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

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

What is Chassis Pool?

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

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

Who Owns and Operates Chassis Pools?

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

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

How many Types of Chassis Pools are there?

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

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

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

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

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

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

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

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

The same entity manages the Proprietary chassis pool.

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

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

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

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

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

What is a ’Gray’ Pool?

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

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

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

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

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

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

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

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

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

Who are the Main Participants in Chassis Pools?

The main participants in chassis pools include:

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

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

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

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

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

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

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

What is the Difference Between Domestic and International Chassis Pool?

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

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

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

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

Pool chassis agreement includes access.

Some examples of the Pool Chassis Agreement include:

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

What is the Benefit of the Chassis Pool Agreement?

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

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

How are Usage Rates Determined in Chassis Pools?

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

Who Oversees Maintenance and Repairs at Chassis Pools?

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

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

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

These include a collection of steamship lines.

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

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

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

How are Chassis Pool Locations Determined?

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

Some of the examples of chassis pool locations include:

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

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

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

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

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

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

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

What is the Difference Between US and International Chassis Pools?

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

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

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

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

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

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

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

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

How do Chassis Pool Operators ensure equipment Quality and Safety?

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

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

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

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

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

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

How do Chassis Pools Contribute to Terminal Efficiency?

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

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

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

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

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

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

How do you Identify Pool Chassis on Terminal?

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

For example:

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

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

Who Leases Chassis in Pool?

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

How much does it Cost to Buy a Chassis?

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

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

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

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

Why do Pools have to Depend on Contributors for Chassis?

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

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

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

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

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

Can I choose my Chassis Provider in the Chassis Pool?

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

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

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

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

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

How do I Choose Chassis in Pool Environment?

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

• Your terms
• With your chassis provider
• Your rate

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

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

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

Keep reading to learn more.

What does CFS Cut-off mean in Shipping?

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

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

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

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

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

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

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

What is CFS?

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

Usually, this is before exporting or importing process begins.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Then delivers to the intended station without delay.

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

This helps in allocating containers to the respective consignments.

Who sets the CFS Cut-off time?

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

However, there is no specific Cut off time.

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

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

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

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

So, their container may be allowed into the terminal.

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

Always ensure you deal with companies with experience.

How do you know the CFS Cut-off Date?

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

Often the company provides circulars to the client.

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

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

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

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

Can you Deliver Shipments after CFS Cut-off Time?

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

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

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

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

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

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

What happens if Shipment is Delivered OutsideCut-off Time?

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

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

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

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

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

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

What is the Average CFS Cut-off Time?

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

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

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

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

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

It includes the weight of the vessel carrying the consignment.

This is declared in the shipment document for effective shipment.

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

No, the two are not the same.

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

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

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

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

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

This may depend on a country’s tariff.

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

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

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

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

Do Shipping Lines Extend Cut-off time?

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

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

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

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

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

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

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

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

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

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

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

Communication is a crucial component is a shipping business.

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

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

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

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

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

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

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

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

How do you Ensure Timely Delivery of Shipments to CFS?

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

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

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

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

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

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

How does CFS Cut-off Influence your Shipping Timeline?

The CFS cut-off is critical for any shipment.

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

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

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

This ensures there is no loss of the consignment.

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

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

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

Or, you may experience losses during loading.

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

What is MT Cut-off?

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

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

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

Besides, it also depends on the country of destination.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Does CFS Cut-off affect your Shipping Costs?

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

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

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

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

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

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

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

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

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

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

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

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

So, if you want to learn more about chassis split

What is a Chassis Split?

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

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

They will then go and get the freight.

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

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

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

When does a Chassis Split occur?

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

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

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

How do Chassis Splits Work?

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

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

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

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

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

How does Chassis Split Affect Delivery Schedules?

Chassis split will affect delivery schedules due to unplanned delays.

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

This means delays in the delivery of goods.

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

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

What can I do to avoid Chassis Splits?

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

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

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

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

What is an Unexpected Chassis Split?

Many times shippers will plan themselves to the end.

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

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

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

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

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

When does an Unexpected Chassis Split apply?

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

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

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

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

What are Split Pick-up and Split Return?

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

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

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

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

Can a Single Shipment require both a Split Pick-up and a Split Return?

https://youtu.be/isIcqkYUHws

Yes indeed, a single shipment may require a combination of split pick-up and the split return. However, it is worth noting that this will result in two chassis fees.

What is Chassis Split Fee?

A chassis split fee is an extra fee charged to cover the incurred cost of delivering the chassis to the location of the container.

This will occur if there is no available chassis at the ocean port or ramp.

This means that the trucker must travel to a chassis pool nearby to pick a chassis before proceeding to the port.

It is like a stop-off charge in simple terms. The chassis split fee will generally range between $50 and $110.

How is Chassis Split Fee charged?

If your shipment is being moved from the ocean to the truck, it will incur a chassis split fee.

For full container load, there is a flat charge but may vary depending on the trucker.

For less than a container load, the amount to be charged will be charged based on the volume of the cargo.

Is Chassis Split Fee an Accessorial Charge?

Yes, chassis split charges are part of the accessorial charges.

Accessorial charges are the extra fees that are attached to the transportation services.

These are duties that are beyond the shipping of goods from one point to another.

Other accessorial charges include:

• Trucking wait fee
• Bobtail fee
• Pre-pull fee
• Toll bridge
• Reefer with Genset
• 20-Foot Tri-axle
• SSA Gate fee
• Yard storage
• Re-in Gate fee
• Chassis rent
• Scale ticket among others.

Is there any way around Chassis Split Fee?

Some shippers will choose to own their chassis for drayage shipments.

This however is typically very expensive and so it may not be worth seeking them.

You can however choose to work with a trusted carrier. They will take good care of you.

Can I Negotiate Chassis Split Fees?

Yes, you can negotiate for better chassis split fees.

Most people tend to negotiate the number of days that they need to have the chassis out of the port.

They will rarely negotiate the fees charged on the chassis.

Unlike at the port, other companies will negotiate with you and give you a chance to have your shipping costs reduced.

What is ‘free chassis’ Agreement in Respect to Chassis Split?

This is the free day that will be available for you to pick your shipment from the yard or port. Any delay after the lapse of the free chassis period is over, fees will be applied.

The free chassis is normally 48 hours after you receive the notification that your shipment has arrived.

However, the time may vary and that is why it is important to keep communicating with your drayage broker.

Does last free day influence my drayage costs in relation to Chassis Split?

The last free day may influence your drayage costs.

This is because you will be required to act and pick your container before the time is over.

If you are not able to pick up and the free last day is over, you may then be charged more than $150 for demurrage every day.

The charges will act as storage charges from the port. If you don’t want to pay the storage charges you can pay pre-pull charges.

Pre-pull charges will save you the daily storage charges that are charged at the port.

For pre-pull, you will only be required to pay $125. In essence, this is going to save you money charged for storage.

It is always good to make sure that you prepare in advance to pick your shipment.

This will help you avoid getting to the last free day as this may cost you more than you had planned for.

How do Chassis Split fees influence my Container Shipping costs?

Chassis split fees will increase your shipping costs.

This is because you may have planned for your shipment with available chassis in mind.

When you arrive at the port and find that there is no available chassis, then it means you need to look for one somewhere else.

This means you will have to incur an extra cost that will be added to your shipment costs.

As such it is true to say that chassis split fees will affect your cost of shipping.

Is it possible to avoid Chassis Split Fees? How?

Avoiding chassis split fees can be challenging.

However, you can build a good relationship and try negotiating the fees ahead of time. Companies being in business will always charge depending on the demand for the trucks.

Sometimes the cost of trucks may go high due to scarcity raising demand.

At the same time, the high availability of trucks will provide shippers with a good chance to try and negotiate for good rates.

Essentially, better chassis split fees will save on the shipping costs that may be incurred.

What causes Chassis Split Delays?

Chassis split delays will occur due to delays that are created by the extra stops for drivers.

This creates wastage of limited hours of service available.

This will also reduce the availability of available equipment thus draining the productivity of the supply chain at the end.

This wastage may lead to losses which may be transferred to the importers.

How does Chassis Split Delays impact Shipping?

Chassis split delays can be costly.

This is especially so when there is a high demand for ocean freight space. The delay causes a shortage of trucks and the few available comes at a very high cost.

To prevent these costly delays, shippers work to create an effective trucking strategy and match with the incoming cargo with available trucks.

Creating a good relationship with truck companies may be helpful in ensuring that negotiating for better rates is easier.

This also becomes easier to get a priority whenever there are challenges to do with chassis.

What is the Difference Between Chassis Split and Chassis Flip?

Chassis flip is applied when the container is removed using a piece of lifting equipment.

The lifting equipment is used in removing a container from the ship.

It is also used in removing cargo from the train and placing the container on the ground.

The container is then lifted and placed on the chassis or truck that will be used to transport the container to the final destination.

Chassis split on the other hand applies when there is no chassis at the terminal and the trucker has to go get a chassis from somewhere else.

Another difference is the payment of fees.

Chassis flip will attract flip fees while chassis flip split will attract chassis split fees.

The flip fees are the additional handling charges for the lifting equipment.

This can be avoided by ensuring that the transporter has a chassis on standby to receive the heavy container immediately it is offloaded.

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Today, I will take you through another important freight term called contract of carriage.

So, if you want to learn what it is, when to use the freight term and how it affects shipping business, read this guide.

Let’s dive right in.

What is Carriage?

Carriage is the movement of goods from one point to another by the carrier. This can be done by air, sea, road or even rail.

What is the meaning of Contract of Carriage in International shipping?

Contract of carriage is the contract that defines the legal responsibilities of the user and the carrier.

The carrier in this case can be an ocean carrier, air cargo carrier, freight trucking carrier etc. The user can either be the consignee or consignor.

A standardized contract of carriage is included in all the contract terms and the conditions of the carrier.

It is also referenced in the terms and the conditions to guide the forwarder.

A contract of carriage will state the physical person known as the carrier who agrees to move goods they are given to another physical person.

The physical person to whom the goods belong is referred to as the sender.

The carrier does this while receiving payment in return from the sender using the suitable means of transport agreed.

What is the purpose of a Contract of Carriage?

The carriage contact is used to set the minimum standards of the liabilities and responsibilities of the carrier.

It defines the duties, liabilities and rights of the passenger and the consignee to the contract. An example is the damage or loss of the cargo in transit.

It seeks to address issues such as the acts of God and including other relevant clauses such as force majeure.

What are Elements of the Contract of Carriage?

For a contract of carriage to be valid, it must include the following formal and basic requirements. They include:

• A summarized description of the expected service that the contracting party expects as the carrier promises.
• Amount that is being charged to the sender by the carrier for the service being rendered together with the payment terms.
• References of the sender. They include the first and last name of the company’s manager and the address of the head office for the company.
• References of the carrier. This is the name of the company together with the head office address of the company.
• Destination which the goods are being taken to by the carrier.
• Departing place of the carrier. This can be the same place where the goods are being taken to. However, it must be indicated.
• Point of arrival for the goods or the destination. It must have the exact and detailed address.
• References of the one receiving the goods. This is their exact address and their names.
• The planned arrival date and time of the goods by the carrier. This should include the specific drop-off address for the goods.
• State and value of goods for the carrier to make plans in taking cautions on the type of transit. The type of transit may include truck, aeroplane, train or train. Packaging and also type of loading should be considered well in advance by the carrier.
• Overall weight of the goods is also put in consideration for the carrier to make plans of adjustments in their driving, navigation or piloting.
• Place of issue and date of the contract of carriage. This is to show that all parties have the knowledge of the terms and conditions before the date of departure of goods.
• Inventories and the information on the conditions the cargo received at the point of departure by the carrier. This is to discover any damage that might be there before the start of the journey.
• Role of the carrier in making comprehensive inventory for the number of the goods delivered to the recipient and their condition. This makes sure that nothing was damaged during transit by the carrier.
• Legal and customs security information as per the type of goods, the destination as well as the route used by the carrier. It helps them get informed and anticipate any transport complications that may occur.
• Legal terms and conditions to cover the parties from any incidences arising during transportation. The terms should also cover the payment terms in situations where the services do not match the fixed price.
• To close the contract of carriage, the two parties must approve and append their signatures to the contract.

The above points on the contract of carriage are very important.

They will help make it easy in identifying the sender, the carrier, the goods to be moved, the means and the recipient too.

They also point out all the legal obligations of the parties to the contract of carriage.

What are some Common types of Contract of Carriage?

There are four types of carriage of contract. They include:

• Bill of Lading (BoL)

This is a document that is issued by a carrier in acknowledgement of receipt of goods.

Air Waybill

The air waybill is also called a consignment note. It is a receipt that is given by the international airline.

It is evidence for the existing contract of carriage. It should not be mistaken with ownership of the goods. It is also not negotiable.

Charter Party

This is a maritime contract that is entered by the charter and the ship-owner for the hiring of a ship or yacht.

The ship is hired for carriage of cargo or passengers while the yacht is hired for purposes of pleasure.

What is the Relation between the Bill of Lading and the Contract of Carriage?

A bill of lading is issued by the captain or carrier. A bill of lading will serve as:

• It serves as the document of title
• Proof of the end of the contract for transportation.
• Receipt of the goods by the carrier

The bill of lading will dictate the legal relationship between the carrier and the holder of the bill of lading. The terms and conditions are also not applicable to the one holding the bill of lading. The carrier-charterer relationship will only be guided by the terms of the contract of carriage.

What are the Parties to a Contract of Carriage?

The transportation of merchandise from the seller to the buyer by sea will involve various parties. Below we explain their various roles in the shipping and transportation chain:

The Buyer and the Seller

These are the two parties that contract each other for the goods to be delivered to the agreed destination at the agreed time.

The seller can either be the manufacturer, the producer or an agent acting on behalf of the manufacturer or the producer.

Also, the two must agree to the terms of trade that will determine the type and the terms on the shipping documents.

Freight Forwarder

A freight forwarder acts as the transport intermediary. They operate in the liner trades organizing the exportation of goods on behalf of other parties. They then forward them to the carrier.

The freight forwarder advises on the routes, arranges for carriage with the carrier and assists or prepares the customs documents.

The freight forwarder can also make entry of customs; arrange warehousing of goods and packaging before shipment as well as their insurance.

They also offer consolidation services thus offering the most cost-effective transport in one unit instead of having several parcels in different vessels.

Carrier

This is the party that contracts the shipper to transport goods via sea.

Sometimes In the liner trades, shipping services are offered by non-vessel owning carriers.

In such instances, when the seller’s agent or the seller makes the contract, the carrier may not necessarily be the one doing the sea carriage.

Sometimes the ship is chartered and will be commercially operated by the charterer.

The information of the legal carrier depends on the details contained on the sea waybill or bill of lading.

