
Every cross-border shipment of goods must clear customs before they can be imported or exported. However, completing the customs clearance process needs some paperwork preparation and familiarity with the import-export rules and regulations in Canada and the USA.
Though the extra paperwork and official inspections may seem complicated, the customs process for shipping freight is less complicated than you may think—especially if you partner with a good shipping company to avoid unexpected delays or fees.
In this article, you will learn about the customs clearance process and complete your next international shipment with your peace of mind intact.
What is Customs Clearance?
Customs clearance process includes the submission of documents to the concerning government custom agency and then the subsequent oversight and clearance of the goods in transit.
1. The customs clearance documentation is collected by the assigned customs broker to the shipper. It will show that any taxes or duties have been paid. Then, the goods are good to go for import or export.
2. The customs clearance process is the act of passing a shipment of goods through customs, the government agency responsible for overseeing the compliance of shipments in accordance with the international trade laws. Customs officials check every incoming and outgoing shipment to make sure it is following the country’s regulations. It is then cleared for import or export.
What is the Customs Clearance Process?
Though the custom clearance meaning is straightforward, the process itself involves many steps and can be overwhelming at first glance. Let’s break it into steps to understand exactly what happens when you send a shipment for customs clearance.
1. Document inspection. The assigned customs officer will check the paperwork for your shipment to mark an initiated customs clearance process. This can include a commercial invoice (CI) (stating the contact information for the shipper and receiver, export date, description of the cargo, and its value), a purchase order from a buyer, shipping bill, packing list, bill of lading (BOL) or air waybill, and certificate of origin (NAFTA or USMCA Certificates of Origin, for example). There may also be further documentation required by the buyer, financial institution or LC terms, or the importing country. Canada, for example, also requires a Canada Customs Invoice for importing shipments.
2. Tax and duty calculation. The customs broker will ensure that the appropriate taxes and duties are prepaid or collected for the type of goods in your shipment, their declared value, and the customs laws of the importing country. Customs officers are responsible to check and track whether these charges have already been paid.
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3. Payment of taxes and duties. If the taxes and duties applicable to your shipment have not already been paid, the customs officer will request payment.
4. DDP (Delivered Duty Paid). If a shipment is marked as DDP, all taxes and duties have been prepaid, usually via your customs broker who can calculate and process tax and duty payments in advance for a clearance fee.
5. DDU (Delivered Duty Unpaid). Shipments marked as DDU are forwarded to an independent customs broker to collect the amount due from the recipient, as well as extra fees like inspection, storage, handling, insurance, and disbursement.
6. Release of shipment. After all the taxes and duties are paid, the shipment is released by customs and can continue to its final destination. Some trucking companies have bonded warehouses that allow a shipment to continue through the border to be held “in bond” at the warehouse until it completes all the procedures. There is usually a charge associated with not having the correct paperwork available to properly clear a shipment. In other words, a carrier’s “in bond” capabilities are beneficial but shouldn’t be something that a shipper relies on every time a shipment crosses the border.
When is Customs Clearance Needed?
Customs clearance is needed for shipping commercial goods internationally, but if you have the required paperwork and use a broker to help coordinate and help you calculate and pay the required taxes and duties, the process becomes relatively simple and quick.
One of the easiest ways to make the custom processes quick and simple is by working with a customs broker who can process tax and duty payments in advance for a fixed custom clearance fee. Tenax Transportation provides custom brokerage to move goods quickly at the Canadian border and speed up the entire customs process.
How to Avoid Clearance Delays
The key to fasten up the clearance process is providing complete and accurate paperwork to the trucking company so that they may coordinate with your customs broker and submit your paperwork for clearance by government officials. Experienced shipping companies and brokers can guide you to make sure your documents are thorough and include the correct business information, inventory, and value of cargo. Doing so will ensure the proper taxes and duties are applied and your shipment isn’t flagged by the authorities.
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Custom Clearance Service to Ship between the U.S. and Canada
If you need to ship between the U.S. and Canada you will need to complete the customs clearance process. At Tenax Transports, we offer cross-border shipping along with proper custom clearance service. Contact us to learn more about what we can do for your international shipment needs.