Let’s look at some of the fundamental aspects of export control classification number.

So, if you want to learn more about ECCN, read this guide:

What Is An Export Control Classification Number (ECCN)?

An Export Control Classification Number is a number which is used by the Commercial Control List (CCL). The number consists of five numbers which include both numeric and alphabetical numerals

Also, the number helps classify exports and determine which exports require a license of commerce from the department of commerce.

The ECCN categorizes the exports into groups.

These are on the basis of the commodity, the software or the technology involved.

ECCN is divided into ten groups under the Commercial Control List.

Further divisions result to five product groups from the ten groups.

As a result, the first character of the ECCN describes the commodity in its broad prospective. While the second character identifies the product group.

Why Do I Need An ECCN Number?

Basically, an ECCN serves as a regulatory tool for which all exports must adhere too.

Aside from ensuring that the products are well categorized, ECCN numbers countercheck the need for licenses for the export goods.

What Is An Example Of ECCN?

First and foremost, the 10 groups used in classification are;

• Nuclear and Miscellaneous
• Materials, Chemicals, Microorganisms and Toxins
• Materials processing
• Electronics
• Computers
• Telecommunication and Information Security
• Sensors and lasers
• Navigation and Avionics
• Marine
• Aerospace and propulsion

The above categories form the Commercial Control List (CCL). For the product grouping, it is subdivided into five with alphabets.

These are;

1. Systems, Equipment and Components
2. Test, Inspection and Production Equipment
3. Material
4. Software
5. Technology

These groupings allow for easier identifications of exports. For example, an export with the ECCN number 4E001 postulates that the exports consist of Computers in relation with the Commercial Control list.

E categorizes the export product in the technology line of product.

Where Is An ECCN Number Necessary?

An ECCN is necessary to determine the need for licensing of an export product. A license depends on the mandates put forth by the country receiving the goods.

There are three levels of control in export for the products. The end user, end use and end use of the product.

This means that the exporting country may not be in need of a license. However, the end user term in the country of export may require a license for the end user.

The ECCN number thus helps to decipher the terms for export and determine need for a license.

Additionally, manufacturers are aware of licensing need owing to the fact that they have numerous handlings of the same product.

Therefore, manufactures apply the ECCN number to help their clients to easily be informed of the need for licensing to their products.

Manufacturers indicate this on the description box for the cargo. The description box has a ‘Reason for control’ part where manufacturers put an x to indicate need for licensing.

To be able to do these manufacturers apply the knowledge of the ECCN numbers as used in previous exports that required a license.

Do Export Licensing Requirements Change Depending On Method Of Shipment?

No, licensing option only differ depending on the classification of the product. The classification depends on guidelines from the Export Administration Regulation EAR.

There are products which are not liable to a license while for other it is mandatory for them to have licenses.

Nonetheless, the mentioned classifications are subject to review by the office of export compliance.

Therefore, method of shipment does not affect the licensing process. It does not matter whether it’s through online shipment or the physical shipment process.

The product is the one to either qualify or dismiss the licensing.

What Is The Difference Between ECCN Code And HTS Code?

Both the ECCN and the HTS Code are used in product classification. However, the HTS code is a 10-digit code used in determining custom tariff classifications for commodities.

The ECCN code consists of only 5 alphanumeric characters that help in the classification process.

What Is ECCN Code Format?

The ECCN follows a certain format universal to all ECCN numbers. This includes the application of both numbers and alphabets in determining an ECCN code.

First and foremost, the ECCN number begins with numbers ranging from 0 to 10.  These numbers categorize the shipment for easier identification.

The category represents the Commercial Control List as earlier outlined.

The second character is an alphabet that indicates further the product group of your merchandise. These alphabets are only five, thus from A to E, as earlier outlined.

In total, the ECCN code consists of five characters. The last three numbers illustrate the reason for control for the shipment.

How Do I Classify My Products For Export Controls?

There are three ways in which you can use to classify your products.

You can choose to classify individually, or use the BIS or rely on a product vendor.

It is part and parcel of the Commerce department, hence can be used to help classify export products.

The following are the three main ways to classify product for export control explained.

Self-classification Method

From the name, you can classify your export product individually.

This means that you will have to source for the ECCN codes in the CCL as well as identify the product group for your export.

As a result, you have to be fully aware of the type of product you are exporting. Additionally, an extensive knowledge on the format and structure of the CCL list is an added advantage.

Sending The BIS A Request For Classification

This can be achieved through an online process. This is an online system that allows you to submit a request for the classification of your goods.

However, there is a certain requirement before accessing the system. The company in charge provides an identification from the company known as the CIN, which allows you to assess the system in order to submit the request.

Rely On Vendor

The manufacturer of the product sometimes is best suit to understand the nature of the product. Additionally, sometimes the manufacturer`s knowledge on the product can easily avail you with the ECCN details.

However, you are also required to make an effort to ascertain the ECCN provided.

As much as the vendors are acquainted with the commodity, any mishaps on the ECCN identification falls back on you, not the exporter.

Ensure your ECCN code is up to date with the current codes and your findings are in line with the vendor’s suggestion.

What Is The Difference Between Schedule B And ECCN Number?

As earlier outlined, ECCN code is used to classify export products according in relation to the CCL list and product groups.

Schedule B codes on the other hand help to track trade statistics.  The codes help to categorize exports meant for other countries.

Unlike the ECCN code, Schedule B is a 10-digit code.  The US Commerce department, Census Bureau and the Foreign Trade Division makes use of the Schedule B especially in publishing the US export statistics.

How Do I Find An ECCN Number?

There are four ways which you can use to find an ECCN number.

First of all, you can choose to just look for the code yourself.  This means you get to familiarize with the CCL list and work your way through the product list as well.

Another easier way is to consult with the manufacturer of the product. Chances are high that the manufacturer has the ECCN number of the product owing to the numerous times handling the same product.

You could also choose to use the Electronic system for item classification. This is an online platform designed to help you find the ECCN number.

However, you will have to be registered and given a PIN that allows you access to the site

Lastly, you could reach out to the BIS and request for the commodity classification for your good. You will thus need to fill the BIS-784P then proceed to make the request.

However, make sure to make earlier arrangements as the process takes 3 to 4 weeks to finalize.

Are There Any Requirements For Product Classification Requests?

Yes, first and foremost you should adhere to the maximum number of request outlined. Thereafter, provide all the necessary information that can aid in classifying your item

This may include attaching brochures and extensive specifications to describe your item

The BIS-784 form helps to disclose the information required to help in the classification process. Ensure to fill it appropriately.

Once you have fully exhausted describing your item, ensure to sign and correctly submit for classification.

If you are using online request services, ensure you have the pin number to access the website for classification

What is A Commercial Control List?

A commercial control list from the name, is a list that outlays the categories for items and further divulges details on the need for a license for the particular items.

What Happens If My Product Is Not On The Commercial Control List?

The product is then listed as EAR99. It is very common as a majority of products are usually not on the CCL list.

Moreover, these goods do not require any licensing procedures. However, this is not the case if your EAR99 is being exported to a certified country, or has proscriptions on the end-use of the item.

In this case a license is mandatory.

Do Commerce Control List (CCL) and ECCNs Change Often?

Yes, the CCL and ECCN s do change over time. As a result, it is important to be aware of the current CCL and ECCN codes.

The commerce department makes changes to the CCL list by removing or even adding products to the list. Additionally, the technical characteristics to items also change.

To be up to date, subscribe to email notifications to help you stay up to date.

Moreover, you could always make visits to the website to double check your ECCNs authenticity and acceptability.

What Is The Difference Between EAR99 And NLR?

EAR99 is for item classification which is assigned to products which are not found in the CCL list.

NLR means no license required. It is used in shipment classification.

EAR99 items mostly fall under items with NLR.

Additionally, there are items in the CCL list that also do not require a license.

Moreover, an EAR99 can also be subject to a license if the item is exported to a country.

It whoever restricts the use of the item, or end-user of concern, or supports a barred end-use.

Is ECCN Number EAR99 A Free Pass For Export Compliance?

No, EAR99 is not a free pass for export compliance.

The EAR99 simply states the product classification is not on the CCL list. However, the item is still subject to authorization for shipment.

It has to undergo a check to determine the terms of transactions such as the need for licensing.

How Much Does ECCN Classification Service Cost?

The unit price used is the SKU. The SKU price depends on the volume of your products or items.

Also, the more the volume of items, the more the discount on the volume of your items which further translates to less costs.

What is ECCN Country Chart?

The ECCN country chart outlines the regulations for licensing for exports to various countries across the world. This is in line with the destination details and the information on reasons for control.

The item follows the procedure of first identifying itself with the CCL list. Thereafter, based on the given information, you either obtain a license or refrain from moving forth with the export.

What Are The Next Steps After Determining My ECCN?

The next step is to find out whether your item requires a license.

This applies to shipments which have items prohibited to the end –user or end use in the country of export.

To determine license requirement for your item, check the `Reasons for Control`.

The ECCN entry provides this information.

Further cross check this information with Reasons for control to the country of destination. The Commerce Country chart helps with these details.

Afterwards, once you find an X in the box, be sure to obtain a license for your item.

What Does Prohibited End User Or End Use Mean In Relation To Export Control?

Prohibited end user which means the item being exported is under restrictions due to the harm it could cause to people.

As a result, such items are subject to licenses or rejection by the country of export. The EAR provides guidelines and restrictions in relation to end user and end use.

How Do I Screen Customers For Exports?

Screening customer for exports helps to easily identify prohibited products from individuals or countries restricted for exports.

Although there are documents that can identify these customers such as the Denied Persons List or Entity list to help with restrictions.

However, there is a website that intensively highlights prohibited exports and the countries. It is known as the consolidated screening list.

It is a much available search engine database.

The information in this site is from the Department of Commerce, State and Treasury.

Moreover, the BIS also provides a website you can use to obtain more information. It can be on the customers, and look out for customers to keep off from.

If I Need An Export License How Do, I Apply For One?

The growing technology has made it easier to acquire licenses. Visit the described online platform as outlined by the export department and fill in the requirements described.

Ensure to attach the following documents in the application;

• Profile of exporter
• Copy of the purchase order
• Identification proof
• Address proof
• Bank certificate
• Any other relevant documents requested by the site.

Is There A Fee For Submitting An Application For License Application To BIS?

No, sending a licensing application form is free, it does not attract any extra costs.

What Is A License Exception?

This is an approval that grants the permission to export and re-export items without the requirements of a license.

The EAR outlines the necessary conditions subject to a license exception for different goods.

Under the EAR the following exceptions to licensing occur;

LVS; These are items with limited value

GBS;  These items are controlled for national security reasons to specific countries.
CIV;  These items are controlled for national security reasons to particular countries where end-user is a citizen.
TSR; These are certain technology and software to certain countries.
APP; These entails computer exports.
KMI;  This encompasses encryption exemption for key management.
TMP;   It entails temporary exports, re-exports, or imports,

RPL;  Involves repair and replacement parts for items already in export.
GFT;   These are gifts and humanitarian donations.
GOV;   Entails exports to some government entities.
TSU;  Involves mass-market technology and software exports.
BAG;    These are baggage exemptions.
AVS;    Aircraft and vessels and most exports of spare parts associated with aircraft and vessels.
APR;    Permits re-export from approved countries.
ENC;  These are encryption devices and software.
AGR;   Agricultural commodities.
CCD;   Authorization of consumer communication devices to Cuba.

What Happens If I Don’t Get The Proper Export Authorization?

You are most likely to attract penalties and fee charges from the export control department. As a result, you are strictly mandated to follow the regulations put in place to evade such extra costs and inconveniences.

Additionally, if you are using a representative to handle your exports, ensure they are in line with the EAR regulations. Failure to which you solely attract punishments, regardless of using someone else to handle your shipment.

At Tj chinafreight, we will help you whenever you’re shipping from China.

We will handle all the freight forwarding services for you.

If you have any question about export license, you will find the answer right here.

So keep reading to learn more.

What Is An Export License?

Export license refers to a shipping document issued by the government which allows products shipping to a foreign country by authorized individuals or companies.

Why Is Export License Important?

In the International market, exportation and importation of products are carried out under certain rules and guidelines.

An export license happens to be one of the requirements for shipping certain goods to a foreign country.

Keep in mind that not all goods will need it.

Factors such as; nature of goods, end-use of the products, and trade activities will determine whether or not an export license is needed.

An export license is important, especially when dealing with expensive and high-value goods. It provides safety to the goods being shipped as it can be presented as a report of the goods.

Who Issues Export Licenses?

An export license is issued by an authorized licensing agency.

This is done after carefully analyzing all factors regarding the export transaction.

Do All Countries Require An Export License When Exporting Goods?

Not all countries require an export license when exporting goods.

Most people fail to understand that type of products being exported, destination, and usability also determine whether or not you will need export license.

In addition to that, trade relations among different countries or regions also determine whether or not you might require an export license.

If you need additional information regarding your exportation, you must confirm with your local authorities for any further requirements.

Are Export Licenses The Same For All Kinds of Shipments?

The export license will vary depending on the use of the product as well as the export destination.  Nevertheless, export license requirements remain similar despite the shipment method or transmission.

How Can I Get An Export License?

The first thing you need to ask yourself is whether you need an export license.

Some basic consumer goods don’t often require an export license and the process for acquiring one is not difficult.

Before sending your application, seek to find out whether the classification of your goods has a specific Export Control Classification Number.

This number gives a description of the products and the licensing requirements needed.

Different countries have different systems and therefore confirm with your local authorities to ensure that you have everything done as per the system.

After confirming if you require one, you will need to apply for the export license.

While some systems only accept electronic submissions, some accept both documentation and electronic submissions.

Supporting documents might also be required during the export license application process. Some of them might include;

• Letter of explanation
• Address
• Bank certificate
• A copy of the purchase order
• Proof of payment
• Application form for the export license

Once you have confirmed that everything is in place, you can submit your application. Processing of the export license might take around 2-6 weeks after which you will receive your export license.

It is important to know that certain factors can delay your application. Such factors are not limited to;

• Failure to sign the application.
• Submitting a handwritten application instead of a typed one.
• Not giving a full explanation to the products that you intend to export.
• Failure to explain the specific end use of the goods.

Depending on the type of export license, the validity period normally ranges from 6 to 12 months after being issued. However, this can vary based on certain factors.

How Do I Determine If I Need Export License?

To determine whether you need an export license, the first thing you can do is check whether your products are controlled by BIS. Analyze the Commerce Control List to see if your products have an Export Control Classification Number.

If they have a number, compare the number to the Commerce Control List to confirm the license requirement for your items.

Do I Need An Export License For All Goods I Ship Out Of The Country?

No, you don’t need an export license for all goods you ship out of the country. However, you shouldn’t assume that your products don’t need an export license.

Exporting some products might need an export license and failure to stay compliant can result in harsh repercussions.

The reason as to whether or not you might need an export license will be determined by the following factors;

• Destination of your goods – Different countries have different product control policies and trade agreements that might determine the acquisition of an export license.
• End use of the products – You need to ensure that your end-user is authorized to freely use the product.
• Nature of the goods being exported – Most if not all controlled goods require an export license.

Some of these controlled products might include;

1. Goods used for torture
2. Radioactive goods

• Products designed for military use

1. Dual -use-items which are used for both military and civil purposes.

• Licensability of trade activities – Exporting your goods to foreign countries might attract the need for an export license.

How Long Does It Take To Get An Export License?

The time taken to get an export license can range from 2-6 weeks or more.

The length of time taken will depend on a couple of factors such as how accurate you fill the forms.

Filling the forms wrongly might otherwise slow down the process.

Is There A Difference Between Export License And Import License?

Yes, just like import is different from export so does an export license differ from an import license.

Export license refers to document issued by government to allow shipment of goods to a foreign country by an authorized individual or company.

Conversely, import license refers to a document issued by the government to allow entry of goods into the country from other foreign countries.

One of the major purposes of an import license is to regulate the goods being brought into a country. This is mostly done to facilitate the thriving of local industries by preventing competition from foreign goods.

What Are The Contents Of An Export License?

An export license includes the following details;

• Details of the products being exported
• Mode of transport to be used
• The expiry date of the license
• Details of the exporter
• Destination of the goods being exported
• The reference number of the applicant
• Date of issuance
• Signature of the authorities
• Quantity of products being exported
• The immediate consignee in the foreign country
• The export license number
• Address of the place of issuance

Apart From Export License, Which Other Documents Do I Need To Export Goods?

An export license is not the only document you need to achieve successful exportation.

You will need to present other supporting documents for customs officials to efficiently allow the exportation of your products.

Other documents you might need for your exportation include the following;

• Bill of lading – A bill of lading is an export document issued by a carrier and acknowledges the receipt of goods.

It contains all the details about the products being exported together with the destination of the goods. Additionally, a bill of lading also outlines the terms and conditions of carriage.