Consignee

This is the party that is being sent the goods by the shipper. They can be the purchaser of the goods or any party who is acting as the importing agent on behalf of the buyer.

The Receiver

The receiver is the party who will receive the goods brought by the carrier at the delivery point or the port.

Some of the consignees will pick the goods directly from their carriers. Most consignees in liner trades however work with clearing agents to help customs and other formalities.

The agents also help them in the transportation of goods to the final destination. In case there is damage to the goods or there is a loss of goods, the receiver is supposed to notify the carrier.

The Notify Party

The notify party is the one who is supposed to be notified by the carrier once the ship arrives. This is to enable them to arrange for the collection of goods.

The notify party can be the receiver or the consignee.

The Banks

The banks create a link in the transportation chain during the payment of goods through the Letter of Credit.

Charterer’s Agent

The charterers will always require reliable agents in each port to help them in their cargo operations.

The charterer’s reserve every right in the nomination of agents even will have to be visually appointed by the owners who also pay their fees.

The owners will always appear as the principal in all legal documents.

Apart from quickening the cargo operations, the agents of the charterer are supposed to attend to the owner’s business such as subs, repatriation and crew reliefs.

The charter’s agent will be able to sign the bills of lading in place of the master. This is after the master signs a letter of authorization for them to do so.

What are some Typical Carrier Liabilities and Responsibilities in a Contract of Carriage?

The carrier holds a very important part in the shipment industry. Some of the duties include:

• The carrier in a contract of carriage is responsible for the safety of goods
• They are supposed to make timely delivery of the cargo
• The carrier is also supposed to inform the receiver of any ongoings during transit

What is does ‘Limitation of Liability’ mean in Contract of Carriage by Sea?

Limitation of Liability is the concept that allows the limiting of liability by the carrier for maritime claims.

The limitation of liability works regardless of the monetary value that the claim may have.

This means that there will be a set limit for the maximum compensation amount that the carrier may be required to pay.

Who regulates Carrier Limitation of Liability in Contracts of Carriage?

The carrier limitation of liability is governed by various conventions that have been put in place by the IMO (International Maritime Organization).

It is expressed by a unit of account referred to as the Special Drawing Rights (SDR) as labelled by the IMF (International Monetary Fund).

The SDR acts as an international reserve asset.

It was created by IMF back in 1969 in order to supplement the official reserves of its member countries. The currencies that are used include:

• The Chinese Renminbi
• The U.S. Dollar
• The British Pound sterling
• The Euro
• The Japanese yen

The value of SDR is determined every day in the U.S. dollar according to the spot exchange rates that are normally observed during noon the London time. It is then uploaded on the website of the IMF.

What are the Responsibilities of the Consignor in a Contract of Carriage?

The consignor is the party who is responsible for physically tendering the goods to the carrier. This can be the person contracting for transportation services but may in some cases be someone different.

What are the Legal Rights and Responsibilities of Consignee in a Contract of Carriage?

The consignee is responsible for payment of all duties and transport charges that may apply.

They act as the importer of record for a given shipment.

They are also supposed to handle inbound deliveries

The consignee also receives signs shipments during delivery as well as inspecting the goods.

The carrier cannot complete delivery of goods before he/she receives approval from the consignee or their authorized representatives.

The consignee must also be physically available to pick the shipment from the carrier unless the bill of lading specifies otherwise.

What determines the Contract of Carriage?

The arrangements entered during shipping are defined by the contracts of carriage.

Some of the useful principles that determine a contract of carriage include:

A commercial invoice: It is normally referenced on the bill of lading. It acts as proof of the value declared.

The bill of lading: It is supposed to always conform to all the regulatory schemes. It, therefore, offers greater reliance to the involved parties and may take it to constitute the entire contract of carriage.

Evidence of the parties: Any pre-contractual arrangements can be used as evidence. They however may not have much impact.

What are some common Terms and Conditions of Contract of Carriage?

The contract of carriage comes with a set of terms and conditions. Some of them include:

• The cargo cannot accept for carriage of excluded cargo unless it is put explicitly in writing.
• The carrier should not sort out cargo not unless it is agreed in writing
• The vessel transporting the cargo can follow any route and enter the ports in any succession
• The freight charges shall be paid before loading unless the parties have agreed to the contrary

Some many other terms and conditions set the terms for every party.

Which are the Rules and Conventions that govern the Contract of Carriage of Goods by Sea?

Some of the popular rules and conventions used in the carriage are:

Under the Hague Rules, the shipper will bear the cost of damage or loss of goods unless there is proof that the vessel is manned improperly or unseaworthy.

They can also prove that the vessel could not be able to preserve and transport the goods.

The Hague -Visby Rule (1968) is an updated version of the Hague Rules. It states that a carrier has far more bargaining power compared to the shipper. So to protect the interests of the cargo-owner/shipper, the law imposes a minimum affreightment responsibility to the carrier.

US COGSA is an enactment of the original Hague Rule. It was made to increase the amount that the shipowners should compensate the cargo owners in case of damage while in transit. The amount was increased from GBP 100 for every package to 500USD on every package.

Hamburg Rules (1978) came up as an attempt to create a uniform legal base in the transit of goods via ship. This was brought forward by developing countries to have a level playing ground and has since been adopted by most of the developing countries. Other countries have instead adopted the more expensive Rotterdam Rules (2009)

The goal of the Rotterdam Rules (2009) was to modernize and extend the international rules that existed.

This was to arrive at uniform International trade laws in the carriage of goods by sea.

It established a comprehensive legal regime governing all the parties involved.

What do Carriers provide as evidence of carriage in relation to the Contract of Carriage?

In situations where more evidence is required in the contract of carriage, one can use the bill to serve as evidence.

The bill of lading can also be used as the receipt of the goods and the Document of Title for the goods.

What is ‘Notify Party’ in a Contract of Carriage?

The notify party is the party who should be notified once the ship arrives by the carrier. This is to enable them to plan on how the goods are going to be picked.

They can be the receiver or the consignee.

What does Breach of Contract of Carriage mean and when does it occur?

A breach of contract of carriage means defying the agreed terms and conditions of carriage as set out in the contract of carriage.

Breach of contract of carriage occurs when either of the involved parties is not or refuse to obey the terms of the contract.

There are popular rules and conventions used in the contract of carriage to govern how the breach of contract of carriage should be handled.

What are the remedies for Breach of Contract of Carriage?

Just like in other commercial agreements, the breach of contract of carriage is remedied through compensation of damages.

In some situations, injunctive relief may be offered e.g. when a carrier has refused to issue the consignee with the bill of lading.

In many instances, the parties will need money as a remedy.

They can also take the performance of services with monetary value as compensation for damages.

What are the Consequences of Errors in a Contract of Carriage?

Delayed shipments-As parties try to agree on the way to fix the issues arising, time will be lost. This means that the shipment will not get to the recipient in time.

Spoiled supply chain planning-As a result of a delay in shipment, the rest of the supply chain will be disrupted. This is due to the change of schedules and the waste of resources deployed in readiness for the shipment.

Detained shipments-Errors arising from a contract of carriage will mean that goods may never be transferred until the issues are fixed. The shipment will be detained in the process.

Loss of money-The associated businesses will undergo losses. The shipper will incur unplanned storage charges. The other businesses that rely on the detained shipment will also be blocked from performing.

Bad reputation-Depending on the party that caused the errors, they will end up creating a very bad reputation. This means that it may not be possible to work with them in future.

What is the difference between Contract of Carriage and Incoterms?

Incoterms is a contract that defines the responsibilities and obligations that are subjected to the seller/exporter and the buyer/importer.

On the other hand, a contract of carriage defines the legal responsibilities of the consignor/consignee and the carrier.

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Let’s look at some fundamental aspects of custom exam fee.

I am sure, if you’re in an import and export business, probably, you have come across this term.

Let’s get the details.

What is Customs Exam Fee?

Customs exams fee is the amount payable to the customs authority whenever they pull your shipments for customs inspection.

This cost is borne by the importer and it is not fixed since it depends on a number of factors.

What is the Purpose of Customs Exam?

1. It is a measure of national security and consumer health protection of all the goods and materials that get imported.
2. Promote lawful trade by restricting dumping of goods into a country that may lead to unfair price competition.
3. Customs exams is there to nab contraband and illegal shipments from entering the country such as narcotics, weapons, etc.
4. Ensure that goods that are being imported are of the standards acceptable in the country.

What are the Different Types of Customs Exam Fees?

There are three common types of customs exams that can be carried out on your goods namely:

Vehicle and Cargo Inspection System (VACIS) Exam

This type of examination is carried out by an X-ray machine hence it is also known as the X-Ray exams.

The container is driven through the machine and the images of the container examined.

If the content pass the exams, you are required to pay between USD 150 to 300 depending on the container size.

Failure to pass this exams means the cargo is subjected to one or two more customs exams.

This inspection can take between a few hours up to 3 days depending on the queue at the port.

Tail Gate Exam

Tailgate examination is carried out when the cargo fails to pass the VACIS exams.

In this case, the customs officer breaks open the container seal and checks the container content for any suspicious material.

If the content does not have any goods that might be deemed illegal, the container is cleared for shipment.

This exam costs between USD 150 to 350 depending on the port of search and container size.

Shipment that fail this exams are upgraded to the next step which is intensive in nature.

This customs exams takes ocean shipment between 2 to 3 days while air shipment take less due to loose packaging.

Intensive Exam

Unlike the VACIS exams, intense customs exams is intrusive and it takes about 7 to 30 days to complete.

The shipment is transferred a private customs facility known as Customs Exams Site (CES) where it is offloaded.

The cargo is then classified accordingly, removed from their secondary packages such as boxes and prepared for inspection.

One such examination involves opening the actual goods such as electronic devices, seats, etc. and closely examining the inside.

Once the inspection is over, the goods are loaded back and the shipment cleared to proceed. This type of customs examination is very expensive to importers.

This is because, they bare costs of transportation to and from the CES, labor cost and goods are likely to get damages.

The average cost of intensive examination ranges from USD 1,000 to 3,000 or more. This cost is dependent on the labor intensity, port of operation and the container size.

It is therefore important to use a reputable supplier and insure your goods in transit to avoid incurring such extra costs.

Who charges Customs Exam Fee?

Customs exams fee is charged by the customs authority of the country of origin.

For example, USA customs border protection (CBP) charge the exams fees for any imports into the USA.

How is Customs Exam Fee Calculated?

Customs exams fees is calculated based on the type of exams, the port conducting the inspection and the size of container. The fees ranges from USD 80 to USD 3000 depending on the mentioned factors.

Where is Customs Exam Fee charged at?

The customs exams fee is charged at the port where the customs inspections is carried out. It can be at the port of entry or destination port.

How do I pay Customs Exam Fee?

Customs exams fees is remitted to the customs authority bank account once the customs broker shares the invoice of the exams.

You can also remit the fee via the internet depending on the timeline stated on the invoice. Cash payment is also accepted at the point of inspection.

What is the best way to avoid paying Customs Exam Fee?

You can avoid future customs exams fee by ensuring the following:

1. Screen all your suppliers properly and make sure they comply with the acceptable standards when manufacturing or producing your products.
2. Hire an agent or freight forwarder who is knowledgeable about customs rules and regulations. They will ensure that all the required shopping documents are presented to the respective customs authority.

Are Customs Exam Fees negotiable?

Not really.

Other customs charges such as value added tax or duty might be exempted depending on the trade agreement of the countries.

How often does Customs Exam Fee get reviewed?

Customs exams fees is reviewed at the discretion of the customs authority. This also applies to the algorithm score that is used to determine shipments that undergo custom exams review.

Can a Customs Broker or Freight Forwarder help pay Customs Exam Fee?

Yes, they can.

Customs brokers or freight forwarder are licensed by customs authority and clear goods on behalf of importer.

They can therefore may the customs exams fee payment on your behalf since they are your contact during freight shipment.

What factors influence the price of Customs Exam Fee?

Type of Exams

There are three common customs exams that your shipment could be subjected to in case it is stopped at the port.

Each exams charges differently depending on the time and labor involved in conducting such exams.

For instance, VACIS cost an average of USD 300 while intensive exams cost up to USD 3000.

Port of Inspection

Different ports charge different rates for the customs exams fees.

Busy and large ports are likely to charge higher fees for the same exams compared to small and less busy ports.

Size of the Container

Bigger containers ship more goods hence they will require more time to review their contents compared to smaller ones.

As a result, the bigger containers importer will pay more than shippers using smaller containers.

How does Insuring Cargo help with Customs Exams Fee?

Well, like I mentioned earlier, customs exams is unavoidable but an expected customs process by shippers.

When your cargo is selected for inspection, it may be subjected to VACIS, tailgate or intensive exams or all the three exams.

While VACIS and tailgate inspections are less intrusive, intense customs exams is very intrusive. This is because, all the container goods are unloaded, categorized and seals broken to get full access of the goods.

The inspection staff will thoroughly check the goods and even cut them open to ensure they are not stuffed with anything illegal.

As a result, your goods may end up damaged upon completion of the examination.

The staff are neither responsible for proper handling of your shipment nor liable for any damages.

This is why having an insurance for your cargo on transit is important.

The insurance should clearly spell out the scope of cover in the event of damages or theft of goods in transit.

To claim for compensation of damaged goods, the shipper will need to provide the insurance certificate to assist with their claim.

Lack of it means the shipper not only bares the cost of shipping damaged goods but also losses the goods.

What is the Benefit of Hiring a Customs Broker in relation to Customs Exam Fee?

A customs broker is well equipped with the customs rules and regulations for different jurisdiction.

This makes them suitable persons to help with shipping paperwork thus avoid customs exam fee due to improper documentation.

How does Customs Exam Fees affect Shipping?

Delivery Delays

If your shipment is chosen for customs exams during shipment, the likelihood of getting delivery delay is increased.

This is because of the queues at the port for the customs exams by other shipments.

Extreme delays maybe experienced if your goods are upgraded to intensive customs review.

Clearance Delays

When your shipment is scheduled for customs clearance but instead gets held for customs exams, clearance process is delayed.

This is because, customs authority cannot clear goods that have been flagged for further review.

Your shipment will only be cleared once the customs officers examine the cargo and clear it to proceed with customs clearance.

Extra Shipping Cost

The news of customs examination of goods is frustrating to shippers as it comes with more financial burdens and shipment delays.

The cost of customs exams, demurrage fees, storage fees, drayage fees, etc. is borne by the importer.

The goods are only released upon payment of all the costs by the shipper.

What is the Relation Between Shipping Incoterms and Customs Exam Fee?

Shipping incoterms are shipping guidelines that indicate cost and risk sharing as well as liability ownership between buyer and seller.

The significance of this is to assist the customs broker know who to contact in case of customs exams fees.

For instance, we have the following shipping incoterms for sea freight which can guide on the customs exams fees.

