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AMA: Customs Brokerage/Freight Forwarding (International Logistics)

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Rsimmons016

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Hey Everyone,

I am new here. I found the forum through MJ's book. I have been checking the forum out for a couple of weeks and find that there is a lot of valuable information and resources here. I guess I would like to start out by trying to help the members who are interested in importing products into the USA.

A little bit about my background. I have been working in the freight forwarding industry for a little over 10 years. I am a Licensed U.S. Customs Broker and certified as a customs specialist.

I am also in the process of opening my own brokerage/forwarding company. Currently I am in the process of... Well waiting. It takes roughly a year to get all of the license's and permits from customs to open your own office. So while I am working with customs through the application process I am working on the back end structuring, and continuing to build my capital, etc.

So if there is anything that you would like to know about the logistics of having your products brought from overseas, customs clearance process, restrictions, regulations, and anything else that you can think of (related of course). just ask.

I will help the best that I can.
 
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merryrows

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hello there!

What is your opinion on exporting from Asia? I know most of the fastlaners are into importing, since I am in Asia I would want to be the supplier.. What are the most imported items you know that sells good?
 

Rsimmons016

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Hello Merryrows,

The are to many products that are imported from Asia into the US to be able to tell you what is the best one.

What I would recommend is to get in touch with some of the members on the forum who are looking for specific products in Asia and try to help them with their sourcing. From there if you guys have questions on getting them into the US and through customs I can help.
 

Lagron

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I have always been interested in importing large quantities of minerals to the USA in bulk.

Let's take rock salt for example, since it is one product I have posted about here already, and it does relate to a number of my other products I am fiddling around with and trying to establish a relationship with buyers for...

If I have tons (literally) of product, in bulk to be shipped to California... I have no warehouse to store it, and am planning on just having it sent to the ship yard and then immediately sent over to the warehouse of the buyer... How would this entire process work? They can't really just place the tons of rock salt on the side of the dock or in their customs warehouse without me being charged a lot of money for it...especially with the load sizes.

Any thoughts? I do not have warehousing space. I am about 1 year off from being able to buy a warehouse large enough to accommodate the quantities I want to start shipping.
As a freight forwarder and someone that wants to start their own company in such business, there is little information available as to what services you are able to offer and the value you can offer...(or perhaps I have just not done a search on it here)

Get back to me, here freely, if there is something of greater importance I do understand I can PM you, and receive your help that way as well.
As you can tell I am still trying to learn how this works entirely, but I do see importing from China and other countries as a phenomenal opportunity.

Thank you for your time.
 
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CommonCents

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It's incredible how I can get a mobile phone case shipped directly to my home for $3-$4 including the cost of the case, from china. Heck I can't mail that same package over a state or 2 for that same price.
 

merryrows

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What I would recommend is to get in touch with some of the members on the forum who are looking for specific products in Asia and try to help them with their sourcing. From there if you guys have questions on getting them into the US and through customs I can help.

Thank you for the suggestion. I will definitely get in touch with you.
 

Rsimmons016

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I have always been interested in importing large quantities of minerals to the USA in bulk.

Let's take rock salt for example, since it is one product I have posted about here already, and it does relate to a number of my other products I am fiddling around with and trying to establish a relationship with buyers for...

If I have tons (literally) of product, in bulk to be shipped to California... I have no warehouse to store it, and am planning on just having it sent to the ship yard and then immediately sent over to the warehouse of the buyer... How would this entire process work? They can't really just place the tons of rock salt on the side of the dock or in their customs warehouse without me being charged a lot of money for it...especially with the load sizes.

Hello Lagron,

The process of importing your rock salt would go something like this:

1. Place order over seas
2. Coordinate shipping (either through supplier or with your own forwarder)
3. Contact a Customs Broker to process customs clearance
4. Cargo arrives to the U.S.
5. Broker processes Customs entry
6. Delivery is then coordinated from port to your/your clients warehouse

Now to break this process down.