There are three types of bills of lading documents which include;

1. Inland bill of lading – It is a contract between the shipper and carrier which serves as the receipt of goods via overland transportation.
2. Ocean bill of lading – Just like the island bill of lading, an ocean bill of lading serves as a receipt of goods via the sea.

• Air Waybill – An air waybill is a contract between the shipper and the carrier to acknowledge receipt of goods transported via air.
• Commercial invoice – A commercial invoice is a trade document issued by the seller to the buyer.

It gives a description of the goods being transported and the total amount payable.

A commercial invoice is one of the most important documents requested by customs officials. It provides details of the destination, contents, value, and origin of the shipment.

• Proforma invoice – Unlike an invoice, a proforma invoice is issued by the seller to provide cost estimates of the goods. Additionally, it includes the shipment time as well as the terms of sale and payment agreed upon.
• Certificate of origin –this is a trade document that states that the products are not only produced and obtained but also manufactured in a particular country.

In simple terms, it declares where the goods come from.

• Packing List – A packing list is a document that describes every aspect of the contents being exported. The type of goods, amount, weight, markings, size, and any special instructions for the shipment is included in a packing list.
• Dangerous goods forms – Just as the name implies, a dangerous goods form issued when exporting goods that are perceived to be hazardous. The document certifies that the goods have met the required standards before being exported.

Exporting such goods is always very tricky owing to the several restrictions in place.

Therefore, before indulging in such, ensure that you confirm if your products lie under the dangerous goods classification and take necessary actions.

• Export declaration – For the customs officials to control exports, they will ask for the export declaration of your goods. This document simply provides information about the goods being exported.
• Certificate of manufacturer – is given by manufacturer to buyer certifying that goods have been manufactured and are ready for pickup with all risks transferred to buyer.
• Shipper’s letter of instruction – provided by the exporter outlining all the requirements to be met during the handling and transportation of the goods.
• Dock receipts – Once your goods are received by your shipping company, they will issue you with a dock receipt. It acknowledges the receipt of goods by the shipper.
• Inspection certificate – An inspection certificate certifies that the goods have passed through inspection and meet the listed terms in a sales contract.
• Insurance certificate – An insurance certificate is meant to cover your goods against any loss or damage while in transit.

What Is An Export License Number?

An export license number comprises five characters that are alphanumeric and which are used in the grouping of exports.

This is done to assess whether or not an export license is needed.

The first character indicates the product’s broader features such as electronics or nuclear materials.

The second character indicates the product’s group which can either be grouped as software or material among other groupings.

What Is A Validated Export License?

A validated export license refers to a document that is issued by the government allowing the shipment of specified products to other countries.

The license is often valid for a specified period in which the exportation is to be carried out.

What Are The Requirements For A Food Export License?

Getting a food export license will depend on the laws and regulations enacted in the destination country you are exporting to.

For instance, most countries will put strict measures on the exportation of staple food to protect the sufficiency of the country.

With that in mind, expect to incur a higher cost when exporting such restricted foodstuffs. Nevertheless, some of the common requirements include health and safety certifications to prove that food is safe for human consumption.

Also, you need to ensure that the product being exported has enough shelf-life left and well packaged.

Additionally, the labeling on the packaging should list all contents and details of each food product.

Depending on the country you are exporting from, you will need to present additional supporting documents for you to get food export license.

Therefore, ensure that you keenly enquire from your local authorities of any other possible requirement needed by them.

Do Export Licensing Requirements Change Depending On The Method of Shipment?

The method of shipment used doesn’t affect the export licensing requirements and this is inclusive of technology shipments.

With the current trends, items such as technology can be easily exported through the internet or via hand-carried items.

How Much Does An Export License Cost?

On average, export license costs can range from $24 -$55 or more.

The cost might vary from one country to the other and therefore it is safe to confirm with your local authorities.

How Long Is An Export License Valid?

An export license is normally valid for up to 6 months since the date issued.

It’s important to note that the validity of an export license will also vary based on the type of export license.

For instance, an Open Individual Export License is normally valid for as long as 5 years.

On the other hand, the Standard Individual Export License is valid for up to 2 years.

Who Is Responsible For Export License?

The exporter always plays a major role in any export procedure as he or she is the one who initiates everything.

That said, it’s worth noting that the exporter is responsible for the export license.

The exporter should ensure that all rules and guidelines are followed to avoid penalties during exportation.

He or she should find out whether or not the goods being exported will require an export license and be well informed.

What Are Export License Exceptions?

Export license exception refers to permission that authorizes you to export or re-export products.

It is subject to Export Administration Regulations that would otherwise need licensing.

This is often carried out under stated conditions and includes products categorized under the Jurisdiction of the Department of Commerce.

How Do I Determine Export License Exceptions?

There are four steps to help in determining export license exceptions.

The first step is to find your product classification in the Commerce Control List (CCL).

There are 10 product categories in the CCL therefore you need to know where your products fall.

Once you find your product classification, you will come across the license exceptions for that classification in the CCL.

The CCL is also where you will find the conditions under which the exceptions apply.

Check in the Commerce Country chart if there’s an “X” in the box or any other requirements. If not, the product doesn’t require any license.

Review the license exceptions and ensure that you meet all criteria. If your products qualify, you are free to use the license exception.

What Are Export License Requirements For Hazardous Goods?

Some of the export license requirements for hazardous goods are not limited to;

• Hazardous goods should have special packaging to prevent them from causing harm.
• You should have your products appropriately labeled. The labeling should be translated to the language of the destination country.
• Exported hazardous items should have the necessary documentation.
• Hazardous goods should be exported by authorized and registered companies or individuals.
• You should not export hazardous materials 6 months to their date of expiry.

Now, for all your import needs from China, Tj chinafreight will guarantee a seamless and cost effective shipping process.

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

In this guide, you will learn everything you need to know about export declaration.

You will learn how to fill export declaration from, goods to declare, know the documentation process and the parties involved, among other critical aspects.

So, before starting an export business, read this guide.

What Is Export Declaration?

Export declaration refers to a form that is submitted by an exporter to customs during the export procedure.

The form contains important details about the goods due for shipping including goods:

• Type
• Number
• Value
• Quantity and any other qualities
• Country of Origin

It is important for the customs official to have this information because it enables them to supervise the export.

Additionally, they can also compile numerical data of how a country trades globally.

This form works the same way as a certificate of origin. The document must be signed by the relevant authority in the country of origin.

Also known as exchange control, the following are some of the importance of export declaration:

• Enables customs officials to know the nature of goods being This ensures that the consignments do not contain any illegal goods.
• It also ensures that an exporter only exports goods for which they have the required documents and certificates.

This mostly applies in a case where the exporter is dealing with sensitive or restricted goods.

• Benefits exporter since he/she can get preferential treatment of the goods exported, especially if he/she is a member of the trading bloc.

The benefits could be payment of lesser fees or no customs duty especially if the goods originate from one of the trading blocks.

• Provides the intended export dates as well as details regarding the port of loading, port of discharge, and the destination port. This helps in avoiding inconveniences that may arise to the exporter, the exporting company, and the importer.
• It is helpful to the exporter while obtaining the Export Declaration Number (EDN). The exporter requires an EDN for a successful export process.

When Is An Exchange Control Form Needed?

This form is a basic requirement during export. However, the form should be filled 6 months before the export date.

This is for all types of goods that are controlled, regulated, or prohibited, and it is regardless of the value. It is imposed for commercial goods destined to any country other than the U.S.

Customs need the export declaration throughout the export procedure.

What Does An Export Declaration Include?

An export declaration shares in it some very important details. Some of these include the following:

• There must be details about the exporter or the consignor, the importer or the consignee, and the consignment.
• The goods in the consignment must be classified as per the prescribed codes, and this must equally be presented in the declaration.
• It is important to indicate in the form the date of export as well as the details about the port of loading, the shipping company, and the destination port.
• Customs require the consignor to sign a document called the charter party. This document has the information about the destination of the shipment, nature of the goods as well as overall freight charges.

What Is An Export Declaration Format?

The export declaration contains checkboxes for information that the declarant is supposed to fill or tick from the provided answers.

Some of this information includes:

• General Information like: customs security number, form number, nature of cargo, shipping bill number and date, mode of transport
• Name and address of the trader
• Name and address of the payee
• General commodity description
• Country of origin
• Country of destination
• Port of discharge
• Invoice number, invoice currency, invoice date, and invoice amount
• Other particular information includes FOB value, freight, insurance, commission, discount, other deductions, and packing charges.

After correctly filling the export declaration, the exporter or representative acting on their behalf should declare that indeed they are the consignor.

The declaration is made and the information they have provided in the form is accurate.

Lastly, the declarant should provide the relevant signatures at the end of the form.

Is An Export Declaration Required For All Kinds Of Goods?

You should file an export declaration for the goods that require an export permit and excisable goods. That is, goods produced within the country such as tobacco and tax paid on such commodities is called excise duty.

You should also file an export declaration for goods with a value greater than $2,000. There are however goods that customs exempt from the declaration such as pets, domestic cargo, household effects, etc.

Who Is In Charge Of Lodging An Exchange Control?

An exporter or a representative working on his/her behalf can lodge an export declaration up to six months before date of export.

The exporter should lodge an exchange control for every shipment he/she trades globally.

A shipment is basically goods sent from a trader to the one who trades. The trader still retains ownership of the goods.

The one who trades is a person exporting the goods. It can also be the one who owns the goods or representative of the trader.

A recipient of a shipment is the one who receives the final exported goods.

Let’s say, a trader trades with the receiver, the trader is supposed to lodge an exchange control for the shipment.

It is however important to note that the consignors are persons established by the European Union.

How Do I Fill Out An Export Declaration Form?

In filling out an export declaration form, you should consider the following:

• Enter the name of the customs office
• If the exporter is the declarant, enter the identity, postal code and location of the trader who is also the

Also fill in the identity, postal code and location of the receiver who is also the consignee.

• Enter the date of declaration and the name of the port of departure.
• State the name of the vessel that carries the goods and the date of departure of the vessel that carries the goods.
• Indicate the final destination and the country of the goods.
• Show the name of the warehouse where you will store the goods.
• Fill in the form after confirmation is granted by the customs counselor or relevant customs officer.
• Give the general product name as provided in the invoice.
• State the tariff schedule code (6 digits) and statistical code (three digits) of the Export Statistical Schedule.
• Enter the statistical units listed on the Export Statistical Schedule and also important to enter the quantity expressed by the unit.
• One must also enter the Freight On Board (F.O.B) price in the currency for the country of origin of the goods.
• Indicate the total number of cargoes, package marks, and numbers. When you load the goods into a container, indicate this and also point of loading.
• On the form provided for export declaration format, the consignor is to check and confirm that all columns are answered truthfully. This should be done before forwarding it to the customs office for verification.

Who Provides An Export Declaration Document?

The exporter may hire a shipping company, transporter or customs agent to make the export declaration and get their goods through customs.

The goods due for export must be ready before you can get custom clearance.

After the consignor fulfilling all processes with the exporting company and issuing of exporting license, then he/she can receive an export declaration.

Upon checking the declaration certificate, the shipping company provides the export declaration. They make the declaration and confirm the details given.

The value of the consignment that buyer receives represents the export value contracted and declared above.

How Much Does An Export Declaration Cost?

Export declaration costs are different for each country’s customs.

The estimated cost for a single export declaration however ranges from $20 to $70.

How Long Is An Export Declaration Valid For?

There is no definite amount of time that an export declaration is valid for.

However, customs office may render an export declaration invalid if goods have not left the customs territory after 150 days from release date.

Can I Lodge An Export Declaration In Advance?

Message declarants can lodge export declarations in advance 30 days before presenting the goods to customs.

The declaration must clearly state the date and exact time the shipment is ready for customs control.

After the date and time pass the customs presents the declarant with a settlement on the release of the goods.

Declarant can rectify declaration made in advance within the said duration, after which goods can be released from the customs territory for export.

It is also probable to delay or bring forward the declared time or date.

The exporter lodges the declaration to the Integrated Cargo System (ICS) of the customs territory. You can submit this declaration either electronically or manually and at the customs office.

What Is The Meaning Of Exchange Control Number?

This number; often abbreviated as (EDN), is a number that has nine alphanumeric characters. Customs provide this number to the exporter in exchange for his/her detailed information.

How Do I Find My Export Declaration Number?

To acquire the EDN, the exporter or export agent needs to lodge export declaration with the customs office using the recommended format.

There are two ways to lodge the declaration:

• Electronically: exporters use an electronic service system provided by customs to lodge their declarations from wherever they may be.
• Manually: the document is prepared manually and submitted at the customs office.

The Customs will verify the information in the export declaration then issue an Export Declaration Number.

If there are any errors, the exporter should lodge the declaration again after the amendment.

Note, to obtain an EDN, first you have to understand how to lodge an export declaration electronically using the correct software system.

How Is An Export Declaration Number Useful?

Some of the uses of an EDN include:

• It notifies the exporter of the release of goods from the port.
• Informs of return or release of goods from or to a warehouse.
• Helps in recognizing individual goods contained in one combined shipment.

Is There A Difference Between The Export Declaration Form And Import Declaration?

Yes, there is a difference between the Export Declaration form and the Import Declaration form.

The export declaration form is presented by a trader at the port. It provides detailed information about the goods due for export.

An import declaration is a form provided by customs office for importer to fill in. They declares the correct details about the goods being imported.

Can I Amend An Export Declaration?

It is possible to amend an export declaration.

You should submit an appeal for amendment as soon as you notice an error in your export declaration.

The goods meant for export cannot leave the customs territory until customs make a decision about the amendment.

The customs must then forward the decision as a pdf to the declarant.

If customs release the goods for export, then the declarant cannot perform but the customs.

The declarant can appeal for amendment to customs either electronically or manually (in writing) by the exporter or a representative agent.

If the export declaration that needs rectification was submitted by an agent, then only this agent can request for correction.

The request for amendment only affects declared goods that have already left the customs territory if the request is made by the exporter.

Can I Cancel An Export Declaration?

You can request for cancellation of an export declaration via the relevant e-customs system.

The steps for the cancellation process are as follows:

• Open the export declaration, go to the ‘actions group’ and ‘click send cancellation request’.
• In the request cancellation window, fill out the applicable fields and click send. The status of the export declaration will change to ‘cancellation sent’.
• The customs will send you a message whether or not your cancellation was successful.

In the event that the cancellation was successful, the status in the customs system will change to ‘canceled’.

If the cancellation was unsuccessful, you can find out the possible reasons for the rejection and try cancelling once again.

Which Documents Do I Need To Enclose With An Export Declaration?

Documents that you need to enclose with an export declaration include the following:

Proforma Invoice – this document shows the value of goods to be exported. Customs requires that the invoice used with the export declaration have the following details;

• The invoice number and the date issued
• The seller’s details (name, postal address, phone number, e-mail address)
• The buyer’s personal information
• Country of origin of the goods
• Country of destination
• Consignment details
• Time and means of delivery
• Commodity code (Hs number)
• Price of the goods
• Reason for export
• Exporters signature

Other supplementary documents that need to be enclosed with an export declaration include:

• Shipping bill- this is a form that customs use before goods can exit a country or a warehouse.
• Airway bill/ bill of lading– this is a receipt that the airline in question issues for goods as proof of export.
• Commercial invoice– this is a document that clearly describes the goods sold and how much the customer owes the seller.
• Letter of credit– this is a document that guarantees payment of goods. It is a third party that issues this document
• Certificate of origin– this document certifies that the goods meant for export are indeed from a certain country.
• Packing list– this document provides details about the consignment including all the packaging details about the consignment.

What Is The Difference Between An Export Declaration And Export Document?

The export declaration is presented by a trader at the port. It contains the information of the shipped items.

This includes what the goods are, the value of the goods and how many the goods are.

Conversely, export document is any document that the exporter issues to their shipping agent containing instructions for shipping the goods.

It also gives details of the goods due for export and the name of the country of origin.

Examples of export documents are: certificate of origin, packing list, invoice, shipping bill, etc.

What Happens If Goods Exit A Country Without An Export Declaration?

Ideally, goods should not leave a country without the export declaration.

If the exporter fails to lodge an export declaration, they might attract a penalty or a customs debt.

If goods exit a country’s without an export declaration, you should lodge an additional statement code and enter it in the export declaration.

The exporter should present all documents enclosed with the export declaration and any other proof that goods have exited the country’s customs territory.

If goods are already in another country where they also require an export declaration, you can lodge the declaration retrospectively under special conditions.

You should lodge the declaration in the country in question.

For any questions or inquiries, contact Tj chinafreight right now.

If you have any question about express bill of lading, you will find it right here.

So, keep reading to learn more.

What Is Express Bill Of Lading?

An Express bill of lading is a document receipt that contains all the relevant information about the shipment.

Normally, the seller issues this document to the shipper who acts as transport agent of the cargo.

What Is The Purpose Of Express Bill Of Lading?

