Detailed guide to freight forwarding customs declaration process

Detailed guide to freight forwarding customs declaration process

Q1: What is freight forwarding customs clearance?

Freight forwarding customs clearance refers to the process where a freight forwarding company acts on behalf of importers or exporters to declare goods to the customs authorities. Freight forwarders, with their expertise, experience, and access to resources, help clients complete customs formalities such as declaration, tax payment, and inspection coordination to ensure the smooth passage of goods through customs.

Q2: What basic documents are required for freight forwarding customs clearance?

The following basic documents are required for freight forwarding customs clearance:
  1. Commercial Invoice: Shows the name, quantity, price, and information of the buyer and seller.
  2. Packing List: Details the packaging of the goods, including the name, quantity, weight, and volume of goods in each package.
  3. Contract: The trade contract between the importer and exporter, specifying the terms of the transaction.
  4. Bill of Lading/Air Waybill/Railway Waybill: Proof of the transportation arrangement, such as a Bill of Lading for sea freight, Air Waybill for air freight, or Railway Waybill for rail transport.
  5. Harmonized System (HS) Code: The international classification code used by customs to categorize and determine the tariff rates for goods.
sea freight
Air Freight
shipping from china

Q3: What are the main steps in the freight forwarding customs clearance process?

The customs clearance process for freight forwarding mainly includes the following steps:
  1. Contract Signing and Document Collection:
    • The freight forwarding company signs a contract with the client, clarifying the rights and obligations of both parties.
    • The company collects all necessary documents for customs clearance, including commercial invoices, packing lists, and contracts, and verifies their accuracy and completeness.
  2. Preparation of Customs Declaration:
    • The freight forwarding company enters the customs declaration data into the customs electronic system based on the provided documents.
    • This includes information such as the basic details of the goods (name, specifications, quantity, price), transportation details (origin, destination, mode of transport), and trade terms (general trade, processing trade, etc.).
  3. Submission to Customs:
    • The entered customs declaration data is submitted to customs via the Electronic Port System.
    • The customs system automatically performs an initial review of the declaration to determine whether an on-site inspection is required.
  4. Customs Review and Valuation:
    • Customs conducts a detailed review of the declaration, including the accuracy of the commodity classification, the reasonableness of the declared price, and the completeness of the documents.
    • If customs has questions about the classification or price of the goods, they may request additional documentation or engage in price negotiations.
  5. On-site Inspection (if required):
    • Based on risk assessment, customs may decide to inspect the goods on-site.
    • Inspection includes verifying whether the name, specifications, quantity, and packaging of the goods match the declaration and whether they comply with relevant standards and regulations.
    • Inspection methods may include visual inspection, unpacking inspection, and sampling inspection.
  6. Payment of Duties and Taxes:
    • Based on the customs valuation, the freight forwarding company notifies the client of the amount of customs duties, value-added tax (VAT), and other taxes due.
    • After the client pays the taxes through the designated channels, the freight forwarding company submits the tax payment receipt to customs.

Q4: What are the common issues in freight forwarding customs clearance?

  1. Incorrect Classification of Goods: Misclassification of goods under the Harmonized System (HS) Code can lead to customs requiring a redeclaration or additional tax payments.
  2. Price Declaration Issues: Discrepancies between the declared price and customs valuation may trigger price negotiations or additional tax assessments.
  3. Incomplete Documents: Missing essential documents such as commercial invoices, packing lists, or certificates of origin can delay customs clearance.
  4. Inspection Findings: If the actual quantity or specifications of the goods do not match the declaration, customs may detain or penalize the goods.
  5. Prohibited and Restricted Goods: Some countries have prohibitions or restrictions on certain goods. Failure to comply can result in goods being returned or destroyed.

Q5: How long does freight forwarding customs clearance usually take?

The time required for customs clearance depends on various factors:
  • Under Normal Circumstances: If the documents are complete, the declaration is accurate, and no inspection is required, the process can be completed within 1 – 2 working days.
  • With Inspection Required: If customs decides to inspect the goods, the process may take 3 – 5 working days or longer, depending on the complexity of the goods and customs’ schedule.
  • Special Situations: Factors such as changes in customs policies, trade disputes, or document issues can further extend the clearance time.

