What happens when your U.S. bound goods arrive at the port of crossing and they are not cleared for entry? In some cases, these goods can either be denied entry and the goods must be returned to the origin country, or they can travel into the U.S. to a designated and authorized warehouse to await release. However, what many U.S. importers don’t know is that these goods can only remain at this warehouse for a maximum of 15 days, after which they will be removed and brought to a Customs General Order warehouse. This is a costly expense that can be avoided with these 3 tips.
Firstly, let's take a deeper look at the expenses incurred in this scenario.
- Arrival Warehouses typically store goods temporarily and charge daily rates. Therefore, if your goods are only there for a few days, you only have to pay for those days.
- General Order Warehouses charge by the month, not by the day. Therefore if your goods are only there for a few days, you will be required to pay for the full month.
All of the fees that were incurred at the arrival warehouse have to be paid to release the warehouse lien and allow the goods to transfer to the general order warehouse.
Here are 3 tips on how to avoid this unnecessary hassle and cost.
Tip1: Ensure Your Customs Broker Knows About The Incoming Shipment And Its Contents
Customs Brokers know each and every classification under the sun off the top of their heads, right? Unfortunately, they don’t. Most customs brokers require a bit of time to investigate each commodity being imported to understand its H.S. tariff classification, duty rate, and the specific regulations governed by any applicable Partner Government Agencies (PGA). In some cases, they may need to reach out to Customs or the PGA involved to get specific regulation information, significantly adding to the investigation timeline.
When importers send new commodities to their customs broker, they will notice an increased processing time for this reason. This increase can be a matter of hours or days depending on the parties involved and the complexity of the commodity.
If you are importing goods that have not yet been reviewed by your customs broker, there is a good chance that they will need a bit more time than usual to investigate the specific requirements of those goods and classify them accurately.
It’s a good idea to communicate any new commodities that you plan on importing to your customs broker well in advance of shipping them to the port. This will allow your customs broker the necessary time to investigate the commodity, classify it correctly, and add it to your commodity database. When your shipment subsequently arrives at the port, the processing time will be similar to what you’re used to.
Tip 2: Ensure Your Customs Broker Has All The Necessary Documents and Data Required For Declaration
We have all heard this story before: A carrier arrives at the port only to find out that the shipment they are carrying has not been cleared for entry. The carrier phones their dispatcher and the dispatcher phones you. Ugh.
In most cases, the reasons the shipment has not yet been released is because the customs broker does not yet have all the required information or documentation required by Customs or the applicable PGAs.
There are a couple of proactive measures both parties in this scenario can take:
Carrier: Call the customs broker one hour prior to your arrival at the port to ensure the load you are carrying is cleared for entry. If not, work with the customs broker to get them the information they need. Often the information can be found on the shipper’s bill of lading or customs invoice.
Importer of Record: Ensure your vendors and carriers understand exactly what needs to be sent to the customs broker, including the individual documents and the data on those documents. Give them examples of the minimum requirements or better yet, send the documents to your customs broker directly. Most customs brokers will be able to match the carriers barcode to the earlier-received-client-provided invoice.
Tip 3: Ensure Your Vendor Notifies You Of All Incoming Shipments
Every so often we will get a hurried call from a client who just received a notification of a shipment arrival they were not yet expecting. As you can imagine in these cases, the shipments are not cleared for entry.
As the importer of record and customs broker scramble to gather documents and data needed to declare the load, the 15 days allotted time in the arrival warehouse expires, and the shipment is moved under a Customs General Order.
Although infrequent, this scenario does happen, and it can cause significant delays and costs.
The best way to avoid it is to have clear expectations on the terms of sale with your supplier. Be sure to clearly communicate your shipping notification expectations. Understand who will be providing the customs documentation to the customs broker and when. If your supplier will be doing so, ensure they have your customs broker’s contact information.
We hope that these 3 tips help you avoid unnecessary delays and costs as a result of landing under a Customs General Order.