck emission standards of the Environmental Protection Agency.

When was Clean Truck Fee First Introduced for US Shippers?

The Clean Truck Fee was originally set to be introduced on 17^th November 2008.

However, due to certain delays, it was initially rolled out on 18^th February 2009.

However, the levying of the clean truck fee came to a halt in 2011.

This was after meeting resistance from the side effects that came with levying the fee, before being reinstated again in 2020.

What is Clean Trucks Program?

It is a program that exchanges aged diesel trucks for ones that adhere to the US EPA 2007 heavy-duty truck emission standards.

The program endorses the reduction of greenhouse gas emissions and aids the sustainable movement of cargo.

The program considers the high emissions due to trucks that enter or leave the marine terminals, particularly during peak hours.

This is when there are several trucks that idle in the ports while waiting for loading or off-loading of cargo or related procedures.

When is the Expected Start Date for Collecting the Clean Truck Fee?

With the revamping of the clean truck fee in 2020, the ports are to adopt the Clean Truck Fee on 9^th March 2020.

They should also propose the development of a collection system and related software.

Why was Clean Truck Fee Halted in 2011?

Implementation of the fee led to decrease in cargo volume as shippers opted for ports that did not impose clean truck fee.

It led to increased costs for draymen in ports, since they had to buy new trucks due to the initiative.

This cost was passed onto the shippers as draymen began charging a fee to recoup losses.

The added costs led to noticeable decrease in cargo volume that entered and left the Los Angeles and Long Beach marine terminals.

Shippers chose to divert their shipments to ports that did not levy the clean truck fee.

As a result, the Los Angeles and Long Beach marine terminals registering among the lowest trade among the ports of the US.

In turn, this led to the suspension of Clean truck fee in 2011.

Who is Responsible for paying Clean Truck Fee?

The person responsible for the fee is the owner of cargo or his/her legal representative.

This is as per the program of ports levying the clean truck fee.

What is PierPass and what is its Relation to the Clean Truck Fee?

PierPass is a non-profit organisation created to address certain issues; congestion, security and air pollution at terminals, particularly during peak hours.

It imposes a traffic mitigation fee to shipments at the ports.

The owners of cargo pay the fee levied to have their shipments transported during off-peak hours.

PierPass website allows owners of cargo to log in, claim their respective shipments and proceed to pay any arising fee.

It works to improve air quality in ports which usually worsens during the peak hours of the day.

During these peak hours, ports normally have many trucks entering and leaving while hauling containers.

This leads to heavy congestion, which in turn leads to pollution from idling trucks, more so old diesel trucks.

It is part of ports initiative to curb congestion and air pollution (by idling trucks) through encouraging cargo pickup during off-peak hours.

How do you Register on PierPass?

You can register on PierPass by logging onto their website.

You then follow the instructions in place to create an account.

To create an account with PierPass, you will be required to provide certain details.

These details include demographic data and individuals to be notified upon the occurrence of certain events within the account.

The instructions are simple, easy to follow and comprehensive enough to capture any details required for claiming of cargo and fees payment.

How Much is PierPass now?

As of 1^st August 2020, the PierPass traffic mitigation fee is $33.47 per twenty-foot equivalent unit.

However, for other container sizes that are more than twenty feet, the fee is $66.94.

What is the Purpose of the Clean Truck Fee?

As part of the Clean Air Pollution Plan, role of the fee is to help ports pay for Clean Truck Program implementation.

Most of the air pollution in ports is due to the fumes released by trucks loading and offloading cargo.

Thus, the essence of the fee is to encourage truck drivers to mitigate pollution by switching to eco-friendly vehicles.

Moreover, the fee facilitates funding of the Clean Trucks Program.

It funds the replacement of old diesel drayage trucks with newer ones that are eco-friendly and adhere to environmental standards.

How Much is Clean Truck Fee?

The fee for a twenty-foot container is $35 and $70 for any container size that is larger than twenty feet.

How will Clean Truck Fee Affect Shipping Fees to the US?

Shipping fees to the United States may increase as a result of imposing the clean truck fee.

It is the drayage driver who bears this cost, who in turn, increases their charges towards shippers.

Shippers will in turn pass down the extra cost to customers seeking to ship cargo to the United States.

Therefore, Clean Truck Fee will increase the cost of shipping goods to the US.

How will the Clean Truck Fee Impact Shipping to US via the Ports of Long Beach and Los Angeles?

Clean Truck Fee implementation in Los Angeles and Long Beach marine terminals may make these ports more expensive than others in the country.

Shippers may have to indirectly bear more costs from drayage drivers who are responsible for paying the fee.

Thus, shippers may divert their cargo to other US ports that have none or lower expenses for cargo entering or leaving them.

This will cause a noticeable reduction in cargo volume at Los Angeles and Long Beach marine terminals.

Reduction in cargo volume may in turn lead to severe loss in revenue.

Are there Exemptions to the Clean Truck Fee?

It is mandatory that all trucks entering marine terminals to comply with the clean truck fee.

This includes all types of cargo trucks configured to haul containers.

There are no exemptions for these types of drayage trucks.

Trucks that do not pay the fee will not be allowed to enter the Los Angeles and Long Beach ports.

Exemptions are only there for trucks that are not structured or modelled to freight containers.

These vehicles should have exempt stickers in order to enter or leave marine terminals during drayage.

How will the Clean Truck Fee Impact the Drayage Trucking Industry?

The clean truck fee will encourage truck drivers to replace old, polluting trucks with newer models that adhere to environmental standards.

However, the costs incurred by drayage drivers may increase due to payment of the fee.

The drayage industry will become more streamlined as registration and claiming of cargo is before cargo can enter or leave marine terminals.

Furthermore, due to PierPass, there will be less congestion in the Los Angeles and Long Beach marine terminals, especially during peak hours.

This will also help in the curbing of air pollution within the ports.

 Is the Clean Truck Fee Rate Fixed or are there Chances for Review?

The rate is fixed for a year.

Resolution approving it mandates an annual review to determine whether it is too high or too low in its impact on volumes.

What kinds of Trucks Are Subject to the Clean Truck Fee?

Any and all drayage trucks that are designed to freight containers are subject to the clean truck fee.

This is without exception, disregarding heavy-duty trucks that are not structured or modelled to freight containers.

What are the Acceptable Payment Methods for Clean Truck Fee?

You can pay the clean truck fee either through credit or through electronic funds transfer.

Payment can only be made after claiming the cargo but before the shipment can enter or leave the marine terminal.

Where can you find Updates on Clean Truck Fee for Long Beach and LA Ports?

You can find updates on Clean Truck Fees from the Freight Market Update newsletter and any other market trends.

How does Clean Truck Fee assist in Port Management?

The fee helps fund replacement of old, polluting trucks with cleaner, eco-friendlier trucks, which in turn reduces air pollution within the ports.

Port operators can use funds accrued from the fee to ensure old trucks are taken out of circulation and scrapped altogether.

Additionally, the fee helps in decreasing congestion in ports during peak hours through PierPass.

Owners of cargo are encouraged to pay for transportation of their shipments during off-peak hours.

This initiative helps port operators in handling of incoming or outgoing cargo.

This makes it easier to keep track of the payment of cargo once it has been claimed.

Does the Clean Truck Fee Apply to Containers Entering or Leaving the Ports by Train?

Containers that enter or leave the ports by train are not subject to the clean truck fee.

The fee solely targets drayage truck drivers in relation to containers that enter or leave the through drayage trucks.

The fee applies to old diesel trucks that do not adhere to environmental standards.

Therefore, cargo brought to or taken from ports through trains is not considered to be contributing toward air pollution within ports.

Who will be Collecting the Clean Truck Fee?

The clean truck fee from ports is collected by PortCheck.

This is a non-profit company established by marine terminal operators for the purpose of fee collection.

The aim of this is to streamline the process of payment of the clean truck fee.

PortCheck enables fee collection by one entity instead of being paid upon entry of ports by drayage truck drivers.

What happens to Unclaimed Cargo in relation to Clean Truck Fee?

Any cargo that goes unclaimed, will be barred from entering or leaving the terminals.

It will be allowed only after owner of the cargo or a legal representative comes to claim it.

Payment of the clean truck fee only occurs once cargo has been claimed by the owner and not before.

Until payment, the cargo will be held by the port.

How do you Claim Cargo through PortCheck?

You can only Claim cargo once you have registered under PierPass.

Upon registration, you will be uploaded onto PortCheck.

There are several options when it comes to claiming cargo through PortCheck:

I. If you do not have a PierPass account, you can sign up and process the cargo through the PierPass website yourself.

II. You can you can let PortCheck handle the claiming of the cargo, along with payment of the clean truck fee.

III. You can create your own PortCheck account. Here, PortCheck will claim the shipment but you will be billed directly for any fees required.

What are the Clean Truck Program Requirements for Trucks Entering the Ports Terminals?

It is a requirement that all drayage trucks entering port terminals to adhere to all state law administrating drayage trucks.

Also, the model year of the trucks should be 2007 or newer engines.

Additionally, all trucks that enter terminals must have valid RFID tags and should be registered under the Port Drayage Truck Registry.

At Tj chinafreight, we make the process of shipping from China to USA easy and simple.

We will handle all your logistics operations.

If you have questions on any freight term, feel free to contact Tj chinafreight team right now.

In this guide, you will find all information you’re looking for about the commercial control list.

So if you have any questions on the commercial control list, you will find the answer right here.

Keep reading.

What is Commercial Control List?

This refers to a comprehensive outline of product categories and groups used to determine the need for licenses to export to the US.

You can get the license to export from the U.S Department of Commerce.

It is from CCL that ultimately generates the alphanumeric code (4E001), also referred to as the export Control Classification Number(ECCN).

The commercial control list has ten categories and five groups of products.

What is the Background and Purpose of Commercial Control List?

The Commercial Control list was established after the Second World War.

It is used in the classification of goods and services, which is important in identifying the required export license.

What are Export Controls?

Export Controls are the federal laws that prevent any unlicensed export of information or some commodities.

These are the laws that seek to restrict any transfer of military or useful technology, goods, services, and information.

These include any technology and equipment used in researching foreign policy and national security.

Some of the export transactions will require written approval or licensing from the government of the United States before exporting.

This happens for the protection of trade or national security reasons.

Export controls can occur for more or any of the following reasons:

• The nature of export either has economic protection issues or has potential or actual military protections.
• If the government has any concerns about the organization, individual, or the destination country.
• The government has concerns about the suspected or declared end-use or even the intended user of the export

Why do I need a Commercial Control List?

You will need the Commercial Control List (CCL) whenever you need to classify your items for export.

This will help you understand which licenses you will need to successfully export your products.

If your item is missing on the CCL, then it will be considered EAR99.

Where can I find the Commercial Control List?

You can get the Commercial Control List in the EAR Supplement from1 up to part 774.

What is the Export Control Classification number in relation to Commercial Control List?

An Export Control Classification Number or ECCN is an alphanumeric key that comprises five characters.

It is vital in a Commerce Control List to help in the classification of goods being exported from the U.S.

The classification number enables you to find out if you require an export license from the Department of commerce.