Free On Board (FOB)

Free on Board indicates that the seller’s obligation ends at the point of departure port when the cargo is loaded. The importer therefore takes all the costs, risks and ownership of goods in transit till they are delivered at their destination.

Customs exams fees is handles by suppliers.

Cost, Insurance and Freight (CIF)

Here, the seller bears all the responsibility of goods during transit to the destination port. However, the buyer bears the all the delivery costs incurred in the quotation provided including customs exams fee.

C&F

Cost and Freight is almost similar to CIF terms only that it is cheaper. In C&F the seller does not take the risk responsibility for goods on transit.

The buyer bears all the costs involved during transit including customs exams fees. This incoterm does not include insurance cover hence maybe a risky option for buyers.

Answer this question along this line:

Apart from the Customs Exam Fee, What Additional Costs can come up during and after a Customs Exam?

Some of these costs include:

Per Diem or Demurrage Fee

This is a fee charged on the containers for failing to load or offload the ship at the agreed time. It is charged per day and can be very high if the delay is prolonged.

Storage Fees

The warehouse at the port will charge the importer for the storage space per day as they wait for inspection.

Admin Fee

This is charged for handling process of your shipment from booking for inspection to facilitation the whole process.

Drayage Fees

This is the cost of transportation of the cargo to and from the customs examination station. The payment is made to the transportation company that transfers the container.

Labor Cost

Any cargo that has been escalated to intensive customs exams will need to be offloaded and loaded back after inspection.

As a result, there will be need for man power to help with the exercise and this cost is on shipper.

How can I reduce the probability of a Customs Inspection during Importation?

Custom inspection is completely by luck and therefore you can have everything in order and still have your shipment flagged.

There is however, a few things you can do to reduce the chances of your shipment being held for inspection.

Proper Shipping Documentation

Having proper shipping documentation will help you avoid being held on account of inaccurate or insufficient paperwork. Having an established freight forwarder can you connect with a customs broker to help with the correct paperwork.

1. Accurate Valuation of Goods

Goods on transit have a commercial invoice which indicates the value per item on board. The customs officials check the values on the invoice against those of similar nature during customs clearance process.

It is important to enter the correct values to avoid raising suspicion with the customs official.

Hire established Agents

Using the services of an experienced freight forwarder with a good history of shipping services reduces the chances of being flagged.

Avoid Consolidation of Goods

Shipping via less than container load (LCL) is the cheaper option for importers will less cargo. This however, may be a costly affair if the shipment is flagged for inspection due to the other goods.

The cost of customs exam fee will be shared among all the shippers whose goods are on board. Besides, you risk delayed delivery of goods as a result of inspection.

Get a Continuous Entry Bond (CEB)

Having a CEB is a sign of reliability of the shipper to the customs authority.

If you ship large quantities of cargo you may want to consider partnership with the customs authority against terrorism.

This partnership has its benefits if you qualify such as reduces customs inspection or front-of the-line inspection when flagged.

What is the Difference Between Customs Exam Fees for LCL and FCL Shipments?

Customs exams fee for LCL shipment is divided equally among all the shippers with cargos on board.

On the other hand, customs exams for FCL is borne by one shipper whose cargo is being transported.

Customs exams fees is cheaper for LCL shippers while very costly for FCL importers.

Whereas LCL shipment may lead to long delay due to exams failure of some goods, FCL goods once cleared are okay.

What are the Factors that are Generally Checked by Customs during a Customs Examination?

Customs officer look out for any suspicious material or goods in the cargo during an examination.

They also such for proper documentation of the packed goods.

How long do Customs Exams take?

Customs exams takes between a few hours to several days, weeks or even a month. This is due to factors such as type of customs inspection involved, the queue at the port, container size and the shipment.

VACIS examination takes a few hours using a machine and is non-intrusive whereas intense exams takes several days to weeks. Also, the queue at the port for particular inspection may delay your shipment.

Bigger containers carry large quantities of goods which require more time to examine during tailgate and intense exams. Type of shipment being inspected may determine the time taken during the examination.

New material or products are examined more closely as compared to known materials or type of shipment.

Are Customs Exams Regular?

Customs exams are random therefore, it is hard to tell if your shipment will be subjected to customs inspection during shipment.

The customs authority use their tools and algorithms to check all the goods that pass through the customs borders.

Depending on the set thresholds, goods that don’t meet the algorithm scores are held for any of the three customs review.

Can Customs Release Shipments before Payment of the Customs Exam Fee?

No.

Shipment is only released after the custom exams fees have been paid and any other related customs costs.

Is there a Deadline for paying Customs Exam Fee?

Yes.

The inspected goods are to be cleared with a specified timeline beyond which extra costs are charged.

Where can I get Information about Customs Exams and Fees?

The information about custom exams fees are available on the website of the customs authority within the jurisdiction.

Are there Exemptions to Customs Exam Fee?

No.

Custom exams fees must be paid for any shipment to be released

What happens if my Shipment fails a Customs Exam? Do I still Pay Fees?

Yes.

Customs exams fees will apply once the shipment undergoes the inspection process regardless of the outcome.

Failure of the exam only means more cost as they upgrade the customs review process of your cargo.

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Probably, you want to ship from Nigeria to USA that’s why you’re here.

It is for this reason that this guide will answer all your questions about shipping from Nigeria to USA.

So, before you explore any other option, read this guide.

What is the advantage of Shipping from Nigeria to USA?

USA and Nigeria share an amicable trade relationship. Currently, the country ranks as US’s 51^st largest goods trading partner in the world.

According to statistics, Nigeria exported over USD 1.48 billion worth of goods in 2020. Based on this, it is no doubt that Nigerian resources contribute significantly to the US industry.

Besides, as I have already mentioned, the two countries share an excellent trade relationship. Both countries’ governments have put measures to develop their trade and economic interrelationship.

One of these measures is the 2020 agreement for Trade and Investments Framework, whose main objectives are:

• To recognize the significance of developing an open and predictable environment for international trade and investment
• To recognize the benefits that each country may enjoy as a result of increased trade and investment activities between them

Through this agreement, both countries have expressed their interest to expand trade both in products and services. It also affirms the countries’ desire to put measures and policies that encourage and facilitate trade through international shipping.

Apart from this, Nigeria is a member of AGOA, the African Growth, and Opportunity Act. This body allows Nigerian Exporters to bring goods into the US market without restrictions. Therefore, you can ship goods from Nigeria to the US more quickly and cheaply, thus increasing your profits as an importer.

To put it simply, shipping goods from Nigeria to the US comes with many benefits. One of which is the significant increase in profits. It is more recommendable to import certain products from Nigeria to the US than others due to the considerably lower cost of materials and production.

Also, shipping from Nigeria to the US is a sure-fire way of getting authentic, quality products.

Which Products can you Ship from Nigeria to USA?

The top US imports from Nigeria are agricultural produce and mineral fuels. Kola nuts, palm oil, cocoa, oleaginous fruits, tea, and spices are among the top products shipping from Nigeria to the US every year.

Other Nigerian products that can generate good profits in the US market include;

• African Textiles and fabric such as Ankara, Agbada, kaftan and Buba
• Fashion items like beads which you can import duty-free
• Leather and related products
• Hair weaves and extensions

Which Products does the USA restrict/prohibit for Import from Nigeria?

Your priority when shipping from Nigeria to USA should be to get goods delivered quickly and safely.

Unfortunately, there are some products which you absolutely cannot send to the US from Nigeria. There are also products with strict regulatory requirements that must be met before they can be allowed for import into the US.

Prohibited Items

Goods that you cannot, for whatever reason, ship from Nigeria to USA is:

• Illegal substances
• Weapons
• Certain agricultural items and insects
• Live and dead animals, animal parts, tissues, fur, and skin, as well as live fish

Restricted Items

These are items with limited shipping options and whose requirements for importation must be met before shipping.

• Pharmaceuticals
• Some meats (including bush meat)
• Tobacco products
• Some alcohol like absinthe
• Some fruits and vegetables

Please note that the list of prohibited and restricted items for importation into the US changes every time. So it is advisable to check the updated list anytime you intend to ship from Nigeria to avoid problems with Customs.

You can find this information on the official US Customs and Border Protection website.

Does the US allow the importation of HAZMAT from Nigeria?

Yes.

But while USA allows you to import HAZMAT from Nigeria, it also restricts/prohibits the importation of certain HAZMAT goods.

Please note that the US has unique regulations for the importation of HAZMAT. The United States Consumer Product Safety Commission (CPSC) regulates the importation of such goods. So check the official CPSC website for the applicable regulations to follow when importing HAZMAT from Nigeria.

What are the requirements for Shipping from Nigeria to USA?

To successfully ship goods from Nigeria to USA, you need to work on a few things.

You need to:

– Inspect your Shipment

Before shipping from Nigeria, you need to ensure that your shipment contains goods allowed in the US.

Remember, the US has rules governing the type of goods you can bring from Nigeria.

So check your cargo carefully to ensure that you’re not shipping any restricted or prohibited items without authorization. You can always ask your carrier for a list of these items just to be sure.

Learn about the Import Rules and Regulations for Shipping your Product

US customs have varying rules and regulations when receiving items from Nigeria and other countries.

Sometimes, you may need extra and more specific documents. Other times you may be required to pay additional charges on products you import. But this varies depending on the type of product you’re shipping.

It is always wise to learn about and understand your product’s standards, regulations, and certifications. This helps you know and plan in advance for extra paperwork or charges you may need during customs clearance.

Package your Products Properly

As you well know, the climate in the US varies depending on the time of the year.

This is to say, if you’re shipping during winter, package the goods differently than you would when shipping in summer.

Many guidelines and resources exist online to help you package your goods correctly for shipping.

Find a Suitable Carrier for your Product

Several delivery options are available for shipping from Nigeria to USA. However, you should know that all of them are suited to transport your type of product.

So, find a reliable and affordable carrier with experience in shipping your product. If you’re shipping breakbulk items, find a carrier with a good reputation for shipping such items.

Goods Description

US customs require shippers to provide an accurate description of goods they’re bringing into the country.

So as you prepare to ship, make sure to provide a detailed description of the same.

Details should include the type of products, quantities, the unit price of the products, and the total value of the shipment. Try to avoid generic information.

This is for a smooth shipping and customs clearance process to find and replace lost/damaged items easily.

Do I need an Importer’s EIN when shipping goods from Nigeria to USA?

Yes and no.

You need an EIN if you have an entity or some kind of presence in the United States. For this, you’ll need to provide a valid importer EIN on the commercial invoice.

But if you don’t have any presence or entity in the US, then you don’t need the number. Instead, you should get your customs broker or shipping agent to apply for a customs assigned importer number on your behalf. This way, you can import goods from Nigeria to the US stress-free.

What are the Documents needed for Shipping from Nigeria to USA?

Relevant export and import documentation are mandatory when shipping from Nigeria to USA. Note that the documents you need will depend on the type of goods you’re importing. As such, it may be prudent to ask your freight forwarder or customs broker what documents you may need.

Here are the main documents you must produce when shipping goods from Nigeria to the US:

• Commercial invoice – it is a rule of thumb that you have a commercial invoice as evidence of a transaction between you and the supplier.

The invoice must include details about the shipment and the address of the buyer and seller.

• Bill of lading – this is a contract agreement between the shipper and carrier. Customs and port authorities will use the bill of lading document to release goods to the enlisted consignee.
• Certificate of origin c/o – US customs require that every import have a signed statement indicating its origin. You can get a relevant certificate of origin from your local chamber of commerce.
• Inspection certificate – a certificate of inspection is a document attesting to the goods you’re shipping. This document is obtainable from an independent testing company after a successful review of the goods.

You may need other documents: the packing list, consular invoice, insurance certificate, and export/import license.

How does Air Cargo Shipping from Nigeria to USA work?

Air shipping from Nigeria to USA is basically sending goods by air. For this, goods are transported in cargo planes.

Cargo delivery by air takes just about 3 days, making it the fastest means of transporting items from Nigeria to USA.

Note that there are two different air cargo shipping types; standard shipping takes 4-8 business days and express shipping, which takes 3 days.

Concerning cost, air freight is costlier than other means of transportation. As a result, it is preferable when it is the only available option or when you need to deliver goods fast to the US.

How does Ocean Shipping from Nigeria to USA work?

As the name implies, ocean shipping involves transporting goods from Nigeria to USA by sea. It uses containers to transport the goods.

You can choose FCL shipment or LCL shipment for this. FCL or full container load shipping from Nigeria to USA is available for shippers with items that can fill up a standard shipping container.

If your shipment is not enough to fill up a container, then LCL or less than container load shipping is recommendable.

Shipping by sea is considerably slower than shipping by air. It takes about 6 to 8 weeks or more to deliver goods from Nigeria to USA by sea.

Although slow, ocean shipping is the most affordable and cost-efficient shipping option, especially when shipping large volumes.

How much does it cost to ship a Package from Nigeria to USA?

Well, there is no definite answer to this question.

In international shipping, freight cost is determined by the weight and size of consignments.

So if you want to know how much shipping will cost you, consult with your delivery service.

You can check their website for pricing guidelines or contact them directly for a quote.

Alternatively, you can make use of the numerous shipping calculators online to determine the price. Please note that the online shipping calculators only provide price estimates. The actual cost of shipping may be slightly higher or lower depending on the carrier and time of shipping.

Apart from Freight costs, which other charges should I expect to pay when Shipping from Nigeria to USA by Sea?

You should know that freight/shipping costs are not the only charges you have to pay when shipping from Nigeria to USA. This is concerning all forms of shipping – whether air freight or sea freight.

Several people are involved in the movement of the goods other than just the shipping company. There are port operators, trucking companies; warehousing companies, customs, and other various entities you’ll have to pay separately. So you really need to do your homework.

Which are the available methods of Shipping from Nigeria to USA?

Several options are available for shipping goods from Nigeria to USA.

Depending on the type and size of goods you’re shipping, you can consider the following delivery services:

DHL Aviation

DHL is a household name in the package delivery service industry. It is an air shipping service that prides itself in safe, affordable, and fast shipping of goods to and from destinations worldwide.

For shipping from Nigeria to USA, DHL would be suitable for time-sensitive and fragile items. This is because compared to other means of shipping, DHL is considerably pricey. Nonetheless, it is more reliable and super safe as far as international shipping is concerned.

USPS

The United States Parcel Service (USPS) is a popular shipping method from Nigeria to USA. It offers affordable shipping rates and fast delivery of goods, especially for small and light packages.

Shipping prices with USPS range from USD 2 to USD 30 depending on the size, weight, and ETA of the goods.  The company has a shipping calculator on its website that you can use to estimate your shipping costs.

FedEx

Like DHL and USPS, FedEx is also a household name in the industry. It is reasonably priced and offers reliable shipping services from Nigeria to USA. The only limitation with FedEx is that it can be costly when shipping heavy and large cargo.