The benefits that come with the Express bill of lading are immense. These benefits include:

1. It is very useful in cases where shipping transactions do not involve a bank. This eliminates the need to secure payments on basis of the original BOL during delivery.
2. Express Bill of Lading is fast: it allows shipments to move faster to the consignee. The carrier should move goods to the named consignee without providing additional documents.

• In cases of a short duration of time, printing, and courier of original BOL is not achievable. Therefore, the shipper and consignee agree to use Express B/L to speed up the process.

When Can I Use An Express Bill Of Lading?

Mostly, you can use Express Bill of Lading under the following circumstances:

• If you have made the payments before shipping the goods.
• You can also use Express Bill of Lading if you still owe/credit the supplier.

By using Express Bill of Lading, the goods are not hold up since there is no issuing of original BOL. This, as a result, saves on the time taken to ship and reduces the courier fee.

What Is The Express Bill Of Lading Procedure?

There is a certain procedural setup that you should follow to ensure the safety of prompt’s shipment. These procedures include:

The consignee signs a contract with the seller, for which the consignee issues a letter of credit to guarantee payment.

The seller arranges for transportation by approaching a transportation agency in this, case the carrier.

The shipping agent can also serve the purpose rather than the seller doing it.

The carrier confirms the date and time of delivery to the seller (exporter).

Upon the arrival of goods, the person in charge of the ship submits receipts to the Port Authority Trust.

These receipts act as confirmation of the presence of the cargo on that ship.

The seller makes all pending charges to ensure the carrier acquires the receipts, which enable processing of the express Bill of Lading.

Once the seller makes payments, the carrier receives the receipts that allow physical inspection of goods against the contents on the receipt.

After completing the inspection, the carrier calculates the goods accordingly to ensure there is no short loads of the goods.

This clearance process allows the processing and fast discharge of the cargo by the responsible agents.

Note, due to the unavailability of the original bill of lading the shipper only presents the Express bill of lading to the carrier.

The agents at the port will not request carrier to produce any other document rather they will release the goods for delivery.

What Is The Difference Between Original Bill Of Lading And Express Bill Of Lading?

Original bill of lading commonly serves as a shipping document between the shipper and the carrier.

This document confirms the carrier receipts of the goods.

Additionally, the original bill of lading does not work as a single copy but rather printing of two similar documents is important.

Both the shipper and the consignee acquire one of these documents.

Note, with the original bill of lading, the consignee will not receive the shipments if the shipper still holds the original BOL.

Carriers use Express bill of lading to facilitate the contract between them and the buyer.

With Express bill of lading, you do not require to produce the original bill of lading.

This results in a fast release of goods for delivery purposes.

Using the Express bill of lading, allows you to mail the documents back to the shipper electronically hence eliminating courier fees.

This method saves on time and any extra cost you may incur along the process.

Is Express Bill Of Lading Negotiable?

No.

Normally this document is not negotiable.

With a negotiable bill, the shipper will specify the delivery of the shipment to anyone who has claims ownership.

The negotiable bill does not indicate the specific names of the carrier and the buyer.

It also specifies the document title and who controls the shipment (does not indicate the specific buyer names).

Express Bill of Lading is non-negotiable, which requires you to document all the necessary information on the same sales contract and not elsewhere.

Express Bill of Lading does not declare ownership of the goods but rather, specifies the names of the consignee to receive the shipment.

Who Issues The Express Bill Of Lading?

Normally, the carrier issues this document after taking over the control of the shipment.

This means the handing over of goods from the shipper to the carrier is complete and the carrier can load the goods for delivery.

During this process, the Express Bill of Lading is inclusive of:

• Receipts indicating the transfer of goods
• Legal ownership of the goods
• Contract aspect sating all the relevant details about the goods.

In some countries and shipping groups, there are set standards that regulate who issue this Express bill of lading.

Note, the issuing process occurs only when the carrier receives and loads the goods on the desirable means of transport for delivery.

What Is The Difference Between Seaway Bill And Express Bill Of Lading?

Seaway Bill normally confirms cargo transfer between the carrier and the buyer.

Seaway Bill does not allow any trading of goods during the shipping procedures as it is not a document of title.

When using the Seaway Bill there is no issuing of any kind of bill of lading.

Seaway bill can be used if you have already made payments whereas Express bill of lading does not allow pre-payments of goods.

Carrier normally use the Express bill of lading as a contract to facilitate the delivery of goods to the buyer.

The contract builds upon trust due to the limited time of printing and courier the same to the consignee.

Is Express Bill Of Lading The Same As Telex Release?

No.

The Express Bill of Lading is not the same as the Telex Release.

We have more distinguishing features that make these two types different.

Express bill of lading allows immediate release of goods upon arrival.

Express Bill of Lading does not require the shipper to pay a surrender fee since there is no request of Original B/L.

Therefore, there is an express release of goods.

Additionally, you do not require Original B/L cargo payments are secure and there is no involvement of the bank in any transaction.

In Telex Release, you should print and hand over the original B/L to the shipper/transporting agent.

As a shipper, you always surrender this document back to origin agents.

Telex Release requires the shipper to pay full documentation charges as well as surrender the charges.

Unlike Express Bill where there is an express release of goods, you can request Telex release under the following circumstances:

• Delays in mailing the Original Bill of lagging to the destination without incurring storage fees.
• If the shipment of the goods is secure and the Original B/L is not necessary.
• Saving on the mailing cost. Agents at the port charge the surrender fee and charges for sending a telex message.

Can An Express Bill Of Lading Be Changed?

Yes.

Changing of Express Bill of Lading is easily achievable.

Shipping agents, NVOCC, or the freight forwarders prepare the Express B/L according to booking confirmation.

You can change the Express Bill of Lading before and after receiving booking confirmation from the logistic service providers.

We have a different circumstance that enables easily changing or amending of the Express Bill of Lading. They include:

• You can change before import customs declaration
• Before export booking confirmation
• Before drafting Express Bill of Lading confirmation
• After import and export customs declaration
• You can also change before and after shipping manifest submission.

There two circumstances that may delay the changing of the Express Bill of Lading:

• Presence of a letter of credit from the financing bank, stating that the Express Bill of Lading should not have pending charges. This forces the consignee to first clear all the charges via the carrier before the release of goods.
• An already existing shipping manifest. This will cause a delay in changing the Express Bill of Lading but eventually, you will be able to change it.

Does The Express Bill Of Lading Need To Be Signed?

Yes.

The carrier mostly signs this document. This implies that the carrier is aware of all the information regarding the goods.

The Express Bill of Lading becomes legal once the responsible parties sign the documents. These responsible parties include shipper, consignee, carrier, and customs broker

Before signing the Express Bill of Lading ensure it is inclusive of;

All the responsible parties

Origin and destination of the shipment

The number of packages and package details.

Content of the packages.

What Precautions Need To Be Taken Before Signing An Express Bill Of Lading?

Before signing this document, you should consider the following precaution measures:

Ensure goods are in the right condition: You should firstly confirm that the goods are physically available on the board ship.

You should also confirm that the goods have an accurate description as per the Express Bill of Lading.

It should also be inclusive of, dead freight and any short-loading of the goods.

Shipper identity: it is important to give an accurate name, identity, and the location address of the shipper.

This will minimize the liability of the carrier in case of false information.

Port and date of loading: Before signing the Express Bill of Lading you should confirm that the dates coincide with dates on the receipt.

This allows you to determine the origin of the goods and the overall customs duty structure.

Port of discharge: this prevents deviations of the shipping vessel. It’s the responsibility of the charter party to enhance this process.

Description of freight load and quantity: before signing the Express Bill of Lading ensure that the description and quantity are correct.

It is essential to confirm the fright. Since the shipper might order a shipment for carriage by the carrier and end up declaring something else on the receipt’s documents.

Note, details on the Express bill of lading should match consignee details during the booking process.

Freight: before signing, you should ensure that the freight is no incorrect markings. For instance, prepaid freights or paid freights.

Conflicting terms: you should ensure that the Express Bill of Lading terms and those of the charter party are not conflicting.

This mostly occurs when the carrier refuses to show all details such as commercial information. This as result brings conflict between the consignee and carrier.

How Do I Surrender The Express Bill Of Lading?

Normally, if the cargo is not on credit, it is easy to surrender this document receipt.

Surrendering of these receipts requires you to submit the original documents with a letter request to the carrier of goods.

Upon receiving the express B/L, the carrier sends a message to the other counterpart at the destination port.

This message indicates complete surrendering of the Express B/L.

This allows you to acquire the freight without producing the Express B/L.

The person in charge at the destination port will release the goods without requesting other additional documents.

How Does Express Bill Of Lading Tracking Work?

Most companies are adopting the tracking method of the shipment to prevent losses along the way.

This process gives the shipper and the carrier an assurance that the shipment will arrive promptly and safely.

We normally use two methods in tracking the shipment;

Use of Express Bill of Lading: This document is essential as it contains all the information of the shipment such as;

• The names of the consignee and carrier and the addresses too.
• Specific handling instructions of the shipment.
• Description of goods available
• It should also include dates, shipping units, and measurements.
• Also, the value of the shipment. This gives the total amount the shipment is worth.

This method is the easiest and the receipts should be readily available for review of the shipment.

With advances in technology, you can use a Pro Number that comprises 6-10 digits. You should print this number and place it on the shipment which is easily scannable.

You will find this number in all paperwork including, the Express Bill of Lading.

This allows the carrier and the shipper to have a fast track of goods, delays or dead-freights

Does An Express Bill Of Lading Serve As A Contract Of Carriage?

Yes.

Contract of carriage involves an agreement between consignee and carrier.

This agreement allows the carrier to ship goods from the port to the destination address

This contract comprises rules, conditions, and obligations that guide the carrier.

That is, in case the carrier incurs the extra cost during the delivery it should reflect on the Express Bill of Lading.

This allows the consignee to evaluate the document and refund the cost to the carrier.

In case of disagreement between the consignee and the carrier, the carrier will hold back the cargo until an amicable solution is achievable.

Can An Express Bill Of Lading Be Consigned To A Customs Broker?

Yes.

You can consign the Express Bill of Lading to a customs broker. This consignment takes place under the following criteria:

The custom broker becomes an importer by obtaining relevant documents from the government.

By acting as an importer, it means you are liable to government regulations of importing goods into the country.

As a result, the Express Bill of Lading will consign with a customs broker who completes all the custom importing procedures. The custom broker finally accepts the delivery of goods as an importer.

Can Goods Under Express Bill Of Lading Be Transferred To Another Consignee?

No.

Considering that this document is non-negotiable and acquiring it does not prove ownership of the shipment.

It, therefore, means, if you obtain goods under the Express Bill of Lading, you cannot transfer them to another consignee.

Is Express Bill Of Lading Used Under Letter Of Credit Transactions?

No.

You cannot use it as it does not guarantee payments of goods by the buyer to the seller.

This document does not prove ownership and therefore, you can present it to clear the charges.

This implies that you cannot transfer these goods to any other consignee

Therefore, it is advisable to clear all the pending charges to avoid delay and withholding of the shipment.

What Are The Disadvantages Of The Express Bill Of Lading?

Below are some of the main disadvantages:

• It is non-negotiable: this implies that you can only present receipts of the goods without exchanging them for money.
• It is less secure hence increasing chances of fraud during the whole process.
• Withholding of goods might occur since the officers in charge request other additional documents.
• Possessing the Express Bill of Lading allows you to obtain the shipment without providing additional documents.

For all your shipping needs from China, you can contact Tj chinafreight right now.

If you’re looking for any information about fulfillment by Amazon (FBA), you will find it right here.

It covers all the critical details about FBA such as what it is, how it works, benefits, products you can sell, etc.

So, keep reading to learn more.

What Is FBA (Fulfilment by Amazon)?

Fulfillment by Amazon (FBA) provides inventory services such as warehousing, packaging, shipping, and customer services.

It helps to facilitate the online selling of products by business owners.

When Did The Fulfilment By Amazon Program Start?

The fulfillment by Amazon program was started back in 2006.

Before its launch, Amazon was facilitating online retail and was a key player on a global scale. It’s when it came to online sales and fulfillment.

One of the major reasons why Amazon founded this program was to fuel the growth of small businesses using Amazon fulfillment capabilities.

The brand not only provides storage and packaging services but also customer service. Which is an added advantage to any business owner selling in Amazon.

That said, the Amazon fulfillment program was geared to have as many third-party sellers as possible. Learn how to increase profits by choosing Amazon.

As current trends pop up, the FBA program ensures that it stays up to date with the current trends. To meet the needs of the evolving online retail environment.

In as much as this enables brands to stay on top of the game, it might as well be challenging to keep up with the constant updates.

How Does Amazon FBA Work?

In simple terms, you send products and Amazon packs and ships to your customers. Below is a detailed explanation of the processes involved;

• First things first, you need to set up your Amazon selling account, create your product listings and prepare your products.
• Thereafter, ship your products to Amazon where they shall be provided storage services in the fulfillment centers.
• Once your products are received by Amazon, you can keep track of them through their tracking system.
• Interested customer orders your product from Amazon and thereafter Amazon takes care of picking and packaging processes of sold products.
• After the sold items are packaged, they are shipped to the customer. The shipping method used will depend on the choice of the customer. The customer is also provided tracking information.
• Additionally, Amazon will provide customer service after the delivery of products. This also entails taking care of any product returns issues.

It’s important to understand that this program not only focuses on orders placed on Amazon but also on other e-commerce platforms.

What Are The Seller Responsibilities On Amazon FBA?

With the several services offered by Amazon FBA, it might be difficult to tell which responsibilities are left to the buyer.

Here are three responsibilities that any seller is in control of when selling through Amazon FBA.

• Selecting the type of products, you will be selling – This is indeed a key aspect if you are looking to sell on Amazon. It’s vital to choose products that sell fast to avoid slow-moving products and fewer sales.

Research and analyze current trends, this might help you settle on a suitable product that most people are interested in.

• Ensure that your inventory is well-stocked – Soon after completing the sign-up process, you can begin storing your products in Amazon Fulfilment centers. It is up to you to observe the stock and restock if need be.
• Marketing your products – It is your responsibility to get your products known to people. You can as well choose to utilize Amazon marketing tools to market your products. Otherwise, FBA doesn’t offer any marketing services. Apart from using Amazon marketing tools, you can decide to use other means to create awareness of your product in the market.

Which Factors Determine Amazon Fulfilment Fees?

The amount of fee charged will depend on three main factors namely;

• The weight of your products.
• The sales platform you use to sell your products.
• The size of your products.
• Type of FBA services used.

Based on the size and weight, Amazon groups products as either oversized or standard-sized.

Standard-sized products comprise products that weigh 20 pounds after being packed.

Aside from that, their dimensions don’t exceed 18” by 14” by 8”. Products that exceed these dimensions are ruled out as oversized products.

Take into account that you don’t have to be selling on Amazon to benefit from the Amazon fulfillment program.

That said, Amazon fulfillment services are available through a program known as Multi-Channel Fulfillment.

Through this, sellers are allowed to ship their products to their desired Amazon fulfillment centers after which Amazon handles their fulfillment processes.

FBA with MCF fees is higher as compared to when directly selling on Amazon.

What Are The Different Types Of Amazon Fulfilment Fees?

There are different types of Fulfillment fees. While some are mandatory for all FBA sellers, others are only applicable under specific circumstances.

Let’s have a look at the types of amazon fulfillment fees below;

• Storage fees – Storage fees are mandatory for all sellers selling on Amazon while using the FBA service. As the name implies, storage fees cover the storage of your products in Amazon fulfillment centers. The number of cubic feet your products take up is used to calculate the storage fees.
• Referral fees -We can describe referral fees as commissions paid by sellers to Amazon for them to sell on Amazon. This applies every time any sales are made by a seller.
• Fulfillment fees -As compared to storage fees, fulfillment fees are not mandatory for all FBA sellers. This fee is paid to Amazon FBA to cover the cost of fulfilling your order. Fulfilling your order will entail services such as picking, packing, shipping, and customer care, and after-sale services.
• Removal order fees – The removal order fee is paid every time a seller decides to remove items from the Amazon fulfillment center. The size and weight of the products being moved will determine the amount of fee to be charged.
• Selling fees – A selling fee is mandatory if you are looking to sell on Amazon. There are two types of plans you can choose from depending on your budget and preferences. There is an individual plan which costs $1 for every sale made and a professional plan which costs $40 per month on unlimited sales.
• Return processing fees – As the name suggests, this fee is applied to any products that are returned. The products must be originally sold on Amazon and have to be eligible for free return shipping.
• Unplanned service fees – Once a seller chooses to sell products in a fulfillment center, they must pack, label, and also barcode their products. Failure to do this will have Amazon take the responsibility and charge a fee. Such fee is what’s termed as unplanned service fees.

How Will Amazon Bill Me For Fulfilment?

Amazon will bill you by deducting the fee from the money credited to your Amazon sales account. The fee will be withheld from the payment of funds to you.

What Are The Categories In Which I Can Use FBA?

Settling on a product to focus on can be quite challenging more so if you’re new to this field. With a wide selection of products to select from, narrowing down your search and finding the best niche is the ultimate goal.