The ECCN categorizes products based on software, technology, or commodity.

There are 10 categories of ECCN in the CCL, which are further put into 5 product groups.

The initial character on the ECCN identifies broad characteristics like electronic, nuclear materials etc.

The second character on the ECCN represents the product group such as software, material, etc.

What is a Dual-use Product?

A dual-use product is a technology, good and software that you may use for both military and civilian applications.

The European Union controls brokering, export, and transit of dual-use products from the EU.

This helps to prevent an increase in the number of Weapons of Mass Destruction.

It also ensures that they take part in maintaining international peace and security.

It is possible to trade dual-use products freely within the European Union.

This however has an exception to some sensitive items whose transfer requires prior authorization.

How do I determine the ECCN number for my Product?

You can determine your products ECCN number by:

• The product’s ECCN
• The exporting destination
• The intended user
• And finally the product use

Start by identifying the right classification of your product.

There are three ways of determining the ECCN of your product:

Going to the Source

Contact the manufacturer, developer, or producer of the product.

Find out if their product is classified and if they are able to give you the ECCN.

They likely have the ECCN if they have exported before.

However, you must know that ECCN may change over a while.

Self-Classify

For you to perform self-classification, technical knowledge of your product is very key.

You must understand the structure and format of CCL.

With the category and group of your product, match functions and particular characteristics of the product to a specific ECCN.

Request the Bureau of Industry and Security (BIS) for the Official Classification

Submit commodity classification requests on the internet via the Simplified Network Application Process – Redesign (SNAP-R) system.

You must have theCompany Identification Number (CIN) to access this system online to submit the request.

What are the Parameters of ECCN?

ECCN will categorize depending on the nature of the item i.e. technology, software, commodity type together with its technical aspects.

What Happens if my Product doesn’t Fit the Parameters of the Commercial Control List?

If after careful review you get convinced that your product is not fit for ECCN parameters, it might be set as EAR99.

No agency controls it.

You may then export your product under the license exception NLR with the emphasis that it requires no license.

For this to happen:

• The product should not be destined to a sanctioned destination, restricted end-user or a sanctioned entity
• The product is not meant for an end-use subjected to higher controls

How is the Commercial Control list Classified?

Commercial Control List (CCL) is classified into categories labeled from 0 to 9 with each category having 5 groups.

Each of these groups is labeled from letter A to E.

The groups are the same across all the ten categories.

The list of the ten categories has the first number used in identifying the primary category.

The list includes:

• Category number 0 – Nuclear facilities, materials, and equipment
• Category number 1 – Special materials together with their related pieces of equipment
• Category number 2 – Materials processing
• Category number 3 –The Electronics
• Category number 4 –Laptops and Computers
• Category number 5 – Information security and Telecommunications
• Category number 6 – Lasers and Sensors
• Category number 7 – Navigation and avionics
• Category number 8 –The Marine
• Category number 9 – Aerospace and Propulsion

The next number identifies each group as a sub-category. The group includes:

• A – Systems, components and equipment
• B – Tests, inspection, and production equipment
• C – Materials
• D – Software
• E – Technology

The third number classifies the regime from which the item/s originates.

This includes:

• 0 – Wassenaar Arrangement
• 1 – Missile Technology Control Regime
• 2 – Nuclear Suppliers Group
• 3 – Australia Group
• 4 – Chemical Weapons Convention

The goods are further classified for a more detailed report on the goods which can be followed by subcategories.

They include:

• A  to mean Australia Group
• C to meanCWC (Chemical Weapons Convention)
• M  to mean TCR (Missile Technology Control Regime)
• N  to mean (Nuclear Suppliers Group) Dual-Use List
• T to mean Nuclear Suppliers Group (NSG) Trigger List
• W to mean The Wassenaar Agreement
• WVS to mean Wassenaar Agreement Sensitive List

• WVS – Wassenaar Agreement Very Sensitive List

The majority of IT items will fall under “4A002a” or “5A002a”– but may not be entirely exclusive.

What are the Licensing Requirements for Items Listed in the Commercial Control List?

For Dual Use/Commercial Technologies, you will need a license from:

• “Friendly Countries” like all others (South/Central America, European countries, etc.)
• “Terrorist Supporting Countries” such as Syria, Sudan, North Korea, Iran, Cuba and Libya.
• “Countries of Concern” such as former Soviet Republics, Vietnam and China.

Licensing Policy (Space Technologies/Military)

• The policy of Denial: States that sponsor terrorism (Syria, Sudan, North Korea, Iran, Cuba, and Libya) and arms embargo (Haiti, Liberia, PR China, Sudan, Somalia, and Burma). Others include Vietnam, Belarus, and Iraq.
• The policy of Denial will be based on the item or the end-user: Congo, Rwanda, Iraq, and Afghanistan.

How do I determine if my Products require Licensing?

If the items you intend to export are listed in the Commercial Control List, you need to have an export license.

The process of obtaining it can be lengthy probably two to three months.

If you manage to get the approval, it may come with restrictive conditions.

What is EAR99 in relation to Commercial Export Control?

EAR99 is a way of classifying a product.

It is essential in indicating that a particular product can be subjected to the Export Administration Regulations (EAR).

However, the product may not be specifically defined by the ECCN (Export Control Classification Number).

Even though this classification is used in describing the item, the shipment authorization for the product might change.

This will depend on the circumstances of the transaction.

You can export EAR99 products without the license.

As the exporter, you may still have to perform proper and careful due diligence to ensure that you understand the product.

License will be necessary if you are exporting to an embargoed country, restricted end-user or is meant for use in prohibited end-use.

How do I Export an EAR99 item from the US?

EAR99 items can easily be exported without necessarily having to apply for a license.

Therefore, it is important to exercise due diligence to avoid exporting to these destinations.

What is Commercial Control List Index?

Commercial Control List Index is a list of items that are controlled for trade.

How do I navigate the CCL using the Commercial Control List Index?

To navigate the CCL using the Commercial Control List Index, you should start by finding your product on the CCL Index.

Once you have a potential ECCN, take time and read through the ECCN on the Commercial Control List index.

Continue and determine if your product is suitable for the parameters of that ECCN.

Check to find if the ECCN entry does have a list under the “Items” heading, which is then divided into subparagraph(s).

If so, check whether your product meets the technical parameters listed in the ECCN category.

Before you find the correct ECCN entry, you may have to review several ECCN descriptions.

How do I apply for an Export License in the US?

Here is the procedure for applying for export license in the US:

Obtaining your CIN

You must have a company identification number (CIN).

CIN is the unique identifier used by the Department of Commerce to track all your international trade activities and liabilities.

You can get the CIN by filling company registration request form at the Department of Commerce’s Bureau of Industry and Security website.

Research Export Controls

You have to make yourself familiar with the Department of Commerce’s export controls.

The federal government does not allow the export of products that may be used for military purposes in other countries.

For example, the Department of Energy does not allow the export of any products that can be used in the creation of nuclear weapons.

Applying for the Export License

Some products like the basic consumer goods that have no particular technological sophistication, may be exported without necessarily having a license.

Otherwise, you will need to visit the Department of Commerce’s SNAP-R website to apply for the license if it is necessary.

You must be careful to read all the specific instructions.

Export licenses are additional licenses to normal business requirements that are necessary and are not meant to replace any of them.

What is a Sanctioned Country?

Sanctioned country refers to a country restricted from trading with certain countries like the US.

Several sanctions may be placed for a country.

For trade sanctions, commercial and financial penalties are imposed by the sanctioning country to target an individual, organization, group, or country.

What is Considered a Foreign Entity for Purposes of Export Control in the US?

They include:

• The foreign government
• Any foreign organizations not incorporated or organized for doing business in the U.S
• Any individual not registered as a U.S citizen or a lawful permanent resident in the U.S.

What does ‘Deemed’ Export mean in US Export Control?

‘Deemed’ export is disclosure or export transfer for controlled items, including technology and information to someone l or foreign entity within the U.S.

The releases are considered as an export to the home country of the foreign individual.

It can happen by such means as:

• Touring to laboratories
• Involving foreign students or foreign researchers in the research
• Visual Inspection, emails or oral exchanges

What are the Common Export Laws in the US?

There exist several laws that are meant to control the export of goods and services from the U.S.

Some of the government agencies responsible for the implementation of these laws are:

The EAR is the one that regulates the export of “dual-use” goods and services identified on the Commerce Control List.

State Department’s Directorate of Defense Trade Controls (DDTC) implements the International Traffic in Arms Regulations (ITAR) laws.

The laws apply to goods and services that are military in nature.

The Treasury Department’s Office of Foreign Assets Control (OFAC) is responsible for implementing the trade and economic sanctions.

What are the Consequences for Violating Export Control Rules and Regulations in the US?

Violating Export Control Rules and Regulations in the US can lead to very severe actions and penalties.

Some of the administrative penalties are:

Warning Letter

these are administrative determinations indicating that a violation has occurred.

It also indicates there is a “good faith effort” or mitigating factor in trying to comply with the required laws.

It shows that an investigation has been indicated and that there are no aggravating factors.

Interim Suspension/Denial Order

This denies the sanctioned party privileges of exporting from the U.S.

It also denies any other access to any goods and services originating from the U.S.

The sanctions are supposed to exist for a specified period.

These restrictions can apply to specific goods or specific destinations.

Seizure and Forfeiture

This applies to any commodities or technical data intended for export from the U.S.

They are goods that have violated the export control rules and regulations and are held by the authorities.

They are seized and forfeited, including any vehicles that were carrying the commodities or the technical data.

Debarment

This is the exclusion from practicing or denial of exporting privileges.

It involves revoking contracts, denial of funding, debarring from government contracts as well as implementing extra measures of compliance.

How do I prevent Potential Export Violations when Shipping from the US?

Whenever you are exporting from the US, you should be very careful not to break the laws associated with exports.

You shall breach the law if, for example, you mistakenly export to Iran products intended for the UAE.

You carry the risk associated with exportation.

It is therefore necessary that you do the due diligence to prevent any situations from coming up.

For that matter, it is important to:

• Make sure you comply with the regulations
• Get to understand the laws and regulations that may affect where you are exporting
• Understand your customers
• Understand the fines and penalties you are likely to face if you break the law

Are there any Exemptions to US Export Control Requirements?

Yes, there are some exemptions. They include:

• Fundamental Research Exclusion
• Educational Information
• Publicly Available Information

How do I ship a Controlled Item or Commodity out of the United States?

There is control by the export regulations in the transfer of equipment and commodities whenever you are shipping products out of the U.S.

There are licenses that you will need to have even if the product results from the fundamental research.

However, you can have a valid exception license (EAR) or License exemption (ITAR).

You will require a license to ship from the US if your product is under the control of ITAR.

Under the EAR, the item and country you intend to ship to will determine whether you will need a license or not.

Sometimes is not mandatory to have an approved license from the Department of Commerce to ship outside the country.

However, you will still be required to maintain other administrative requirements.

This is in addition to maintaining records about the shipment of EAR-controlled products outside of the United States.

What is the Impact of Export Controls on the US Shipping Industry?