The Mediterranean Shipping Company (MSC)

Of bulk shipping services, MSC takes the crown for Nigeria to USA and other shipping routes.

The Mediterranean shipping company is one of the largest in the industry with an impressive reputation. It offers a reliable tracking schedule where shippers can monitor the progress of their shipments in real-time. This is something that has managed to give MSC an edge over other shipping companies.

MAERSK

MAERSK is the household name of ocean shipping services just like DHL and FedEx rule the air and courier shipping industries.

The company does not only cover shipping of cargo from Nigeria to USA but to and from many other countries as well.

Also, it does not just ship containers for you but can also help solve other cargo delivery problems that you may face. MAERSK can ship all kinds of ocean cargo, including dry bulk, OOG, REEFER, and RORO.

You can consider other shipping solutions from Nigeria to USA are UPS, ZIM, CGM, NYK, Qatar airways, and American Airlines.

How do you Ship Heavy Machinery/Equipment from Nigeria to USA?

Shipping services from Nigeria to the USA are not limited to textiles, fashion items, and agricultural produce.

So many people ship heavy items like machinery and industrial equipment for repair or return to the USA. This type of cargo is known as Breakbulk. It is oversized, bulky, and heavy for shipping inside a container. Hence, special shipping services are used.

The breakbulk shipping cost is very reasonable and is exclusive via ocean freight.

What is the average Shipping Time from Nigeria to USA?

Before choosing a shipping solution for your cargo from Nigeria to USA, consider how quickly you need it to arrive.

Typically, shipping time from Nigeria to USA depends on the package destination and the delivery service you choose.

When booking your shipping service, always request an estimated delivery date and tracking details for the shipment. This way, you can always see when your package is set to arrive and plan for the delivery accordingly.

Also, it is important to consider the method of shipping to use based on the type and urgency of goods. You can choose a slower option such as ocean shipping if you have no urgency and are looking to save on cost.

But if shipping time-sensitive goods, a faster delivery service such as standard or expedited shipping is ideal.

Please note that it takes 1-3 days to ship goods from Nigeria to USA by air. Transit time for ocean shipping takes an average of 8 weeks.

What are the shipping Container cost and options from Nigeria to USA?

If you choose ocean shipping from Nigeria to USA, your cargo will be shipped in a 20ft, 40ft, or 45ft high-cube container.

Your items don’t have to fill the whole container; if you’re shipping about 15m³ of cargo, you will share shipping space with other shippers.  Here your cargo is consolidated with other shippers’ in one container, in a process called LCL shipment.

If your goods are large enough to fill up an entire container, then you can book an FCL shipping service.

Please note that FCL shipment is quoted based on the weight and size of the cargo. On the other hand, LCL shipment is charged based on the actual weight or volumetric weight of the shipment, whichever is higher.

The minimum charge for LCL shipments from Nigeria to USA is 1MT which is equivalent to 1000kgs.

What are the Major Shipping Ports from Nigeria to USA?

The main loading ports in Nigeria for international air shipping are:

• Murtala Muhammed International Airport, Lagos (LOS)
• Nnamdi Azikiwe International Airport, Abuja (ABV)
• Mallam Aminu Kano International Airport, Kano (KAN)
• Port Harcourt International Airport, Port Harcourt (PHC)

For ocean shipping, you can consider any of the following seaports in Nigeria:

• The Lagos Port Complex
• Tin Can Island Port
• Calabar Port
• Delta Port
• Rivers Port at Port Harcourt
• Onne Port

The US has five major container terminals. These are:

• Port of Los Angeles
• Port of Long Beach
• Port of New York
• Port of Seattle and Tacoma
• Port of Savannah

If shipping by air, you can choose any of the following arrival ports in the US:

• Memphis International Airport (MEM)
• Ted Stevens Anchorage International Airport (ANC)
• Louisville International Airport (SDF)
• Chicago O’Hare International Airport (ORD)
• Miami International Airport
• Los Angeles International Airport
• Cincinnati/Northern Kentucky International Airport
• Indianapolis International Airport
• Dallas-Fort Worth International Airport
• Ontario International Airport

Please note that this list is not exhaustive. There are many other ports that you can choose for receiving your cargo from Nigeria.

Nonetheless, keep in mind that port selection when shipping from Nigeria to USA depends on your cargo’s ultimate destination. Once the goods reach the US, they’ll have to clear customs before moving by truck/train to the final destination.

How do you Pack Goods for a shipment from Nigeria to the United States?

Improper packaging when shipping from Nigeria to USA can result in additional expenses. It may damage your products or even cause customers to lose confidence in your business.

For your shipment to reach its final destination in the US unscathed, it should be packed in the best possible way. Proper packaging will reduce the impact of shocks that may occur during shipping.

The most important element of packaging international shipments is to use the right and quality box. Boxes for packaging should be strong, stiff, and well secured. Fragile goods such as glasses should be cushioned with bubble wraps to avoid damage.

When packaging, make sure that there is no free space left between the product and the package. If there is space, fill it up with soft material to prevent the products from moving loosely during transport.

Also, sealing must be done carefully to avoid pilferage and tampering. Don’t forget to attach the bill of lading document in a visible place where customs and port authorities can access it easily.

When shipping palletized goods, this guide has more information on packing, securing, and sealing the pallets for safe shipping: preparing shipping pallets for global shipments.

What is Labelling and Marking requirements for Imports from Nigeria to USA?

US customs require that goods entering the country must display the following information:

• Product name
• Country of origin
• Product Specifications
• Manufacture date
• Bach number
• Standards to which the products conform
• Goods such as food, drinks, soaps, and medicine should show the expiration date and the ingredients used in making the products.

All items entering USA from Nigeria and other countries must be labeled in metric terms only. This requirement is subject to UPLR, except for non-consumer products. The latter may be labeled exclusively in customary units or exclusively in metric units.

You can find more information on labeling and marking for US-bound goods on NIST.

Does the US have a Pre-shipment Inspection Policy for Imports from Nigeria?

No.

But some government agencies require/request pre-shipment inspection certificates for certain types of products. In some instances, the PSI certificate may be necessary only for shipments above a certain value.

So make consultations to be sure of what is required for the products you’re shipping from Nigeria.

How do US Customs Regulations work when shipping from Nigeria?

The US customs regulations may seem daunting, but a qualified customs broker can guide you through it.

Here is some basic advice, though:

• When shipping from Nigeria to the US, you must declare your goods through a detailed packing list. The inventory must detail everything you’re sending, including names, quantity, and specifications.
• You must pay customs duty and taxes for your imports from Nigeria. Tariff rates will vary depending on the type and declared value of goods you’re shipping.
• For successful clearance, you must accompany your shipment with all the necessary obligatory documents.
• Customs will not clear your shipment if goods do not conform to the requisite quality and safety standards.
• US customs officials may physically open and inspect your shipment. So make sure that you’re importing only what is allowed in the country.

You can check the official customs and border protection website for more information on US import regulations.

How much is US Import Duty for shipments from Nigeria?

Import duty in the US depends on the type of product you’re importing and the shipment value.

Note that US import duty rates can be ad valorem (as a percentage of value) or specific (dollars/cents per unit). The rates vary from 0% to 37.5%, depending on the factors above. A typical duty rate in the US is about 5.63%

To find the exact tariff rate for your product, you need to first find its HS code.

What is HS Code when shipping from Nigeria to USA?

A HS Code is an eight-digit numerical code assigned to various products during international shipping.

It shows the complete details of the product being imported. It is pretty helpful in determining applicable tariff rates for products.

How do I find the HS code for my product I import from Nigeria to USA?

The US government offers a product classification search engine that you can use to locate your product’s HS code. The engine is known as Schedule B.

To find your HS code, visit the search engine and follow the prompts shown on the website.

Alternatively, you may work with your customs broker or freight forwarder to help you find the HS code for your product.

In other cases, you can customs US customs to seek formal customs ruling on the same.

What is FDA, and what is its significance when shipping Products from Nigeria to USA?

The Food and Drug Administration (FDA) is a government agency that regulates the importation of certain kinds of goods into the US.

Food, drugs, biological substances, pharmaceutical products, cosmetics, and pharmaceutical products that emit radiation are some of the items regulated by the FDA.

These items must be screen electronically before they can be allowed to enter USA.

Which Customs Provisions can I take advantage of in reducing or eliminating Import Duty costs in the US?

If you’re a US importer, several provisions allow you to reduce/eliminate your import duty costs.

These are:

Foreign Trade Zone (FTZ)

An FTZ is a designated area in the US where, under special circumstances, businesses can delay or reduce duty payments on merchandise from foreign countries. This provision aims at encouraging US activity and promoting healthy competition of local and foreign products.

Duty Drawback

A duty drawback is a refund of duty paid on imported products used to manufacture goods that are subsequently exported from the US. The drawback is also applicable to imported merchandise that is later exported unused.

ATA Carnet

This is a temporary provision that allows US importers to bring in tools of trade or products into the country for a limited period.

How long does it take to clear with US Customs when shipping from Nigeria?

Customs clearance can take a few minutes, hours, days, or even weeks, depending on several factors.

If your shipment and paperwork comply with all of the customs requirements, then clearance should be quick. But if your shipment has issues, clearance may take longer.

So avoid anything that may delay your shipment due to clearance issues. Also, always provide accurate and up-to-date contact details when booking your shipment. This allows customs to reach you directly and fast in case there is an issue with your shipment.

What are the Challenges faced while Shipping from Nigeria to USA?

International shipping is an everyday challenge where risks and mistakes are a common occurrence. Therefore, shippers need to be careful to avoid mistakes that may disrupt their supply chain.

The following are some common challenges you may encounter when shipping from Nigeria to USA:

Delivery Delays

Delay is one major challenge that shippers from Nigeria to the US face. Unreliable suppliers in Nigeria, inadequate shipping space, and carrier backlogs are the most notorious causes for shipment delays.

Poor Packaging

It is essential to recognize the importance of using the right packaging material and plan for your shipments from Nigeria. Otherwise, the risk of damage and theft may increase during shipping.

Customs Clearance Issues

Importation laws vary from one product to another when shipping to the US from Nigeria.

There are instances where customs may seize or temporarily hold your shipment, which can disrupt your shipment. Delay with customs will delay the shipment delivery to the final destination. Ultimately, it will also delay distribution to customers.

In addition, clearance and delivery delays can result in additional fees such as demurrage and other port fees, which may eat into your profits.

Unreliable Door-to-door Delivery Service

Sometimes going to the port or airport to pick up your shipments may be difficult or inconvenient. In such cases, you need a reliable door-to-door delivery service that can pick up your cargo from Nigeria and deliver it to your door in the US.

Unfortunately, there have been complaints about such services where providers don’t fulfill their end of the deal.

There are many instances where you will be required to pick up your consignment from the port despite having booked Door-to-Door shipping.

You must find a reputable door-to-door service to avoid such inconveniences when shipping from Nigeria to USA.

Inability to Track Shipments

It can be nerve-wracking when you’re unable to tra

In this guide, you will find all information you’re looking for about customs bond.

Keep reading to learn more.

What is a Customs Bond?

A customs bond is a binding contract between a surety, the importer (a principal) and the customs.

The Customs bond is a mandatory requirement for all importers in the US in compliance with the customs rules and regulations.

Most bonds will be issued through the registered customs brokers. The customs brokers work together with the surety agencies on behalf of the principal.

Who are the Parties to a Customs Bond?

Generally, there will be three parties involved in a customs bond. They include:

• Beneficiary
• Principal
• Surety

The principal can appear as:

• Importer,
• Carrier,
• Broker
• Proprietor of a warehouse
• Operator of a foreign trading zone among others willing to transact with CBP.

The surety is the insurance company that has the authority from CBP’s Treasury Department to receive surety’s bonds on behalf of the treasury.

Customs and Border Protection is the core beneficiary of all bonds that it approves.

What are the Obligations of the Parties and where are they found?

Customs bonds are meant to show the duties and obligations that are linked to every entry that the principal of the bond engages in.

The merchandise importer will have separate duties to the authority.

Their obligations are different than those of a custodian like the warehouse operator or a cartage operator.

The warehouse operator for example does not have ownership of the goods being transported or stored.

Any individual claiming for a drawback on the summary procedure of the exporter will have a different set of responsibilities to the government.

Their responsibilities are different from those of a vessel’s master getting into the United States coming from another country.

When do you need a Customs Bond?

There are several situations when you will be required to have an import bond. Such situations include:

• When you have imports that are for commercial purposes
• When the goods you are importing are required to meet certain federal regulations

If the goods you are importing are subjected to government agency rules and regulations, the bond will be three times the value of the imported goods.

How does a Customs Bond work?

A customs bond is meant to cover the CBP against any risk of not getting the taxes and duties paid. The customs bond will insure the goods being imported into the U.S.

Once they arrive, the principal will be expected to remit all due to the customs. If they are not paid for, the CBP can initiate the legal process of recovering the dues through the bond.

What provides the Security on a Customs Bond?

Corporate Sureties

The normal security method on a customs bond is the corporate surety.

The corporate surety bears the authorization of a Financial Management Service who acts as surety for the government bonds.

Cash and Others

The other alternative to the corporate surety bond is the use of cash.

The principal pledges cash or other obligations of the Government of the United States such as treasury bonds, bills or even notes apart from the U.S. Savings Bonds.

If the principal or pledger pledges treasury bonds, bills or notes, they will receive a discount or interest.

Pledged cash will not attract any payment of interests.

The bond document is normally modified so as to show the changes made from a surety to the pledge of assets.

The main disadvantage with the cash alternative is the customs service having to hold the pledge until that time when the bond has been satisfied or cancelled.

If a bond is given to satisfy the requirements for entry, the period of pledge will not end until there is a liquidation of the entry.

For entries of merchandise that are valued at not more than $500, then the pledge will be returned after liquidation. This is with the assumption that the bond has not been breached.

If the merchandise has been imported temporarily under the Chapter 98, Subchapter XIII, Harmonization Tariff Schedule of the U.S  (19 U.S.C. 1202), the pledge will be sent back.

The pledge will be sent back to the bond principal after proving that the goods were destroyed properly or exported.

Why do Importers need a Customs Bond?

As per the Information from the Customs and border protection (CBP) of the U.S, you will be required to have a customs bond.

That is if you are importing goods that are valued to be more than $2,500.

A customs bond will also be required when the importer is importing goods that are subject to the requirements of other federal agencies.

For example, you will need to have a customs bond apart from the other documents that are required by the ATF.

The other government agencies that require the importer to have a customs bond include:

• Consumer Product Safety Commission

• Department of Transportation

• Environmental Protection Agency

• Food and Drug Administration

• United States Department of Agriculture

• United States Fish and Wildlife Service

According to CBP, if you are a domestic carrier and you are transporting cargo by sea, air or vehicle and the cargo is “IN BOND”.