That said, below are some of the categories that you can use FBA;

• Books
• Baby products
• Clothing and accessories
• Consumer electronics
• Health and personal care
• Pet supplies
• Shoes, handbags, and sunglasses
• Sports and outdoor items
• Tools and home improvement products
• Video games and apps
• Beauty and personal care
• Musical instruments
• Office accessories
• Luggage and travel items
• Toys
• Software
• Camera and photo products
• Industrial and scientific (BISS)
• Garden and outdoor
• Home and kitchen
• Arts, crafts, and sewing
• CDs and Vinyl
• Automotive parts and accessories

While making your selection, it’s important to consider certain aspects such as the competitiveness of the product and profit margins just to mention a few.

Does FBA Have A Minimum Number Of Items Required?

No

There are no limitations to the number of products you can send to Amazon FBA. You are free to send any number of items from one to 5000.

If you are sending large-sized products, they must not exceed 500.

What Are The Advantages Of FBA?

Fulfillment by Amazon has a lot of benefits to your business which are not limited to;

• Provision of warehouse services – Storage space is vital for any business that sells products.

In as much as some choose to rent or buy their storage space, it might end up being a costly venture.

Not only will you need to pay for space but also the employees to manage it.

Additionally, determining whether space will be the right size for your goods might be tricky.

Fulfillment by Amazon takes away all these hassles and provides you with enough space for the storage of your products.

The overall cost is inclusive of the inventory fee which is quite affordable.

It’s worth noting that businesses with fast-selling products enjoy unlimited storage space as a reward.

• Managing your returns – Managing returns from customers can be an overwhelming task.

You have to find the cause of the return as well as decide if it is worth returning the product.

In addition, the costs are incurred by you and if by chance you need assistance you will need to employ staff.

All these are minimized by making use of FBA which ensures every process is handled smoothly as you continue with your routines.

• Sell products globally – Expanding business to reach the global market will require a huge number of resources which might be unaffordable to some.

Not forgetting the risks associate with such a milestone which might result in an unsuccessful business.

With that in mind, FBA has made it easier for any business owner to reach the global market.

With fewer resources and finances without many risks involved.

• Minimizes cost of shipping – Amazon has partnered with several prime shipping companies to ensure that your goods are delivered as desired at affordable rates.
• Handles your fulfillment process – The fulfillment process entails all the procedures done to complete a customer’s order. Fulfillment by Amazon handles all these processes for you.

How Do Amazon FBA And FBM Compare?

With Amazon FBA, sellers ship their products to Amazon warehouse and have their items delivered to customers by Amazon. On the other hand, FBM gives sellers full responsibility for storage and shipping orders.

Which Is Better Between Amazon FBA Vs Seller-Fulfilled Prime?

Both options have their unique benefits and cons.

Determining which of the two is better will depend on whether you are a smaller merchant or a larger merchant.

For instance, Amazon FBA would be ideal for smaller merchants lacking storage spaces and in need of hands-off fulfillment.

On the other hand, larger merchants owning their warehouses with experience in this field would find it ideal to use seller-fulfilled prime.

That said, it’s important to carefully weigh the two options and settle on what works well for your business.

How Can I Get Started With Amazon FBA?

The first thing you need to do for you to get started is to create an account. Amazon’s website provides all the information you need regarding the sign-up process.

On the Amazon website, you will find important and helpful information explaining services provided and how to go about selling on Amazon.

And that’s not enough, Amazon also provides marketing services and insights which will help you leverage the benefits.

Ensure that you take advantage of all these free tools and services as you get started with Amazon FBA.

Are There Drawbacks To Using FBA Services?

Yes, there are. Just like any other venture expect to experience both sides of the coin.

That said, Let’s have a look at the disadvantages that come with using FBA services.

• Costly fees – Slow-moving and oversized products can result in piling up of storage fees as well as fulfillment fees. In addition to that, the seller incurs charges on removal fees for damaged. Unsellable or defective items and disposal fees to get rid of unsellable products.
• Specific product requirements – There are a set of requirements that need to be met by certain products to ensure the safe delivery of the products.
• Product handling issues by Amazon – Sometimes products get damage during the fulfillment process. If the damages are caused by Amazon, they will repay the loss. Sometimes such faults go unnoticed causing the seller to incur losses.
• Many returns – Since Amazon takes care of returns with FBA, more customers will be willing to return products upon realizing how easy the process is.
• Stickerless Commingling – Might result in losses if a low-quality product is mixed with your quality products. The loss will be realized after your account gets suspended or accused of fraud.

Can I Enter A Joint Venture With Amazon FBA?

Yes, you can. Several service providers are opting to enter joint ventures in a bid to maximally utilize the convenience offered by this fulfillment service.

By so doing, third-party retails avoid dealing with the product themselves and have Amazon do all the preparation and delivery procedures.

FBA has continued to grow in popularity since 2004 when Beta was officially launched.

That said, FBA has made most businesses stay competitive and thus it’s a must-have for any business making online sales.

Is Amazon FBA Suitable For All Businesses?

In as much as there are several e-commerce entrepreneurs, Amazon FBA cannot be suitable for all businesses.

You must do thorough research and understand the requirements as well as your customers and target market.

Not forgetting choosing the right products to sell and having solid business objectives.

All these will help you decide on whether Amazon FBA is indeed suitable for your business or not.

How Do I Know If Amazon Fulfilment Is Right For My Business?

To know whether Amazon fulfillment is right for your business, you need to ask yourself the following questions;

Do You Have Adequate Employees?

Seasonal and trending products tend to sell fast during certain seasons.

In times like this, you might need extra employees to get work done efficiently.

Using FBA at such times would be a wise idea.

What Type Of Products Are You Selling?

Using FBA is ideal for small pricy products.

How Many Sales Orders Do You Receive?

If you are still new to the business, it might not be worth using FBA.

The reason being, you still have fewer orders which you can easily handle on your own.

Once your business picks up, it starts gaining popularity and so will the orders increase.

Managing orders on your own will be difficult and thus the need to hire employees will arise.

At this point, it would be ideal for you to start using FBA.

How Do I Upload My Listings On Amazon FBA?

There are three main methods you can use to upload your listing on Amazon FBA namely;

• Add a product– Once you log into your seller account, you will see the inventory tab. Click on add product.

You can as well add products by clicking “Add products via upload”. If you are dealing with a small number of items, you can one by one.

As soon as all your products have been listed, you can convert them to fulfill by Amazon.

• API interrogation -Amazon inventory catalog provides a platform where you can integrate your website or inventory management software. This is most ideal when dealing with a large number of products.
• Flat file feeds – Flat file feeds are applicable when listing several products. Upload a flight file and directly list your products for fulfillment by Amazon.

What Product And Order Information Do I Need To Provide When Uploading Listings To Amazon?

Amazon will require you to provide information regarding your products including the fulfillment of your items. You should follow the order of information upon request.

Some of the product information that you will be required to provide is not limited to the following;

Your product categorization and sub-categorizations

• The weight of your products
• Barcode data of your products
• Packaging dimensions
• Condition of your products

Can I Ship Directly From A Manufacturer In China To Amazon FBA?

Yes, you can directly ship from a manufacturer in China to Amazon FBA.

You need to trust your manufacturer to meet the required Amazon packaging requirements and quality standards.

You can either choose to directly ship to Amazon FBA or work with a freight forwarder.

However, it’s important to note that using a freight forwarder is suitable when shipping to multiple FBA centers since it’s cheaper.

In addition to that, it’s recommended that you use a freight forwarder when working with a new manufacturer.

What Is Stickerless Comingling Vs. FNSKU For Amazon Fulfilment?

For your products to be scanned as they pass through the Amazon system, you will be required to sticker them.

You are allowed to either use stickerless comingling or FNSKU on your items.

With stickerless comingling, you are free to use ASIN, EAN, or UPC among others.

Not only is it the cheapest but also the most efficient method you can use to sell on Amazon FBA.

Ensure that you carefully inspect your products to make sure they have stickers as listed. Failure to do this might result in being fined.

FNSKU (stickered) tends to be more expensive than stickerless since you will have to individually label your items.

Nevertheless, FNSKU separates your products from other sellers’ products which helps in quality control.

This is quite beneficial especially when your products have higher quality than other sellers.

What Are The minimum Packaging And Labeling Requirements For Amazon FBA Shipments?

The rules surrounding packaging are not that strict as long as the product is well covered and protected.

You can use items such as cardboard boxes, bags, plastic sleeves, and cardboard sleeves when packaging your products.

Nevertheless, the product should have a clear label to facilitate tracking.

That said, ensure that your packaging is secured without any markings to prevent any confusion.

If you are shipping using cartons, they must not exceed 50lbs and 500 products in the carton.

Products shipped in poly bags need to be sealed in transparent, clear, and durable bags which should be 1.5ml or larger.

The bags should also display barcodes and labels. Through the plastic as well as show a suffocation warning for bags that have a 5” or wider opening.

Keep in mind that any explicit products should not be packaged in a transparent bag but in opaque packaging.

Also, the expiration date of the product must follow the DD-MM-YYY format.

Another way you will have to display a sticker with the appropriate format covering the original date.

Last but not least, loose products should be well secured by tape.

How Do I Calculate How Many Products To Send To Amazon FBA?

Knowing the number of products to send to Amazon FBA is essential in avoiding any unnecessary payments.

Such payments can range from storage payments and restocking fees plus losing money on stock-outs.

To calculate the economic order quantity, you will need to have existing data of your business.

1. Identify the turns – Analyze how fast your product sells as this will help you calculate the cost of storage.
2. Identify the demand for sales velocity – Get to know how many products are sold per turn.
3. Calculate the ordering cost -The ordering cost is the fee that covers the process of ordering a product and shipping it to FBA. You will incur this cost upon creating a new shipment for FBA.
4. Calculate carrying costs products – Analyze the total cost of storage as well as management costs.
5. Calculate the Economic Order Quantity (EOQ) – This will help you know the right number of products to send to Amazon FBA to balance the ordering and total storage cost.

You should send more products to Amazon if the ordering cost gets higher. A decrease in demand will mean that you have to send fewer products owing to the payment of long-term storage.

Will My Products Be Safe In Amazon Fulfilment Center?

Yes, they will be safe. Amazon safely stores your products until the time of shipping. However, in some cases, your products might be damaged through the fulfillment process. The better side of it is that Amazon is always willing to reimburse you for any damages caused on their side.

Does Amazon Take Liability For Damaged Or Lost Products In FBA Warehouses?

Quite simply, yes! In case your products are damaged or lost in the FBA warehouse. Amazon might either replace the product with a new one or reimburse you for it.

Take into account that this doesn’t apply to returned products.

What Are Amazon Requirements For Product Shelf-life?

The expiration date of products is one of the most sensitive factors you should pay attention to whenever you are shipping to Amazon FBA. A slight mistake or violation in this might have your products confiscated or being fined.

Let me walk you through some more Amazon requirements that you should know about before engaging in this business.

• The format used to print the expiration date must be in MM-DD-YYYY format.
• Only one expiration date is allowed per carton.
• FNSKU must be used on any product that has expiration dates.
• You are only allowed to send products to Amazon FBA if the shelf life exceeds 105 days after being delivered to Amazon.
• The expiration dates must be highlighted preferably in 36-point font or larger. Each of the printing must be on every individual unit.
• If your products happen to expire within 50 days, they shall be confiscated by Amazon.

To avoid such situations, it’s important to know the right number of products send to avoid sending excess or less. Ensure that you send products that will sell before the 50^th day of the expiration date.

How Do I Ship Products To Amazon FBA?

You can ship products to Amazon FBA using the following eleven steps;

1. Sign in to your seller account and proceed to manage inventory.
2. Choose products that you want to ship from your inventory.
3. Select “Action on Selected” and next choose “Send/Replenish Inventory”.
4. Choose your shipping plan.
5. Enter your shipping address.
6. Confirm the type of packaging. Either individual products or case packed.
7. Click “continue to shipping plan”.
8. Choose the product preparation method then prepare and label your products.
9. If you are using labels, set the quantity and print labels.
10. Preview and prepare the shipment.
11. Select the type of shipment. Either small parcel delivery or less than a truckload.

Can I Use FBA Services With Third-Party Stores?

Yes, you can use FBA services with third-party stores. Buyers who purchase from third-party stores such as Shopify, and Etsy can receive products via Amazon.

The shipped products will be packaged in an Amazon-branded box regardless of the site bought from.

Why Does Amazon Label Some Products As ‘Add-on Item’?

To start with, add-on items refer to small products that might have a higher shipping price as compared to their actual price.

That line of reasoning, items can only be purchased if they are sold with other complementary products adding up to $25.

Upon realizing this, Amazon introduced the add-on item program and it’s easy to understand why.

If a customer runs out of a pen, they will purchase more products to have their totals stand at $25.

The weight and price of a product play a major role in determining whether a product should be added to the list.

How Do You Determine Break-even Point For Amazon FBA?

Just like any other business, selling on Amazon is a risk and most people are afraid to fail. This is due to the high costs and therefore every business owner strives to balance the costs with the sales. By so doing they can make profits.

Break-even Point in Units = Fixed Cost Over Sales Price per unit Minus Variable Cost.

Additional, calculate the total business costs of the following;

• Fixed Cost – Such costs include salaries, property tax, warehousing, Amazon fees, software, and lease. Let’s take for example $80,000 per year.
• Price per unit -This is the cost of a single product. We can use $20.00 for our example.
• Variable cost – Variable costs are dependent on the volume of sales. They include Amazon fee, Manufacturing, Amazon percentage, and shipping. We can set this at $13.00

Break-Even Point = $80,000 Over $20.00 Minus $13.00 = $3987

Ensure that you calculate the total costs to avoid losing money.

What Are The Tips And Tricks For Maximizing Amazon FBA Sales?

Some of the tips and tricks for maximizing Amazon FBA sales are not limited to;

• Optimizing your product page with SEO makes it easier for buyers to find your product. Use the right keywords in your product title to boost your SEO.
• Make use of influencer marketing strategies.
• Select products that go wide with keywords
• Create an email list or use social media to sell your existing audience.
• Register your brand to avoid issues with someone selling counterfeit products under your brand name.
• Have outstanding product images.
• Stand out from the competition. Seek to find out a gap that most sellers haven’t exploited and take maximum advantage of the opportunity.
• Strive to get customer reviews and feedback. Studies show that most customers check the product reviews before deciding on whether to make a purchase.

What Is Amazon Algorithm And How Does It work?

Amazon algorithm refers to the criteria used to rank products on Amazon to help consumers with their product search.

The algorithm ensures that the customer is provided relevant results by ranking sellers and their products on the site.

The reason why this is a prime key to any business. It determines whether or not your product will be visible to customers on the product page.

This goes a long way in determining how fast your products move as well as the overall profits and success of the business.

Interestingly, Amazon algorithms keep on changing and this might be challenging to keep up with.

Let’s take for instance Amazon A9 algorithm.

This algorithm ranked items based on profits. With the introduction of the A10 algorithm, the main factor is displaying to customers the most accurate results without considering profits.

Paying closer attention to the updates is quite important if you want to be at the top of the game.

What

If you have any question about first sale valuation, you will find the answer right here.

Whether you want to know what it is, role it plays or how to go about all aspects about first sale valuation – you will find them right here.

Keep reading to learn more.

What Is First Sale Meaning?

First sale valuation refers to a program that is aimed at reducing duty for specified products from a particular country. The duty reduction is what has been agreed between the two countries.

The main purpose of first sale valuation is basically to save costs associated with dutiable value of products.

Dutiable value refers to value incurred and capped from the first transaction between broker and manufacturer of a particular product.

It eliminates costs associated with utilization of middlemen.

What Is First Sale Valuation In Shipping?

An item that is being imported may be subject to several transactions, with each transaction adding to the final price paid. Because duties and tariffs depend on the value of goods being imported, the duties and tariffs due by the importer may increase.

First sale valuation is used in the determination of the real value of the goods being imported.

It enables importers under given conditions to base the valuation of a product entering the country on the first sale in several transactions.

A valuation can also be made on the last transaction. The purchase price between a buyer and the factory determines the dutiable value of a first transaction.

This is considered rather than using the price between the importer and vendor. Due to this, duties are not imposed on the vendors’ markup or any additional charges from consequent sales.

To take advantage of this, the following procedure must be met:

• To take advantage of first sale valuation, ensure that the export goods are destined to the given country. This should occur at the time the first sale is completed.
• Ensure that the bona fide sales are at a minimum of two before the importer’s purchase.
• The parties which are involved must be unrelated or rather the transactions conducted apart.

Is First Sale Legal?

Yes, first sale is legal although many importers are hesitant to do so despite it bringing forth a cost-saving advantage.

Some importers suffer by having a false perception that first sale means cooking books as it requires making two invoices.

One of the invoices has the total costs the importer has paid to the middleman. The other with the first sale cost for customs valuation at the border.

