AMA: Customs Brokerage/Freight Forwarding (International Logistics)

[Bimmer]

Hello Bimmer,

It is my pleasure to help as much as possible!

What products are you interested in importing into the U.S.?

Thanks.

The products are 3 small plastic pieces, one piece runs on a battery.

Sorry for being a bit vague but don't want to expose my business with all the hungry people here, if you need more details i can sent you an PM

 

[Bimmer]

Alright i sent you a message

 

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[RE Taipan]

RSimmons....I did not see you answer/address this (and if you did, please excuse me)....it might be helpful to the folks here to discuss the element of FOB point...what this is and how it can have a significant impact on a shipment price/performance and liability, etc.

 

[GregK]

hello @Rsimmons016 i am a fellow freight forwarder with 7 yrs in the industry. i dont have a US Citizenship so i cannot currently pursue the customs brokerage exam, but i may change this one day.


For the people following this thread, i want to mention that the test to become a licensed US Customs Broker is TOUGH!
From what i hear, less than 10% of the people taking the test actually pass it.
You must be a US citizen to take the test, generally ones you pass you have the license for life.

Treat your customs broker right. Ultimately the Importer of Record is responsible for duties/taxes and knowing the product. You have to do your due diligence and while a Customs Broker can help you, they can only go off the information you provide to them.

 

[Rsimmons016]

RSimmons....I did not see you answer/address this (and if you did, please excuse me)....it might be helpful to the folks here to discuss the element of FOB point...what this is and how it can have a significant impact on a shipment price/performance and liability, etc.

Hello RE Taipan,

Sorry for the delayed response! Below is an Incoterms Chart. This chart illustrates at which point the seller/buyer assume responsibility for the cargo.

FOB – FREE ON BOARD
•Seller delivers goods across the ship’s rail at the named port of shipment
•The buyer bears all costs and risks of loss or damage to the goods from that point
•Term used for sea transport only

 

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[Rsimmons016]

hello @Rsimmons016 i am a fellow freight forwarder with 7 yrs in the industry. i dont have a US Citizenship so i cannot currently pursue the customs brokerage exam, but i may change this one day.


For the people following this thread, i want to mention that the test to become a licensed US Customs Broker is TOUGH!
From what i hear, less than 10% of the people taking the test actually pass it.
You must be a US citizen to take the test, generally ones you pass you have the license for life.

Treat your customs broker right. Ultimately the Importer of Record is responsible for duties/taxes and knowing the product. You have to do your due diligence and while a Customs Broker can help you, they can only go off the information you provide to them.

Hello Greg,

Yes the importer of record (owner of goods) is ultimately responsible for all duties/taxes and any other customs related fees (including exams and penalties). This is the reason I started this thread. I wanted to help the members with their due diligence and advise of the intricacies importing into the US.

You are correct about the exam, on average only 4-6% of the people who sit for exam pass it!

 

[MoneyDoc]

Hi there.

Thanks for offering such a quality thread.

I have a question. I have recently been contacted by a large retailer for this beverage I have exclusive rights to.

The value of the beverage will be in the low 5 figs for the trial order (that is my cost) including the shipment to a local port.The terms are FOB (location) so I would have to get a logistics company to truck it to the warehouse.
That shouldn't cost too much as its in the same city as the port.

I went on duty's calculator.com and calculated the additional costs.

I'm just wondering, is there any other cost I need to take into account?


Thanks.

 

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[Rsimmons016]

Hi there.

Thanks for offering such a quality thread.

I have a question. I have recently been contacted by a large retailer for this beverage I have exclusive rights to.

The value of the beverage will be in the low 5 figs for the trial order (that is my cost) including the shipment to a local port. The terms are FOB (location) so I would have to get a logistics company to truck it to the warehouse.
That shouldn't cost too much as its in the same city as the port.

I went on duty's calculator.com and calculated the additional costs.

I'm just wondering, is there any other cost I need to take into account?


Thanks.

Hi MoneyDoc,

Send me the details of all your expected charges and I will be able to let you know what fees you are missing.

 

[Dicky Dee]

@Rsimmons016 Thanks for the valuable info you have provided! Im located in Canada and i import roughly 80k of clothing a year from the U.S. as you know duties is high for clothing especially shoes and delivery by UPS is a killer which really cuts into my margins, do you have any tips as to the cheapest way of shipping goods from U.S. (mainly L.A.) to Canada? By sea perhaps?

I also have started importing goods from China to Canada, as of right now i only havea freight forwarder when the shipment arrives to Canadian ports and they handle all the paperwork, i currently ship my CIF terms but i was wondering if it would be more cost effective if i hired a freight forwarder to handle the goods in China? If so do you have any reccomendations of reputable companies?

Thank you for any advice you can give me!