Since the end of World War II, the U.S remained top producer and exporter of highly demanded goods and services globally.

Export controls have however contributed to competitive difficulties in the United States.

This has imposed a very significant burden on the economy of the U.S.

Apart from the Export Controls; other factors collectively contribute to the competitive challenges in the U.S.

However, unlike the other factors, the export controls can be largely modified by the changes in the U.S.

This ameliorates the negative effects if not totally eliminating them.

Terms and conditions for the export controls will change from time to time.

This requires agencies to keep on adjusting as well as modifying the regulations to apply and enforce the new laws.

There is also the impact brought about by the presidential executive orders.

They can instantly change whatever export control is or how some activities are regulated.

Although sometimes there are specific exclusions from export controls, the exclusions come with attached terms and conditions.

Many SMEs are not able to strictly comply with the export control enough.

Many businesses do not have the money, time, or staff resources to adhere to the export control requirements.

I hope you got all information you need to know about the commercial control list.

However, in case you have any questions, feel free to contact the Bandar team.

If you’re importing from China or shipping from China, most probably you have come across the freight term consignee.

Remember, correct use of terms will save you the unnecessary cost that comes with a misunderstanding of freight terms.

That’s why today I will answer all questions you have about the consignee.

Let’s dive right in.

What is Consignee?

The recipient of the goods being shipped is the consignee.

This can either be the buyer or the agent of the goods being shipped.

Their details must appear on the bill of lading.

What is Consignment?

Consignment is the act of issuing over to another person care or custody of material or goods while still retaining the legal ownership.

The ownership of the goods is ceased once the goods are sold.

Consignment can be done in order to ship the commodities, transfer goods to an auction or place the goods on sale in a given store.

Is Consignee the Shipper or Receiver?

The receiver of the goods being shipped is the one referred to as the consignee.

In this case, it is the consignee who will be the receiver since they are the ones to whom goods will be delivered to.

The details of the person or agent to receive should be entered on the ‘consignee’ field when filling the forms.

Can Shipper and Consignee be the same?

The answer can be “yes” and “no.”

The two parties can be the same.

This can happen if one company has a branch in another country.

Since the name of the company is one, the name will appear both on the shipper and the consignee.

The shipper’s address and the consignee’s address will however be different since the locations are different.

Another instance where the shipper and the consignee can be the same is where one party is involved.

This is to say, the buyer buys their goods and sends them to him/her in their own country.

The names will be the same.

The addresses will however be different since the place at which the shipper is sending the goods, is different from where they will pick the consignment.

What is the difference between Consignee and Consignor?

Both the consignee and consignor are common terms used in the trading as well as the transport sector.

In a consignment, the one receiving the goods is referred to as the consignee.

The consignee is only a receiver but not the owner of the goods.

Once the consignee undertakes to pay the consignor the full amount for the shipped goods, then the ownership is transferred.

In many cases, a consignee happens to be an agent to receive goods from the consignor.

The person receiving goods will always be the consignee no matter the circumstances.

Whether the receiver is the buyer, the agent, or even an agent who intends to receive goods and sell them later.

This does not concern the carrier as they will enter their name as the consignee in all documents pertaining to that consignment.

When goods are being sent by the producer or the manufacturer, they are sent as a consignment.

The sender of the consignment in this case is referred to as the consignor.

Their name as the sender will be entered in all official documents by the consignor.

What are the Duties of Consignee in International Shipments?

The duties of a consignee are generally payment of duties as well as covering any charges that accumulate on top of them.

It is upon the consignee to ensure that the goods are in good order as illustrated in the bill of lading.

They will inspect the shipment to ensure that there will be no broken or missing items once the cargo arrives.

In case the items are found to be over, short and damaged (OS&D), it is upon the consignee to immediately file a claim with the carrier.

They will be required to carry the request for reimbursement or the incorrect shipment be removed.

After the consignee has signed all the required documents, they take over the responsibility and the ownership of goods.

To this extent, the carrier will have nothing to do with the shipment, excluding any duties relating to transmission of paperwork or returning the items to headquarters.

Who Does a Consignee Interact with During Shipping?

A consignee is part of a large team of contracts that must work together in harmony for a shipment to be complete.

Below are some of the people other than the consignee must interact with when the shipment is being processed:

• Consignor: This is the sender who is in control of releasing items from a warehouse to the destination.

He puts the bill of lading together as well as ensuring that items are in the best condition before getting to their destination.

• Carrier: A carrier is in charge of delivering items to their destination.

This can be an independent owner-operator or someone who is working with a large fleet.

He is also in charge of receiving the bill of lading as well as transiting the goods to the consignee safely.

• Notify party: Sometimes the consignee may not be able to physically inspect as well as receiving all the shipments.

At this point, notify party which is responsible for receiving notification once a shipment gets to its destination come into play.

The notifying party will arrange customs clearance in case of an international shipment.

• OS&D Clerk: Large shipping companies may sometimes employ a dedicated clerk for over, short, and damaged.

The OS&D clerk is in charge of receiving, inspecting and managing claims.

They typically work out of the consignor’s warehouse together with the other members of the shipping department.

Why is Consignee Important in International Shipping?

The consignee is important in any shipping transaction.

This is simply the customer-the individual whom the carrier must please in order to receive the compensation.

Customer experience is everything.

The shipping company must therefore please the consignee as he forms part of the most important business metrics.

The consignee has the power to take the business somewhere else if they are not happy with the services.

Businesses will therefore need to go beyond keeping the consignee happy in all transactions.

It is for this reason that the fleet managers are required to be in direct contact with the consignee or the team during the whole process.

The company should provide all updates regarding shipping to create a strong customer experience.

During Shipping, Does the Carrier have to Listen to the Consignee?

Sometimes consignees can be hard to work with and they may have excess demands.

If the carrier finds it hard to work with the consignee, they may choose not to listen to them by sticking to the words of the bill of lading.

In case of a dispute, it should be handled by the management back at the warehouse.

The carrier should not negotiate with the consignee as this will violate the contract terms.

It may result in a complicated legal situation.

Is Consignee the same as Delivery Address?

The Bill of lading form will have both the consignee and deliver-to fields.

The two may look similar but they are not the same when there is an export.

The consignee will be the customer’s ship-to address.

A delivery address will be indicated as the physical location where the goods will be delivered.

The consignee address may be different depending on who will receive the goods.

What is Third Party Consignee?

This is a service for clients who may not want to reveal the real commercial value of a shipment to the consignee.

With this service, you are allowed to ship goods to consignees without attaching a commercial invoice.

This allows for faster shipments and eliminates additional handling and warehouse costs at the destination.

Is Consignee the Importer of Record in Shipping?

Consignee is not the Importer of Record.

A consignee can assume the duties of an Importer of Record (IOR) but this can only serve the interests of an individual or the company.

Professional Importer of Record facilitates the import of shipments for any client who has no connections in the destination country.

How do I tell my Supplier who the Consignee for my Shipment is?

The consignee will be the party who will end up with the ownership of goods once the cargo gets released at the final destination.

For example, if you have a registered business in the U.S and you intend to ship to Amazon, you will be the consignee.

Therefore, ownership of goods will be transferred to you once the cargo gets to its final destination.

What is the Role of a Consignee on a Bill of Lading Shipping?

The consignee in a bill of lading is very important.

They are the receiving party for the shipment and their details must be clearly and correctly captured on the Bill of lading.

They are responsible for the collection and verification of the goods.

Who keeps the Bill of Lading between Shipper, Consignee, and Buyer?

The Bill of Lading gives ultimate control of the shipment to different parties along the route

As such, the Bill of lading can be kept by the shipper, buyer, or even the consignee.

If a carrier or shipper has not been paid the full amount of money for transport services, then they can keep the bill of lading.

They can hold it until such a time that the payment for the shipment is paid for before they can release the bill of lading.

If the goods are being delivered to the consignee, the bill of lading will be transferred to the consignee.

This is what they will use to collect the shipment.

There are several types of bill of lading. They include but not limited to:

• Straight
• Shipper’s order
• Air Waybill
• Originals
• Inland
• combined /Multimodal transport
• Through
• Switch

How Do you Make an E-waybill if Buyer and Consignee are Different?

When transferring goods to a different location of the same buyer, you will only be required to generate one e-way bill.

In a situation where the addresses are different along with the buyer and taking delivery of the same, you will be required to generate two e-waybills.

Generating two e-way bills was brought having in mind instances where the delivery location is located in a different state away from the buyer’s state.

This is done in order to complete the transaction and taxes cycle that changes with inter-state transactions.

How Do I Change the Consignee on a Bill of Lading Document?

The supplier may realize a discrepancy in the consignee’s bill of lading after releasing the Bill of Lading by the carrier.

If the discrepancy is realized before the documents are submitted to the supplier’s bank, changes can be effected through the submission of all originals with the vessel owner’s agent.

Also, at load port who issued the Bill of Landing or with the supplier’s bank.

The freight forwarder carrying the goods can be able to amend the consignee named in the bill of lading for the export shipping documents that are authorized by customs authorities.

If the name of the consignee to be amended was not indicated in the export shipping documents, the carrier is not permitted to amend it.

In such a situation, the exporter or his customs broker will be required to amend the consignee named in the shipping documents with the customs.

They can then approach the carrier for amendment of the consignee’s name on the Bill of Lading.

How Do you Build Trust with Your Consignee?

Below are some of the factors you need if you want to build a trustful relationship with your consignee:

• Settling on the responsibilities of incoterms
• Protecting the goods through Insurance
• Duty of storage-Convince the consignee to pay for proper storage fees to avoid losses.
• Buy out and stock rotation: It is your responsibility as the consignee to sell off the goods.

Are all Consignees Buyers?

The answer is yes.

It can be that a consignee has signed a contract with the seller or the original consignee has transferred the rights of ownership for the goods being shipped to a new party.

The new party will then become the rightful owner of the goods.

What is a Shipping Bill?

A shipping Bill is a document required by the customs authorities in order to clear the goods.

Is Notify Party and Consignee the same?

Normally the notifying party and the consignee will be the same.

On other occasions, the two will be different parties.

The notify party can be the clearing agent, the consignee, or even a third party with a promise of goods by the buyer or consignee.

Why do I need a Notify Party During International Shipping?

When shipping internationally, you will need a notify party to be notified on the arrival of a consignment.

They will be arranging for the formalities of the consignment.

Notify party understands the custom laws of the destination and will therefore handle everything.

Also ensuring your consignment follows the required procedures in order to comply with all laws.

Who is the Consignee if Shipping to a 3rd Party Like Amazon?

Whenever you are shipping to a 3rd party like Amazon, or when your goods will stop at an inspection center before going to the final destination.

The inspecting or 3rd party like Amazon will not be the consignee.

The consignee will be the importer.

Is the Consignee Responsible for Freight Charges if Shipping EXW or FOB?

The consignee is the importer.

When you are shipping EXW or FOB, it is the responsibility of the consignee to handle the freight charges once the consignment is handed over to the consignor by the forwarder.

What is an Ultimate Consignee?

The ultimate consignee will be the intended recipient of the imported goods sold by the shipper.