Despite this seeming shady, the first sale was established in Trade Agreements Acts in 1979. It has been observed by several legal decisions and guidance customs for a very long time.

Historically, importers used to seek approval to use first sale bypassing the Customs Service Office of Regulations and Rulings (OR & R).

This process was very long and could take about one to two years to complete.

Nowadays, customs permit importers to use reasonable care to self-certify. Alternatively, they may also pass through the port of entry or via the Customs Centers of Excellent and Expertise (CEEs).

Despite it not being mandatory for customs to approve the first sale, it may assist in making audits smoother.

How Does First Sale Valuation In A 3-Tiered Transaction Work?

Value of the goods purchased normally determines the duty to be paid. This is a phenomenon seen when goods are imported into any given country.

In a 3-tiered transaction, the manufacturer sells to a middleman. The middleman includes his/her charges then forwards or sells the shipments to the importer.

The importer is disadvantaged because they will pay duty based on price forwarded by the middleman on the second sale. The higher price margins constitute the profit margin of the middleman.

What Are The Benefits Of First Sale Valuation To Importers?

Some of the benefits of the first sale to importers include:

• Reduction of customs duties on all transactions from a vendor who has implemented the first sale.
• This leads to increased profits and the goods are offered at more competitive rates.
• Ensures there are no paying duties on certain incidental costs and indirect costs.

Who Is Eligible For The First Sale?

Importers using a multi-tiered transactions are the ones eligible for the first sale. The goods eligible for first sale valuations should be the first to be brought in the country.

Is The First Sale Rule Applicable To All Commodities?

Initially, first sale rule was used primarily in industries like uniforms and sportswear with particularly extensive FOB volumes and elevated duty rates.

With the recent trade agreements between different countries, companies are being impacted when it comes to duty free status.

This is because many of the countries have reintroduced duties on merchandise.

How Do I Implement The First Sale Within My Business?

For your business to be eligible, it must meet the first requirements as put in place by customs.

It is important to establish internal procedures and controls to ensure that the entire process stands up to scrutiny from customs.

First sale program which is well documented will make audits easy and provide clear manual backup expressing that products meet the requirements.

Where there is transparency and close supply chain relationships, importer will be able to trust factories are establishing first sale value.

It is important to carry out regular assessments to make sure that the requirements for the first sale are continuously met.

What Are The Requirements For First Sale Valuation?

The requirements for first sale valuation include:

• Should be Bona fide; intermediary’s transaction between them and manufacturer should be a bona fide sale and be complete with transfer of title.
• Should be enroute for export in the relevant country at the first sale period. For example, products are specially labeled or designed based on the standards of the relevant country.
• The transaction should be at “arm’s length” or be free of non-market influences. The manufacturer and the intermediary should not be related or if related, the transactions should be conducted at “arm’s length”.
• All the dutiable cost should be declared.

Which Factors Indicate Whether A Bona Fide Sale Has Occurred In A First Sale Valuation?

The reason why transaction constituting goods do not make up bona fide sales is that the goods are subjected to a sale.

These goods are usually shipped on consignment making it hard or impossible for them to be appraised based on their transaction value.

For goods’ transactional value to be appraised, it is important to ensure that they are not shipped into a country as consignment.

Goods that are imported are also not categorized as bona fide sales in the following cases:

• If the goods are promotional items and are to be issued for free.
• Gifts
• Samples
• Items indicated to be leased while in real sense were loaned out.

Some of the factors which determine whether a bona fide sale has occurred in the first sale valuation include documentary evidence like:

• Distributions
• Company brochures or reports
• Purchase orders
• Invoices
• Bills of lading
• Correspondence between the parties
• Proof of payment

Are Incoterms Of Significance In First Sale Valuation?

In scenarios where there is no other pertinent evidence, customs may determine whether a bona fide sale observed the terms of sale. This will show whether there was a transfer of the title and loss of risk.

In the absence of this, the sales term may be looked as part of the perspective of the whole situation. This is established together with the evidence gathered in totality.

The customs will primarily consider taking control of the sale terms given on the written contracts, invoices, and merchandise sales.

This means that all incoterms will follow the “Uniform Commercial Code” and “Incoterms 2020”.

However, this may only be exempted if the parties involved show via contracts, agreements, or course of dealing.

An important factor to be considered is showing that meanings to the terms have been utilized differently.

During A Multi-Tiered Transaction, At What Point Is It Clear That Goods Are Destined For Import Into The Respective Country?

Determining the point at which it is clear goods are destined for import in multi-tiered transaction may be made on an itemized basis.

Customs will put in mind that the goods are destined to be an import of a given country once evidence is available.

The evidence tends to prove that from the time the middlemen purchased the imported goods, the only possible destination was the respective country.

These goods should from the beginning possess the following specifications of the respective country:

• Conform to the relenant country’s design specifications for example material, models, and colors.
• Possess the relevant country’s labels, stock numbers, logos, and barcodes.
• Should be destined strictly to a particular country with no room for diversion.

Which Documents Are Required To Support A First Sale Claim?

Some of the documents required to support the first sale claim include:

• Purchase order from importer to vendor
• Purchase order from a vendor to factory
• Invoice from the factory to the vendor
• Payment from the importer to the vendor
• Payment from the vendor to the factory
• Contracts between the parties involved
• Any other additional documents that could support a first sale claim

When Is A Sale Considered To Have Been Conducted At “Arm’s Length” In First Sale Valuation?

While there may be approval of the first sale for related parties, customs may demand evidence that cost is a Bonafede arms-length transaction.

This tends to be a bit challenging more so if the parties are related to one another.

In this case, a sale would be viewed reachable.

The interaction between seller and the buyer should not have influenced the payable price or the price paid.

What Is Tariff And HS Classification And Why Does It Matter In A First Sale Valuation?

Tariff and HS classification are international systems used to classify imported or exported goods. They exist for all products which are involved in global trade

The classification is based on an international classification system.

It makes it possible for communication between customs departments and different countries.

Having the appropriate tariff classification codes on goods ensures your trade practices are compliant and saves a lot of money.

Very many countries around the world use 10-digit HS codes for classification and reporting imported goods.

Tariff and HS classification help to determine the number of duties required on every imported item. This helps ensure that you are not paying a lot of duty than you need to or eliminating heavy fines for non-compliance.

Is There A Difference Between First Sale Valuation And Duty Drawback?

First sale valuation is a legal route to cut down duty liability.

This is because goods value is declared by importer based on the first sale of a multi-tier transaction, thus lowering their duty exposure.

The importer is allowed to elect value declaration in the relevant country’s customs using the lowest of the many bona fide sales.

The chosen value may then serve as the basis of duty appraisal.

This applies so long as each of the sales is properly documented and ascertained as bona fide.

In first sale valuation, a lower declared transaction value translates into lower duties and fees imposed by the government.

Conversely, duty drawback refers to a refund of paid duties that amount to about 90 percent on imported goods into a country.

The owner of the drawback may either be a manufacturer, importer, or exporter.

What matters is that the claimant of the drawback has filed the relevant documentations for the drawback. The refund may be a reduction or waiver in part or whole of the customs duty which is assessed.

Assessment and collection of these duties occurs after the importation of the relevant materials. The main purpose of duty drawback is to encourage the relevant country’s manufacturing as well as export sales from foreigners.

The main types of duty drawback include:

• Manufacturing substitution drawback.
• Unused merchandise direct identification drawback.
• Unused merchandise substitution drawback.
• Manufacturing direct identification drawback.

What Are The Risks Of Incorrectly Implementing First Sale Programs?

Because of the large potential savings and related compliance risk, the implementation of first sale programs needs careful and experienced planning.

This is to make sure all legal requirements are met fully.

A first sale program that is implemented incorrectly may lead to several risks.

These may include massive duty exposures which are escalated by civil penalties, potential interests, and legal defense costs.

Implementation of a successful first sale program is determined by conducting rigorous auditing procedures.

What Are The Best Practice Tips For First Sale Program Management?

Some of the best practices for first program management include:

• It is important for importers to develop long term relationships with vendors. This is especially if they are planning to do with them long term business engagements.
• Custom compliance requires high levels of confidentially making it ideal for long term relationships between vendors and importers.
• Partner with your customs broker in implementing a first sales process in your company.
• You should consult with a specialist concerning the first sale such as a trusted Customs Attorney.
• Automate workflows to reduce the amount of manual effort to maintain compliance with the first sale.
• Make sure there is an internal escalation process should there be changes in business arrangements with your vendor or factory. This will ensure that you meet the requirements of the first sale program.
• It is critical to ensure that the first sale transaction is developed carefully. This may be done through careful planning and coordination with suppliers.

What Is Global Trade Management Software?

It is software that assists companies in the management of their trade operations throughout the world.

GTM is mostly used by exporters and importers to enhance collaboration with trade partners and in the management of trade operations.

How Does GTM Software Help With First Sale Program Management?

The right organizational structure in place assists to assess, implement, manage, and maintain a first sale program.

This can therefore be achieved by the digitization of records using cutting-edge global trade management software (GTM).

GTM software helps in the automation of first sale invoices using customization functions that enable companies to create and send invoices.

This is done automatically by turning it on and off for different vendors as not all factories qualify for the first sale.

Flexible GTM eliminates the need for keeping a second separate set of invoices displaying the value of the first sale.

This is because the vendor still requires to be paid the full amount.

GTM software also simplifies the following processes:

• Implementation of the first sale rule needs collaboration with your supply chain.
• Enables importers, middlemen, and manufacturers in communicating about specifically required information and to meet the first sale rule.
• Helps in mitigation of compliance risk.
• Reduction of costs of imported merchandise, increasing profits, and improvement of vendor relationships as they work more closely.
• Simplifies serious self-assessment and continual follow-up.

What Are The Common Barriers To First Sale?

Some of the common barriers for the first sale include:

• The first sale entails a lot of costs in setting it up including establishing the required documentation and certifying suppliers.
• In case your savings are small first sale may be cost-prohibitive. This is because it requires a manual component to maintain a first sale compliance program.
• There is a reluctance to reveal sensitive sourcing information.

At Tj chinafreight, we help you in all freight forwarding services from China.

Contact us now for all shipping from China.

I know you are wondering what foreign trade zone (FTZ) is.

Or, you would like to know what happens in the foreign trade zone.

If that is the case, then read this guide.

Let’s dive right in:

What Is Foreign Trade Zone?

This is a geographical area near or inside United States entry port.

It is where domestic and local goods receive special customs treatment.

The areas are under U.S Customs Border Protection (CBP) under the federal government.

Commercial merchandise in FTZ are exempted from taxes, tariffs re-export payments, etc. to encourage American business to engage in global business.

Even though FTZ are generally outside the U.S. customs territory, they are still on the U.S soil. Therefore, all activities and merchandise within the FTZs are under federal, state and local government.

What Is The purpose Of AForeign Trade Zone?

The main reason for foreign trade zones is to create an enabling environment for U.S. based business to trade globally fairly.

Reducing the tax burden on the FTZ activities and goods allowed foreign producers to compete with producer in the U.S.

Is Foreign Trade Zone The Same As Free Trade Zone?

Foreign trade zones are areas within United States where goods can land, modified, repackaged, relabeled, manufactured and re-exported without customs regulations

Free trade zones are similar to FTZ in operations except for manufacturing on some but are not within U.S.

When you need to manufacture goods and re-export then foreign trade zone would be the way to go.

For repackaging or relabeling of merchandise, then free trade zones be the best choice.

In both cases, customs duties and taxes do not apply within the zone but would be applicable once they exit zones.

What Are Foreign Trade Zone Benefits?

Some of the benefits associated with foreign trade zones include:

• Exemptions from duties, value-added taxes, tariffs and re-export duties.
• Imports into the FTZ enjoy deferred duties and federal excise taxes.
• Manufacturers can enjoy inverted tariffs on goods whose finished product has lower tariffs than its individual parts.
  This occurs when the manufacturers import the component parts into the FTZ.
  Additionally, they can introduce the finished product at its applicable tariff upon exiting FTZ subject to authorization.
• Since FTZ have special customs procedures, the process is streamlined end-to-end making it faster and efficient.
  Instead of filing every entry, businesses can file weekly entries to and save on costs.
• It saves business money due to reduced cost of operations.
• Time is saved on goods at the port since they are not subject to customs inspections thus receive priority pier-side treatment.
• Business within FTZ are under federal, state and local laws and must meet the requirements before admission.
  This improves company compliance.
• Job creation
• Promote local and state development initiatives
• Goods can stay in FTZ for a long time since they are not taxed or subject to duty.

Where Are Foreign Trade Zones Located?

Foreign trade zones are enclosed sites located within or adjacent to U.S. entry ports in the U.S. soil.

Who Regulates FTZ Operations?

The U.S. CBP operates and supervises the foreign trade zones.

Normally, it is under the jurisdiction of the federal, state and local government agencies.

A FTZ site is under the governance of the location port director who represents the local authority in the FTZ Board.

The port director’s duty is to oversee day-to-day site activities and enforce customs related regulations relevant to FTZ.

The customs officials conduct regular visits to the FTZ sites to verify the activities and share in the Annual Customs Review.

Foreign trade zones must comply with the security requirements of the U.S. customs border protection.

What Are The Two Types Of Foreign Trade Zones?

There are two types of foreign trade zone namely general-purpose zones and special purpose subzones.

General Purpose Zones

This category of FTZ serves multiple clients (companies) at the same time and usually offers warehouse services only.

It is can be located at the entry port or in industrial parks.

General purpose FTZ are public and utilized by small companies that need to benefit from the FTZ but do not own one.

These clients can hire the services on a third party logistics (3PL) to optimize their processes while saving on cost.

General-purpose zones can also apply the Alternative Site Framework (ASF), which extends the FTZ outside their zones fasters.

Provided the company is customs compliant, it can apply the FTZ advantages virtually.

Special Purpose Subzones

Unlike general-purpose zones, a single company for specific need such as distribution or manufacturing utilizes special purpose subzones.

They occupy large spaces such as large acres of land designated for manufacturing plant only.

How Do You Set Up A Foreign Trade Zone?

Setting up foreign trade zone is not a walk in the park as it is a lengthy process and capital intensive.

One must do a thorough cost-benefit analysis before deciding to set up on by following the below steps:

1. Submit an online application to the foreign trade zone board stating why you need a new FTZ.
2. Specify the type of FTZ that you are pursuing, either general or special purpose zones.
3. Make the necessary payments as directed by the authorizing officer.
4. Request for zone activation from the U.S. Customs Boarder Protection before stating operations in the FTZ.

What Are The Considerations When Pursuing A Foreign Trade Zone Status?

Companies pursue foreign trade zone status in order to enjoy the benefits that come with them.

However, the cost of putting up a new FTZ is not cheap coupled with a long thorough application process.

You should therefore consider the following factors before pursuing a FTZ status;

Relevance Of FTZ Choice For Your Company

Most companies set up FTZ zones in order to enjoy the duty free and tax free importation into the zones.

This is beneficial as it allows them to compete with other alternatives products fairly in the market.

Certain goods such as steel and aluminum have to pay customs related duties and taxes even in FTZ.

Subsequently, there are other costs associated with putting up a FTZ such as security, system fee, legal, CBP compliance record maintenance, etc.

These costs when calculated may outdo the need of having your ow FTZ.

Therefore, you must consider doing cost analysis against benefits before going the FTZ route.

Tax Implications

While FTZ businesses enjoy tax exemptions and tariff free environment, not all are applicable everywhere.

There is federal related and state related tax benefit and they operate independently.

Federal tariffs include delayed duty payment.

Inverse tariffs, duty exemption on re-exported goods.

This ensures increased cash flows to the businesses and is controlled by federal government.

State tax benefits like reduced property tax vary from one state to another.

You need to understand how various state laws operate before venturing into FTZ status.

In some states, local tax bodies must authorize applicant’s use of FTZ, water district, fire district, etc. This process can be tedious and long where various tax bodies are involved.

Type Of Foreign Trade Zone

There are two kinds of FTZ sites a company can pursue.

They include; general purpose and special purpose subzones.

General-purpose zones are multiple use public FTZ that can accommodate several clients at any given time.

Special purpose subzones are single use sites that are designated for a special need outside the general-purpose zones.

Beside these two, there is also Alternative Site Framework which can either be a magnet site or usage-driven site.

Magnate sites are used by different clients who perform different independent activities and usage-driven is a single use site.

A single-driven user can operate within or outside the site.

ASF are used by applicants as they await their FTZ status approval process which takes a long time. Usage-drive sites are mostly preferred because of their short approval time of 30 days and its allocation is unlimited.

Usage-driven sites can be self-operated because they involve single user.

Conversely, magnate site allocation is limited to six sites only and it requires FTZ compliance commitment by companies.

For instance, magnet site automatically loses its FTZ status after five years on non-usage.

Secondly, it requires its operator which is highly unlikely due to many different users forcing a third party operator services.

Knowing which type of FTZ best suits your needs is key before making the decision.