 

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[Rsimmons016]

@Rsimmons016 Thanks for the valuable info you have provided! Im located in Canada and i import roughly 80k of clothing a year from the U.S. as you know duties is high for clothing especially shoes and delivery by UPS is a killer which really cuts into my margins, do you have any tips as to the cheapest way of shipping goods from U.S. (mainly L.A.) to Canada? By sea perhaps?

I also have started importing goods from China to Canada, as of right now i only havea freight forwarder when the shipment arrives to Canadian ports and they handle all the paperwork, i currently ship my CIF terms but i was wondering if it would be more cost effective if i hired a freight forwarder to handle the goods in China? If so do you have any reccomendations of reputable companies?

Thank you for any advice you can give me!

Hello Dicky,

I understand your concerns with UPS. How big are your shipments from L.A. to Canada (pieces, weight)? Where in Canada are you shipping to (Big country)?

For your shipments coming from China. I would recommend you taking the details from your last couple of shipments and getting quotes from a couple of different forwarders to see if their rates are competitive enough for you to purchase EXW or FOB. If your supplier is giving you better rates than stick with them.

 

[MoneyDoc]

I sent you a pm bro, please check.


Sent from my iPhone using Tapatalk

 

[Rsimmons016]

I sent you a pm bro, please check.


Sent from my iPhone using Tapatalk

Replied

 

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[Dicky Dee]

Hello Dicky,

I understand your concerns with UPS. How big are your shipments from L.A. to Canada (pieces, weight)? Where in Canada are you shipping to (Big country)?

For your shipments coming from China. I would recommend you taking the details from your last couple of shipments and getting quotes from a couple of different forwarders to see if their rates are competitive enough for you to purchase EXW or FOB. If your supplier is giving you better rates than stick with them.

@Rsimmons016 The shipments from L.A. are usually anywhere between 30-70 lbs, i ship it to Edmonton, Alberta.

Would my freight forwarder in Canada be able to handle the shipping from China? Or do i have to find a company over there to do it? thanks.

 

[Rsimmons016]

@Rsimmons016 The shipments from L.A. are usually anywhere between 30-70 lbs, i ship it to Edmonton, Alberta.

Would my freight forwarder in Canada be able to handle the shipping from China? Or do i have to find a company over there to do it? thanks.

Hi Dicky,

I would recommend that you find a freight forwarder in Canada. They should be able to assist you with both the shipments from LA and China.

 

[mzee99]

My questions are:

• From the moment you place an order of 1500$ from China on Alibaba, what are all the steps necessary to clear customs?
• At what price range do these steps change?

Thanks for the AMA

 

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[Rsimmons016]

Hello Mzee99

My questions are:

• From the moment you place an order of 1500$ from China on Alibaba, what are all the steps necessary to clear customs?
• At what price range do these steps change?

Thanks for the AMA

Hello Mzee99,

I have answered these questions in the thread already. Go back and read the thread, If you still have specific questions afterwards let me know.

 

[Dicky Dee]

Hi Dicky,

I would recommend that you find a freight forwarder in Canada. They should be able to assist you with both the shipments from LA and China.

Yes i do have a freight forwarder and i will ask him about shipments from L.A. Being in the industry do you know of any cheap options to ship goods from L.A. to Canada instead of UPS?

 

[mzee99]

Hey Rsimmons,

Another question:

If I'm in Canada, but I'm having my suppliers in China ship my products directly to US, should I hire a customs broker in the US or would a Canadian customs broker be fine?

Thanks

 

[Rsimmons016]

Hello Mzee99,

You will need a broker in the U.S. to clear cargo coming into the U.S.

 

[IntegraR0064]

So just to clarify, if I place a $2,000 order for a category that is the $2500 informal entry threshold (batteries), and they're shipping DHL from China to US, is there anything that needs to be discussed with the supplier when it comes to shipping and terms outside of how much shipping will cost and the fact that it's DHL? I assume I don't have to worry about incoterms or ports or custom brokers or anything. They just ship it to my door and DHL handles customs?

Does DHL charge me extra for that privilege outside of the quoted shipping fee from the supplier? I assume the duty and merchandise processing fee are not included, but does DHL charge me extra fees?

Thanks for your help, this thread has been immensely helpful.

 

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[IntegraR0064]

Hello Integra,

Based on the details provided you should not have any issues. In regards to whether or not DHL will charge you any additional charges? That is at DHL's discretion.

Thanks for your help. Now that I have passed the "extreme basics" of importing by having a package sent UPS to my door informal entry with UPS handling customs, I'm looking into the next level and what's involved.

If I am considering the possibility of importing car exhausts (fairly light but large - 5 kg each, wood carton ~60x18x12 inches each, order quantity of 5-20 - so air will definitely be out of the question), and they have quoted me prices EXW, from Guangdong China and I'm in the east coast of the US...what are my next steps to determine what an estimate of the price to my door will be, including outsourcing as much of the process as possible? Who would I need to hire and how much will they cost? Are you available to hire as a customs broker yet?

