Most frequent questions and answers
While insurance is not required, shippers should carefully evaluate their potential exposure to loss. All carriers limit their liability under the terms of carriage. In general, trucking companies and customs brokers limit their liability to $50 per shipment, ocean carriers to $500 per shipment, and air carriers to $20 per kilo. The low cost of insurance should be considered and requested in writing from your broker or forwarder.
The very basic documents required are:
- Commercial invoice
- Packing list
- Copy of the airway bill or ocean bill of lading.
The commercial invoice must be detailed to indicate the sellers/buyers name and address, description of merchandise, incoterm, value and country of origin. Certain types of merchandise require special invoices or additional invoice detail such as footwear, wearing apparel, bearings and others.
In general, only shipments valued at over $2500 USD require an entry bond. CBP can always require a formal entry with bond regardless of the value of the shipment. Certain merchandise may be subject to other government agencies; for example, food item and drugs require a bond for three times the value of the shipment. Please note if your commercial shipment is arriving via ocean and is valued at over $2500, you will be required to post a separate bond for your ISF- Importers Security Filing. The alternative is to file a continuous bond which will cover all of your shipments for a one year period.
The terms of sale or incoterms are very important to include on your purchase order. The terms define what is included in the agreed upon price for the merchandise. As an example if you agree to FOB terms based on the price offered, the seller, at the sellers expense will be responsible to get the merchandise to the nearest port or airport of export. The buyer/importer will be responsible for all international transportation charges, clearance, duties and delivery to final destination. Always make sure to have your supplier indicate the term of sale on the invoice when purchasing on a C&F or CIF basis. The supplier must break out the actual cost of the international air or ocean freight and insurance on the invoice so that those amounts can be properly verified.
The steamship line will issue three original bills of lading and multiple non-negotiable copies after the shipment has been confirmed on board the exporting vessel. At least one original bill must be signed on the back by the importer or their agent and surrendered back to the steamship line in order for the consignee to gain release of the shipment at the destination. The retention of the original bills by the shipper allows the shipper to receive payment as agreed prior to release of the originals to the consignee/buyer. Many importers either prepay or have credit terms with their suppliers so shipments are released on express bills, basically a paperless system. The use of express bills reduces costs for couriers and expedites the final delivery of the shipment.
This question comes up when importers purchase items on the internet, especially smaller shipments. Generally if your shipment weighs under 150 kilos and does not have a large cubic volume, it will likely be less expensive to ship by air than as ocean freight. That’s because, with ocean freight shipments you have a minimum bill of lading charge, ISF filing requirement, warehouse devanning, documentation charges and forklift charges. If your shipment is designated for a government examination that will also be much more expensive on ocean shipments in most ports.
To reduce landed cost per piece of merchandise importers must purchase enough items to fill 40 ft container loads. The value of the merchandise and transit time must also be considered while deciding to ship via air or ocean. Very high priced electronics will almost always ship via air freight.