Proper Paperwork

Paperwork must be accurate to make the process smooth all through.

This is because you need approval and activation of the FTZ before it becomes operational.

FTZ site can be approved but not activated meaning you are not eligible for tax or tariffs benefits that come with it.

Magnet sites can remain inactive for up to five years while usage-driven for three years, beyond which approval lapses.

Activation of FTZ is made through Customs Border Protection who are in charge of activation process. This must be accompanied by satisfactory reason for wanting a FTZ status and patience for the long winding paper work involved.

Activation process may take up to 15 months before a site is activated, is investment intensive and requires compliance commitment.

Businesses that wish to acquire FTZ status must carry out proper research before venturing into the process.

They risk losing time, resources and money if their application is denied after a long wait.

Who Can Use FTZ?

Small or large companies for various needs including manufacturing, distributions, packaging, assembly, exporter/importers, etc. can use Foreign Trade Zones.

It is important to perform cost-benefits analysis in order to ascertain if the FTZ will be right for you.

The type of product and volume also play a significant role when opting to use FTZ.

Some of the industries that use FTZ include:

• Automobile manufacturers who import different car parts and assemble them in FTZ site before exporting a finished car.
• Garments and textile distributors can use FTZ sites as their distribution sites.
  Therefore, they can ship-in in bulk and redistribute gradually for longer hence optimizing on consolidated shipment and duty benefits.
• Other industries that use FTZ include, oil refineries, footwear, pharmaceuticals, electronics, consumer products, etc.
• Companies using bonded warehouse or temporary importation bond may consider FTZ to reduce paperwork, save cost, increase flexibility and efficiency.

How Do I Know The Potential Savings To My Business If I implement FTZ?

Businesses incur costs from taxes, customs duties, customs fees and other related charges.

Foreign trade zones offer exemptions to such costs provided the company meets CBP compliance and is activated.

In order to enjoy such benefits a company must operate from an activated FTZ and acquiring one comes at a cost.

The costs include; application process, approval and activation fee, CBP fee, personal training cost, etc.

Analyzing the cost difference between the two will give you an estimate of the amount you are likely to save.

What Can You Put In A Foreign Trade Zone?

Only goods that are allowed entry into the U.S. can be allowed admission into a foreign trade zone.

This is because; they are still under the law of local, state or federal laws even in the FTZ sites.

The FTZ Board approves the activities that go on in a zone such as manufacturing, distribution, processing, repackaging, except retail trade.

Documentation like import permit and license may be needed to admit merchandise into the zones.

Admission of merchandise into FTZ may be restricted by government agencies if they feel that the site is inadequate.

Similarly, they may prohibit goods on public health and safety grounds, or handling capabilities.

They may also restrict the zone’s activity performed on particular products since they control and oversee FTZ operations.

What Types Of Activities Are permitted In FTZ Zone?

Foreign Trade Zones activities and goods are controlled by the FTZ Board.

The zones are considered outside U.S. CBP but under the jurisdiction of the local, state or federal governance.

Activities permitted in FTZ include; storing, manufacturing, mixing, processing, exhibition, repair, salvage, assembly, relabeling, repackaging, sampling, testing and manipulation of products.

Retail trade is not allowed in Foreign Trade Zones.

The FTZ Board may restrict an activity in a zone if they determine that the site cannot handle the activity it.

Restriction may also be imposed on goods that are considered harmful to the public.

How Does FTZ Work In International Trade?

Foreign Trade Zones were established in 1934 during the Great Depression Era as a way of encouraging commerce in the U.S.

They are a special area within the U.S. that are considered non-CBP territory.

FTZ allow businesses to process, manufacture, repackage and re-export merchandise without paying the normal duties when brining in merchandise into FTZ.

An equivalent of FTZ outside of U.S. is Free Trade Zone and they offer the same benefits and much more.

Many countries have embraced the free trade zones to promote international trade and enjoy the economic benefits that come with them.

For instance, fifty-four African nations signed the African Continental Free Trade Agreement in 2019 to free themselves from intra-Africa tariffs.

This made them compete favorably with other global manufacturing hubs such as Asia.

In U.S., the FTZ zones offer the American businesses same competitive advantage by allowing re-export of finished products at inverted duties.

As a result, there has been an increase in FTZ companies in the U.S. and more employment opportunities.

Besides, FTZ operated businesses can access “foreign status” commodities such as petroleum and oil, consumers, electronics and vehicles at competitive price.

What Is The Difference Between Foreign Trade Zone And Bonded Warehouse?

Foreign Trade Zone is enclosed locations near or within entry ports in U.S. that are outside the Customs Border Protection territory.

The goods brought into FTZ are not subject to customs procedures and tariffs.

Bonded Warehouses are secure government storage facilities for dutiable goods before actual duty payment.

Duty is once goods are moved from the bonded warehouse and are subjected to the normal customs processes.

A Foreign Trade Zone offers unlimited duty deferral period while a Bonded Warehouse offers a five-year duty deferral period.

Goods in bonded warehouses are for storage or distribution only while in FTZ goods, can be manufactured, distributed, stored, manipulated etc.

Customs filing is done when goods exit FTZ while upon entry in bonded warehouses.

FTZ admit both domestic and foreign merchandise, bonded warehouses only permit foreign cargo.

Movement of goods is relatively unrestricted in and out of FTZ while in bonded warehouse, movement of goods is limited.

Why Do Businesses Use FTZs?

There are various reasons as to why companies opt for FTZ sites rather than normal operations. some of the reasons include:

Weekly Entry Procedures

This was implemented in 2000 by the U.S. President Clinton under the Trade and Development Act of 2000.

It allowed FTZ users to file one customs entry per week as opposed to filing one customs entry per shipment.

Companies used to spend between USD 25 to 485 merchandise procession fee for every entry regardless of the duty cost.

This led to increased operational cost to businesses thus making it expensive to operate.

Weekly entry processes lessened the number of customs entries, significantly reducing the cost on business owners.

Duty Deferral On Imports

Duty is deferred on goods within the FTZ and is only applied when they leave the zones.

This increases cash flow for businesses operating within FTZ.

• Duty is eliminated on scrap and yield loss within FTZ, merchandise sold to U.S. military or NASA.
• Ad Valorem tax relief on products stored in foreign trade zones.
• Duty exemption on defective parts that need to be returned to country of origin.

What Is FTZ Identifier?

This is a unique label that is used to trace the Foreign Trade Zone that goods originated from.

It is for accountability purposes.

Goods that are no longer in FTZ export list should have their identifier reported to relevant agencies.

What Are The Challenges Of Using A Foreign Trade Zone?

Challenges associated with Foreign Trade Zones can be associated with the type of FTZ.

Compliance and paperwork is one of the challenges that applicants face when pursuing FTZ status.

Another challenge is that the process can take up to a year to get an approval from the board.

This delay may be costly to the company in times of resources and costs.

General purpose FTZ are hard to manage due to different clientele needs at the same time using same resources.

This is easier for special FTZ subzones since it is one client for a particular operation.

One of the requirements for FTZ is software integration into to the CBP system for oversight purposes. This still is a challenge to implement in a timely manner.

First time companies are likely to face serious delays due to frequent flagging by CBP for inspection purposes.

This can lead to major stock shortage if the company did not plan well.

What Is A Foreign Trade Zone Manual?

Foreign Trade Zone manual is a guiding document that stakeholders can use to get information on FTZ.

It is however not a binding document unless incorporated into a contract.

How Does Foreign Trade Zone Promote International Trade?

Some of the ways that FTZ promote international trade include:

• Allow favorable global competition between U.S, manufacturers and foreign companies.
• Promote exports business.
• Create employment for locals and foreigners.
• Encourage domestic business.

How Does Foreign Trade Zone Program Compare With Other Customs Tariff-Reduction Programs Such As Duty Drawback?

In FTZ program no duty is paid for imported merchandise meant for FTZ.

In duty draw-back a refund is paid in whole or part on imports whose duty were paid when coming into U.S.

What Are Foreign Trade Zone Regulations?

There are two key regulations that provide guidance on the administration and operation of FTZ.

• Customs Federal Regulation (CFR) Section 19 Part 146
• CFT Part Section 15 Part 400

These two regulations provide a guide on how FTZ work and how businesses stand to benefit from them.

They are complex therefore, businesses should have a basic understanding of these regulations before they venture into FTZ.

What Is The Cost Of Using A Foreign Trade Zone?

The cost of using a FTZ site by companies vary as per their operations and merchandise and many other factors.

There are standard requirements such as security, administrative fee, activation fees, operation costs which apply across the different FTZ types.

These costs can be determined by carrying out a cost-benefit analysis before pursuing a FTZ status acquisition process.

How Do You Transfer Merchandise From A Foreign Trade Zone?

Transfer of merchandise from FTZ can be for consumption in the U.S market under the following categories;

Privilege Foreign Zone Status

Here, importers apply to lock duty and tax rate at the time of import of merchandise to avoid paying current rates.

The reason behind this is that the rates keep fluctuating and are likely to be hire for the manufactured or processed product.

Non-privilege Foreign Status

Unlike privileged foreign status, there is no locking of duty or tax rate at the time of import.

Business pay for merchandise duty at the time the goods leave FTZ.

Domestic Status

Goods can acquire ‘domestic status’ when;

1. They are grown or manufactured within U.S. and have their taxes updated
2. They are imported into U.S. and have paid all the necessary duty upon entry or
3. Goods that were allowed into FTZ without duty.

Domestic status merchandise can be moved out of FTZ without CBP permit provided it has not mixed with other status.

Zone Restricted Status

The FTZ user must apply for ‘zone restricted status’ at the beginning of the process for merchandise meant for export or destruction.

Such goods cannot be moved to U.S. CBP territory unless authorized by FTZ Board.

What Paperwork Will I Need For FTZ Activities?

Paperwork is compulsory when operating in FTZ to verify the activities going on in the site. Some of the paperwork needed include:

• Commercial invoice
• Bill of lading
• Packing list
• Harmonized tariff codes (HS) for every item
• Import permit and license
• Arrival notification

U.S. CBP oversee the FTZ and may restrict activity if they verify that the user in non-compliant.

Do I Need Customs Broker When Admitting Goods Into A Foreign Trade Zone?

Foreign Trade Zones are considered non-CBP areas therefore, customs procedures are not necessary to admit goods into FTZ.

When these merchandise leave FTZ for export, still customs roles do not apply.

Customs brokers can be beneficial when introducing the goods in U.S. market place for consumption then custom entry process is required.

What Are The Recent Trends And Future Of FTZs?

There has been a rise in the number of FTZ sites in the U.S. particularly in Nebraska.

Two subzones have been opened in the past five years with several more inquiries from companies.

They continued growth will help open up many countries’ free trade zones for international trade.

In Africa, fifty-four countries signed an agreement that will liberate them from intra-Africa tariffs thus making them compete globally against other trade hubs.

U.S. and European union are in talks that could see a Trans-Atlantic free trade agreement signed.

This will open up the two continents for international trade.

In 2007, Alibaba founder Jack Ma opened a digital free trade zone (DFTZ) in Malaysia to promote Asia e-commerce growth.

This platform allows small traders to enjoy same benefits as large companies operating in FTZ sites.

Overall, there is an increased uptake of the FTZ both in developed and in developing countries.

At Tj chinafreight, we will help you in all shipping from China to any global destination.

So, you don’t have to worry about any freight forwarding services from China, Tj chinafreight is here to help.

If you’re in import-export business, probably you have come across the term forty-foot Equivalent Unit (FEU).

Today’s guide will explore everything you need to know about forty-foot Equivalent Unit.

So, keep reading to learn more.

What Does FEU (Forty-foot Equivalent Unit) Mean In Shipping Terms?

FEU is an acronym for Forty-foot-Equivalent Unit, and it describes the measurements of a shipping container that is 40-foot long.

For instance, a single container measuring 40 ft would be equivalent to 1 FEU.

Same as having two containers measuring 20’ each, they would be equivalent to 1 FEU.

What Is The History Of FEU?

FEU was developed naturally due to the emergence of containerization, which Malcolm McLean first discovered.

Therefore, once you comprehend the history behind FEU, you will have understood how container shipping surfaced into existence.

Taking you back to how FEU began, Malcolm McLean was an entrepreneur mainly dealing with trucks.

It wasn’t long before he realized how tiresome and problematic loading and unloading cargo was. Without a doubt, it was.

Goods were being transported in whichever packaging, or they were at, be it barrels, crates, and sacks, to mention a few.

One day, Malcolm was at the docks. He thought about coming up with a better and much simpler way of transporting goods.

In that line of reasoning, the idea of making containers crossed his mind. He thought of transporting goods in containers that would use on ships and trucks.

As much as the containers were to be standard-sized, They would help minimize the loading and unloading of cargo frequently when transportation modes changed.

Thus, he embarked on his mission, decided to sell his trucking company, and then fully concentrated on building containers.

It didn’t take him long to make some containers, and afterward, all he needed was a shipping vessel.

Malcolm decided to buy a ship that went by the name Ideal X and customized it to accommodate all his 58 containers.

The first-ever ocean freight took place in April 1956 where the ship sailed to Houston from New Jersey.

However, Malcolm McLean’s containers measured 35 feet, which proved to be inefficient to ship in. Thus arose the need for more standardization.

In 1968, double ISO standardizations defined the dimensions, classification, and identification of containers.

When 40-foot and 20-foot containers emerged, the former came to be referred to as Forty-Foot Equivalent Unit (FEU).

What Are FEU Dimensions?

40ft containers are one of the most common types of containers used by most shippers. Normally, they have both interiors as well as exterior dimensions, which are not limited to;

• Interior Dimensions (In feet); 39’6” long x 7’9” wide X 7’10” high
• Usable Capacity 67.7 m³
• Exterior Dimensions (In feet) 40’ long X 8’ wide X 8’6” high
• Exterior Dimensions (in meters) 12.19m long X 2.44m wide X2.59m high
• Internal Dimensions (in meters): 12.025m long X 2.352m wide X 2.393m high

Is There Difference Between FEU For General Purposes And High Cube Containers?

Yes, there is a considerable difference between FEU for General Purpose and High Cube Containers.

The major difference between these two lines is height.

General-purpose containers have a height of 2.6m (8’6″), while High Cube Containers have a height of 2.9m (8’6″).

While this might not seem like a huge difference, it does play an important role in shipping, specifically stacking.

Normally, you will find more High Cube Containers in the 40ft container market as General Purpose dominates in the 20ft container market.

The choice will depend on the importer’s or the exporter’s preferences.

What Are The Benefits Of Using 40ft Containers For Shipping?

Among the standard-sized containers, 40ft containers are considered to be the largest. Despite it not being as popular as the 20ft containers, it is very beneficial when transporting and storing goods.

Let’s have a look at some of the benefits of using 40ft containers for shipping;

• Ample storage space – Being the largest standard-sized container, you have enough storage space for your goods.
• Cost-effective – Shipping several goods using a 40ft container eliminates the need for shipping using several 20ft containers. In addition, it can accommodate a large volume of goods. So be sure to save on costs that would otherwise be used when using several containers.
• Ability to transport more goods – A 40ft container cuts costs and the number of containers you will need to transport goods; they can accommodate more goods and therefore eliminate the need to pay for two smaller containers for shipping.
• Protection of goods against theft – Owing to the tough build, 40ft containers are difficult to break into; thus, rest assured of your goods’ safety.
• Protects goods against damage -These containers are designed to prevent air and water from accessing the contents of the container. IT is beneficial as some products easily go bad when exposed to such elements.
• Ability to transport large goods -40ft containers make it easier transporting large cargo that could otherwise not fit into smaller containers.
• Versatility – Apart from shipping, 40ft containers can serve several purposes, such as storage facilities.
• Customizable – You can modify a 40ft container to meet your preferred size requirements.

How Is FEU Calculated?

To calculate the FEU of a container, you need first to understand how TEU is calculated.

A single forty-foot container is equivalent to two 20-foot containers (2TEU). To calculate the TEU, take the actual length in feet and divide it by twenty.

For instance, one TEU will be (20ft x 8ft x 8ft) while 2TEU will be (40ft x 8ft x 8ft), the same as 1 FEU.

How Many Pallets Can Fit Into A 40ft Container?

To start with, three different types of pallets can fit into a 40ft container;

• Standard pallets (1000mm width x1200mm length) – These pallets are Mainly used by companies in Canada or the US, which explains why they are also referred to as North American Pallets.
• EU pallets (800mm width x 1200mm length) and EUR2 pallets (1200 x1000)
  This kind of pallet is mostly used in the UK, Europe, and New Zealand. They are the most common types of pallets used by shippers.
  Each of these pallets has different maximum fittings into a 40ft container as listed below;
  Standard pallets -20 pallets
  EUR2 pallets -20 or 21 pallets
  EU pallets – 20 pallets

What Is The Maximum Load Per FEU?

The maximum load per FEU may be roughly from  30,480kgs to 67,200 lbs.