In most cases, the consignee will be the same party as the ultimate consignee.

U.S businesses will have to act as the ultimate consignee for the foreign importer.

What are the Considerations for Appointing a Consignee?

Before appointing a consignee, make sure they have the following:

• They must have an EORI number for their business
• Their business must be VAT compliant

If they do make any taxable transactions in the country of import, they must have a VAT in that country.

The EORI and VAT number will be linked and will be used by your carrier in the customs documentation on the section for the consignee.

What are the Possible Issues of Working with a Consignee?

Many challenges may occur when using a consignee.

They include:

• You will receive revenue that is much less compared to if you had sold directly to the end-user. Working with a consignee will reduce the revenue that you could have earned.
• The ownership and the risk will be retained and any goods that are not sold will be returned at no cost on the side of the consignee.
• The goods that are on consignment may not get enough promotion or exposure by consignees.

How Much do Consignees Earn?

Consignees earn based on the percentages.

The rates are agreed and stated in written consignment agreements and signed by both the consignor and consignee.

The commission charged is subjective and will depend on:

• How adept the management of the store is in getting the highest prices for the goods

The overhead costs for the store.

Also, the store must charge enough to cater to its cost and make profits as well.

• The relationship that exists between the consignee and consignor- They may be neighbors, friends or even relatives who call for some discounts.
• The total value of every item- Some of the high-end items like Porsche might call for large splits among consignors than other items.
• The locale and clientele-Wealthy people may not be so much concerned about their share of sales compared to clients at the bottom of the spectrum. who may hope to turn their merchandise into the much-needed dollars.

Some of the percentages that consignee charges are:

• Clothing items at 40-60%
• Furniture goods 50-70%
• High-end goods: 80-90%
• Mall Vendor Goods: 80-90%
• Sporting items: 50-70%
• Vehicles/Automotive: 70-80%

What Does ‘Gouging the Consignee’ Mean in Shipping?

This is a situation where the agents for the carriers, the agents for the port, and even agents of the CHB may pass extra costs belonging to them.

These are their costs involving the customization of a shipment that was not initially rubber-stampable.

They charge for items such as transfer charges, collection charges, processing charges, notification charges, or anything they can charge.

It cannot be agreed whether these actions truly mean gouging the consignee or covering their costs which may be caused by the shipment challenges or even a “slow” consignee.

Can a Shipment have Multiple Consignees?

A shipment can have multiple consignees.

For instance, if a freight forwarder acts as the intermediary and steps to complete the delivery of the goods will be an intermediate consignee.

There can also be the ultimate consignee who acts as the final recipient of the goods.

For cross-border transactions, the importer of records was considered as the ultimate consignee.

They will be considered as the owners of the goods for purposes of declaring customs as well as payment of taxes and duties.

What Happens if a Consignee is not Available During Shipment Delivery?

At times the consignee may not be available when the shipment arrives at the port of destination.

It can happen if the importer did not receive the Cargo Arrival Notice from the carrier.

Depending on the situation, immobile shipping containers can lead to financial losses.

The containers will become a burden to the freight forwarder or the shipping line.

Since they cannot hold them for a long time, they will need to get rid of them to avoid additional expenses.

In most cases, the company gets rid of the cargo by holding auctions to sell the goods.

Once the cargo has been abandoned, the shipping company will have the right to:

• Unpack and remove the goods from the container
• Taking the cargo and storing it in a bonded store
• Selling the cargo
• Recovering any costs incurred from the money they get after the sale
• Taking legal action in order to recover any remaining amount that couldn’t be recovered after the sale.

How Do I Find a Consignee who will Receive the Cargo on My Behalf?

You will first need to find out who is the Ultimate consignee as per the customs and border protection definition.

Once you have that, look out for their identification number.

Once the merchandise is bought from the seller, the ultimate consignee becomes the buyer.

Find out if by the time the shipment was getting into the United States had not been bought.

If so, then the ultimate consignee will be the individual or entity which was consigned the goods by the shipper.

If the ultimate consignee is one individual, contact them and request their social security number.

You will use this as the consignee number.

You can also do this if it is an organization.

If you find it convenient enough, you may obtain Employer Identification Numbers from the online database of the Securities and Exchange Commission.

If shipping to the US, can I appoint a Foreign Consignee Without a Social Security Number?

When you are shipping to the U.S and you need a foreign consignee, sometimes they may not have a Social Security Number.

In such a case, they can use their passport number, their country where they got the passport and the date of birth.

This will be accepted and they will be able to act as your consignee.

What Does ‘Consigned to Order’ mean in Shipping?

‘Consignee to Order’ is taken to mean that the BOL was consigned as the order of the shipper.

It means the shipper will decide on who is supposed to collect the shipment once it gets to the port discharge.

They should give the carrier at least one original copy for the shipment to be released.

The endorsement is the one that helps the shipper to make this determination.

It is different from ‘Blank endorsement’ in that the person having the original bill of landing cannot claim the shipment from the carrier once they arrive at the port of discharge.

What does ‘Container to Consignee’ mean?

This is a shipping term that can be applied during the handling of cargo whenever the carrier hands over the shipment to the consignee.

This takes place either by loading the consignment from the warehouse or by discharging the consignment from the port directly to the consignee’s transport means.

The term can also be used whenever the carrier is handing the loaded container of goods to the consignee at the port of discharge.

This happens when the container gets loaded from the warehouse to the means of transport being used by the consignee.

When using this term, the ‘container’ will also be taken to mean any large units of the load.

What Does Consignee Billing Mean in International Freight?

Consignee billing is an agreement in form of a contract where the receiver of the gods pays for their shipping charges.

This includes oversize as well as the DIM weight.

The receiver is also obligated to pay for any additional handling fees that may be charged.

All other charges are paid for by the shipper.

Now, I would like to hear from you – If you have any questions or inquiries about this shipping from China, contact Tj chinafreight now.

In this guide, you will find all information you’re looking for about container yards.

From basic definition, functions, classification to ownership, among other critical aspects.

So, if you want to learn more about container yards, read this guide.

What is Container Yard in Shipping?

Container Yard refers to a place specially designated for the storage of containers before loading or offloading from a ship.

Also referred to as a container depot, CY provides the space for aligning containers ready for loading onto a ship.

You can also use it to store all the containers being offloaded from the ship.

You keep the cargo until it’s time to shift them either to the rail yard, Container Freight Station, or delivering to the consignee.

Where is Container Yard Situated?

The location of container yard must be a very convenient place for business.

The best location of a container depot is normally near the terminals to reduce movement to and from the terminal.

You can also choose container yard located closer to the port and the hinterlands commonly known as inland container depot (ICD).

What are the Functions and Uses of a Container Yard?

Container depot has many uses all of which ensure that there is smooth flow of trade among various ports and countries.

Among their functions is the storage of empty containers after unloading them at the warehouse of the receiver.

It would be expected that every shipping company should have its container yard.

However, this was seen to cause congestion in the areas surrounding the port.

As such, there came the concept of private entities and ports to offer storage services at minimal charges.

Some of the large shipping lines however have their secured storage facilities.

The main benefit of having a private container yard is the ability to have easy cargo movement from one port/depot to another.

It helps you avoid the storage issues as well as bottlenecks which may be as a result of improper planning.

Other auxiliary functions of container yards include:

• Repair services
• Maintenance services
• Security/Protection Services
• Cleaning services
• Transportation services
• Fumigations services among others

Organisms or moulds can enter and start breeding inside the containers especially when you leave them still for some time.

To prevent this from happening, Container yards will clean and fumigate containers regularly.

Lashing may come loose when containers are in transit and this can lead to damage of goods inside the container.

Container yards will undertake the duties of repairing and maintaining the damaged or broken containers.

The damages may range from small dents to even major overhauls.

Reefer containers require regular maintenance of the cooling systems to avoid any short-circuiting risks during transit.

Shipping container yards come in handy for shoppers who are able to get such services within the yard.

Another useful service is short-distance free transport services.

Container yards can give incentives such as transport from the container yard to other pick-up locations.

These services may attract charges if you hire a Logistics Company.

But with container yards, you will be able to save the extra cost.

What is the Layout and Design of CY?

The construction of container yards employs a standard layout in order to offer security as well as enough storage space.

Offering security to large units can sometimes be challenging, thus proper measures must be put when setting a container yard.

The container yard design must consider the use of pilfering machinery for containers like the cooling systems for reefer containers.

They must ensure easy detection of trafficking of illicit goods using the containers.

The entry and exit points should have a large boundary wall with round-the-clock security.

They should also have facilities and equipment to test for any traces of drugs and other substances for empty containers.

Container yards should also feature larger spreader cranes or straddle carriers.

These help in piling of containers high in the air.

They are very useful in lifting containers and stacking based on their entry and departure times.

Some yards also stack containers by the company they belong to.

Therefore, there may be a separate region for each company.

The allocation of size and location of this region is often through bidding.

Proper arrangement of containers is key in reducing the turnaround time.

Large container yards should also have an in-house rail for sending and bringing containers.

Some yards can also have a customs office that oversees the unloading and loading of containers as well as performs a regular inspections.

How Does a Container Yard Work?

A container yard receives containers from the client or agent and stores them waiting for delivery or shipping.

At the entrance, your containers must be inspected before being given entry.

Some yards can offer maintenance and other services for the time the container will be held inside.

Once all the plans to move it are in place, the yard then releases the container.

However, there must be proper checks to make sure that only the authorized container moves out.

What is Inland Container Depot (ICD)?

Inland container Deport is a dry port well equipped to handle temporary storage containers with cargo as well as empty containers.

This helps hinterland customers in receiving all the port services closer to their premises and in a more convenient manner.

Their main purpose is to help customers enjoy the benefits that come along with containerization.

What is the Difference Between Inland Container Yard and Container Freight Station?

It can sometimes bedifficult to distinguish between Inland Container Depot and Container Freight Station.

This is because both of them serve as points of consolidation.

In many instances, you will find Container Freight Stationlocated closer to the port of entry.

It helps in storing any cargo that cannotfill a container as they wait arrival for more cargo tofill the container.

This is to say that it mostly deals with Less than Container Load (LCL) cargo.

CFS greatly helps in reducing congestion at the ports, and they feature rail and road connections.

Conversely, the location of Inland Container Depot (ICD) is on hinterlands, a distance from the ports that they serve.

ICDs will mainly serve the Full Container Load (FCL) and also have rail and road transport connections.

Although closely associated with ports, Inland Container Depot acts as a separate entity with the same authority as any other customs station.

What is the Difference between ICD and CY?

An ICD is like a seaport though its location is away from the actual seaport.

It helps in bringing port services closer to importers and exporters.

You can be able to import, export as well as pay for all the customs duties at the Inland Container Depot.

On the contrary, a container yard is commonly close to the seaport.

Is where you store all the cargo offloaded or to be loaded onto the ship.

It is permissible to store the goods until it is time to move them to the consignee or the ship.

Who Owns Container Yards?

Container yards may be owned by states, private-public or private entities.

For example, in North America and Europe, different parties have assumed ownership of rail companies, port operations as well as shipping companies.