Oh and it would probably have to be formal entry.

 

[GravyBoat]

I've never had any issues with importing products from South America or China. I'm sure you guys have heard horror stories but unless you're doing something very obscure, you probably won't have an issue getting your shit into the country.

@Rsimmons016 good thread tho, lots of great stuff that I had no idea about.

 

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[Dicky Dee]

Hi Dicky,

An LTL trucker might be less expensive.

i just want to thank you for your suggestion, i tried my first LCL trucking company and it saved me about 50% in shipping costs!

 

[Rsimmons016]

Thanks for your help. Now that I have passed the "extreme basics" of importing by having a package sent UPS to my door informal entry with UPS handling customs, I'm looking into the next level and what's involved.

If I am considering the possibility of importing car exhausts (fairly light but large - 5 kg each, wood carton ~60x18x12 inches each, order quantity of 5-20 - so air will definitely be out of the question), and they have quoted me prices EXW, from Guangdong China and I'm in the east coast of the US...what are my next steps to determine what an estimate of the price to my door will be, including outsourcing as much of the process as possible? Who would I need to hire and how much will they cost? Are you available to hire as a customs broker yet?

Oh and it would probably have to be formal entry.

Sent you a PM

 

[Rsimmons016]

i just want to thank you for your suggestion, i tried my first LCL trucking company and it saved me about 50% in shipping costs!

Hey Dicky!

Congrats! I am happy to hear you were able to save some $$$$.

 

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[Rsimmons016]

I've never had any issues with importing products from South America or China. I'm sure you guys have heard horror stories but unless you're doing something very obscure, you probably won't have an issue getting your shit into the country.

@Rsimmons016 good thread tho, lots of great stuff that I had no idea about.

Hey Gravy!

I am happy to help as much as possible.

It's really good to hear that you haven't had any issues with your imports. The issues that typically do arise are less about the country they were purchased from and more about the actual eligibility of the products being imported. (I.e. The importer didn't do their due diligence and wasn't aware of any additional government agency requirements.)

 

[Rsimmons016]

Are you available to hire as a customs broker yet?

Yes I am! The business has been up and running since April and is doing very well!
Check out my website for a list of the services offered!
www.a1worldwidelogistics.com

 

[amp0193]

Hi, quick question for you:

I made two orders of identical quantity of a product from Europe to the United States about a month apart. The first time through Customs, a 3% duty rate was applied, but the second time a 27.7% duty rate was applied and I owed hundreds more. The only difference in the two shipments was that the first one was valued at $916, and the second was valued at $1,167 (due to a price increase).

Is the duty fee decided based solely upon the discretion of the customs agent handling the package, or is there something I can do to make sure it stays the same every time? Is it based on how the paperwork was filled out by the supplier?

The classification I think the product belongs has neither a 3% or a 27% rate, but an 11% rate, so I don't understand where these numbers are coming from.

Thanks

 

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[Topaz]

That's Great! This is a very good industry to get into! Yes it is growing and will continue to grow. Like anything else you have to get your foot in the door and learn!

Even though in the same industry there are three main avenues you can pursue; Imports, Customs Brokerage, and Exports. These are all completely different businesses and are not as closely related as it would seem. Once you get enough experience and make all the right contacts you can set up your own office and build your business.

Exports:
Main Customer is U.S. manufacturers/suppliers
Coordinate with Overseas Agents
Negotiate contracts with Airlines/Steamship Carriers
Obtain bookings with Airlines/Steamship Carriers
Consolidate multiple shipments to same final destination (Overseas City/Country)
Generate export packages for Customs/Carriers
Work with Hazmat companies to ensure all hazardous cargo is packed, documented, and declared properly
The export side is always a time crunch, you have meet the cut offs for the carriers or you will miss the departure.
To open office you have to apply and receive OTI license
No license required to work in field

Imports:
Main customer is U.S. Importers as well as Overseas agents
Work closely with Overseas Agents
Work closely with Customs Brokers
Consolidate multiple shipments destined to your U.S. location
Deconsolidate shipments
Coordinate delivery (If broker doesn't)
To open office you have to apply and receive OTI license
No license required to work in field

Customs Brokerage:
Main Customer is U.S. Importers
Work Closely with import forwarders
Work Closely with Customs
Work Closely with Other Government Agencies
Have extensive knowledge on customs import rules and regulation
Process customs clearance for import shipments
Coordinate exams with Customs and Other government agencies
Forward all releases to Freight Forwarders warehouse
Coordinate delivery of shipments
Educate importers of regulations for different items they are interested on importing
To open office you have to pass Brokers exam, apply and receive Customs Brokers license
No license required to work entry level positions

You mentioned one would need an OTI license. What does OTI mean?

 

[Topaz]

Hi Topaz,

OTI stands for Ocean Transportation Intermediary

Ok. Thanks for replying back.

 

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