The maximum load varies depending on the type of container. Smaller containers will have a smaller load and vice versa

What Is The Difference Between TEU And FEU?

TEU and FEU differ in different aspects when it comes to shipping cargo. Some of these differences are not limited to;

• TEU refers to a twenty-foot Equivalent Unit, while FEU is Forty-foot Equivalent Unit.
• The maximum capacity of TEU is 28 cubic Meter while FEU has a maximum capacity of 58 Cubic meters.
• The inner dimensions of FEU are 39’ 6.5” x 7’8” x 7’ 9.5” while TEU has 19’ 5” x 7’ 8” x 7’ 9.5”.
• TEU can take up to 9 to 11 pallets, while FEU can hold 20-24 pallets.
• TEU can hold smaller loads of goods as compared to FEU, which can hold twice as much.
• The outer dimensions of TEU are 20’ x 8’ x 8’ while FEU has 40’ x 8’ x 8’.

How Many TEUs (Twenty-Foot Equivalent Unit) Is An FEU?

Twenty-Foot Equivalent Unit measures the volume of 20-foot containers, thus the name “TEU.”

On the other hand, FEU is a measure for 40-foot containers making it twice as big as TEU. That said, 2 TEUs are equivalent to 1 FEU.

What Is FEU Reefer, And How Does It Work?

FEU Reefer is a refrigerated 40ft container that is used to ship controlled goods.

The goods used to be shipped; fruits and vegetables, meat, seafood, flowers, dairy, and pharmaceuticals.

Reefer containers are designed in a manner that they can preserve—items at the required temperatures, which might range between -30°C and +30°C.

Gensets (generator sets) dependent on fuel and electricity are used on reefers to bring about the cooling effect.

While goods are being transported, the temperatures are being indicated and logged by Data Loggers. Data loggers are equipment found inside a reefer unit.

The data collected can be downloaded and accessed via a personal computer.

TEUs are known to be the commonly used size for reefers globally.

What Are The Requirements For Loading An FEU Reefer?

Some of the requirements when loading FEU reefers are not limited to;

• There should be adequate spacing (preferably 12cm) between the cargo and the roof of the FEU reefer.
• You should leave enough space during the loading process to facilitate cool air circulation in the container.
• Ensure that power is switched off while loading to prevent the ambient exchange of air.
• The goods to be loaded in the FEU reefer need to be pre-cooled before being loaded into the reefer.
• Reduce your reefers and goods’ exposure to open-air to keep them fresh.

What Is A CSC Plate In Container Shipping?

Like a vehicle’s number plate, the CSC plate describes the container and includes details as inspection date and the container’s gross weight.

Altogether with its payload, and design to mention a few.

This plate is fixed on all containers after inspection, and it confirms that the container is safe for transporting cargo.

If you may ask, an inspection of containers should happen once every 30 months, as stated by CSC 1972. An authorized inspector should do the inspection exercise.

How Much Does It Cost To Ship A 40ft Container?

As much as a 40 ft container is twice the size of a 20ft container, the charges are not doubled.

You are bound to spend only 20-25% more when shipping via a 40ft container than a 20foot container.

20-21 pallets can fit into a 40ft container, and the total capacity stands at 2,389 cu ft.

What Is The Role Of ISO Standard In Container Shipping?

In 1961 ISO standards were enacted to ensure that containers adhere to the required size and durability requirements. It was in a bid also to ensure safe and uniform stacking.

Shipping containers are inspected once every 30 months to confirm the conformity of the container to the required standards.

For instance, the ISO standard 668:2013 is for classification, dimensions, and the gross mass of containers under series 1.

On the other hand, ISO Standard 1496-1:2013 is for specifications and tests.

The ISO 1161:2016 is for corner and intermediary fittings, specifications for containers under series 1.

There are several types of ISO Containers which are not limited to;

• Open top containers
• Reefer containers
• Dry freight or cube containers
• Tank containers
• Insulated or thermal containers
• Flat racks and platforms

What Are FEU Shipping Container Marking Codes?

The main purpose of having marking codes on containers is to easily display the type, length, and height of the container.

It is composed of four characters: letters or digits displayed under the container identification sequence.

Each of the characters represents details of the container, for example;

• First character represents the container’s length.
• Second one represents the height.
• Last two characters give details on the type of container as well as its characteristics.

What Is ACEP For FEU Shipping Containers?

Approved Continuous Examination Program refers to an inspection that is carried out on containers.

It is to ensure that they met the required safety standards for international shipping.

If the container is under ACEP, it should inspect after five years after the manufacturing date.

They should also check containers during repairs, renovations, or when the container is about to ship items.

The inspections are frequent, and this ensures that the container is always safe.

After every 30 months, the container is required to undergo inspection.

Luckily, frequent updates are done in the ACEP online database to remind the container owner about an upcoming inspection.

Renewal of the ACEP is done after every ten years.

What Is ISO Tank FEU Container And Dimensions?

ISO tanks FEU containers refer to 40ft containers that are designed based on the ISO Standards. Such tanks are used in the transportation of liquids and gases such as;

• Water
• Molasses
• Liquid resins
• Chemical/solvents
• Alcoholic and non-alcoholic beverages
• Dairy products
• Hydrogen peroxide
• Oils
• Sulphuric acid
• Liquefied sugars

In as much as ISO tanks facilitate hazardous shipping products, additional requirements might be needed for you to execute the shipping process.

It’s worth knowing that once an ISO shipping container is designed to be used to transport dangerous materials. It cannot use in shipping food substances and vice versa.

Normally, there is an exterior structure that supports ISO containers and can be adjusted to match the container’s dimensions.

In addition to that, these types of tanks have an insulating material that protects them from the transported goods.

The dimensions of ISO tank FEU are as follows; 8ft (2.43m) wide, 8.5ft (2.59m) high, and 40ft (12.2m) length.

What Are The Considerations When Choosing FEU Vs. TEU Container Shipping?

Before choosing whether or not two use FEU or TEU, there are certain factors that you need to consider. Such factors include;

• The purpose for the shipping container – You can use Shipping containers for storage and shipping purposes. Aside from these, you can as well use a shipping container to construct a house or office. Knowing the purpose your shipping container will play will help you decide which size suits you. The size you want the size of your container will determine your house or office.
• Dimensions of your goods can ship anything via a shipping container regardless of the size or weight. However, if you want your cargo to fit appropriately, you need to consider the shipped’s size. FEU would be suitable when shipping or storing large-sized goods owing to the extra storage space available.
• Packaging of the goods – If you are shipping your goods in pallets, the number of pallets to fit in FEU will differ from TEU. While FEU can accommodate 20-24 pallets, TEU can only hold 9-11 pallets. Therefore, if you are planning to ship several pallets, FEU would be the ideal choice.
• Amount of goods to be shipped – In as much as FEU and TEU differ in terms of size, the cost associated with shipping using these two might not be far from similar. For instance, you might realize that just by adding 20-25% of TEU’s cost, you can ship your goods via 40ft container. Thus, shipping several goods will be economical when using a single 40ft container instead of two 20ft containers.
• Your budget – Finally, your budget will play an important role in determining whether to use TEU or FEU. It comes without saying that you are bound to spend more when using FEU owing to the larger capacity that it can accommodate.

It’s also important to analyze how you will stack your goods into the container. It will help you know whether they will neatly fit into your container.

What Are The Delivery Options For FEU Cargo?

There are three main delivery options for FEU cargo which include truck, ship, and rail.

The choice will depend on the shipper’s preferences as well as the destination.

Delivering FEU cargo will be applicable with sea freight Globally.

In contrast, rail and truck options are ideal for delivery around the country or neighboring countries.

What Are The Rules And Regulations For FEU Cargo Ground And Rail Transportation?

Containers adhere to the ISO standards and other rules and regulations concerning the transportation of FEU cargo.

As we know by now, FEU cargo can only be transported on land via truck or rail or by sea via ship. That said, below are some of the rules and regulations that should be followed when transporting FEU cargo.

• The weight of the container should not exceed 67,200 lb. It’s important to check with your local authorities regarding your container’s required weight, whether on the ground or sea.
• The container should have passed through inspection and adhered to the ISO standards before being used to transport cargo internationally.
• It should safely secure Hazardous cargo being transported via road or rail as per the ISO standards. In addition, the container should have a visible warning sign marked on it to create awareness about the contents being transported.
• The container should have certifications such as ACEP and CSC to confirm its safety. The CSC certificate confirms that the container has been inspected and passed the safety tests conducted.

Keep in mind that the rules and regulations vary from one country to the other. Therefore, it will be essential to confirm with your local authorities about any other rules and regulations that should follow.

If you’re shipping from China, Tj chinafreight is here to handle all your logistics needs and requirements.

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

If you have any question about emergency bunker surcharge, you will find the answer right here.

So keep reading to learn more.

What Is Emergency Bunker Surcharge?

We can define Emergency Bunker Surcharge as the sudden increase in prices resulting from increased fuel costs.

This rapid fluctuation of fuel prices allows the carriers to provide mitigations to allow ships to continue operating.

To determine the constant fluctuations of fuel prices, the EBS works with the Bunker Adjustment Factor. Therefore, it implies a sudden increase in bunker prices will increase BAF and vice versa.

What Is Bunkering?

It is a process that involves supplying fuel oil to the ship bunkers during the shipping process. Modern bunkering involves using fuels such as petroleum products, unlike when coal steam up the ship.

Bunkering sometimes can be dangerous, and there, you should be extra careful while conducting this process.

Here are procedures to follow before bickering:

1. The engineer checks out which bunker tanks require filling after confirming the available quantity of fuel from the shore office.
2. In most cases, emptying of tanks or shifting of oil from one bunker to another is important. It prevents the mixing of these fuel oils, which might result in the incompatibility of the oils.
3. Offer relevant information to individuals undertaking the bunkering process.

When Do Carriers Charge An Emergency Bunker Surcharge?

Carriers always try to look for ways to mitigate the constant fluctuation of fuel prices.

However, the constant changes in prices might increase the price where the carrier is unaware and incurs losses.

Carriers Charge EBS when the fuel price increases and there is a shorter timeline regarding FMC regulations.

The Emergency Bunker Surcharge does not immediately reflect on the increase and decrease of fuel prices hence more benefits.

Carriers also charge Emergency Bunker Surcharge when there is conflict from the shipper. Normally, the shippers claim the carriers should be responsible for the increase in fuel prices.

Therefore, the introduction of EBS protects the carriers from these mishaps.

Is Fuel Surcharge The Same As Emergency Bunker Surcharge?

No.

The Fuel Surcharge is not the same as EBS.

The additional charges that the carriers pay apart from the shipping charges, we term these additional charges as Fuel Surcharge.

With a Fuel Surcharge, you can involve a third party who signs an agreement with the shipper. Both parties determine how much standard rates you will pay and what fuel prices affect the surcharge.

Emergency Bunker Surcharge covers the carrier’s costs due to the sudden increase in fuel cost against the original anticipation.

Why Are Carriers Increasingly Charging Emergency Bunker Surcharge?

Carriers are increasingly charging Emergency Bunker Surcharges for several reasons. The main reasons are:

High Fuel Prices: Constant increases in fuel prices affect different sectors all over the world.

As a result, it causes an increase in the cost of every other commodity due to production costs.

This factor leads to constant conflicts such as strikes and demonstrations in various sectors experiencing these hikes.

Emergency Bunker Surcharge Now Low Sulfur Emissions Standards: The IMO regulatory body regulates sulfur in fuel. The sulfur content should be 0.5% from the previous 3.5%.

Low sulfur content in fuels have the following benefits:

First, Reduce Air Pollution: hence more clean air is available. Protect human health.

It’s, as a result, prevents exposing people to health hazards such as cancer, lung disease, and respiratory problems.

It also prevents environmental hazards.

However, emitting sulfur-based fuel to the environment has great side effects such as low production of produce on farms.

Sulfur cap regulations require the shippers to use fuels with low sulfur content, especially in areas with high populations.

The Decline In Spot Rates And Financial Losses: is a result of the following factors;

• Increase in fuel and vessel charter costs
• Weak freights rates
• Pressure for the delivery of new containership

All these factors will lead to variations in the carrier margins.

What Is The Difference Between Emergency Bunker Surcharge (EBS) And Bunker Adjustment Factor (BAF)?

Emergency bunker surcharge occurs as a result of a constant increase in fuel prices.

Normally, the carriers are not aware of the increase in price and the sudden introduction of EBS.

Emergency bunker surcharges mostly vary with the following factors

• Type of container you are moving
• Fuel prices
• Finally, the trade lane that the shipment is moving in.

The emergency bunker surcharge occurs mostly during the last minutes, which might result in inconvenience.

On the other hand, normally bunker adjustment factor caters to any extra charges as a result of constant fluctuations of bunker prices.

The base freight charges are separate from the BAF, and you can adjust quarterly.

With BAF increase in fuel prices corresponds to an increase in Bunker Adjustment Factor and vice versa.

Additionally, it allows each carrier to set their cost rates with BAF, unlike doing it collectively.

Constant updates on the Bunker Adjustment Factor Surcharge allow the shippers to always ahead.

What Is The Relationship Between Vessel Fuel And Crude Oil In Shipping?

Ideally, vessel fuel corresponds to the oil price that is set by Brent crude oil price.

This Brent crude oil is constantly increasing with a reduction in oil supply by the organization of petroleum exporting countries.

Sanctioning of fuels by some countries also contributes to an increase in fuel prices.

Why Are Vessel Fuel Prices Increasing?

Normally, you can tie fuel price to oil price. Brent crude oil usually sets the price and is constantly increasing due to a decrease in supply by OPEC.

It’s as a result, leads to low anticipation by the carriers. Hence, the carriers adopt the Emergency Bunker Surcharge to protect them.

Note, implementing the EBS allows the carrier to recover all the fuel costs they incur.

Is Emergency Bunker Surcharge An Emergency As Put?

No.

An Emergency Bunker Surcharge is not an emergency since we experience constant fuel fluctuations.

But, unfortunately, it has been happening even in the past.

Therefore, a one-time increase or decrease in fuel prices does not warrant it to be an emergency.

Also, presenting weak evidence to prove the sudden rise or decrease of fuel prices discredits the EBS as an emergency.

How Long Will An EBS Be Effect?

Normally, the carrier decides on the duration which the Emergency Bunker Surcharge will be in effect in a specific trade lane.

The possibility of continuous increase in oil prices will lead to oil cuts and the sanctioning against Iran by the u.s government.

This variation depends on the trade lane and the carrier.

Why Do Freight Costs Vary Per Trade Line?

Freight costs vary per tradeline due to the following reasons:

First, Supply And Demand: Low rates result in high traffic trade lanes where the carriers need to be competitive to attract a large market share.

In the case where freight rates are high, the demand lowers. It implies only a few carriers can provide these services.

General Rate Increase: This occurs when the freight rates are low due to competition between carriers. Thus, the need to implement the GRI to increase the freight rates.

Market Conditions: When trade lanes are in high demand, the carriers apply the pick season surcharge.

Other factors such as weather, strikes will also affect the market condition.

Which Factors Determine The Price Of Emergency Bunker Surcharge?

The following factors determine the variation in the price of EBS:

• Size and type of container
• Fuel prices
• Tradeline
• Carrier

How Much Do Emergency Bunker Surcharges Cost?

The cost of Emergency Bunker Surcharge varies with the following factors

• The cargo you want to ship
• The type of containers you want
• Whether you are shipping a dry cargo or a reefer, the reefer is not long-lasting and requires special containers.
• Additionally, the cost varies with the carrier.

With these factors, the following are the estimates of Emergency Bunker Surcharge costs;

$50-$60 for dry containers

$90-$180 for reefer containers

How Do Carriers Bill For An Emergency Bunker Surcharge?

The carriers include the EBS to the charges of the shipment to allow balancing of the changing costs. The carrier bills the EBS as a percentage of the miles you cover.

Carriers also bill the Emergency Bunker Surcharge by comparing fuel prices from the previous week. It allows them to determine the gap between fuel prices and how to mitigate it.

Additionally, the carrier determines the retail prices from the stations then determines the average cost. It allows the carrier to determine how much Emergency Bunkering Surcharge to impose.

Is Emergency Bunker Surcharge Applicable To Both FCL And LCL Shipments?

Yes.

You can apply both the full container load and less container load to EBS. The carrier initiates this process, which applies in all trades around the ocean.

With the FCL coming into effect, the EBS will affect shipments not relating to the US and shipments on distant destinations.

For LCL, it allows implementation of Emergency Bunker Surcharge. It is, as a result, allows the carrier to recover the fuel margins.

Do Carriers Charge The Same EBS For All Kinds Of Container Shipping?

No.

Charges vary with the type of container you are shipping. These containers can be dry or reefer containers.

The cost will also vary with the length of these containers. For instance;

For reefer containers, the price ranges from $85-$250 for a 20-inch container and $180-$250 for a 40-inch container.

The price ranges from$50-60 for a 20-inch container and $90-180 for a 40-inch container in dry containers.