The state owns most of the container yards in China, Asia, and India.

Container yards in India are under the management of the Container Corporation of India (CONCOR).

The private sector owns the majority of Inland Container Depots in Africa.

What does CY Cutoff Mean?

CY cutoff refers to the set date on which a given container will be checked-in (gated-in) in the container yard.

The checking in is to prepare the consignment for its sailing schedule.

What does CY/CY Indicate on a Bill of Lading?

CY/CY is a shipping term used to mean “container yard to container yard” when dealing with international shipping.

It means that the carrier will accept the goods once they get to the container yard located at the port of lading.

They will then deliver the goods to another container yard located within the discharge terminal/port.

What does CFS/CY mean on a BOL?

The CFS/CY is read as ‘CFS to CY’.

It is a container service used in shipping to mean port-to-door container service.

Simply, it implies that when delivering the loose cargo to carrier’s container freight station, it will be packed into a whole container.

The carrier will then deliver the whole container to the premises of the consignee.

What does CY/CFS mean on a BOL Document?

The CY/CFS is read as ‘CY to CFS’.

It is a container service used to mean door-to-port container service.

Once the whole container gets to the carrier, it will be packed at the premises of the forwarder or the shipper.

This whole container will then be emptied at the freight station of the carrier at the port of destination.

It is the responsibility of the consignee to organize for transportation of the loose cargo to their premises from the container freight station.

What are the Implications of Using CY/CY Terms on a Bill of Lading?

CY/CY has two major significant effects statements on the bill of lading.

They are:

Unstuffing and Stuffing Responsibility

When a carrier declares CY/CY term, they will be certifying that unstuffing and stuffing of the container will be under the shipper.

Also, any responsibility relating to the wrong stowage of containers will belong to the consignee.

For that matter, the insurance may not handle any claims relating to such a loss.

Delivery Place

If the carrier declares CY/CY on the bill of lading, the shipper will deliver goods to your designated destination based on chosen incoterm.

How are Container Yard Activities Managed?

The management of a yard has very significant effects on a port’s competitiveness on the shipping network globally.

Once a ship arrives at the port, the manned quay cranes will offload the containers from the ship.

The quay cranes will then transfer the containers from the ship to vehicles like Automated Guided Vehicles (AGVs).

These vehicles normally travel between the ship and the stack.

They help in dropping the containers at the storage point where you can keep them for some time.

From there, cranes pick the containers from the stack.

The AGV will then transport them to their respective modes of transport, which can be trains, trucks, barges, deep-sea ships, etc.

Loading containers for export onto a ship is one process executed in reverse order.

Which Types of Containers can be Stored in a Container Yard?

There are no restrictions on the type of containers that container depots can accept.

You can store all the containers from or heading to the ship.

However, there is a thorough check and clearance of the containers for the next shipment stage.

How Much do Container Yard Services Cost?

Container Yards normally offer free services.

This is so to give importers and exporters time to organize their logistics.

How Long Can a Shipping Container Stay in CY?

Normally the container yard is a place to store the containers for a short period of time awaiting clearance.

The container yards offer free service during this time, normally 3 to 7 days.

The duration gives you time to organize for the collection of your cargo.

The goods can remain in the container depot until it is time to transfer them to the final destination.

However, the container yard can recover its dues through an auction if the container owner cannot take the cargo due to financial challenges.

This can take around 30 days of non-commitment.

Do I Need to Pay for Insurance on Shipments in a CY?

Normally you won’t need to pay for extra insurance for your goods.

This is because normally, the cargo insurance covers them until their final destination.

How Secure are Container Yards?

Container yards are very secure.

They have monitoring equipment all round the clock.

Any entry into the container yard is thoroughly checked.

Whenever there is a departure, proper checks must be conducted to ensure only authorized persons leave with approved cargo.

There are seals and tracking devices to ensure that all goods are safe within the container yard.

Broken seals are an indication of a container that has been tampered with.

Most CY has CCTV cameras installed around to monitor activities going on.

Moreover, well-trained guards control the gates to ensure that only authorized entry and exit takes place.

Are there Restrictions on Containers Arriving and Departing CY?

Container yards have restrictions on the containers that may get in or leave.

Containers carrying illicit goods can never be allowed inside a container yard.

Other cargos that may be denied entry into a container yard are:

• Any cargo that may be carrying dangerous goods or substances unless they are stored in a properly designed DG block.
• Any container carrying explosives without approval

What are the Operational Hours of Container Yards?

Container yards operate from 8 AM to 5 PM every Monday to Friday.

They open from 8 Am to 12 Pm on Saturdays and are normally closed during the weekends.

How are Containers Delivered to CY?

How you intend to use your container will greatly determine the best delivery option to choose for your container.

You may need to consult your container vendor or agent for advice.

Below are the delivery options that you can choose from:

Tilt-Bed

This is the most popular option for delivering your container.

You can transport either with a tractor-trailer combo or a straight truck.

The trailer will be driven back to the exact place you need your container stored.

This is because once you place the trailer, you may not have the ability to move it again.

The trailer then tips down and a winch will be lowered at the end of the container until it reaches the ground.

The truck will then pull to the front with the winch lowering the other end of the container.

Pros: Once your container arrives, it is slid down exactly where you need it on the ground.

Cons: This method is very expensive compared to other methods.

Although the trucks can easily lift a lightly loaded 20’ container, it may not be possible to do so with a 40’ loaded container.

Flat-Bed Delivery

Trucks that have a long flatbed are able to hold either two 20’ containers or a single 40’ container.

They will use a crane or forklift to lift your container and set it on the truck as the journey starts.

The system will then lift the container off after it arrives at your site.

Pros: Flatbed delivery may prove to be an alternative low-cost method.

This is because your container will be loaded onto a truck that will also carry other cargo.

This is especially key when you are shipping the cargo over a long distance.

Cons: You must ensure that you have equipment for loading and unloading your container.

Chassis Delivery

Chassis is a metal frame that has wheels well designed for carrying containers in a secure manner.

A trailer pulls the chassis.

Shipping lines tend to use chassis together with special forklifts to deliver containers to their customers for offloading as well as loading.

Pros: It is a cheaper way to transport your container.

The truck will easily disconnect from the chassis.

This will give you some more flexibility in case you need more loading time and do not want to keep the driver waiting.

In some cases, this is the only means of delivery that is acceptable to rail lines or ports.

Cons: You must have the means to lift the container off and on the chassis.

Otherwise, you will be required to load the container while still on the chassis.

You may need a crane to lift a 40’ steel container off the chassis.

You must load the container while it stays on the chassis or has some means of lifting the container on and off the chassis.

What is FA Date in Relation to Container Yard?

FA date refers to the first date available for the pick-up of an imported container.

Typically, you enter the date on the terminal system at the end of business hours.

It implies that your cargo has been discharged and is at the terminal.

The cargo has the shipping line and custom releases but not yet ready for pickup.

The FA date will be the following day of business after vessel discharge.

8 AM is the time when the business day starts.

What is Does it mean when CY Issues an OOG Hold?

When a container yard issues an OOG Hold, it means that they require extra handling fees for such a container.

OOG Hold signifies that the standard container dimensions will require special stowage together with special gears when handling it at the terminal.

An out-of-gauge container at the terminal will require an equivalent space of at least six standard containers.

These special handlings require extra charges and are payable through the issue of an OOG Hold.

Do CYs help with Exporting Containers?

Container yards can help exporters in exporting their goods to different countries.

What is the Procedure of Export Containers through CY?

As an exporter, it is your responsibility to take the cargo to the container yard or the container freight station.

You will then file the Shipping Bill among other necessary documents.

The goods must be inspected by the officer in charge of customs before stuffing inside the container before sealing it.

After that, the containers get transported to the gateway port.

At the port, you load them onto the shipping vessel ready for delivery to the destined port.

Can I Import Containers through CY? What is the Procedure?

Yes, it is possible for you to import containers through the Container Yard.

If you intend to import your goods through the container yard, the specific container yard should advise you.

So that your suppliers are able to manifest the containers to that specific container yard.

To import cargo through a container yard, instruct your supplier to manifest the containers to your designated CY.

After landing at the seaport, the cargo will be sorted and transported to your chosen container yard through your forwarding agent.

On arrival at the container yard, the consignment will be transported to the Container Freight Station.

You will file a Bill of Entry and other necessary documents before releasing of the containers.

How do I Export Containers that are to be Loaded at the Supplier’s Premises through CY?

You need to have the empty container delivered to your supplier’s premises if you intend to stuff it with goods there.

Your agent will help you seek permission from the customs authorities to take the container from the yard to the premises.

The permission is vital since the containers are of foreign origin and necessary measures must be taken by taking a guarantee/bond.

The bond will ensure that you take the containers ack to the CY.

It will be necessary to requisition the central excise officers’ services to help in examining the cargo being stuffed.

The officer will also aid in supervising the loading of goods into the container.

The officers will inspect the goods based on the export invoice and other documents before allowing them to be loaded.

Once the loading is complete, the sealing of the container with the central excise seal is done.

The central excise officer will sign the export invoice together with other necessary documents.

He/she will then forward a sample copy and other documents to the customs officers at the container yard.

After receiving the container, shipping bill, and other documents, the officers will verify the seal and allow the exporting to proceed.

There is no inspection of goods as long as the excise seal is intact.

However, there can be a delay if there is evidence that you have tampered with or broken the seal.

This will warrant suspicion on the correct value, quality, or quantity of the goods insider.

There will be a need to re-examination the container before the customs authority allows you to continue with exportation.

What is a Container ID and why is Important in CY?

A container ID is a unique code on the container issued based on international standards.

The code consists of a sequence of letters and numbers.

The unique ID acts as a unique identifier in a container yard.

It helps organize the containers based on goods contained when they should move out or specific owner.

This not only helps in easy access to containers but prevents any misplacement of the containers.

Their likelihood of misplacement is very high if proper identification and organization is not in place.

Can I buy a Shipping Container from a Container Yard (CY)?

Yes, you can buy a shipping container from a container yard near your port.

Simply make your inquiry with the department in charge of selling equipment at the yard.

You will get a good deal buying directly from a container yard than buying from brokers.

What are the Advantages of Container Yard?

There are many advantages to a container yard.

They include:

• The container yards tend to provide some facilities like clearance of customs. They also bring import/export service near the industrial complexes in the mainland away from the seaports.

After the cargo gets clearance,it doesn’t need to go through the customs at the port and will be cleared for export.

• Reduce the overall logistics of empty containers through the provision of consolidation facilities for LCL shipments in the mainland.
• Container yards are able to maintain the importing and exporting costs at competitive rates.This is through the provision of the necessary facilities in the mainland.
• Container depots greatly increase the export business of a country through the construction of feeder infrastructure for ports.
• Container yards come in handy when it comes to creating more space in the port spaces.

The advantages of containerization cannot be fully experienced without a proper network of container yards.

With this, the exporters are able to enjoy exporting cargo via the container yards.

At Tj chinafreight, we will help you in all your freight forwarding needs from China to any global destination.

In case you have any questions about the container yard, feel free to contact Tj chinafreight team.