1. When you place order over seas you will have to negotiate your buying price and terms, including credit and shipping terms.
(i.e. Prepaid(100%), 30% deposit so cargo can ship / Upon receiving remaining 70% supplier will surrender original BL (Which transfers ownership of cargo), Credit terms, etc.)
2. Based on the terms negotiated with your supplier you/supplier will arrange the shipping (Incoterms). See link for detailed explanation http://en.wikipedia.org/wiki/Incoterms
3. During this process I recommend you "shop" around for a reliable Customs Broker (If you have not found one yet). I do not recommend allowing the supplier to have control over this aspect because in Customs eyes you are fully liable for any penalties and payments if not processed properly.
4. Once the cargo arrives to port (California in this case) you are allotted "Free Time" at the port. This is the amount of time that your shipment is allowed to sit at the port before they begin to charge storage fees. Usually, between 2-5 business days (varies on terminal and steamship line).
5. Your Customs Broker will classify your shipment to determine the duty rate, process shipment for customs release, and coordinate exams with customs and terminal (If applicable). In the case of rock salt: It is duty free but still subject to standard customs fees. They are the Merchandise Processing Fee (MPF) and Harbor maintenance Fee (HMF). These fees are MPF 0.3464% & HMF 0.125% of the value of the shipment.
6. Once the shipment has been cleared by customs your cargo will then be either delivered to your clients or your warehouse. If you are not ready to deliver to your clients facility and don't have yours set up yet, you will have to locate a warehousing company that specializes in storing break bulk cargo.
 
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ddall

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Hi RSimmons,

Can you comment at all on this from a Canadian perspective? Would you know if the process is similar?

Thanks
 

Rsimmons016

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Ddall,

To my understanding the process is similar. However, the fees and duties might be different.
 

JAWS

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What freight do you typically deal with?
What countries are you most familiar with?
How long does a deal supplements, herbs, or vitamins take?
 
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Rsimmons016

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What freight do you typically deal with?
What countries are you most familiar with?

Hi Jaws,

I work with a wide variety of products. Everything from exotic leathers, food Products (Human and Animal), clothing, Medical Devices, glasses, furniture, to vehicles, earth moving equipment, and household items. The list goes on and does include vitamins, herbs and dietary supplements from Peru. The countries that most of the products I work with come from Asia, Europe, Central and South Americas.

How long does a deal supplements, herbs, or vitamins take?

I don't understand this question.
 

needchaser

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At what point do you have to start worrying about customs? Let's say I order a small sample from China, 2 items that weigh a total of a couple pounds and fit in a large shoebox and are shipped via Air. Do I need to fill out any forms or declarations for that or is it only once you start importing larger quantities?
 

pro

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What type of insurance do you recommend purchasing?

What type of escrow companies do you recommend using?

What are your recommendations for settling disagreements between the supplier and purchaser settled? What jurisdiction would an issue be settled?

How do you enforce settlements and collect on judgements in Asia?
 
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buwatcha

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At what point do you have to start worrying about customs? Let's say I order a small sample from China, 2 items that weigh a total of a couple pounds and fit in a large shoebox and are shipped via Air. Do I need to fill out any forms or declarations for that or is it only once you start importing larger quantities?
I am also interested in this question.

I just received small samples from two different Chinese manufacturers. One shipped via Fedex and the other via DHL. As far as I know I had no involvement with customs at all. At what point does it become an issue? Is it dollar amount? Size? Or did the manufacturers already clear customs when sending the samples?
 

nickreilly

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Rsimmons,

Welcome - I am also new to the forums. I recently had a client shipping a $250,000 dollar rack of computer equipment from the east coast to France. We used a firm who said they were the customs broker, but in fact it seemed all they did was crate up the cargo and drive it to UPS who did all the customs work. Charged about 10k to get the package there in 3 days, then nobody realized but there was a VAT tax of 19% (ouch!)

Question - what kinds of software are used in your business to make the job easier and more efficient?
 

Rsimmons016

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Hey Guys,
There seems to have been a lot of questions over the past few days.

At what point do you have to start worrying about customs? Let's say I order a small sample from China, 2 items that weigh a total of a couple pounds and fit in a large shoebox and are shipped via Air. Do I need to fill out any forms or declarations for that or is it only once you start importing larger quantities?
I am also interested in this question.
I just received small samples from two different Chinese manufacturers. One shipped via Fedex and the other via DHL. As far as I know I had no involvement with customs at all. At what point does it become an issue? Is it dollar amount? Size? Or did the manufacturers already clear customs when sending the samples?

