There are many variables that shippers need to consider when selling their products abroad. Customs clearance requires detailed international shipping documentation, unless you want surprise fees, delayed products, and unhappy customers.
Ecommerce brands need to determine the method of shipping they’ll use to ship products across country lines. As part of this decision, it’s important to weigh the freight carrier options and how they will affect your customs clearance experience.
While using the postal service is often cheaper and simpler, it can mean longer wait times and delays. Commercial clearance is when a shipper uses a private broker or private carrier to manage the customs clearance; it can expedite the customs clearance process but can also require more paperwork, resources, and overall costs.
Here is a breakdown of postal clearance and commercial clearance, and the benefits and drawbacks of each.
What is Postal Clearance?
Postal clearance refers to the process undertaken by national postal services to process parcels and other shipments being imported into a country. When your product arrives in a foreign country via postal services, it must pass through postal clearance.
Some distinguishing characteristics of postal clearance include:
- A simpler process compared to commercial clearance
- Involves fewer customs duties
- Often requires less paperwork
- May take longer to process due to the high volume of packages processed through this method
How Does Postal Clearance Work?
There are a few distinct steps for a package to pass through customs as postal clearance. To pass via postal clearance, a package must be in the hands of the postal service carrier.
Here is the process of postal clearance at customs:
- Package arrives at the destination country’s customs.
- Customs’ authority assesses the contents based on the customs declaration forms.
- If any duties or taxes are due, these are usually collected from the recipient upon delivery.
As with all shipping, there may be additional steps depending on your package specifications. There are many variables that may affect the postal clearance flow, including customs regulations of the receiving country and the specific contents of your package.
Pros of Postal Clearance: Cost-Effective and Convenient
Postal clearance can be cost-effective and convenient for small ecommerce businesses. It’s a method that involves sending your goods via the national postal service, which can simplify the process and save on costs. These savings are primarily due to lower customs clearance fees compared to commercial clearance services.
Another advantage of postal clearance is its simplicity, which appeals to smaller businesses or those just starting out with importing products. You don’t need to have deep knowledge about customs regulations, making it a more stress-free option.
Types of Products Best for Postal Clearance
The suitability of postal clearance often revolves around the size, weight, and value of your product. Since postal services usually have size and weight restrictions, this method is best suited to small and lightweight items.
Many ecommerce businesses can take advantage of postal clearance, including, consumer packaged goods, pet products, apparel, office supplies, toy brands, and much more.
What is Commercial Clearance?
Commercial clearance refers to the process where imported goods are cleared through customs by a private broker, rather than by the post office.
The process is typically swifter and offers more reliability, making it ideal for businesses who handle large volumes of goods or sensitive items, with a greater need for control over delivery times.
It is particularly beneficial for ecommerce brands who want to capitalize on quick and reliable delivery.
What Types of Products are Not Fit for Commercial Clearance?
Commercial clearance is not suitable for products that may require more tailored and specific handling that commercial clearance simply cannot provide. This includes special label checking, special handling, or items that are delicate and perishable.
Some examples of products and goods that are not a good fit for commercial clearance include:
- Most food and beverages
- Medicine or medical products
- Live animals
- Dangerous goods or hazmat materials
- Perfumes or anything with alcohol content
- High-value items like precious metals or stones
Pros of Commercial Clearance: Speed and Reliability
What makes commercial clearance more reliable is its robust structure and oversight. Unlike postal clearance, commercial clearance involves a professional customs broker who ensures adherence to all regulations, offering an added layer of security.
In general, commercial clearance promises faster, more predictable delivery timescales as goods won’t get held up, providing peace of mind for ecommerce brands that require efficient, dependable shipping.
Managing Customs Duties and Taxes for Customs Clearance
It’s important to note that managing customs fees, both taxes and duties, is an important part of customs clearance. It can also be a tricky and complex task to figure out your exact customs fees.
Customs duties and taxes are levied by each country to control the flow of goods, especially international mail. However, if done right, these processes can be managed effectively to bring substantial benefits to your ecommerce business.
In each internationally shipped package, there must be a custom declaration form. This form, which essentially is a ‘contents note,’ is used by customs to assess if any taxes or duties apply to your package. The information you provide in this form is therefore crucial. Always ensure that the contents of your package are well-described and accurate. It will make the customs clearance process smoother and faster.
A few tips to consider when understanding international duties and taxes:
- Know your import regulations: Every country has its import regulations, including limitations on certain product types, and these rules change often. Spend time getting to understand these regulations to avoid unpleasant surprises in additional fees or shipment returns.
- Harmonized System codes (HS codes): In your customs document, include the HS code for the product. This is a standardized numbering system for products, universally accepted, and it could speed up the customs clearance process.
- Invoice and pricing: Include an invoice with the correct pricing of the product. Underpricing can result in penalties, while overpricing can lead to unnecessary duty payments.
Expanding your ecommerce brand globally means exploring different shipping methods. Understanding how your product needs fit into the process of customs clearance will better inform your decision when seeking efficient and effective transportation for your goods.
When expanding your ecommerce footprint to international markets, it’s not just about getting your products through customs—it’s about doing so in a way that’s legal, efficient, and cost-effective. Navigating the maze of customs regulations might seem daunting, but with knowledge and planning, postal clearance can indeed be a viable option for your international shipments.
Ultimately the smoother you can get products across the border, the more money you’ll be saving and the happier your customers will be.