This guide will cover yet another important freight term – chassis fee.

So if you want to learn more about chassis fee, read this guide.

What is Chassis Fee?

A chassis Fee refers to the amount paid in case your cargo is visiting through truck, that is, after your cargo arrives at an ocean port and it’s being transported via truck to a China warehouse.

Basically, it is a flat rate which varies by trucker and the charge is calculated based totally on the quantity of the cargo.

That extra transportation amount charged is the chassis fee.

What is a Tri-Axle Chassis Fee?

A tri-axle chassis fee is the amount classified if a cargo journeying with the aid of truck is so much heavy.

Generally, a 20′ field above 36,000 lbs and a 40′ box above 44,000 lbs requires a tri-axle chassis.

If the cargo weighs below this, there’s no tri-Axle Chassis Fee charged.

What is Chassis Split Fee?

A chassis Split Fee happens whilst the field isn’t always located within the same location as the chassis.

In this scenario, the trucking agency may also verify a chassis cut upcharge.

Generally this fee takes $50 to $110 – to cover the price of taking the chassis to the box area.

Is Chassis Split Fee the same as Chassis Repo Fee

No.

The Chassis Repo Fee is the amount charged for the cost of transporting the empty containers to the nearest hub for the purpose of reusing.

Also, the Chassis Split Fee is charged for the cost of taking cargos to the boxing area. In this case, the cargo is not empty.

How is Chassis Fee Calculated?

A chassis rate is assessed in case your cargo is touring via truck.

That is, after your shipment arrives at an ocean port it’s being transported via truck to a warehouse.

This is generally a flat price which varies by means of trucker.

The total amount of fee is calculated primarily basing on the extent of the shipment.

This entirely depends on the shipment process and the distance the truck has to cover to the warehouse.

What is the Average Cost of Renting Chassis per Day?

In acquiring the chassis from the brand -new proprietors who sold or are shopping for the chassis from the provider’s ranges among $25 and $30 per day on average.

Those are extensive expenses.

Who charges Chassis Fee?

Fee charged is done via ocean companies, for example at certain ports for using their chassis.

This price is to inspire you.

That is, shippers and truckers to provide their personal chassis for pick-up and transport of ocean containers.

This also applies to the usual chassis pool which is now supplied via a few ports on the U.S. East Coast.

Is Chassis Fee negotiable?

You are allowed to generally negotiate the top charge of the assignment and/or the wide variety of days that chassis is out of port.

However, they hardly ever negotiate the chassis price.

Unlike port fixed offerings, many companies will negotiate with you.

They will allow you to further lessen your costs.

This makes it easier and fair.

How do I reduce my Chassis Rental Fee?

Generally, you could get a chassis for round $35 per day (or $75 in keeping with day if it’s a 3-axle chassis).

Those costs may additionally differ a piece relying on which port your items are kept at.

However, shippers hardly ever take note of how many tons they’re spending on chassis rentals until they get a freight bill.

This can averagely sum to $140-$200 and doesn’t appear too “insignificant”.

When it comes to chassis rentals, it normally goes for five+ days, meaning those small charges stack as much and make a distinction ultimately.

The longer the items are kept the higher the Chassis Rental Fee.

Hence, you can reduce this by picking up your items as earlier as possible.

Also, ship less regularly and ship a fixed volume of commodity at off-peak times to reduce the Chassis fee.

What Factors Influence Chassis Fees?

Various aspects determine the range of the Chassis Fees.

This Factors include;

• The price of fuel – Both maritime and land transport heavily depend on the cost of fuel.

If it is low, the cargo shipment becomes cheaper and truck transportation cost is low as well. When high, the Chassis Fee rises.

• Loyalty of the client – If you as a customer regularly does business with the shipment company.

You are more likely to be charged a lower rate of the Chassis Fee as compared to that who does it once in a while.

• Government policy – The regulation of the transport activities by the government greatly impacts on the Chassis Fees rate.

For instance, the limitation of transportation to a maximum of the given hours makes the Chassis Fees expensive.

• Reputation of the merchant –If you are a well-known merchant who packages the cargo well and within the given time, you might be charged a lower rate of Chassis Fees.

However, those who take more time and does the job badly is charged more

• Insecurities – Issues such as sea piracy and other endangering aspects call for more security and change of routes for the shipping companies.

Leading to a rise of the Chassis Fees eventually.

Will I pay Chassis Fee if I Bring my Own Chassis during Shipping?

Basically, Chassis Fee is charged for the transportation of the cargo by truck.

Therefore, if you bring your own chassis you avoid the high cost of the Chassis Fee.

This is way much convenient rather than waiting for the company’s chassis usage which operates according to the company’s schedule and will.

However, it might not be suitable in cases where fragile objects are being transported.

In such event, you should use the company’s Chassis instead.

This is because each company has the needed equipment to safely transport all types of loads. Including the most fragile ones.

What are Split Pick-up and Split Return and how does it affect Chassis Charges?

Split Pick-up refers to a situation in which the truck picks up a given fraction of the various places and transports to the respective destinations.

Split Return is when the truck comes back for the remaining fraction of the load and transports it to the given destination.

Both of these do raise the Chassis Charge since the truck covers more distance and the fuel consumed is also higher.

This can be avoided by choosing to use a way bigger truck that suits the size of the given load that needs to be transported.

What is ‘Free Day’ in Relation to Chassis?

This generally refers to a day on which the cargo transportation is not charged.

This applies to both the pick-up and returning process.

However, the size and weight of the cargo is limited to a certain amount. Extra size and weight need to be paid for.

On such a day, the deliveries are done free of charge.

This is however draining to the shipping company and is thus not economical.

Is there Free time Included for Chassis?

When it comes to chassis, there is no free time.

Maybe a free day.

The Chassis Fee is calculated from the time the container is picked up till the time it is returned.

All is calculated depending on the distance covered by the truck and size of the load.

Every minute and distance covered is accounted and paid for.

A delay in pick-up and return might also be charged due to the inconveniences caused to the company.

On a free day, which happens once in a while, the customers are lucky to enjoy free pickups and deliveries.

Again, this is limited to the size of the load. Extra wait beyond the given one incurs charges.

Do Intermodal Trucking Quotes include Chassis Fee?

Intermodal Trucking Quotes cater for the transportation of the load via railway transport.

After that the load needs to be transported by trucks on the road to the given destination.

This road transport cost is charged separately.

The Intermodal Trucking Quotes expense is separate because the railway transport sector operates on its own while the road transport sector operates on its own.

The two have costs that are different too.

This is excluded when it comes to free days when the transport cost is not charged on customers.

Either way, if you use the company’s Chassis, they are allowed to pay the total amount of the transport cost once.

Note, the Chassis fee is calculated on its own and then added on the total amount.

Do Chassis Term Leases Protect Against Chassis Fee Spikes during Peak Seasons?

The shipment and trucking companies benefit a lot during on- peak times.

This is not influenced or changed by the Chassis Term Lease.

During the on-peak seasons, the Chassis Fee highly rises because of the high rate of demand in the market.

Chassis Term Leases only ensure that the Chassis Fee is well paid to the right receiver and in time.

It might cover for the average range of the Chassis Fee

What cost Benefits does Using an Asset-Based Carrier Provide as Compared to Using a Non-Asset-Based Carrier?

An asset -based Carrier is way cheaper since the company has their own equipment and works directly with you as the merchant.

The fact that the company already has equipment saves you time too.

To you as a business person, time is money.

On the other hand, the Non -asset-based Carrier is more expensive since it involves brokers who need a little more pay.

It also takes much time to access the Chassis.

In addition, the truck found might not be favorable to transport the given goods.

It might be way smaller than the size of the load.

This will incur a lot of unrealistic charges since the track has to make many laps.

You can however cut the cost if you used an Asset-based carrier and was provided with a bigger and convenient truck instead.

How can I Pay my Chassis Fees?

Chassis Fee is paid to the shipment company involved. Each company has its own payment procedure and method.

Payment can be done through the till or to the account given by the company.

You should always alias with the company before making payment to avoid confusion or even losing cash to scammers.

Confirming with the company before making payment ensures security of the goods too.

It proves that you have received your goods safely and in good condition.

Will I still pay Usage Fees if I Cancel my Chassis Booking?

Chassis Fee calculation starts from the time the container is picked until it is returned.

It is only paid for after the load is transported to the given destination.

Therefore, as long as transportation has not occurred, nothing is paid for.

In cases where the delay was way much over time, you might be required to pay some fee for keeping them waiting.

This might be because of the inconvenience one has caused the company.

The Chassis in My Possession has been Impounded; Will it Affect the Total Chassis Fees I Am to Pay?

The time the you spend while in possession of the Chassis reflects the total charge of the Chassis Fee to be paid at the end.

However, in cases where the chassis is impounded, the company might be responsible for it.

This only happens if the problem is with the truck and not you as the customer.

The company should be responsible for such issues.

It is the company’s role to ensure the customer receives the load safely.

Does Chassis Fees Include Liability costs?

The Chassis Fee caters for the whole transportation process.

Liability issues might however call for additional costs.

It depends with weight and impact of the issue at hand.

If the liability is your fault such as overage and other illegal actions, you are totally responsible for these actions.

And will also pay for the over time charges.

What are the Possible Fees Involved with Late Chassis Pick-up or Return?

Since the Chassis Fee is calculated from the time the container is picked to the time it is returned.

A delay in pick-up or return increases the total cost of the fee charged.

If you delay to pick up your load, your rental Chassis Fee definitely increases as well.

To avoid this, you should pick up the load on time.

Late Chassis pick-up or return might also lead to discontinuation of various customer favors such as low Chassis Fee charge due to customer loyalty and reputation.

You might henceforth be charged normally or even higher because they stopped being loyal customers after all.

Is it Illegal to overage for Chassis?

An additional amount of weight might be added to the chassis more than the required one.

This should not be too much since overloading is prohibited.

In cases of overage, legal actions might be taken.

It is advisable for you to load the Chassis only with the required maximum weight.

If the load is too big, you have a choice of using a larger container or carrier that has more space and accommodates a bigger load.

If the truck is small, then the load transportation process can be done in bits.

It is better to pay more Chassis Fee than to face legal confrontation by the law.

For example non-adherence to transportation rules and regulations.

Can I avoid Chassis Fees?

Yes. If you bring your own chassis, then you are not charged.

In this case, you only pay for the shipment process.

This is easier as you simply pick up your goods from the company once they arrive.

Alternatively, you can depend on the company for transportation where you have to wait because the company does it depending its own schedule and operations.

If you use the company’s chassis then you must pay for the Chassis Fee.

In addition, if you opt to use a Non-asset-based carrier, you are more prone to paying more Chassis Fee because a broker must be involved.

Should I Include Chassis Fee in Total Landed Cost?

If you deal directly with the company, you can include the Chassis Fee in Total Landed cost.

This is because you use the company’s Chassis for transportation means.

You can therefore pay the total cost once together.

But if you have your own Chassis or using a broker then you should not include it at all.

However, you always have a choice of paying both the Chassis Fee separately in the Landing Cost.