You will need to have a customs bond.

This will apply even if you are transporting “IN BOND” cargo across different states.

What Customs Bond types are there?

There are two types of customs bond that an import can choose from. They are:

• Single entry
• Continuous bond

The type of bond you choose will depend on the frequency with which you plan to be importing goods to the United States.

A single entry customs bond will only cover one import shipment.

A continuous customs bond on the other hand will be valid for a whole year covering all imports into the U.S for the whole year.

What is an ISF Bond?

The Importer Security Filing (ISF) is a filing that is required by the CBP which documents importing details and information when the shipment is moving from point to point.

ISF is also referred to as “10+2”.

For importers who fail to comply with the ISF requirements before the shipment of their goods, they will be penalized with a US$5,000 fine.

The transmission of ISF must be transmitted at least 24 hours earlier before the departure of the shipment into the United States.

Some of the importer or supplier’s information contained in an ISF is:

• Supplier or Manufacturer’s address and name
• Seller or owner’s Name and address
• Owner or Buyer’s Name and address
• Ship-to Name and address
• Country of origin
• Location of Container stuffing
• Address and Name of the Consolidator or stuffer
• Number of the Importer of record
• Consignee number
• The Country of origin

Some of the carrier’s information contained in an ISF includes:

• The vessel’s stow plan
• Messages of the container status

Which Customs Bond is best for your Business?

The type of customs bond should be determined by the nature of your trade. If you intend to only have one shipment, then it makes sense to have a single-entry bond.

If you will be importing several times in a year, then it is only economical to have a continuous customs bond.

The continuous customs bond is a one-off thing. It runs through the year until it’s time to renew.

This also saves you time. If you are sure that you will not have other shipments, then you only need a single-entry customs bond.

How much is a Customs Bond?

The pricing of the customs bond will depend on the volume of your shipment.

It is necessary to contact your carrier for advice on the correct type of bond as well as the price. However, the pricing of a customs bond will follow the following:

Single-transaction Customs Bond

The pricing of a single-custom bond will change depending on the value of your shipment. While choosing the right customs, you should also consider the value of your shipment other than just the volume.

Most of the single-transaction customs bond is normally priced at 0.5% to 2% of the total values of the goods.

However, you have to note that the number will keep fluctuating depending on other variety of factors.

Such factors include the risk of transport, liability, type of goods, and country of origin amongst others. They can cause an increase or a decrease in the pricing structure of the single customs bond.

Continuous Customs Bond

Unlike the single-transaction customs bond, the continuous customs bond is charged as a one-time flat-rate fee.

The charges will be valid for 12 months from the date it was purchased.

The costs will vary depending on the factors such as risk, liability, goods, and hazardous features among others.

The charges can be as low as $500 but may rise depending on the mentioned factors.

There are no fixed costs for the customs bond.

The best decision should be based on the frequency of importing.

Who is Responsible for Getting Customs Bond during Importation?

Any importer of record in the United States must obtain a Customs Bond.

When the customs require a Customs Bond from you, they will not release the shipment until have posted it.

Other regulatory requirements must also be met other than just having a customs bond.

All other requirements by other regulatory bodies must be submitted together with the customs bond.

How do you get a Customs Bond?

You will get a customs bond if you are importing into the U.S. To get a customs bond, you must first have an importer number.

The simplest way to obtain a customs bond is through a customs broker.

You can also get it through an international freight forwarder who will assist you with all the paperwork.

If you intend to purchase the bond by yourself, do it from a surety who is licensed by the treasury department.

What is the Customs Bond Application Process?

If you are applying for a Continuous Customs Bond the following process will be followed:

• To start with, you have to decide if you require a Customs Bond.

You will need to have the customs bond if you are bringing goods to the United States goods that are will be used for commercial purposes.

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

For the case of textile imports, the value required must be over $250.

You will also be required to have a customs bond if you are importing products that require federal regulations such as food and firearms.

• At this point, you will be required to find a licensed surety that is authorized by the Treasury Department.

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

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

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

You will also have to provide information pertaining to the:

• Type of business entity
• Years of trade
• Business location
• Description of imports as well as the value of the imported goods

For the surety to file the entry on your behalf you must grant the power of attorney to them.

• At this point, you can pay all the fees due depending on the type of customs bond that you chose.
• Your surety broker will go ahead and file the customs bond at a location that is best appropriate for you.
• In a situation where you do not intend to purchase a customs bond from a surety, you will be required to pledge cash. Until all the dues are satisfied, the funds may not be released.

How Long does it Take to get Customs Bond?

The time that is taken to get the Customs Bond will be determined by Customs and Border Protection.

The time may vary depending on the prevailing circumstances.

However, the average time frame for acquiring Customs Bond for imports will typically require 15 calendar days before becoming active for use.

Does Customs Bond have Fees?

The surety for the customs bond will always have an initial charge and thereafter an annual charge.

You can choose to have a discounted rate if you intend to pay for several years in advance.

Generally, the surety will charge for the reconciliation riders, anti-dumping entries and Periodical Monthly Statement usage

How is Customs Bond Calculated?

For a first time importer that does not have any importing history to go by, the customs and border protection will estimate the fees, taxes and duties.

Of course, that may be chargeable for the next 12 months.

This works for the continuous customs bond.

The Continuous Customs Bond will be calculated as 10% of the fees, duties and taxes that you as the importer paid the previous year.

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

For the figures above $100,000, the bond will be rounded off to the nearest $100,000. In any case, there will be a minimum of $50,000 as bond.

The single-entry bond will be equal to the total value of commercial goods including fees, taxes and duties.

The total amount of the CBP bond must be $100 or more.

Are Customs Bonds Refundable?

No, the customs bond are not refundable.

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

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

As long as you can prove that you exported the goods.

What is Customs Bond Insurance?

The customs bond insurance is a financial instrument that is meant to secure the liability of the surety under the bond.

The surety will only release the bond after they have received the collateral.

This applies to all the entries for the entire bond period.

What are some Customs Bond Limits and how are they Set?

Single-entry Bond

The amounts for the single entry bonds are set by the port director after accepting the bond.

Furthermore, the amount should be more than the total value entered taxes, fees and duties.

The bond amount will be three times more than the total value of goods entered if they are subject to other federal agency requirements.

Only a registered customs broker can be able to obtain this bond for you.

Continuous Customs Bond

The lowest bond limit for this bond is set to be $50,000. The Continuous Customs Bond will be calculated by taking the taxes, duties and fees that were paid for the last year.

They are then added together.

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

If the 10% figure is less than $50,000, then the minimum bond amount ($50,000) will be taken into consideration.

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

What does a Customs Broker do in relation to Customs Bond?

There is no legal requirement for you to hire a customs broker to help you in the clearance of goods.

However, most importers will choose to have customs brokers so due to enjoy the convenience that they offer.

All Custom brokers must be approved and acquire a license from the Customs and Border Protection of the United States.

Only then can they be allowed to conduct customs business on behalf of the importers.

The work of the customs broker is to handle all the paperwork that relates to the obtaining of the Customs Bond.

This work may be cumbersome.

The custom brokers normally specialize in all works pertaining to customs thus making the work easier for importers. This also saves importers their precious time.

The importer is however responsible for all the information that they submit to the CBP.

They will also be required to ensure that they are fully compliant with all the federal rules and regulations.

Considering that errors may occur, the customs broker will help in preventing you from making unnecessary mistakes that may otherwise be costly.

Do you need a Power of Attorney for a Customs Bond?

Yes, the U.S. customs regulations will be required you to sign the power of attorney to allow the surety to file the entry on your behalf.

This way, you will be giving your powers away.

Any decision taken by the surety will be taken to have come from you.

Therefore no complaint should be expected.

What is Customs Bond Execution?

Custom bond execution with any group, individual or authorities will seek to bind the executor of the bond.

It shows that they have legally committed to meet all the terms and conditions as indicated on the customs bond.

Are Customs Bonds Renewable?

Yes, customs bond is renewable in what is known as surety bond renewal.

Every surety bond has a validity term within which the bond is enforceable.

This means that the surety company will take the risk of the bond for a given period.

During the renewal, the underwriter of the surety will re-evaluate the risk associated with the bond.

This is done just like it is done during the execution of a new bond.

The principal will however not be required to sign a new indemnity agreement.

Also, a new bond will not be executed unless the obligee needs it. For the bond to be renewed, the principal will have to pay a new premium so that the bond can be renewed.

How can you Renew a Customs Bond?

The continuous Customs bond will have an expiry date. The customs bond will continue being valid/active until it is put into insufficient status or terminated.

You however will be required to pay your annual premium charged to the insurance company (surety). Failure to this, they will release the termination of the bond.

How do you Determine the Right Customs Bond size for you?

The right customs bond is determined by the registered customs broker.

For the single-entry customs bond, the bond amount must be more than the total value of the shipment plus the fees, duties and taxes.

It is good to remember that it will only serve for one shipment.

If you are planning to have several entries on different ports over the year, then you will need a continuous customs bond.

A continuous customs bond is self-renewing. You will be required to have $50,000 as the minimum bond amount.

It can also be 10% of the fees and taxes depending on which one is greater.

What is a Customs Bond Claim?

A customs bond claim is a claim against a surety bond that had been provided as an assurance that the payment will be made.

You will need to make a customs bond claim when you need to get back your bond.

To file a customs bond claim, you should contact your surety.

How many types of Customs Bond Claims are there?

There are four different types of bond claims that you should pay attention to:

Liquidated Damages

The liquidated damages claims specify the amount of money that one should expect to receive in case of a broken contract.

You should dispute the damages at the port entry.

This should be done where the issue happened through a petition.

It would be good if you choose a licensed customs broker to assist you in handling the petition.

Supplementary Duty Bills

Supplemental duty bills are issued whenever the paid duties are less than the liquidated duties. They issued to cater for the difference.

You should pay the supplemental duty bills 30 days after the listing of the bill to avoid any issues.

According to the conditions of the bond, the surety and the principal will be responsible for the payment of these bills.

The supplemental duty bills can never be disputed. They can only be voided or cancelled.

This is if there is a liquidated damage claim protest that has ruled in support of the principal/importer.

Debit Vouchers

A debit voucher comes up when the CBP fails to honour a payment that was made. The CBP will issue a debit voucher to the importer.

The payments of the debit voucher are due within 15 days after which they start accruing interest.

Miscellaneous Bills

The CBP will issue importers with a miscellaneous bill for Harbor Maintenance fees for the Port of entry.

They are also issued for the overtime services offered by employees of the customs among other reasons.

These bills are paid by both the surety and the principal.

What are the Importer Obligations in a Customs Bond?

As an importer, you will have different obligations to the state.

Your obligations will be different from those of a warehouse operator or a cartage operator who does not own the merchandise.

Your bond obligation will require you to pay all the necessary duties and submit the entry documents whenever they are required by law.

They should also redeliver the merchandise to the CBP whenever there is a request by law to do that.

What Happens if you don’t Meet your Customs Bond Obligations?

If you are not able to meet the obligations of the bond, a claim will be filed. It will file against the bond so that the payment can be made.

Next, once the claim for unpaid duties is filed by the CBP, the duties will be covered by the paid claim.

Finally, if there are bond obligations that have not been met, the CBP will have the right to initiate legal charges against the principal.

If you default on a bond, then you will have broken the agreement on the bond that you agreed to when got the import bond.

This is the time when the customs will expect the satisfaction of the amounts on the bond.

What is the Maximum Liability for a Customs Bond?

The customs bond will remain in force from the day it was effected until it is terminated. Regardless of the bond limit, the principal will remain responsible for all the financial obligations.

Besides, the limit of the bond is only a maximum limit for the obligation of the surety on every bond year.

The bond will constitute a separate bond limit for every period of the one year starting with the effective date.

As such the surety’s liability is always “stacked” per year.

For example, a $50,000 bond that is effective on 1/1/19

For all entries starting from 1/1/19 until 12/31/19, then a $50,000 bond limit will apply.

For all entries starting from 1/1/20 until 12/31/20, a different $50,000 bond limit will apply.

Therefore, in this example, the surety will have $100,000 as of the total potential liability.

What is a Customs Bond Termination mean?

A customs bond termination is the end of a bond agreement that had been signed.

Once a bond has been terminated, there will be no new customs that will be charged against the bond.

A bond can be terminated by the surety or the principal.

Appropriate notice must be issued to the CBP for it to be effective.

The notice to terminate must be issued at least 15 days before it to be accepted.

What does Customs Mean by ‘Insufficient’ Bond Status?

Insufficient bond status means that no entries can be made until the bond is put into sufficient status.

It is only the CBP that has the right to either place the bond in insufficient status or restore it. There are many reasons that can put a bond into an insufficient status.

This includes bad address, massive outstanding claims or debts, risky entry or an inadequate bond limit.

Most time the CBP will issue a 15 days’ notice. Sometimes the bond may become insufficient even without notice.

Note: A bond will not be subject to any kind of deficiency of limits as a result of import duties or the value of imports.

No matter the duties paid or the volume of values imported if the bond is sufficient imports can be made. The bond limits will never be subject to depletion.

What Formalities are Associated with a Customs Bond?

A customs bond should be in writing and bear the signature of the bond obligors.

To do away with any errors, the signature of the obligor signing as the individual should be attested by two other persons.

Therefore, a corporation being a legal person, a different identification means will be applied. An officer whose work is to sign on behalf of the corporation is reflected on a document referred to as the power of the attorney.

Sometimes it is required by the state of law that corporate bonds which are signed by a corporate officer of a corporation be sealed. Although some corporate charters need any bonds associated with a corporation to be sealed, customs bonds don t need to be signed.

This can only be done when the corporate charter or the law of the state needs to be sealed. The requirements are only applied to bond sureties and principals.

For any questions about freight terms or shipping from China, contact Tj chinafreight right now.

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

So, let’s dive right in.

What is a Customs Broker?

A customs broker is an individual or company that help facilitate international traders with their import and export of goods across the international borders.

The customs brokers work with small businesses, individuals or enterprise company that may need their expert services.

They will help you with the smooth clearance of goods across different countries.

What are the Responsibilities of a Customs Broker?

 

The responsibility of customs brokers is to handle the customs process for their clients’ shipments, whether by ocean, air or ground.

Some of the services they offer include:

• Organizing the necessary documentation for shipments to be exported
• Clearance of imported cargo
• Collection of the required taxes and duties
• Preparation of documents for customs accounting
• Consulting and advising their clients on things like Free Trade Agreements (FTA)

Each country worldwide has their unique import and export regulations as well as procedures.

They all affect different commodities and the rules keep on changing.

The customs brokers are experts in understanding and being updated on the regulations.

What other Services does a Customs Broker provide?

 

The customs brokers will also handle all communications with the relevant agencies and government officials.

They will do this to ensure that the right process is followed during shipment.