Since these two questions are essentially the same I will address them together. As far as customs is concerned there are value thresholds. For most products anything under $2500 is considered an "informal entry". With an informal entry the courier companies will typically clear them with customs and absorb any duty payment under $100. However, there are certain products that require a "formal entry" if there value is over $250.

What type of insurance do you recommend purchasing?
What type of escrow companies do you recommend using?
What are your recommendations for settling disagreements between the supplier and purchaser settled? What jurisdiction would an issue be settled?
How do you enforce settlements and collect on judgements in Asia?

Hello Pro,
Who ever you use for your logistics provider should be able to offer you cargo insurance. This will protect you in the event that your cargo is damaged or stolen while in transit.
For the other questions I am sorry but that is out of the scope of my expertise. There are lawyers who specialize in international trade. If any issue arises similar to your questions I would recommend you seek one out.
 
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Rsimmons016

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Rsimmons,

Welcome - I am also new to the forums. I recently had a client shipping a $250,000 dollar rack of computer equipment from the east coast to France. We used a firm who said they were the customs broker, but in fact it seemed all they did was crate up the cargo and drive it to UPS who did all the customs work. Charged about 10k to get the package there in 3 days, then nobody realized but there was a VAT tax of 19% (ouch!)

Question - what kinds of software are used in your business to make the job easier and more efficient?

That sucks. This is a great example of why it is so important to do your due diligence. You have to vet the company that you are doing business with. Also be sure to ask what are the taxes/duties associated with your shipment prior to shipping international.

The software that is used is tailored to the individual tasks that are being performed by that company (i.e. warehousing, customs clearance, freight forwarding). The large companies offer 1 system that is capable of doing all the tasks. However, they will typically sell you each function as a different module for a monthly fee.
 

MHolland

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Hey Everyone,

I am new here. I found the forum through MJ's book. I have been checking the forum out for a couple of weeks and find that there is a lot of valuable information and resources here. I guess I would like to start out by trying to help the members who are interested in importing products into the USA.

A little bit about my background. I have been working in the freight forwarding industry for a little over 10 years. I am a Licensed U.S. Customs Broker and certified as a customs specialist.

I am also in the process of opening my own brokerage/forwarding company. Currently I am in the process of... Well waiting. It takes roughly a year to get all of the license's and permits from customs to open your own office. So while I am working with customs through the application process I am working on the back end structuring, and continuing to build my capital, etc.

So if there is anything that you would like to know about the logistics of having your products brought from overseas, customs clearance process, restrictions, regulations, and anything else that you can think of (related of course). just ask.

I will help the best that I can.


How do you like the new $75k bonding requirements that came into effect Oct. 1st? Or does that not affect your situation?
 

Rsimmons016

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Hi Mholland,

The $75k requirement I believe you referring to is for over the road trucking companies. That doesn't really affect me as I'm in the international logistics side of the industry.
 
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Last edited:

nclabs

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Hi RSimmons,

I'm planning to import cotton clothing products from China and would like to know what is the threshold amount ($2500 or $250 ??) for informal entry which can be handled by courier
companies ( Fedex, DHL etc.). Do you recommend hiring a customs broker for smaller shipments ( under $2500) and how do customs broker charge for such smaller shipments. Would really appreciate your advise on this.

Thank you!
 

Rsimmons016

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Hello Nclabs,

When importing textile products your threshold for informal entry is less than $250, any textile shipment with a value over $250 will require a formal entry. If you are shipping via courier you can let them process the customs clearance for your shipments. However, you must be cautious because if they do anything wrong customs can/will hold you liable.

You mentioned you are importing from China, you may want to consider importing your products from Colombia or Peru. There are Free Trade Agreements in place that will save you a lot of money on duties (as well as shipping costs).

To the question about customs brokers charges. When you find a broker that you would like to work with, they will quote you their rates. Those rates should apply to most if not all types of entries.