This might be appropriate if there is a delay in picking up your load.

Are there any Accessorial Charges Involved in Chassis Usage?

This entirely depends if you are dealing with the Non-asset -based carrier or asset-based carrier.

In asset- based carrier, accessorial charges are avoided since the company has its own equipment.

They deal directly with you, unlike in Non-asset based scenarios where you have to pay the broker to access the Chassis.

In addition, you might be required to pay more charges since brokers usually do not have their own equipment.

This is way much expensive to the customer or merchant.

I hope this guide has clarified everything you need to know about Chassis fee.

However, in case you have any question, feel free to ask us.

Tj chinafreight will help you with all your freight forwarding services.

In today’s guide, I will answer all questions regarding yet another important freight term called countervailing duties.

So if you want to learn more about countervailing duties, read this guide.

What are Countervailing Duties?

Countervailing duties (CVD) is a form of import duty imposed by the government so as to protect its domestic manufacturers/producers.

By doing this, the government is able to counter the negative impacts brought about by the import subsidies.

This way they make their products cheaper and are able to export to other countries at competitive prices.

Who Imposes Countervailing Duty?

Countervailing duties are import taxes on imported goods set by the International Trade Administration’s (ITA) Commerce department.

The importing country is able to protect its locally produced goods from competitive prices.

They eliminate and nullify the low-price advantage enjoyed by imported products once it is exempted from tax in their manufacturing country.

ITA is responsible for the calculation of countervailing duty rates as well as establishing the scope of orders for the same.

It is also responsible for enforcement and compliance with the set orders.

Customs and border protection enforces decisions made by the ITA and collects the CVD that have been assessed on all imported goods.

When can Countervailing Duty be Imposed?

Countervailing duty will be imposed once importing country feels that price of locally produced commodities isn’t competitive enough with those being imported.

The government however cannot impose the countervailing duty based on price difference alone.

It must be able to prove that the imported goods are cheaper because they are being subsidized from their country of origin.

Once this is evident, the countervailing duty will then be imposed as per the guidelines set by the World Trade Organization.

What is Subsidization?

Subsidization is the act of subsidizing goods done by the government or any other organization.

When subsidization occurs, the prices of commodities are affected by a decrease in price.

There are many reasons why the government may choose to adopt subsidization.

Some of the subsidization measures are mostly taken in developing countries to cover commodities such as food, electricity, water and education.

Subsidization may also be done to protect local manufacturers from unfair competition from imported products that may be enjoying better manufacturing terms.

Once that is done, it means that the prices of locally produced goods will become cheaper compared to imports.

Are all Subsidies Countervailable?

Not all subsidies will be countervailable.

For a subsidy to be countervailable, it must be specific.

A countervailable subsidy must include the government’s financial contribution.

Government support must confer benefit that is very specific to a certain type of industry, enterprise or region in the country.

What is the Purpose of Countervailing Duty Laws in International Trade?

The purpose of Countervailing Duty is to offset the value of subsidization to avoid its misuse.

Countervailing Duty Laws have been put in place to ensure that unfair trade policies are not introduced.

They are created to also fix any disputes that may arise from the introduction of countervailing duties by different countries.

It also seeks to ensure that developing countries are given room for growth without strict policies.

Which Countries have Countervailing Duties?

Many countries across the world have countervailing duties. Importing countries are the ones that impose countervailing duties on the goods entering their market.

This measure may be seen more in developing countries which do not enjoy a lot of benefits in their products like developed countries.

They do this in a bid to try and boost their manufacturing sector and protect it from exploitation by incoming foreign goods.

Why do Countries Impose Countervailing Duties on Imports?

The purpose of countervailing duties on imports is to protect their domestic industry from getting a material injury.

This is the injury caused by the subsidization of imported commodities from their countries of origin.

For a country to be competitive in the international market, it should be able to offer good products and at affordable prices.

This may not however be achievable when other countries are having low costs of production compared to another country.

To compete, the government may subsidize production costs or other fees that may be pushing price above-average global market price.

Once this is done, the producers or manufacturers are able to export their goods at a cheaper price than other countries.

When these products are exported to other producing countries, they may slow down the sales of locally manufactured products in those countries.

This may cause adverse effects on the economy of the importing country.

This may include collapsing of industries due to lack of market as well as unemployment caused by layoffs due to low sales.

To prevent these adverse effects, the importing country will conduct research on the subsidization of the product.

It then adds the same subsidy on the product which will be known as a countervailing subsidy.

Without countervailing duties, some countries especially developing countries may not be able to grow.

This is due to cheaper imports that block the locally produced goods from selling.

To prevent these adverse effects, the importing country will conduct research on the subsidization of the product.

Then, add the same subsidy on the product which will be known as a countervailing subsidy.

Without countervailing duties, some countries especially developing countries may not be able to grow.

This is as a result of cheaper imports that block the locally produced goods from selling.

How do Countervailing Duties Work?

Countervailing duties normally work through an increase in price for a given commodity.

The commodity’s price is believed to have been lowered by the producing country through subsidies making it sell at a cheaper price.

The cheap price may mean lower sales for the locally produced goods.

Therefore, government can therefore carry out the subsidy investigation before filing a countervailing duty petition.

The countervailing duty petition can be filed by the affected companies as well provided there is proof of injury.

The countervailing duty, therefore, seeks to establish a level playing ground where products can compete fairly based on the price.

Without countervailing duties, local industries may collapse due to a lack of market for their products.

What is the Difference between Countervailing Duties and Antidumping Duties?

Antidumping duties are imposed when a government realizes that some foreign suppliers are selling their goods at unfair market price.

It is considered dumping when the product is sold at a lower price compared to that of the exporter’s home country.

Moreover, it could even be sold lower than its actual cost of productions.

To issue anti-dumping duty, there must be proof that the product has a harmful effect on another local company in importing country.

The duty cannot however be put at any figure.

The amount is calculated so as to offset the dumping margins and prevent the dumping from happening.

Countervailing duties on the other hand applies when the foreign government offers assistance to their local industries or provides subsidies.

This can be given in form of tax exemptions, loans at low rates as well as indirect payments.

This government aid enables manufacturers/suppliers to sell their goods at affordable prices in comparison to domestic industries of exporting country.

This kind of government assistance enables their manufacturers and suppliers to export and sell their goods at less and affordable prices.

This is compared to the domestic industries of the exporting country.

The International Trade Commission conducts investigations so as to assess amount of subsidy offered by their government before imposing countervailing duty.

Which Products are Currently Subject to Countervailing Duty?

Some of the most common items that are subjected to countervailing duties include but are not limited to:

• Plastic Bags
• Wooden Furniture
• Steel
• Household Supplies such as Tissue Paper.

How do you Calculate Countervailing Duty?

Countervailing duty cannot be placed at any general figure.

There must be proof of an existing subsidy on the product from the producing country’s government.

From this subsidy, the countervailing duty will be calculated.

The duty must be the same as the subsidy that is being enjoyed by the product.

The countervailing duty should not come in to take advantage and create another unfair price competition from imported goods.

What are Countervailing Measures and Subsidies?

These are measures that are set by the World Trade Organization that seeks to discipline the application of subsidies.

The measures also seek to regulate the actions taken by countries to counter the effects arising from subsidies.

A country may use the dispute-settlement procedure under the WTO to seek withdrawal of a subsidy.

Moreover, it can seek removal of the adverse effects brought by the same.

The country may also launch its independent investigation and charge extra duty on the subsidized goods.

How are Countervailing Duty Orders Imposed?

The countervailing duty order is imposed by having the department of commerce inform the bureau in charge of Customs and Border Protection.

The bureau will assess the countervailing duties on the imports for the product in order to offset the detected unfair trade practice.

How can you Find the List of Products Covered by Countervailing Orders?

The Automated Commercial Environment has modernized trade processing on all trade capabilities including exports and imports as well as Partner Government Agencies.

Through ACE, you can find a comprehensive guide on every case of Countervailing Duties.

The International Trade Centre (ITC) also publishes a comprehensive list of countervailing duty case.

The list of products subjected to the countervailing Duties can also be found on the International Trade Administration’s (ITA) website. This list is comprehensive and list products based on their countries of origin.

What is the Difference Between Countervailing Duty and Import Duty?

Import duty is the tax that is imposed on imported goods and some exports by the authorities of a given country.

Conversely, countervailing duty is the tax imposed on imported goods to offset the subsidization benefits they enjoy from their countries of origin.

The amount of countervailing duty charged is dependent on the amount of subsidy offered to the product by the government.

The import duty on the other hand is based on the value of the imported good.

The import duty may sometimes be referred to as import tariff, tariff, customs duty or import tax depending on the context.

Are there Exemptions to Countervailing Duty?

There may be exemptions on the application of a countervailing duty that are aimed at safeguarding the exporting country.

Products exported from developing countries are safeguarded if has little or no effect on the developed country’s economy.

Also, developing country could be exempted from CVD when it supplies less than 3 percent of a given product.

The product should have less than 9 percent market share.

If the members of a developing country supply less than 3% of a given product with a collective share of less than 9% market share, they may be exempted from countervailing duties.

What are the Acceptable Payment Methods for Countervailing Duty?

The U.S Customs and Border Protection (CBP) will accept only payment methods that have been authorized by the Department of Treasury.

The payment methods include credit cards as used in payment of other fees, taxes, non-commercial entry duties as well as other charges.

Is there a Difference Between Countervailing Duty and Safeguard Tariff?

Safeguard tariffs is also known as safeguard duty or safeguard quota.

It is imposed if there is a sudden increase in imports posing a threat to the local industries.

Safeguard tariffs are normally set at a level similar to the average imports for the last 3 years.

This can be taken as a temporary measure put in place to shield domestic industries from foreign exporters.

Unlike countervailing duty which only focuses on products of one or several countries, safeguard tariffs are concerned with all the imports.

For European unions, for example, the countervailing tariff may include imports from third world countries.

What is Countervailing Duty Petition?

A countervailing duty petition is a request made for consideration of a countervailing duty.

One must provide a reasonable basis for authority to believe that indeed subsidization of the product in question is happening.

In order for a countervailing duty petition to be successful, you must provide a reasonable basis for the authority to suspect.

Or believe that indeed subsidization of the product in question is happening.

You must prove that the local industries are suffering or has suffered a material injury.

There must be a clear link between suffering and subsidization.

Who can Submit Countervailing Duty Petition during International Trade?

A countervailing duty petition can be filed by any local industry that has been affected.

Any company can file a countervailing duty petition irrespective of the number of players in the affected sector.

The statute will define specific criteria to be followed by various interested parties that may want to file a petition.

Those filing the countervailing duty petition must prove that they have the support of the industry as per the statutory criteria.

How do you file a Countervailing Duty Petition?

All petitions must be filed simultaneously at the International Trade and the Department of Commerce.

The draft petitions must also be sent to the Petition Counseling Office in Enforcement and Compliance’s Office of Policy.

Is Countervailing Duty and Additional Excise Duty the same?

Yes, this because the countervailing duty is an additional import duty imposed on imported goods by the importing country.

Is Countervailing Duties Tariff or Non-tariff Barrier?