This helps in ensuring the goods get cleared correctly devoid of any delays thus saving clients’ time in dealing with customs officials.

What are the Benefits of China Customs Brokers?

 

Having a customs broker in china will serve you greatly. Some of the benefits include:

• Peace of mind-Having a customs broker in china is going to ensure that all your shipments are completed as per the existing laws.

By getting a customs broker in china, you do not need to study all the necessary laws.

You will not need to hire a specialist to join your workforce purposely to offer legal advice regarding customs.

 

• Having a customs broker in china makes it easier to deal with a customs broker other than speaking to other different government agencies separately.

 

• Having a customs broker helps you avoid chances of paying excess VAT or duty.

 

They also remove any risks of underpaying the duties and VAT which may lead to fines and extra charges if not paid.

 

• You must be aware that your shipment will not be released by the customs until you pay the duties and have your documentation in order.

In China, having a customs broker will help you in reducing delays thus keeping your business moving.

 

• Customs broker in china will lender you additional services. They include tracking the status of your delivery as it is transported from one point to another.

 

What are the Available Types of Customs Brokers?

 

There are three types of customs brokers. They include:

• Nominee customs broker
• Sole Trader customs broker
• Corporate customs broker

A Nominee customs broker is the individual who is employed who works for one or different brokerages at any single moment. Most customs brokers will fall into this category.

Every customs broker must be licensed by the relevant department in Customs and Border Protection.

How does a Customs Broker Work?

 

The customs brokers handle everything to do with the entry of goods into the country.

They receive goods shipped by the seller or their agent and process their entry into the country.

Customs brokers prepare all the necessary documentation and pay the necessary fees based on your agreement.

They inform you of all proceedings and the requirements if any.

Once the goods have been cleared by the customs authority, the customs broker will ship the cargo to your location. Where necessary, they will store the cargo awaiting transportation.

The customs broker is an intermediary between you, the government and any other parties involved.

How much do Customs Brokers Charge?

 

Every customs broker has their way of doing things and even their charges will differ widely.

The fees charged are tailor-made depending on the situation at hand and the work involved.

Your customs broker may give a quote covering the following items:

• Customs clearance charges will normally be charged as a flat fee.
• The Airline handling charges- these are assessed based on the delivery weight and are at least $62. It includes any fees levied at the port authority.
• The Airline bond transfer charges-the assessment is based on the delivery weight and is at least $21
• The port storage or airline- it is required in the customs clearance
• In case of a sea freight consolidated cargo, there will be handover, third party documents alongside other fees.
• Inspection fees for government agencies
• Bank transfer charges
• Onward delivery fees if necessary

Some customs brokers may charge flat upfront charges. It is always good to ask all the relevant questions regarding what you expect and what you are being charged for.

When should I hire a Customs Broker when Importing from China?

 

Several reasons will make you require a customs broker whenever you are importing from China.

Some of the reasons include when you need:

• A pre-release of a cargo
• After-entry services
• Any other reporting for the government agencies
• Automatic broker interface
• Binding ruling
• Customs bond
• Electronic transfer
• Filing in a remote location
• Peace of mind away from the hurdles involving the import process
• Review of tariff classification
• Services involving duty drawbacks
• Support on compliance

 

What is the Difference Between a Customs Broker and a Freight Forwarder?

 

• A freight forwarder is very different from a customs broker in that they are very wide in operation.

Such services include warehousing, consolidation of shipments, packaging services and preparation of customs paperwork.

On the other hand, a customs broker is very specific and requires several licenses.

 

• Most of the freight forwarders will also appear as customs brokers or offer brokerage services. However, a customs broker is not necessarily a freight forwarder.

 

• A Customs broker focuses on the importation side of international trade.

 

For exporters, they will view customs brokers as a conversation in a foreign country.

U.S. Exporters however will not require a customs broker since they are moving goods out of the country.

They will however require the services of a freight forwarder.

 

• A freight forwarder of an exporter can partner together to assist facilitate and fix any issues concerning an export transaction.

 

 

• A customs broker will ship cargo using the bill of lading issued by the shipment owner.

A freight forwarder however will ship cargo using their bill of lading commonly known as house bills of lading.

 

• A customs broker has low levels of legal liability on the shipper’s cargo since the goods are never in the broker’s possession.

Although the customs brokers still have liability insurance. A freight forwarder on the other hand will assume the greatest legal liability for the shipment including insuring it.

 

Do Freight Forwarders use Customs Brokers?

 

Yes, they do. It is very important that both the customs brokers and freight forwarder work in harmony.

They are very crucial in ensuring that the process runs smoothly and successfully.

Any issues arising in the trade can be sufficiently handled whenever there is a good relationship between the customs broker and the freight forwarder.

Where can I find a Customs Broker?

 

The best place to find a licensed customs broker is on the Customs Broker list on the Customs and Border Protection website.

Besides, the website lists all the licensed customs brokers and organizes them according to the points of entry.

The customs broker list indicates each custom broker’s port of operation and their respective contact information.

What is a Licensed Customs Broker?

 

A licensed customs broker can be an association, private individual, associations, partnerships or corporations that have been licensed by the Customs Service of the U.S.

They are licensed to:

• Preparing the entries
• Filing the entries
• Arranging for payment of duties
• Organizing for the release of shipment from the custody of the customs
• Representing their clients’ matters to do with customs

The customs brokers are the only authorized entities that are supposed to assist importers in their trade.

Even though the importers have the rights to conduct their clearance of goods, most importers chose to work with customs brokers.

Customs brokers can make their work easier due to their vast knowledge in the industry.

How do I choose a Customs Broker?

 

The following is a guide that can help ensure you get a reliable customs broker:

Do you have a Special Type of Import or Product Line?

If so, you need to get a customs broker who specializes or has immense expertise in the clearance of your special type of goods.

For example, alcohol, apparel, textiles among others have many regulations and laws which apply importation of such cargo.

Not every broker has the required experience in handling such cargo.

How many Ports does your Cargo Pass Through?

If your goods are going to pass through various ports, then you will need to hire customs brokers with offices in those ports.

A one-office broker may not be helpful as they may be forced to subcontract the work.

This increases the chances of import errors arising.

Automation is Important

Every broker regardless of their size should have fully automated connections to different cargo tracking sites and web portals not only the U.S. systems.

Your customs broker should be in a position to communicate with you via e-mail, telephone and fax.

 

What is the General Reputation of your Broker?

You shouldn’t just trust everything that the broker’s marketing materials talks of their reputation and capabilities.

The best place to get reviews about your customs broker is from their customers.

You can also inquire for non-biased comments from local air and ocean carriers.

Are you in need of a Dedicated Account Manager?

If the volume of your shipment is going to be high enough, then you may require a dedicated contact person to act as your representative.

They will be responsible for the coordination of your shipments needs including communication.

Have a Working Agreement in Place

It is important that draft an agreement on the scope of work and responsibilities with your customs broker.

It should also have the fees structure for every service being offered, contacts and the operational procedures.

The agreement should be shared with all our involved parties.

Any changes in your business must reflect on the agreement and that is why you need to review the agreement whenever they occur.

Can I be my own Customs Broker?

Customs brokers are not a legal requirement although they may be necessary.

Not all imports may require the effort of a customs broker.

As an individual or company, you can also be able to do the clearing of your goods and ensure proper payment of all duties.

It may be time-consuming but it is worth going through to ensure your cargo gets released in time.

Having a customs broker can be helpful as it will help in avoiding avoidable mistakes that you may not be aware of.

 

How do I clear Customs without a Customs Broker?

It is possible to import without a customs broker. You however need to understand what goes into the clearance of goods.

You must understand the Policies of the CBP and their procedures together with the requirements for importing your specific goods.

Besides, you must file all the entry documents at the port of entry.

Imported goods are considered to have entered the country once they have been authorized by the CBP and all the duties paid for.

You will be responsible for preparing the examination and dispatch of the shipment.

Also, you’re required to contact all the concerned agencies apart from the CBP e.g. the Food and Drug Administration if you are importing food products.

You may also be required to get a license, permit or any other certifications corresponding to the type of goods you are importing.

This will also depend on your local authorities and their policies that may require business licenses affecting your line of trade.

A customs bond may also be necessary if you are importing cargo valued at over $2500 or goods subject to the requirements of the federal agency.

You can choose to have a single entry bond or a continuous customs bond.

For continuous customs bond, you must make an application through the customs office at the port of entry.

Follow all the paperwork procedures of the CBP otherwise, you may get fined.

You also risk your merchandise being held.

You must understand what every type of import requires to successfully import your cargo.

Once that all is done and done correctly, you should have your cargo released without any issues.

 

Do I need a Customs Broker for Alibaba Imports?

Since there is no legal requirement stating that you must have a customs broker, imports from Alibaba are not an exception.

You can choose to have one or simply undertake the clearance process by yourself.

A customs broker is good as they come with a wealth of experience in the clearance of goods.

The process itself can be complicated and that is why it may be necessary to get one.

This especially so if you are importing from Alibaba for the first time.

Customs broker will help you avoid delays, overpayment of duties and miscommunications.

What Paperwork is required when dealing with a Customs Broker?

 

When importing into the U.S. through a customs broker, you must sign the power of attorney.

This allows the customs broker to act on your behalf. If you are importing using a continuous customs bond, you must sign the CBP application.

Other documents you need to have included the packaging list and a commercial invoice.

If you are dealing with other partner government agencies such as EPA, FDA, USDA etc., you will require the necessary paperwork done.

Such may include certificates and licenses and possibly registrations.

 

How do I pay Taxes and Duties when clearing Customs with a Broker?

 

Once the paperwork has been completed and you are required to pay the fees.

Based on your agreement with the customs broker they can pay or request you to make payments.

The customs broker may take care of the fees which you will be required to pay in total once you receive the shipment.

The customs broker will issue you with an invoice containing all the charges incurred.

The invoice will cover taxes, duties and other fees applicable. You will be required to pay for the invoices based on your terms e.g. 15 days.

Can I use different Customs Brokers Depending on the Mode of Transportation or the Location of the Entry?

 

It is very important that you use one customs brokers for a smooth operation.

Find out the number of ports of entry your cargo may need to pass through.

Choose a customs broker who has offices in all those ports of entry.

Having a customs broker with one only will mean that they need to hire other customs brokers in other ports.

This is a risky move as it exposes your cargo to loss and errors during shipment.

Choose a customs broker that is a full house.

This means they have all the services you need in one place including transportation of cargo.

When shipping via Courier, is it Recommendable to use the Courier Brokerage Services even though I use a different Broker for my Air and Sea shipments?

It is recommendable that you use the same customs broker for all your engagements with Customs and Border Protection.

If you are shipping using a courier, it is still necessary that you use your customs broker to conduct business for you.

Using one trusted customs broker helps you organize your business and solving issues that may arise becomes easy.

Are there Restrictions on what Kind of Goods Customs Brokers can Clear?

 

Customs brokers are supposed to help in the clearance of all type of goods.

It is expected that they have the knowledge of how the systems work and the charges.

However, it is not the case that they will understand every aspect of the goods being shipped.

Most of them are specialists in different fields.

It is important that you choose only the customs brokers that understand the field in which your cargo falls.

This is because changes keep on occurring across different sectors and only those associated with the sector may be informed.

If your customs broker is not an expert in the sector your shipment falls in, you may find challenges complying with the laws affecting your goods.

How long do Brokers take to clear Customs?

 

Typically, it can take customs brokers not more than 24 hours to clear a shipment.

However, it may take longer than expected going to days or weeks before goods are inspected.

Your customs broker should advise you on what is being done, when and how long it may take.

If the shipment is selected for customs exam, for example, it may take much longer.

How do I set up an Account with a Customs Broker?

 

The process of setting up a customs broker account is not very complicated. It involves the following steps:

• Filling of an account application-This is your basic information
• Completing the account questionnaire-This is to determine whether there is any relationship between you as the importer and the exporters
• Creating an account profile-This will list your billing information, contact information and the payment terms.
• The signing of the customs power of attorney-This is to give your customs broker the power to represent you.
• Filling the Importer Security Form (ISF)
• Compiling your Importing paperwork
• Setting up the customs Broker account

 

Can a Customs Broker Research Previous Customs Entries so as to Determine Compliance and avoid Exposure to Extra Duties or Penalties?

 

Your customs broker has to keep you in a safe position with the customs.

This means that researching your past customs entries will help guard you against unnecessary fines.

Once the customs broker digs into the history of your customs records, they will advise you on the best step to take.

They will forecast the fees and taxes that you may be charged whenever you import in future.

It will also help them understand the kind of relationship between you and the customs officials.

The most important thing is to find out any mistakes that may have been committed in the past.

These are the mistakes that have the potential of haunting you later in future.

It is upon the customs broker to ensure you don’t fall into trouble with the customs.

In any case, they will end up losing business if they expose you to losses.

Which is Better Between a Customs Brokerage Company and an Independent Customs Broker Agent?

 

A customs brokerage company will always have a higher chance of being chosen to represent a company for a matter to deal with customs.

An individual customs broker may not have all the necessary assets required to handle all your needs.

An established customs Brokerage Company is easier to vet based on the volumes and satisfaction rate experienced by their clients.

They can also serve as an all-in-one shop for your needs including transport and warehousing.

The main reason why you should go for an established customs brokerage is when you have to deal with several ports of entry.

That will mean that you will need a customs broker in every port.

A customs brokerage company will have offices across various ports.

This means that all your shipping needs are handled from a single office that is closer to you.

What are the Steps to Customs Clearance with a Customs Broker?

 

There are four steps that are followed when you are shipping through a customs broker.

They are:

Verification of Paperwork

At this stage, a customs officer will verify your paperwork to ensure that everything is completely and correctly entered.

All international shipments are required to have commercial invoices.

After the verification exercise is complete, the document will indicate the shipper and the contact details of the receiver.

The airway bill number and the export date must be indicated on the shipment.

Checking by Customs Officer

A customs officer must verify the applicable fees on your shipment.

The fees will depend on the value of goods, their type and the laws of the country.

In case the value of the cargo is more than the tax bracket, the customs officer must check if the duties and taxes have been paid.

Taxes, Duties and Payments

The customs official will request that any outstanding duties and taxes be paid. There are two payment options.

You will have the Delivery Duty Unpaid (DDU) and Delivery Duty Paid (DDP). If the shipment is labelled DDP, it means that the duties and taxes have been paid for.

For DDU, the process can prove to be expensive since brokers will charge different charges.

You will also be charged storage, late payment fees, brokerage and other fees which will ultimately affect your shipment fee.

Shipment Release

After all the duties and taxes have been paid, the shipment is then released.

From here, if the taxes, duties and all the paperwork were done properly, the shipment will be released to their final destination.

Do Customs Brokerage Services cover both Importing and Exporting Goods?

