International shipping is complex. It’s especially difficult to juggle the difference requirements of each country—restricted or prohibited goods, for example, often require special labels, permits, and documentation. Each country has a unique set of information needed when importing products, and merchants are expected to adhere perfectly.
Many merchants get a bit mixed up on some of the import documentation entries. Here are some of the most common international shipping documentation issues and how to fix them to ensure your shipments won’t get stopped at customs.
Country of Origin
Many merchants get confused by this. What should be listed is the country where your products are being shipped from, not the country of provenance or where it was manufactured.
Companies should investigate any duty or tax advantages based on regulations. For example, a brand manufacturing products in Europe, fulfilling in the US and shipping to Canada will be paying extra when they could get duty free shipping if they ship direct from Europe into Canada, because of a free trade agreement between Europe and Canada.
HS and HTS codes are classifications that need to be specified. For example, the commodity description should be of the materials used in your products, not the product name. For example, the marketing name for a green t-shirt might be “Sea Turtle” but if that’s listed instead of cotton apparel, your products will likely get stopped often causing supply chain headaches for you.
Specific codes added to your import/export documentation, Incoterms define the transaction of goods between the entity exporting and the entity importing. They set out the various parts of trade that assign responsibility for cost, logistics, and any operational processes needed.
The stakes for international shipping are higher because there are more variables to get right. When international shipments don’t have the correct documentation there are big consequences—monetary fines and delays.
A commercial invoice is one of the most important types of international documentation. It is a core component to smooth international shipping. Occasionally there are discrepancies between what’s listed as a unit amount on your commercial invoice and the actual number of units being transported. Take the right steps to correct and adjust your commercial invoice so no penalties are incurred.
Export Control Classification Number (ECCN)
In addition to classifying your products with the proper HS code, you also need to determine if your products require an export license. Many merchants don’t realize these are different, and very important classifications. Some examples of products that require an ECCN include chemicals, electronics and computers. The Commerce Control List (CCL) gives the full list of products subjected to licensing rules.
There are so many different costs associated with any given product: retail value, wholesale value, actual cost. The value line on a commercial invoice should be the price the buyer in the United States paid for the goods, not the amount the goods will be sold for in the United States. There are occasions where a buyer will ask to change this value, based on duties and taxes incurred from certain value amounts. It’s prudent not to change this, unless you want to expect customs delays.
Also known as hazardous material or hazmat, dangerous goods are a classification of material that requires special handling and labeling. Each country has its own policies on hazardous materials. These goods can vary widely, but usually include lithium batteries, battery powered devices, aerosols, oxygen cylinders, and flammable materials. There are very specific steps to ship dangerous goods, it’s important to make sure you have the correct dangerous goods documentation.
Because freight rates can be such a high percentage of your transportation bill, many ecommerce brands look for the cheapest ways to ship products. If a brand inaccurately chooses a low freight class because it costs less, they may end up paying for freight adjustment fees. Carriers can easily determine incorrect class designations and then assign a reclassification penalty.
If you work with a 3PL, freight forwarder, or international shipping partner, they can help ensure you have the right information listed and formatted. Keep in mind that at the end of the day the information you provide is your responsibility and you’ll pay the penalty if it isn’t correct.
It’s so important to work with reputable international shipping partners. Everything is more complex with international shipping.
If you If you are looking for a 3PL partner with experience in dangerous goods regulation and compliance, we would love to hear from you. You can read DCL’s list of services to learn more about what we do, or check out the many companies we work with. Send us a note to connect about how we can help your company grow.