Non-tariff barriers are trade used to restrict the import of goods through other means apart from the tariffs.

As such, countervailing duties are considered non-tariff barriers.

Other non-tariff barriers include quotas, embargoes, licenses and import deposits.

Non-tariff barriers are often used by developed countries to control trade between them and other countries.

Can you avoid paying Countervailing Duties?

Countervailing duties are unavoidable since they are charged at the port of entry by the Customs and Border Protection.

They are put as additional import duty which means that the product must be cleared before being granted entry.

It is also illegal to evade payment of duties and taxes and nobody would want to fall into trouble with the authorities.

Always ensure that the payments are made correctly as per the requirements.

As a leading freight forwarder in China, Tj chinafreight will help you ship from China at affordable rates.

Contact us today for any inquiries when importing from China.

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

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

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

Keep reading to learn more.

What is Continuous Customs Bond?

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

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

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

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

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

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

What is the Importance of Continuous Customs Bond?

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

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

a) Less Hassle

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

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

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

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

This means you will save yourself some valuable time.

b) Cheaper

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

c) Better Communication

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

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

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

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

What does a Continuous Customs Bond Cover?

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

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

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

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

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

When is a Continuous Customs Bond Required?

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

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

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

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

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

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

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

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

You must apply for it from your closest port director.

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

Who are the Parties to a Continuous Customs Bond?

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

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

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

The purchasing entity or person is known as the principal.

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

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

How is Continuous Customs Bond Calculated?

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

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

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

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

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

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

How does the Continuous Customs Bond Work?

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

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

Working with a Continuous Customs Bond is quite easy.

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

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

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

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

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

Who is Responsible for obtaining the Continuous Customs Bond?

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

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

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

What are Examples of Continuous Customs Bond?

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

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

Examples of Continuous Customs Bond include:

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

How do you Apply for a Continuous Customs Bond?

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

Step 1

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

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

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

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

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

Step 2

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

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

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

Step 3

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

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

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

Step 4

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

Other than these, you will also provide information about:

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

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

Step 5

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

Step 6

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

Step 7

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

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

Where is the Continuous Customs Bond Filed?

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

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

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

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

This time may vary.

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

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

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

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

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

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

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

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

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

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

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

It is calculated as the total value of the goods.

This will include any fees, duties and taxes.

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

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

Continuous Customs Bond is renewable annually.

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

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

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

How long is a Continuous Customs Bond good for?

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

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

It runs through 12 months before it is renewed.

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

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

Is the Continuous Customs Bond Refundable?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How do you Renew a Continuous Customs Bond?

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

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

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

Otherwise, they may release the termination of the bond.

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

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

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

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

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

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

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

What does ‘Insufficient’ Bond Status mean?

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

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

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

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

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

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

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

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

The bond limit cannot be subjected to depletion.

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

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

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

Therefore, no complaint should be expected from you.

How Much does Continuous Customs Bond Cost?

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

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

How Often are the Charges for Continuous Customs Bond?

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

Thereafter, an annual charge will apply.

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

Are there Surcharges to the Continuous Customs Bond?

Yes, several surcharges may apply.

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

What are the Typical Credit Terms for Continuous Customs Bond?

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

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

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

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

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

How is Continuous Customs Bond Approved by the Surety?

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

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

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

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

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

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

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

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

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

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

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

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

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

What is an Indemnity Agreement for Continuous Customs Bond?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What is does ‘Reconciliation’ mean in Customs Bonds?

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

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

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

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

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

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

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

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

Sureties will always surcharge for any additional risk.

Is Continuous Customs Bond Eligible for Reconciliation?

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

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

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

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

Let’s dive right in.

What is Compliance Assessment?

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

What is Trade Compliance?

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

It is also known as Customs compliance.

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

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

Why is Trade Compliance important?

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

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

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

Who is subject to Customs Compliance Assessment?

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

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

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

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

What is the Purpose of Compliance Assessment?

Customs conducts compliance assessments for many reasons.

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

Other reasons include:

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

Is Compliance Assessment the same as Compliance Audit?

Not really.

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

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

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

Why should you assess your Business’s Trade Compliance?

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

Internal Audit being part of the Compliance Program

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

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

Preparing for an official Customs Audit

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

While planning, you should include the following:

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

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

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

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

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

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

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

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

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

Compliance assessment will serve many purposes, including:

Identification of Gaps

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

Helps in Making Improvements

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

Reduction of Risk

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

Avoiding Fines and Penalties

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

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

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

How do you prepare for a Compliance Assessment?

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

You need to prepare to pass adequately.

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

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

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

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

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

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

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

What happens in a Compliance Assessment?

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

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

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

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

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

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

How do you conduct a Compliance Assessment step by step?

Compliance assessment

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

Initial Discovery and Plan

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

Gathering of Information

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

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

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

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

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

Analyzing of Data and Information

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

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

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

Report Writing

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

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

Reviewing Assessment Results and Creating an Action Plan

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

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

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

How do you manage Compliance when Importing from China?

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

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

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

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

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

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

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

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

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

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

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

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

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

What is a Compliance Assessment Report?

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

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

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

What happens if a Compliance Assessment discovers errors and risks?

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

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

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

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

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

Are there Penalties for Violating International Trade Compliance?

Yes.

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

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

What is an International Trade Compliance Program?

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

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

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

What are the considerations of building a Trade Compliance Program?

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

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

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

What are some Trade Compliance Program Mistakes to avoid?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What is a Trade Compliance Checklist?

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

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

Who is responsible for Conducting a Compliance Assessment?

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

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

Delegated customs compliance auditors do comprehensive compliance assessments.

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

Do you need a Customs Broker for Compliance Assessment?

Yes.

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

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

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

How much does a Compliance Assessment Cost?

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

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

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

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

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

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An inspection is an acceptance test for quality control.

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

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

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

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

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

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

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

Initial Production Check

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

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

What does IPC check?

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

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

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

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

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

Benefits of Initial Production Check

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

By performing an IPC, you:

Minimize Risks that may Disrupt your Supply Chain

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

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

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

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

Get an Opportunity to verify the Manufacturer’s Readiness

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

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

Measure your Manufacturer’s Capability

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

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

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

When and Why an Initial Production check is needed

You need an initial production check when:

Dealing with High-quality or Fragile Products

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

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

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

Sourcing Raw Materials from Different Suppliers

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

The inspector ensures the raw material meets your product requirements.

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

You Launch a New Product

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

IPC is necessary for an initial production check.

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

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

Initial production inspection will point out any initial errors.

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

Limits of Initial Production Check

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

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

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

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

It may then be challenging to control raw material.

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

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

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

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

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

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

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

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

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

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

You need to be careful when conducting IPC checks.

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

During Production Inspection (DUPRO)

During Production Inspection is also known as DUPRO or DPI.

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

The inspector will randomly pick and inspect the finished products.

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

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

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

During Production Checklist

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

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

It creates cost savings and shorter production times for you.

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

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

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

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

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

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

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

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

Objectives of Performing a DUPRO

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

It comprises procedures aimed at inspecting work during production.

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

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

Monitoring makes mass production less expensive.

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

When you should Consider DUPRO

DUPRO can be beneficial in the following instances:

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

DUPRO helps detect errors and faults early.

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

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

Limitations of DUPRO Inspection

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

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

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

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

Daily Production Monitoring

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

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

When to Consider Daily Production Monitoring

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

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

Daily production monitoring ensures all your specifications are in force.

Any defects the inspector identifies, the factory corrects early.

How long Daily Production Monitoring Lasts

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

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

Benefits of Daily Production Monitoring

Production monitoring provides many benefits.

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

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

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

The process monitoring ensures product quality specifications are met.

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

It also helps you to understand the entire production cycle.

Limitations of Daily Production Monitoring

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

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

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

Sample Checking

Sample checking is an everyday activity in production and manufacturing.

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

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

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

What happens During Sample Checking?

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

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

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

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

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

Pre-screening ensures they meet your quality standards.

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

Benefits of Sample Checking

The benefits of sample checking are as follows:

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

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

Limitations of Sample Checking

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

It might miss on faulty products.

Pre-shipment Inspection

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

It happens when products are 80- 100 percent complete.

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

Procedures conducted in Pre-shipment Inspections

The inspector inspects random samples from the packed boxes.

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

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

The process takes place as follows:

Step 1: Factory Visit

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

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

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

Step 2: Quantity Check

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

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

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

Step 3: Random Sampling

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

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

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

Step 4: Compliance Checks

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

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

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

Step 5: Workmanship Check

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

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

Step 6: Performance Tests

Here, the focus is mainly on performance and safety.

Products must meet all requirements on the above.

They include:

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

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

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

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

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

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

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

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

Importance of Inspecting Products before Shipment

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

Pre-shipment inspection will catch the faults.

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

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

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

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

It will please your customers too.

A pre-shipment inspection is an essential tool.

It ensures the quality of goods before shipment.

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

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

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

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

Standards for Sampling Procedures in Pre-shipment Inspection

Inspectors follow a standard sampling procedure.

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

The standards for sampling in PSI are:

Sampling Plans

The quality inspector does not test every item.

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

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

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

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

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

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

Select Level II is your cargo is general.

It is the commonly used quality inspection level.

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

It is suitable for low-risk products.

Acceptance Quality Limit Table (AQL Table)

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

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

You may adjust it to best suit your requirements.

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

The Pre-shipment Inspection Report

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

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

This report can be manual or automated.

It summarizes the quality of the merchandise.

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

A draft report is given to the manufacturer.

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

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

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

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

On the other hand, the final report is detailed.

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

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

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

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

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

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

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

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

Limitations of Pre-shipment Inspection

Some limitations of pre-shipment inspection include:

Conflict of Interest

The inspecting company serves to represent your interest by default.

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

Lack of Responsibility

Faulty goods may find their way into the shipping container.

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

The company may also refuse to take responsibility.

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

Unclear Expectations

Communicate your expectations with the inspecting company.

Supply them with the golden sample and your quality checklist.

Make sure that the inspector is not operating under assumptions.

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

Uncommitted Agency

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

Sorting Inspection

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

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

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

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

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

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

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

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

Standards used by Sorting Inspectors

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

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

The standards used by sorting inspectors include:

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

Metal Detection

Metal detection inspection is a quality assurance check.

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

Why Invest in a Metal Detection Inspection

Metal detection inspection as a quality check will prevent:

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

Container Loading Inspection

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

It happens at the manufacturer’s premises.

What happens in a Container Loading Inspection?

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

The weather condition on the loading day is also recorded.

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

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

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

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

For this, inspections check for;

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

The shipping container should be free of the above elements.

It should also be clean and airy.

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

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

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

Benefits of Container Loading Inspection

CLS inspection protects you from receiving inferior quality goods.

It also offers the following additional benefits:

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

Limitations of CLS

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

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

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

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

This may leave you bearing substantial financial losses.

Container Unloading Inspection

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

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

What happens in a Container Unloading Inspection?

A professional inspector does supervision the container.

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

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

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

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

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

Why invest in a Container Unloading Inspection

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

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

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

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

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

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

Conclusion

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

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

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

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

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

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