Who Should Pay Emergency Bunker Surcharge?

The seller pays for the Emergency Bunker Surcharge. This payment usually occurs at the port after the arrival of the cargo.

Payment of EBS varies with different trade lines. For instance

The MCM estimates the variation of the fleet and the supply of fuel to be above 2 million dollars as they approach2020.

Maersk line expects an increase in fuel supply costs to above 2 billion dollars due to the visible difference between the current fuel and the compliance.

Other trade lines such as MSC, OOCL, APL, and CGM also accept these compliances and subject these costs to customers.

How Do Carriers Communicate Emergency Bunker Surcharges?

The introduction of EBS allows continuous and sustainable services to the customers. Carriers may communicate through the following ways:

They reach out to local MCC transport representatives to inquire about customer needs’ concerns, questions, or clarifications.

They allow you to log into the pages they provide to view information about the EBS. In addition, if you do not have an account, they allow you to register for the same.

You can contact the carrier via calling the toll number they give (440-336-8862)

Also, you can visit and connect with the carrier via the website.

What Is The Difference Between Low Sulphur Surcharge And Emergency Bunker Surcharge?

A low sulfur surcharge is normally the charge the seller pays while using low sulfur fuels. These costs will cover these costs as the sulfur cap regulation standards.

While EBS covers the sudden increase or decrease of fuel prices, this fluctuation leads to losses; hence implementing the EBS allows compensation to the carrier.

What Are The Implications Of EBS In The Freight Forwarding Industry?

Emergency bunker surcharge implications on the freight forwarding industry include:

• Weak freight rates
• Fluctuating fuel prices
• The conflict between the shippers and the ocean carriers,
• Last minutes pop-up of fluctuating fuel prices information.

What Is The Future Of Bunker Fuel Surcharges?

Recently increase of questions of who will take the burden of the fuel costs is increasing. Should the shippers or the carriers take the burden?

With these rising issues, there is a need to develop new strategies to provide long-term solutions for Emergency Bunker Surcharges. The shippers want the carriers to be responsible for these charges.

They claim the carrier uses an Emergency Bunker Surcharge to compensate for the losses and not the bunker.

Note, the carriers do not have control over the fluctuating fuel prices. Therefore, they use the EBS to cover the losses.

At Tj chinafreight, we help in all shipping from China.

Contact us today for all freight forwarding services from China.

Today’s guide explores everything you need to know about FDA.

So, if you have any question about FDA, you will find the answer right here.

Keep reading to learn more.

What Is FDA?

We can define food and drug administration as an agent that oversees the process of production of different products that we use and consume in our day-to-day lives.

The food and drug administration monitors products such as cosmetic products, medical equipment, biological products, and food.

They also regulate products that present to be a hazard. That is an emission of radiation which is harmful to the consumer of the products.

What Is The Main Purpose Of The FDA?

Food and drug administration’s perform a wide role in regulating what products the end-user purchases and consumes.

The following are some of the benefits of food and drug administration:

• Facilitate advancing of public health by ensuring a speed up process during product innovation.
• FDA offers protection of the public consumer from products that emit radiation for instance-rays
• They also offer regulations on the amount of content on tobacco products
• They inspect all the cosmetic products and food to ensure proper labeling to prevent consumers from using the wrong product.
  This will cause effects on the body.
• They also ensure that all medical devices, vaccines, and biological products that humans use are effective and safe for them.

What Products Are Subject To FDA?

The food and drug administration regulates consumer products to protect public health.

There are certain products that FDA highly regulates.

These products include:

1. Medical products: such products include, first aid kits, surgical instruments among others. The food and drug administration inspects the standards of these products to prevent preventing under quality equipment.
   This will pose a threat to public health.
2. Human food: FDA regulates what consumers take in terms of food, for instance, excess intake of food additives will cause health issues to the consumer.
3. Another case is the dietary supplements that cause an increase in weight when the consumer takes them.
4. This will lead to accumulations of fats in the body which is dangerous to your health.
5. Human drugs: regulates and inspects all drugs coming in from other countries.
   This prevents an increase of counterfeit drugs which will cause a serious problem to the consumer
6. Cosmetic products: inspects these products to evaluate if the ingredients used meets the threshold.
   As a result, preventing any side effects on the consumer’s body and face.
   These products include face creams, shampoo, artificial eyelashes among others.
7. Radiation emitting electronic products such as microwaves, X-ray equipment, LEDs, Laser printers pose a health crisis to the public. users.
   The FDA ensures low emitting devices are available with guidelines of their usage.
8. Tobacco products: FDA ensures the percentage of tobacco in cigarettes, e-cigarettes, and smokeless tobacco meets the specifications given threshold.
9. High nicotine in these products causes health issues among the users such as lung cancer due to the high concentration of the substance.
10. Biological products, vaccines, and blood: FDA ensures accurate examination of these products before the consumer receives them.
    For instance, you should examine the blood for the presence of additional elements, also the body organs should be a match and to the receiver to avoid health crises.

What Are FDA Entry Types?

Entry type refers to all types of goods that a country allows in via the help of regulatory bodies like the FDA and CPB.

FDA entry uses an Automated broker interface program to achieve the entries electronically.

Food and drug administration process different types of entries. These FDA entries include

Consumption Entry: allows importing goods into the US without issuing requests for the goods and the time.

You can either use these goods for commercial, personal, or business purposes.

With consumption entry, different individuals are responsible for this entry.

They include:

• The owner
• Custom brokers
• Purchaser

We can further classify consumption entry into:

• Mail
• Informal entry
• Formal entry

In cases of warehouse and import for export FDA entries, they help in removing goods that are entering us.

Other FDA entries include;

• Immediate transportation
• Transportation and exportation
• Temporary importation under bond
• Foreign trade zone

What Is The FDA Entry Process?

The food and Drug Administration entry process involves the steps that custom brokers follow while shipping the products into the country.

These processes include:

If these products are FDA regulated, the customs broker submits custom entry documents to the FDA.

In other cases, the customs broker will submit prior notice to the FDA in case they need more time.

Usually, the customs broker should submit this notice two hours before the arrival of the shipment.

This gives the FDA more time to pre-examine all entries and decide on whether the shipment will cross or needs more examination.

We recommend custom brokers to ensure that products enter the country during the day to allow reviewing at the arrival port.

In case the FDA issues reviews of the products, custom brokers will send a notification to the owner to hold goods longer.

This allows the customs broker to clear any pending issues with FDA to prevent additional charges or refusal of goods entry.

What Does It Mean For A Product To Be FDA Approved?

The main responsibility of food and drug administration is to carry out tests, examinations, reviews and provide approval of products for human consumption.

These products range from medical devices, food, cosmetics, tobacco products, and biological products.

Therefore, for FDA to approve these products they must meet a certain threshold which means they do not pose any danger to the consumers.

Hence, protecting the consumers’ health.

What Is The Importance Of FDA Approval In Shipping?

Food and Drug Administration is important in shipping in the following ways:

• Counterchecks all paper documents to ensure that the shipment does not pose a danger to public health.
• They implement final rules on FDA regulated products such as biological products, food, and medical devices.
• It reduces the holding of goods at the port when the owner provides relevant documents.
• FDA approval also fastens the process of shipping.

This means if the products qualify and adhere to the law FDA will release them immediately.

Do I Need To Register With The FDA?

Yes. To allow easy importation of these products it is important to register with food and drug administration.

Normally, when importing these products into us, you need to register because each product has specific registration variations.

Below are some examples of products and how to register them;

Cosmetic products you should check in with voluntary cosmetic registration program which works as FDA post market reporting system.

This body provides approvals of cosmetic products for manufacturers and distributors.

Tobacco products: if your business in the production, selling of this product you should register with food and drug administration.

You should include sources and types of materials you are using to manufacture these products.

What Products Do Not Need FDA Approval?

In some cases, the food and drug administration does not approve all the products the importers are shipping into the country.

Some of these products pose health risks to the consumer and therefore the FDA will take a longer time to review this product.

These products that do not require food and drug administration approval include;

Tobacco Products

We all know what danger tobacco products pose to human health.

Therefore, the FDA standards examining medical products can not apply to tobacco products.

The law requires you to obtain a written food and drug administration order to allow the production and selling of tobacco products.

The dangers of tobacco products will always bring setbacks to the manufacturer while approaching the market.

As a result, the manufacturer can use the following ways to penetrate the market:

• Premarket tobacco applications
• Substantial equivalence applications
• Exemptions from equivalence applications.
• Compounded drugs

They are a result of a combination of different elements by the pharmacies or doctors to produce medication that best suits patient needs.

FDA approved medicines contain elements that may cause an allergic reaction to different patients when they take these medicines.

Therefore, the Food and Drug Administration does not approve these compound drugs due to the health issue they pose to patients.

Cosmetic Products

As the manufacturer of these products, it’s your responsibility to accurately label and give a description of their usage to consumers.

The food and drug administration does not need to approve these products before reaching the market.

This is because manufacturers will always find ways of penetrating these products to the market.

Infant Formula

The marketing of infant formula allows consumers to sample these products. Thereafter the FDA will evaluate consumer feedback on the infant formula

If this product poses a threat to public health, the FDA declines to approve this product.

In cases of a new brand of infant formula, the manufacturer should provide samples and ingredients for examination to the FDA authorities.

Medical Foods

Normally, we use medical foods to care for the needs of the patients who require specific nutrients foods.

For instance, patients who are diabetic require insulin to low the sugars in the body

Additionally, the FDA does not require the manufacturer to label the products but rather provides accurate information.

How Does The FDA Classify Medical Products?

We can classify medical products into three classes.

It is important to acquire relevant information that helps you understand how these classes work. This normally occurs before submission to the food and drug administration.

This classes results from 16 medical specialists.

These classes include:

Class 1

This class contains general controls providing exemption and in some cases no exemptions

We do not associate this device with high risks of danger

Examples of class1 medical devices are, face masks, bandages,

Class 1 with exemption devices requires the 510k for marketing purposes

Class 2

This class contains the general controls and special controls providing exemption or no exemptions.

This class also requires 510k for a device with an exemption.

Examples; wheelchairs

Class 3

Contains general controls and pre-market approval

These devices cause high risks of danger to the patients.

For example; an oxygen support machine

What Is A Premarket Approval In Relation To FDA Regulations?

Premarket approval normally occurs when the manufacturer clears with the FDA.

This normally occurs when the manufacturer presents a new product.

The FDA will approve the product to penetrate the market and later will review the consumer feedback.

This allows them to determine if the product will pose danger to the consumers, before giving marketing approval.

When Is A Premarket Approval Required When Shipping FDA Regulated Products?

You will require a premarket approval while shipping products considered to pose a great danger when consumer user them.

For instance, if the owner is shipping medical devices that fall under class 3. They will require a premarket approval because they pose a great danger to patients.

What Is The Difference Between Premarket Approval And 510K Premarket Notification?

Both premarket approval and 510k premarket notification have distinguishing functions thus making them different.

Below are some of the main differences:

Premarket approval applies for totally new products in the market such as the class 3 medical devices.

Timeframe for premarket approval is strictly 6 months.

With premarket approval, the food and drug administration conduct thorough research to determining ease penetration of product to market.

This normally occurs the product poses great danger.

With remarket approval, the food and drug administration should approve or decline the product.

Premarket approval entails a lot of paper documentation that provides the plan for the establishment of these products.

On the other hand,

510k premarket notification applies when the manufacturer produces a similar product to that existing in the market.

The timeframe of submitting the 510k premarket notification is an average of 90 days which makes it faster and affordable.

Allows illustrations of the products to prove distinct features from the existing one

Also, 510k premarket notification does not require showcasing of all information.

There is an exemption if the manufacturer alters the products to perform the same functionalities.

Submitting 510k only guarantees the clearance process and therefore you cannot advertise it as food and drug administration approval.

How Long Does FDA Approval Take?

Food and Drug Administration requires a certain timeframe for the complete approval process. This timeframe depends on the following;

Submission of the 510k applications

Submission of premarket approval

If you register individually.

Considering these factors FDA approval will take between 5 working days to 120 (equivalent to 8 months).

What Is The Difference Between ‘’FDA Registered’’ And ‘’FDA Approved’’ And ‘’FDA Cleared’’?

There are unique features that make each of them different features apply while evaluating what regulations govern them.

These differences include;

FDA approved implies a complete examination and review of products to ensure they are safe and effective for human consumption.

This means the products should not pose any health risks to the consumers.

FDA cleared applies where the manufacturer presents to the FDA a product that is like that existing in the market.

The FDA request for demonstrations to prove the product achieves the FDA regulations i.e., safety and effectiveness.

After a successful demonstration, the FDA will clear this product for marketing. This process is what we term as FDA cleared.

FDA requires the manufacturers to register with them before releasing their products to the markets.

Registration of the products allows the FDA to be aware of all activities you undertake to produce the products.

The main importance of registration is to help deal with any arising issues from malfunctioning devices.

What Is An FDA Hold In Shipping?

We can refer to food and drug administration as a form of custom hold at the custom clearance offices.

FDA hold occurs mainly when the FDA finds the need to hold products for further detailed examination.

The FDA will request more documentation to prove the usage of the products.

This decision is a result of goods not meeting the FDA threshold.

Therefore, the FDA will hold these goods for as long as the details are unclear.

Why Would The FDA Hold A Shipment?

The key importance of the FDA is to evaluate and examine products for the safety of the consumers.

If this product does not meet these standards, FDA will hold these goods and send a holding notification to the relevant individuals.

The FDA holds this shipment if the owner refuses to provide proof that the product complies with the law.

Failure to provide a plan to bring the product into compliance

Failure to accept that the products violate the law.

How Long Can The FDA Hold A Package?

On normal occasions, FDA will hold this package for a period of 1 to 2 days, but under special circumstances, it can take even months.

The earlier the owner provides the information that the FDA request the faster they will release these packages.

Delays as a result owner withholding information will lead to a long period of holding.

What Happens When The FDA Holds A Shipment?

Normally, FDA holds products if they suspect that they need further inspection or provision of unclear information.

In case the FDA holds they will send a notification to the customs broker who has an obligation of notifying the owner.

The FDA will request additional information about the product

They might as well pick samples for lab testing

All these procedures help to determine if the products meet the US laws and regulations.

How Do I Perform An FDA Hold Status Check?

This status check is achievable by;

You can use the custom broker to follow up on the holding process

You can also contact the FDA via their platform.

This will require you to fill in your details in a form.

This form includes entry number, CPB, and FDA number.

THE FDA will communicate back to you.

What Can I Do If My Package Is Held By The FDA?

Normally if the food and drug administration hold the package, you should consider the following two options:

• Submit a request to allow you to make changes to the products to clear the violation issues.
• You can submit proof of the product’s information to the FDA to clear the violation. Submission of proof further allows the FDA to conduct a further examination.

What Is The FDA Product Code?

Food and Drug Administration product code provides a description of the products and what group they belong to.

FDA product code usually contains seven alphanumeric characters. It is made up of different elements such as;

• Product industry code
• Class code
• Subclass code
• Process indicator code
• Group code

What Is The Process For Importing FDA Regulated Products?

Importing products that under FDA regulations requires:

Involve custom brokers who act as third parties.

The ensure submission of relevant documents and make payments for all the entries.

The Customs broker will make an entry with Customs and Board Protection and later include an HTS.

The HTS consists of tags that assist food and drug administration which information is important and which is not.

The HTTUS code determines if the product meets the FDA standards. If it’s the case submission of all documents takes place.

Can A Customs Broker Help With FDA Custom Clearance?

Custom brokers act as agents between the buyer and the seller.

Thus, preventing direct involvement.

Customs brokers play a vital role in the customs clearance process.

Custom brokers help in the following ways;

They ensure that the goods you are importing adhere to FDA regulations

They determine a suitable harmonized tariff schedule which is a requirement by the customs and border protection.

Custom brokers provide you with FDA information and affirmation of compliance requirements.

During the entry of goods, they will always acquire a bond for you which help in the payment of the products.

They prepare and provide all the documentation to the food and drug administration.

They use Automated Broker Interface to transmit all information to FDA and back to the owner.

A customs broker can file a notice before.

They also provide answers to queries regarding FDA custom clearance.

What Is The Cost Of Importing FDA Regulated Products?

It is important to evaluate all possible cost options while importing FDA regulated products. Normally, these costs vary differently depending on the following factors:

The type of product you are importing into the country.

This means every product type you import will have costs differently normally due to sizes.

How much are the products worth?

This implies if the products constitute a high amount of money.

The cost charges will increase.

We can also determine the cost by the longevity period that the owner has been in business.

This means if the owner has been in business for long, they will pay less.

For start-up businesses, the costs are high which poses a challenge to the business owner.

Costs will vary from bond charges, shipping charges, and duties.

And it’s the responsibility of the business owner starting up to be aware and prepare for these costs.

In case you have problems with product quality inspection, Tj chinafreight is here to help.

Contact us now when importing from China.