Q6: How can freight forwarding companies help optimize the customs clearance process?

  1. Advance Planning: Freight forwarding companies can prepare customs clearance documents in advance based on the type of goods and destination country requirements, ensuring that all documents are complete and compliant.
  2. Professional Guidance: They can help clients select the correct HS Code, declare prices reasonably, and avoid delays caused by classification or pricing issues.
  3. Real-time Tracking: Using customs electronic systems, freight forwarding companies can monitor the customs clearance progress in real-time and promptly address any issues raised by customs.
  4. Risk Alerts: By staying updated on customs policy changes, freight forwarding companies can alert clients to potential risks and help them avoid unnecessary losses.
  5. Value-added Services: Providing additional services such as cargo insurance, logistics consulting, and clearance guidance can ensure the safe and efficient passage of goods through customs.

Q7: What should clients pay attention to during the freight forwarding customs clearance process?

  1. Provide Accurate Information: Ensure that the content of the commercial invoice, packing list, and other documents provided is true and accurate to avoid delays due to incorrect information.
  2. Maintain Communication: Keep close contact with the freight forwarding company to stay informed about the customs clearance progress and any issues raised by customs.
  3. Be Aware of Policy Changes: Understand the customs policies and restrictions of the destination country to prepare in advance.
  4. Plan Ahead: Arrange customs clearance in advance based on the urgency of the goods to avoid delays that may affect delivery schedules.
  5. Keep Copies of Documents: Retain copies of all documents involved in customs clearance (such as customs declarations, tax payment receipts, commercial invoices) for future reference or audits.

Q8: How are the costs of freight forwarding customs clearance calculated?

  1. Customs Clearance Service Fee: Freight forwarding companies charge a service fee based on the type, quantity, and complexity of the goods.
  2. Taxes and Duties: These include customs duties, value-added tax (VAT), consumption tax (for specific goods such as cosmetics or alcohol), calculated based on the value of the goods, HS Code, and destination country’s tax rates.
  3. Inspection Fees: If customs requires an inspection, inspection fees may apply, with costs varying depending on customs and the type of inspection.
  4. Other Fees: Additional charges may include document translation fees, inspection fees, and warehousing fees, depending on the situation.

Q9: Can freight forwarding customs clearance be done entirely online?

A9: With the advancement of customs informatization, most customs clearance processes can be completed online through the Electronic Port System, including customs declaration entry, submission, and tax payment. However, some steps (such as on-site inspection) still require offline operations. Additionally, special circumstances (such as changes in customs policies or system failures) may affect the smooth operation of online customs clearance.

Q10: How can I check the status of my goods after customs clearance?

  1. Customs Electronic System Inquiry: Freight forwarding companies can check the status of customs clearance through the Electronic Port System, including whether the declaration has been accepted, inspected, or released.
  2. Notification from Freight Forwarding Company: The freight forwarding company will notify the client of the latest status of the goods based on feedback from customs.
  3. Logistics Tracking System: For goods that have been released, the logistics tracking system can be used to monitor the transportation status of the goods until they reach their destination.

People also ask

What are the stages of the freight forwarding process?

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A customs declaration is an act by which a person indicates his wish to place goods under one of the customs procedures which consequently triggers customs processes such as duty calculation. All goods intended to be placed under a customs declaration except for the free zone, must be covered by a customs declaration.

Export transport, origin handling, export customs clearance, destination handling, sea freight, import customs clearance, and interior transportation are the seven steps of international shipping. If in doubt, check the contract between the recipient and the sender.

What is the procedure of freight forwarding?
Freight Forwarding Process
  1. Export Documentation. There are a number of documentation necessary for cargo exports, and they might differ from country to country. …
  2. Export Haulage. …
  3. Items Checkpoint. …
  4. Export Customs Clearance. …
  5. Origin Handling. …
  6. Import Customs Clearance. …
  7. Destination Handling. …
  8. Import Haulage.
The ultimate or final location where the goods or shipment is intended to be delivered.
 

The shipping cycle has four stages: trough, recovery, peak, and collapse. In the trough, freight rates fall to operating costs, forcing companies to sell ships at low prices. In recovery, freight rates rise above costs and laid up tonnage falls.

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