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Posted on May 1, 2012Navigating International Shipping: Vol. 2 – Shipping to Other Countries
A key factor in successful shipping is making sure that your tangible goods end up in your consumers’ hands intact and in a timely manner. This can be a testing task domestically, let alone internationally. And while internationally shipping from the United States can seem overly daunting, this series will make international logistics seem almost as easy as putting a stamp on an envelope. This particular volume will walk you through the documentation process.
There are a number of documents you’ll need to include when shipping internationally. Make sure to include your necessary documents and customs paper work en route with your packaging whilst safeguarding yourself from loss. Missing documents can be a big problem, so remember to minimize your chances of losing documents in the processes of transit.
When filling out your paper work, remember that you’ll need four copies of the customs documentation. Though it may seem counter-productive, U.S. Customs requires two copies and customs in the recipient country will require two forms as well. There are usually two forms to fill out, bringing your grand total to eight pages. Don’t forget to sign each one.
In most cases, you’ll need the following…
1. Commercial Invoice (Pro Forma Invoice)
Remember that this invoice is separate from the one you typically issue to your client. Though they’ll have similar information (ex. price, quantity, totals), it’s best to have a separate Customs Commercial invoice template prepared for your international shipping processes. Avoid creating these commercial invoices in your normal billing software. You’ll find that it will conflict with your profit and loss accounting/reporting.
We suggest that you use a Commercial Shipping Invoice Template and input the information into the template. Microsoft provides a fairly robust template for Microsoft Excel on their website. Remember to make four copies for EACH package in a multi-part shipment.
2. Certificate of Origin
This document was created, in part, by the Geneva Convention to make the export and customs processes simpler. Providing the required information may seem repetitive, but it’s required. Note the country that you’re exporting to because different countries and regions will require different Certificate of Origin forms. For example, the North American Free Trade Agreement (NAFTA) created a tax-free trade zone for products that are created or exported from Canada, Mexico, and the U.S. These countries require a specially formatted Certificate of Origin. The form is slightly different and requires some additional information like the Harmonized Tariff Schedule Clarification Number (HS Code/HTSUS/Schedule B), a coded number that identifies what a product is or its ingredients/consistency.
The HS Code was established by the World Customs Organization; and though it may seem like an evil offspring of the Dewey Decimal System, it’s quite manageable and organized because it is recognized by nearly every government’s customs service, hence “harmonized.” Your shipping partner can help you identify the HS Code of your product or try using the US Census Bureau’s simple and powerful search engine.
The easiest way to manage your paper work is by packaging your forms into re-sealable, adhesive poly bags. UPS calls these bags the “International Waybill Pouches” and UPS customers can order them free of charge on their website. You can use a standard address pouch or label for your waybill (the document containing your return address, account information, package details, tracking information, and recipient’s address). Use a separate pouch for your customs documentation to avoid any confusion; additionally, remember to use a pen and directly label your packaging with tracking numbers while enumerating any multi-part shipments. Export.gov has a series of documents that your organization might need to export its goods depending on country, type of goods etc.
You can never take too many precautions to ensure safe deliveries, so take the extra step of including a packing list on the exterior of the box or with the customs documentation. The list should detail the contents of each package in a multipart shipment. Each list should only reference the items in the particular package. Try not to mix SKUs, especially in complex shipments. You want to keep everything as simple as possible. If you’re shipping in large volumes, try to keep the products in separate boxes for an easier inspection process and shorter delay times.
Now that your goods are properly documented and prepared for customs, you’re ready for everyone’s favorite part, taxes. Ensure that your business is registered with your state’s Franchise Tax Board. You’ll have to pay taxes to the country in which you are exporting to so be sure that you’re not paying taxes on your raw materials and assuming twice the taxes.
Your shipping partner should be able to help you with billing duties and taxes. Don’t be afraid to give them a call to discuss your shipments. It’s important to have your shipments itemized and declared because customs on both side of the shipment will more than likely inspect your packages to verify its content to assure that it’s properly tariffed. But after your duties are paid, you’re sure to find that international trade can be a great source of revenue. And if properly managed, the shipping process can be relatively painless.
Between the advice your partner will provide and the information we offer you in this series, you’ll find international shipping to be much more manageable than it first may seem. However, if you don’t navigate carefully, you can become trapped on the rocky shores of customs and border control departments around the world. Stay tuned for our next volume (Vol. 03 – Freight Shipments) and sail smoothly with Allied Wallet.
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Posted on August 1, 2011Welcome to our Blog for Entrepreneurs
“E-Ship” has posts catered to those of us who seek financial prosperity flowing like wind through our sails, those of us who are hungry for just a little more market share that lies beyond the horizon. We take risks and initiative. And as the current changes, we build but never crash. If we adapt, we can stay dry in the splash.We’re prepared for growth and potential.
We’re inspired and informed. We’re stimulated and motivated.
We’re able to analyze and innovate on paths to prosperity.
Whether you’re a social, serial, or lifestyle entrepreneur, we can keep you on track with tips and articles to help you reach your entrepreneurial goals. Bookmark our blog and we just might be your company’s compass to success.