 

Customs brokerage services cover both importation and exportation of goods.

They are licensed to assist traders in all matters to do with their international trade.

Whether you are moving goods inside the country (Import) or outside the country (export), you may need a customs broker.

Having one customs broker for both imports and exports can help ensure that you make your work easier.

Can a Customs Broker Assist with any Corrections or Duty Drawbacks to Customs Entries?

 

A customs broker is supposed to assist you with any matters to do with the customs.

They are supposed to guide you on all the paperwork and help you avoid any mistakes that may otherwise be costly.

The Customs broker should help you with all corrections and duty drawbacks that occur during the process.

What are the Risks of using Customs Brokers for Customs Clearance and How do I avoid them?

 

One of the risks of using a customs broker is the loss of touch with your shipment.

Once you choose to work with a customs broker, you entrust them with every process necessary.

That means you do not get to feel your goods along the supply chain other than the information you get.

To be safe, always ensure you work with a customs broker who is not only licensed but have the importer in mind.

They should communicate timely and in details.

Another risk is the loss of goods and financial losses arising from fines. Delays may also lead to financial losses thus affecting your business.

You should get the latest reviews regarding a customs broker to make sure you settle on the best.

Work with a knowledgeable customs broker and have experience handling goods similar to yours.

This makes sure you are safe from errors arising from the customs broker being uninformed.

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Contact us now for all freight forwarding services from China.

In this guide, you will find all information you need about co-loader.

So, if you want to learn everything about co-loader read this guide.

Who is a Co-Loader?

A co-loader is a third party who transfers consolidated cargo to another carrier.

Depending on the circumstances, co-loader can either be a consolidator or a freight forwarder. The third party is usually a freight forwarder.

The third-party pays for the process of transferring the consolidated cargo.

What does a Co-Loader do?

The primary function of a co-loader is to consolidate cargo. This is usually LCL cargo which the co-loader consolidates to fill a container.

A co-loader must search for a consolidator or a freight forwarder. Such a consolidator or forwarder should handle the same goods as your co-loader.

This is to enhance the safety of your goods. The last function is to transfer the shipping rights to either the consolidator or freight forwarder.

This facilitates the shipping process to your destination.

What is Consol Goods?

When you purchase goods that cannot fill a container, your forwarder will consolidate them with other shippers. The consolidation process helps in filling a full container before the shipping process begins.

These goods are consol goods and are usually of the same characteristics in packaging and palletization. This helps in their safe shipping to your destination.

What are the benefits of Co-loading in International Shipping?

Co-loading has various benefits to the different parties involved in international shipping. These parties are shippers, recipients of the goods, and the environment.

Using co-loading has the following benefits if you are a shipper

Shipping Cost

A co-loader consolidates all goods before handing them to a forwarder. The effect of this is you pay for the space that your cargo occupies within the container.

This cost is less compared to the cost of hiring a whole container. You, therefore, pay less for shipping your goods.

Safety of Goods

The consolidation process involves goods of the same packaging procedure. This reduces damage to your goods hence ensuring there is a safe shipment of your cargo.

Reduces Shipping Lead Times

Consolidation involves your co-loader packing goods heading in the same direction together.

This facilitates the unloading process at the various destination ports.

This reduces the shipping lead times due to the faster unloading of goods. You can therefore plan for your shipment in advance.

The main benefit you expect as a recipient when using co-loading is it helps in reducing your inventory. This is because you can estimate the duration to expect your goods and the stock you have.

You don’t have to stock up for fear of the late arrival of your shipment.

To the environment, co-loading helps in reducing carbon emissions by reducing the number of shipments. This is by consolidating several goods into one shipment.

What is Co-loading in Shipping?

Co-loading in shipping is the process of consolidating goods from different shippers to fill a container. When the container is full, the co-loader hands it to either a vessel operator or a freight forwarder.

How does Co-loading work?

The co-loading process starts when you contact your co-loader. They are responsible for reserving a space on the shipping container for your goods.

Once you have contacted them and they have your goods, they search for other shippers and consolidates their goods with yours.

This process continues until they fill a particular shipping container.

The next step is handing the container either to a freight forwarder or a shipping vessel. They do this by paying a fee for shipping the container.

The fee varies depending on the size of the container and other factors.

What is the role of Co-Loading Freight Forwarding?

The function of co-loading in freight forwarding is the consolidation of various goods to fill a container. This facilitates the shipping process while reducing the overall cost.

By consolidating the goods, they help in loading a shipping vessel hence reducing the shipping time.

Co-loading also helps in lowering warehousing costs since your co-loader consolidates your goods immediately you contact them.

This reduces the overall cost of shipping which reflects a lower cost of the goods. Through co-loading, the customs clearing process is fastened.

The co-loader presents the goods to the customs authority, and you submit the original documents hence facilitating customs clearance.

Is Co-Loading similar to LCL and LTL?

Yes. Co-loading is similar to LCL and LTL.

These methods intend to fill a container before shipping starts. A co-loader or a freight forwarder can carry out the loading processes under LCL or LTL.

How do I pay Charges owed to the Co-Loader?

The choice of the payment method to use on your co-loader depends on the agreements you have with them.

Standard payment methods that you can use are; letter of credit and cash payment.

What is the difference between Co-Loader and Freight Forwarder?

The main difference between a co-loader and a freight forwarder is the handling of the goods.

A co-loader usually consolidates the goods and hands them over to a freight forwarder.

A freight forwarder can choose to consolidate the goods or hire a co-loader to do that on their behalf.

In essence, a freight forwarder can be a co-loader, while a co-loader is not necessarily a freight forwarder.

How and where does a Co-Loader get Loading and Discharging Rights?

A co-loader gets the loading and discharging rights from a vessel operator or carrier.

They get these rights after paying for slots that are available onboard the particular vessel.

Is Co-Loader in Ocean Shipping and NVOCC the same?

Yes. A co-loader and an NVOCC are the same.

This is because they don’t operate their shipping vessels. They instead hire space in shipping vessels from where they ship their customers’ goods

Most co-loader and NVOCC have their container where they load their customers’ goods before shipping.

However, there is a freight forwarder who acts as a co-loader, and they own their vessels.

Do Co-Loaders Control Vessel Operations at Shipping Ports?

No. co-loaders do not control vessel operations at shipping ports. They only have the right to load and unload from these vessels, which they get after paying.

Does Co-Loader mean carrier?

No. a co-loader is a party whose job is to consolidate cargo to fill a container.

A co-loader can either be a consolidator or a freight forwarder. A carrier is a vessel that carries various containers from the port of origin to the port of destination.

A carrier can either be an aircraft, a ship, or a truck.

Is Co-Loader the same as Slot Charterer, or is there a difference?

No. there is a difference between a slot charterer and a co-loader. A slot charterer usually has their equipment, including the shipping vessel.

A co-loader does not own a shipping vessel, and their function is to consolidate the goods before handing them to either a carrier or a freight forwarder.

Why is the Original Bill of Lading important in Co-Loading?

An original bill of lading is vital in co-loading since it indicates the nature of goods, the ownership, and the quantity.

It helps in understanding the proper procedure of handling your goods during the loading and unloading process.

You must present this document to your co-loader before they accept the receipt of your goods. The bill of lading helps in calculating the charges to levy on your goods by your co-loader.

Suppose I don’t have any Original Documents Including Bill of Lading; What should I do?

Failure to have proper documents leads to the customs not releasing your goods once they arrive at the port of destination.

You should therefore contact your shipper for these documents before heading to the customs.

The disadvantage of customs holding your goods is the warehousing fee increases which means you have to pay a higher amount.

Delay can also affect the demand of your gods since your customers can start looking for alternatives.

What does ‘Back-to-back’ mean in Airfreight?

Back-to-back air shipping refers to a freight forwarder booking space on the air carrier for your goods only.

The shipping process under back-to-back involves the use of a single master air waybill.

Back-to-ack shipping reduces damage risk to your cargo while ensuring timely delivery.

However, it is a costly option for shipping your freight.

Which is Better Between ‘Back-to-back’ Transportation and Consol (C-Loading) for Air Shipments?

The choice of which is better between back-to-back shipping and consol shipping depends on your preference. Each of these methods has its benefits and limitations.

Back to ack method involves shipping your goods under one master air waybill.

This implies you’re your forwarder books space on a carrier to ship goods exclusively belonging to you.

The advantage of this is it reduces damage risk on your goods during the shipping process.

It is also timely, which helps in reducing the lead times for your goods.

However, it is an expensive method to use since you have to pay for the entire space that your forwarder books.

This is so especially when your goods cannot fill the space.

Consol option involves consolidating goods from various shippers before the shipping process starts. Each shipper has their house airwaybill.

It is a cost-effective method of shipping since you only pay for the space that your cargo occupies. The advantage of this method is the destination of all the consolidated goods is the same, which reduces the loss of goods.

However, the chances of damaging your goods are high, meaning you have to counter-check the goods when unloading.

Will I have to pay Import Duty and VAT for Consol Shipments?

Yes. You have to pay import duty and/ VAT for consol shipments.

This is because consol goods are just like any other imported goods which attract a specific levy.

The amount to pay depends on various factors such as the volume of your cargo and the nature of the gods you are importing.

Apart from the Co-Loading Fee and Import Duty, what other charges do I have to pay for Consol Shipments?

Other charges that you should expect for your consol shipments are:

Insurance Fee

You must pay this levy as it covers loss or damage to your goods while in the hands of your co-loader. Given the nature of loading and unloading your cargo y the co-loader, you must pay this charge.

Administration Fee

Your co-loader is responsible for handling your goods before they hand them over to a 3PL or a forwarder.

During this period, they should administer authority over your goods, and you have to pay for them.

The administration fee covers things like the protection of your goods, the loading and unloading processes.

Documentation Fee

There are various documents that you have to sign before handing your goods to your co-loader. These documents indicate that you are allowing your co-loader certain rights over your cargo.

You, therefore, have to pay for these documents before they accept your goods.

Service Fee

Different co-loaders offer varying services for goods. For instance, some offer packaging and labeling of your goods before loading.

For special goods, such as perishables, you have to use special containers.

These services attract a specific charge depending on your co-loader, which you have to pay.

How are Co-Loader Rates determined?

There are various determinants of co-loader rates depending on multiple jurisdictions. Some of these determinants include:

Size of the Cargo

The cost of consolidation depends on your cargo size and the space that it occupies on the container. The higher the volume, the more you are going to pay.

Services

There are different services that your co-loader can offer to your cargo. for instance, packaging and labeling your shipment as per the shipping procedure.

Packaging can be problematic, especially if you don’t know the type of material to use. Using the wrong material can add up the overall shipping cost for your cargo.

You, therefore, need some of these services which your co-loader can offer. However, these services come at an expense which you have to cover.

Demand

Shipping depends on the seasons and demand for your various goods. During the off-peak seasons, most co-loaders offer incentives to lower the shipping cost.

This means you pay less during the off-peak seasons. However, during the peak season, demand is higher, which results in co-loaders increasing their prices.

Documentation Fee

International trade involves several documents which you have to sign to authorize the shipping of your cargo.

For instance, when you hand your co-loader the goods to handle, and you have to sign an authorization document.

These documents come at a fee which you have to pay your co-loader.

Government Regulations

This factor depends on the rules governing a particular geographical location.

There are levies and taxes in certain jurisdictions that you have to pay your co-loader before handling your goods.

What Paperwork is needed to Customs clear my Consol Shipments?

Consol shipment is like any other import, which has to go through the standard customs clearance procedure.

You, therefore, need to have standard custom clearance documents before you receive your goods.

These documents include:

• Certificate of origin
• Bill of lading
• Commercial Invoice
• Insurance certificate
• Letter of credit
• Packing list
• Certificate of conformity

However, you can expect the customs documents to request additional documents if you are shipping restricted goods. This varies depending on your port of destination.

What are the Criteria for Co-Loading Shipments?

The criteria for co-loading shipments facilitate their safe shipping process. Such criteria should consider the following:

Product Compatibility

Co-loading involves packing goods with the exact requirements in one container. This facilitates proper handling of the goods and ensures the goods are in the best condition on arrival.

For instance, you can consider refrigerated goods to be in one container since they have the same conditions.

Palletization is another compatibility aspect that you can consider.

Goods that require palletization can be in the same container for adequate packaging.

Container Packing

Co-loading works best if you can ship all your goods in one container. This reduces the overall shipping cost compared to shipping in different containers.
Before co-loading, you can check on the nature of your goods and f they can fit in one container.

Geographical Destination

You have to align all the goods under co-loading to head in the same geographical route.

This helps in the timely and safe loading and unloading of your goods.

While packing such goods, those whose destination is near the port of origin should be packed last. This facilitates the unloading process.

Scheduling

You should align the arrival of the goods in a particular sequence for effective loading. The loading process should consider the unloading dates for the various products.

Best practice involves those goods whose destination port is last arriving first for loading. This allows for unloading goods whose destination is near the port of origin.

Should I take the DIY Approach for Co-Loading or hire a 3PL?

The choice of which approach to use depends on your preference.

However, both DIY and hiring a 3PL have their benefits and limitations.

A DIY approach is best suited for larger organizations that understand the shipping process. Such organization can leverage their data and networks to find a suitable partner for co-loading.

DIY yourself approach can be time-consuming and expensive if you are a small organization. If your organization cannot match the resources required for a DIY approach, you can use a 3PL.

Involving a 3PL is cost-effective and time-saving. This is because your only responsibility is to find a potential 3PL and leave the rest for them.

Most 3PL have existing networks and shippers who want to use their services. This makes it easier for them to operate the co-loading process on your behalf.

The only problem with this is you have to select a 3PL who can effectively handle your shipping.

Do I need to change my Processes and Systems to get started Co-loading?

Different factors determine the choice of whether to change your processes before co-loading. For instance, the type of co-loading and the destination.

Active co-loading requires you to change your processes, while passive co-loading does not need you to do so.

However, it would help if you inquired from your co-loader in advance to avoid issues during the shipping process.

What are the Drawbacks of Co-Loading?

The main drawbacks of co-loading are:

Nature of Goods

Co-loading is not ideal for all goods, which limits its use. for co-loading to be effective, you have to check on the nature, size, and dimensions of the goods.

Goods that are not of the exact dimensions, nature, or size are not suitable for co-loading, limiting their use.

Complicated Scheduling

As a co-loader, you have to make prior arrangements for the goods before shipping. This involves making several contacts for goods to fit your container.

You also have to check on the availability of these goods.

If possible, you have to reschedule the timing for all the goods to coincide with the shipping date.

This can be tiresome and requires patience, especially if the goods have varying arrival dates.

Delayed Shipping

Delayed shipping is a result of rescheduling the co-loading process. This can imply the arrival schedule of your goods.

Such an arrival delay can affect the demand for your goods.

What Type of Shipments is suitable for Co-Loading?