Hope this helps to clear up some things for you!
 

nclabs

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Hello Nclabs,

When importing textile products your threshold for informal entry is less than $250, any textile shipment with a value over $250 will require a formal entry. If you are shipping via courier you can let them process the customs clearance for your shipments. However, you must be cautious because if they do anything wrong customs can/will hold you liable.

You mentioned you are importing from China, you may want to consider importing your products from Colombia or Peru. There are Free Trade Agreements in place that will save you a lot of money on duties (as well as shipping costs).

To the question about customs brokers charges. When you find a broker that you would like to work with, they will quote you their rates. Those rates should apply to most if not all types of entries.

Hope this helps to clear up some things for you!

Hi Rsimmons,

Thank you for the info. This is very helpful. You had mentioned that you were in the process of opening your customs brokerage/forwarding company. Do you provide these services to clients in TX. If yes, could you please provide me your contact info.

Thank you.
 
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Rsimmons016

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Hi Rsimmons,

Thank you for the info. This is very helpful. You had mentioned that you were in the process of opening your customs brokerage/forwarding company. Do you provide these services to clients in TX. If yes, could you please provide me your contact info.

Thank you.

I am happy to help. We hold a National Permit that allows us to clear your merchandise in any U.S. Port. You can send me an email or check out my website for my contact information.

Email: Robert@a1-wwl.com
Website: www.a1worldwidelogistics.com

Good Luck!!
 

Leo Hendrix

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Hi...I am actually beginning to get into exporting into my home country of Papua New Guinea from a business registered in Taiwan but factories for the manufactured good in China, we still have a lot to mesh out with the Sales director and our own end from my country but I am still trying to determine what the 'best' arrangement is. As an independent contractor or an agent of the, with Taiwan company, as a buyer or a seller of the good with little to no capital at the moment to expand, with high costs for everything from customs clearance to import tarrifs. Anyway I would just like to ask the importance of and application or your own experience of using ICC's Incoterms and other international sales contracts. Did you find that using their templates that the transactions and agreements were easy to be on the same level with and more efficient? @Rsimmons016
 

Phenom

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Thanks for the AMA @Rsimmons016 and welcome to the forum.

Question: Not sure if you ever dealt with Europe: What's the best approach if I wanted to import apparel (i.e bike helmets) from England to Canada? Would you re-routed somewhere else to save costs? I'm trying to figure the most cost effective way to get this product to Canada.

Thanks in advance.
 
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Leo Hendrix

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And how rude of me sorry, thanks in advance @Rsimmons016 ...btw if anyone would like to find out more information about anything to the pacific islands area then feel free to inbox me.
 

Vigilante

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Leo where are you from?
 

Vigilante

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BTW the OP hasn't logged in for the past month
 
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Leo Hendrix

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Hi Vigilante I noticed your location...where are you from? I am from P.N.G (Papua New Guinea) great to hear from someone from my area
 

Rsimmons016

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Hi...I am actually beginning to get into exporting into my home country of Papua New Guinea from a business registered in Taiwan but factories for the manufactured good in China, we still have a lot to mesh out with the Sales director and our own end from my country but I am still trying to determine what the 'best' arrangement is. As an independent contractor or an agent of the, with Taiwan company, as a buyer or a seller of the good with little to no capital at the moment to expand, with high costs for everything from customs clearance to import tarrifs. Anyway I would just like to ask the importance of and application or your own experience of using ICC's Incoterms and other international sales contracts. Did you find that using their templates that the transactions and agreements were easy to be on the same level with and more efficient? @Rsimmons016

Hello Leo,

I cannot comment on the import regulations, Tariffs, or import process for New Guinea as we my business and expertise is bringing products into the U.S.

The incoterms are used globally and are very important when purchasing products internationally. They dictate who takes "responsibility" for a shipment and at what point. I.E. If you were to Purchase Ex-Works (EXW) your suppliers responsibility would be to have the cargo ready at their door. All other aspects of the transportation (and costs) would be your "responsibility". On the flip side if you were to purchase Delivered Duty Paid (DDP) the supplier would have to arrange all the shipping to your door and pay any and all import fees/taxes.

See link for detailed explanation http://en.wikipedia.org/wiki/Incoterms

I hope this brings some clarity to your concerns.
 

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