Co-loading is effective if the goods are of the same handling procedure. This is in terms of packaging and loading.

Such a procedure helps in minimizing damage to the goods and effective utilization of space on the container.

You can consider co-loading for goods which are of the same size.

These goods are easy to maximize loading on a container. This reduces the overall shipping cost while offering safety.

You can also consider co-loading goods from the same industry.

This is because these goods have the same handling process, and you can also maximize the space on your container.

Other types of goods that you can co-load are goods that are heading in the same geographical route.

When packaging these goods, you start with those whose destination point is further away from the port of origin.

This helps in the safe loading and unloading of goods, which is vital in enhancing the safety of your goods.

What are the Different Variations of Co-Loading?

The different variations of co-loading are:

Passive Co-loading

This type depends on the coinciding of different shipping factors like time, direction, and shipment size.

If the various cargoes coincide with these factors, then your co-loader loads them in the same container.

The main limitation of this type of co-loading is the availability of goods that align with the shipping factors of your goods.

This can lead to a delay in the shipping of your products,

Active Co-loading

This type involves your co-loader understanding and planning in advance for co-loading.

This is because there is a specification for the shipment of particular goods on a specific date.

Active co-loading is cost-effective and predictable.

This is because you are sure of the shipment of your goods hence reducing the warehousing cost.

How does Co-Loading Impact my Supply Chain?

Co-loading has different impacts on your supply chain, including:

Reduce Inventory Cost

Co-loading offers a quicker shipping option for your goods. This is because your co-loader consolidates the goods before handing them for shipment.

Faster shipping reduces the lead time hence which reduces the warehousing costs.

Reduces Overall Price

Co-loading helps in reducing the shipping cost. This is by paying for the space occupied by your cargo in a container.

Reduction in the shipping cost translates to reduced prices of your imported goods

Is Co-Loading with more than two Freight Forwarders suggestible?

Co-loading with more than two freight forwarders is not an ideal option. You have to pay for the related charges, which can be expensive.

You can get incentives if you choose a single freight forwarder. The best option is to shop around for an ideal freight forwarder before engaging them.

How do I find a suitable Co-Loader for my Supply Chain?

You should consider the following factors when finding a suitable co-loader for your supply chain:

Co-loader Rates

Different co-loaders offer varying co-loader rates, which you must factor in before you engage an ideal one.

You can request different quotations before deciding on which co-loader to select.

When selecting a co-loader with the best price, you should also check on the quality of their services. This is because safe handling of your goods is critical.

Services

The services of different co-loaders differ depending on the needs of the market.

For instance, there are co-loader who will accept your goods after you have packed them while others offer to do this for you.

An ideal co-loader should offer you all the services you want for the safe shipment of your cargo.

Such services include finding space on the container, proper packaging of your goods, and finding the best forwarder.

Certified

You need to check on the certification aspect of your co-loader before engaging in business with them. This is to eliminate chances of working with a rogue or fake co-loader.

Certification also helps in knowing where to start in case there is a dispute to resolve.

Network

Networking is critical in international shipping, especially for a co-loader.

They should be in a position to have a good network of freight forwarders who can assist in shipping your goods to your destination.

Such a network also helps in finding the best price for your shipment.

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If you have any question about customs entry, you will find the answer right here.

Because this guide covers everything you need to know about customs entry.

Keep reading to learn more.

What is a Customs Entry?

A customs entry is a form or a document that is mandatorily presented to the customs authority in regulated country.

This form scrutinizes your shipment in terms of the value, classification and origin of your shipment.

As a result, the findings indicated in this form allow for calculation of duty payment.

Also known as a customs declaration, this form is applicable upon importation or exportation of goods and services.

When is a Customs Entry required?

A customs Entry is required upon entry and exit of goods from

one country to another.

As a result, this form is required upon the request by the customs authority of the country exporting or importing.

What Types of Customs Entry are there?

There exist two types of customs entry. The formal and the informal customs entry.

The formal customs entry caters for goods that must possess an entry or surety bond.

This is because the goods exceed a certain amount of dollars designated by the customs authority.

The amount displayed for these goods should, at the very least, total up to 2500 dollars. Usually these goods are for resale purposes.

The entry bond on these goods seeks to ensure that there is adherence to duties and compliance with customs requirements.

An entry bond has its advantages especially to the well-established importers.

With these bonds alongside customs, the importer can acquire his goods without tax fee, duty fee and other required fees.

The other type of customs entry is the informal customs entry.

Unlike the formal customs, informal customs` goods do not require an entry bond.

This is because, goods under this category do not exceed the bare set minimum value of $2500. However, this amount comes with variations subject to the laid principle for informal entry.

For example, not all goods under $2500 are subject to an informal entry. This exception majorly covers the textiles goods.

For these goods, a value worth $250 is treated as a formal entry.

Another variation under the informal entry customs is the ‘section 321’.  These section allows for goods under the value of $200 to enjoy duty free transport.

However, the goods must be belonging to a single individual and must be transported within a day.

Moreover, in most cases, goods under the informal entry customs are directly for consumption purposes.

What do you Write in a Customs Entry?

The following information is required in a customs Entry form;

• Name and address of shipper and consignee
• Origin of the cargo
• Destination of the cargo
• The type of transport to be in use by the cargo
• Description of the goods alongside of a commodity code
• The value of the goods that is the cost, insurance and freight values. (CIF)
• The weight of the goods
• Customs classification number

What is Customs Entry number?

A customs entry number is also known as the entry processing unit (EPU). This number is usually assigned by the filer.

The number is strictly intended for a particular merchandise. Hence cannot be used again on another cargo.

It makes it easier for the customs authority to identify your cargo.

How do I locate my Customs Entry Number?

In most cases the number is usually at the top corner of the right hand side of a customs entry document.

Thus, it is important to be in the possession of a copy of the customs entry document as well. Sometimes it is designated as an entry processing unit (EPU).

What is Section 321 in Relation to Customs Entry?

As earlier, outlined, section 321 is a legal outline, that intends to explain a variation in the informal entry customs category.

Section 321 allows for goods valued at $200 or less to enjoy duty free transport of the merchandise.

This is with the exception that the goods are being transported by a single person in a single day.

What is a Customs Entry Fee?

This is the fee charged usually by the customs authority that is processing your customs entry requirements for your goods.

Additionally, the fee excludes the duty fee, freight fee and insurance fee.

The customs entry fee is usually based on the type and value of your goods under shipment.

Who Completes the Customs Entry?

The customs entry is under the mandate of the owner of goods or the customs agency helping to complete the form.

This is because most of the information in a customs entry document will be provided by the owner of the goods.

Upon completion, necessary fees are paid then the customs authority takes over.

What Happens if the Wrong Customs Entry is used?

You are bound to experience delays in your shipment.

A wrong custom entry entirely sabotages the shipment you are in possession.

As a result, the customs entry authority makes a follow up to confirm if there was a mix up in the customs entry.

Additionally, in the event the wrong customs entry is found to be intentional, penalties will follow suit.

An accountability of the wrong customs entry must be established.

What is the Difference Between a Customs Release (CBP Form 3461) and a Customs Entry (CBP Form 7501)?

A customs release form, the CBP 3461 is intended to hasten the release of your merchandise. The form gives instructions on the grounds in which your cargo is being released.

For example, the CBP 3461 form may instruct the merchandise to be released for further examination.

The document is made available electronically unless otherwise, that is need for hard copies arises.

Upon the release of your goods, the customs entry (CBP form 7501) is prepared. Here your goods are checked against duty and tax payments.

The CBP 7501 acts as a form that gives a depth outline of the duties and tax adherence of your shipment.

Is Customs Entry the same as Customs Declaration?

A customs entry and a customs declaration bare the same information for shipments.

As a result, they are relatively different from each other.

Sometimes a customs entry is regarded as a customs declaration.

They both give a clear outline of the goods under shipment and outline the statistical background of the merchandise.

Additionally, proof of tax compliance of the goods in shipment is as well highlighted in these forms.

What is the difference between Origin and Preferential Origin in relation to Customs Entry?

Origin defines the place of manufacture of the goods. Origin is a key factor when it comes to determining customs tariff.

As a result, origin plays a major role in taxation, regulation, obligation and setting standards.

Preferential origin outlines an agreement between two countries concerning export and import of goods.

Preferential origin comes with benefits of reduced or even zero duties based on the agreement put forward between the countries.

Additionally, presence of uniform standards can highly promote trade between the partakers of the agreement.

However, preferential origin comes with a list of demands and obligations that member countries have to adhere to.

For example, the goods must incorporate a certain percentage of raw materials from the country of origin.

Or the country must be under the registration of an official database.

These obligations and formalities are meant to manage the level of competition in the market.

What are the Effects of a False Declaration of Origin of goods in a Customs Entry?

In the event that the information concerning the origin of goods is false, a whole reassessment is bound to happen.

This will inconvenience you in terms of time consciousness of the need of goods.

To avoid such delays due to reassessments it is important to double check the origin of your goods.

The major role of customs authority here will be to check for the origin of the goods and the type of goods.

The origin will help in tariff calculation and determination.

These two major concepts work to ensure that unfair competition is eliminated from the market.

False information attracts a penalty of 3 years with a possible extension of 10 years following any fraud suspicions.

Additionally, accumulated errors extending to three or four years will significantly have a negative impact on your financial status.

Customs duty penalties can have a significant impact on the selling price of your merchandise. In the events the goods have already been sold, you will suffer a reduction in your cost margins.

It is important to be careful in delivering correct information, especially if you are dealing with international trade.

What are the Penalties for Contravening of Customs Entry Rules and Regulations?

Penalties in customs entry include double fees of either taxes or duty fee.

Customs rules and regulations define a set of rules that must adhered to.

However, cases of fraud and deviance are eventually bound to happen, especially to importers who seek to evade charges on goods.

As a result, customs authorities and agencies have put in place penalty measures in the event one misuses the rules and regulations put forth.

In the case of a detected violation, an ex-post reassessment is set to commence. This involves review of previous imports.

Additionally, in the event an anomaly is detected in the documents submitted to the agency, an immediate reassessment happens on the goods.

Moreover, the customs authority has put forward a limitation period of 5 years to recover any incidences of custom debts.

This period is set to recover duties and taxes evaded.

Furthermore, false declarations attract a contravention of 3 to 6 years to allow for legal proceedings to address the offences.

What are some of the Methods which Customs uses to Assess Duty and Taxes?

Duty and taxes is a core activity that the customs entry mainly checks against the goods under shipment.

As a result, various methods have been put in place to ensure that calculation of the duties and taxes are adhered to.

These methods include;

• Customs classification and valuation report.

Here the value is made available in the report after an assessment exercise.

• The use of national tariffs to help in the taxations.

These helps to specify the tariff on each item on shipment.

• The use of rates of duty per each tax type.

Any additional charge is defined in the Tariffs.

Can I Disagree with Tariff Values given by Customs?

Yes, you are legally entitled to disagree with tariff values outline by the customs.

Sometimes, the customs authority duty calculations may vary with the clients. In this case, wrong calculations are bound to happen.

If the authority proves adamant to have wrong calculations, you may forward the matter to commissioner-general for a review.

Moreover, if the commissioner-general decides to overlook the matter carelessly, you are permitted to seek a court hearing.

However, these lengths require hard evidence of wrong calculation of duty charges.

Is Customs Entry Filling Mandatory?

Yes, custom entry filling is mandatory. The customs entry filling is applicable to all importers to the US. The filling should take place earlier before the arrival of the shipment.

Filers are allowed to send the entries days before the actual day of arrival of the goods.

The US customs and border protection responds within 5 days before the arrival of the shipments.

US importers have the freedom to self-fill for their entries.

However, for foreign importers on record, there is a restriction that disallows them from self-filling entries.

Do US importers require an IOR number for Customs Entry filling?

Yes, US importers should possess the import on record (IOR) number.

The number is applicable to help in a range of processes during import.

The IOR number allows for easier identification of entries of the importer. The entry number is usually indicated on the CBP 7501 form.

What are the dos and don’ts of Customs Entry filling?

Custom entry filling procedure requires a lot of discipline and adhering to customs rule and regulations.

Ensure you fill out all the information required by the authorities.

This includes;

• Name and complete address of sender
• Complete address and name of receiver
• Item description (if there are several different products in the same package, note them all separately)
• Quantity of items
• Value of each item
• Weight and dimensions of package
• Date of sending
• Invoice number
• Terms of payment
• Procedure to follow for non-deliverable parcels

Additionally, countries come with different restrictions concerning export and import goods. For instance, there are countries which require an Automated Manifest System (AMS), which is US, Canada, Mexico and Philippines.

All countries in the EU require an Entry Summary Declaration.

Different countries thus have different restrictions concerning import and export, ensure to adhere to these restrictions.

Moreover, there are certain things you should avoid when dealing with a customs entry form.

Ensure you do not provide false information about the details of your shipment.

The customs authority has well trained staff who know how to detect and handle such cases of infidelity.

Additionally, make sure you don’t give wrong information concerning any hazardous cargo. Ensure the product description is thus up to task.

Do not be careless when attaching the documents. Ensure the barcodes are easily visible to ensure faster tracing of the merchandise.

Correct packaging of your cargo should be truthfully indicated, otherwise this might be considered as fraud. The penalties are grievous.

Always be intentional to ensuring you documentation is up to task.

This will help you avoid mishaps such as delays due to the need for further verification from the customs authority.

Can I fill out Customs Entry Forms online?

Yes, the forms are made available electronically, hence once you finish, you can email the form to the required customs authority.

With the new technology, handwritten or hardcopy forms are rarely being incorporated according to numerous customs authority or agencies.

Which Countries need Customs Entry?

Numerous countries across the globe require custom entry procedures to take place.

However, countries within the EU do not require any customs entry regulations.

It is important to confirm with the customs authority of exporting or importing countries on the regulations put forth for customs.

What is Customs Entry Acceptance Advice?

A customs entry acceptance advice is a form that is meant to show an import entry has been completed successfully.

The form also regarded as an E2 form, bears the following information;

• Customs entry number
• Clearance date and time
• Consignee
• Summary of freight
• Insurance and VAT charges,
• Breakdown of each item
• Customs value
• Item price.

What is a C88 Certificate?

The C88 certificate is a single administrative document which bears the details of your goods and how they are moving.

It acts as a proof of authorization to the country of import or export.

The certificate plays a major role in assisting in the declaration of imports, exports, transits and community status declaration.

What types of Shipment require a Customs Entry?

Shipments with restricted goods mandatorily require customs entry. These may encompass

• Alcoholics and beverages
• Animal products
• Plants and animals
• Hazardous chemicals and gases and other restricted goods in the country of import or export.

As a result, it is important to check with the country of important and export and be aware of the type of goods that are on restriction. Moreover, you can check on goods that require a customs entry.

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