Customs Clearance Process: 4 Easy Steps to Follow

Before your international shipment can be delivered to the customer, it must clear customs. Customs clearance is simply the act of moving goods through customs, so they can enter the country.

Every country imposes import duties and taxes on goods crossing their borders. This helps to generate income, protect the economy, environment, and the citizenry.

But what actually happens within a customs office? For many merchants, this unanswered question is a stumbling block on the way to lucrative cross-border shipping.

For 99% of merchants, though, clearing customs is a simple 4-step process. All you need is a few documents, and you're done.

Easyship helps merchants generate all their customs paperwork, pre-pay import duties and taxes, and save on shipping couriers that transport your package from customs to the customer.

The Customs Clearance Process

In four steps, here's what happens when a shipment arrives at customs.

1. A customs officer examines your customs paperwork

These documents must be accurate and complete, specifically the shipping label and commercial invoice. The commercial invoice is most important because it lists the contact information for the shipper, the receiver, as well as the export date and airway bill number.

The air waybill is a key transport document required for air freight and is essential for customs clearance, similar to how a Bill of Lading is used for ocean freight. It is important to declare the country of origin on all paperwork, as this affects customs classification, duty rates, and compliance with trade agreements. Here’s a full list of all necessary paperwork for customs clearance.

With Easyship, you can easily create accurate and complete shipping labels and commercial invoices, ensuring that your customs paperwork meets all the requirements. This simplifies the customs clearance process and reduces the chances of delays or rejections due to incorrect or incomplete documentation. The customs process involves several steps, including document verification, duty and tax assessment, and compliance checks by customs or another government agency.

2. Incoterms Check

Your shipment is likely liable for taxes, which makes it imperative for the customs officer to check if duty and taxes have been paid. Additionally, certain restricted goods may incur fees regardless of their value. The customs process at this stage may involve a government agency reviewing the shipment, especially if documentation is incomplete or irregular.

At this point, the choice between shipping with Deliver Duty Unpaid (DDU) and Deliver Duty Paid (DDP) becomes relevant.

Delivery Duty Paid (DDP) means that import duties and taxes have already been paid. Most express courier services like FedEx have customs brokers who will process this payment on your behalf at customs. Payments for duties, taxes, and customs charges are handled during the import process, ensuring a smooth import customs clearance.

With DDP, the price you paid for shipping covers any import fees, and this is reflected on the attached shipping label. In other words, using DDP is the best way to ensure a smooth customs clearance process.

Delivery Duty Unpaid (DDU) means that import duties and taxes are unpaid. In this case, the customs officer forwards the shipment to an independent customs broker to collect the required amount.

Customs brokers are middlemen who charge fees for facilitating the customs clearance process. These variable fees can be expensive because they include brokerage, storage, and late payment.

With customs fees unpaid, the broker will contact the recipient to collect payment. Obviously, this may upset customers.

Here’s a comparison of potential charges when shipping DDP and DDU:

With so many variable costs, shipping DDU makes it impossible to tell customers the final amount for shipping. This is why we recommend that sellers pre-pay duties for a smooth delivery experience. Learn more about DDU and DDP here.

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3. Customs requests payment for taxes and duties, if applicable

Once customs clearance is complete, your chosen courier service transports the shipment from customs to the end destination country. Shipments rarely get stuck at customs. When they do, it’s usually because of faulty paperwork or missing information required by the government agency. If the declaration is incomplete, customs may request further information to proceed.

Here’s what to do if your shipment gets stuck at customs.

Managing imports across international borders can be complex, especially when shipping to or from certain countries like Canada, where specific regulations and trade agreements apply. Importers can streamline the import customs process by working with experienced customs brokers, such as CSA Transportation, who are familiar with Canadian import customs clearance and compliance requirements.

Whether you ship by air freight with an air waybill or by ocean freight with a Bill of Lading, understanding the import process, documentation, and payments involved is crucial for smooth and timely delivery.

Here's a comparison of potential charges when shipping DDP and DDU:

With so many variable costs, shipping DDU makes it impossible to tell customers the final amount for shipping. This is why we recommend that sellers pre-pay duties for a smooth delivery experience. Learn more about DDU and DDP here.

4. Your shipment clears customs once all duties are paid

Once customs clearance is complete, your chosen courier service transports the shipment from customs to the end destination country. Shipments rarely get stuck at customs. When they do, it’s usually because of faulty paperwork or missing information required by the government agency. If the declaration is incomplete, customs may request further information to proceed. Here’s what to do if your shipment gets stuck at customs.

Managing imports across international borders can be complex, especially when shipping to or from certain countries like Canada, where specific regulations and trade agreements apply. Importers can streamline the import customs process by working with experienced customs brokers, such as CSA Transportation, who are familiar with Canadian import customs clearance and compliance requirements. Whether you ship by air freight with an air waybill or by ocean freight with a Bill of Lading, understanding the import process, documentation, and payments involved is crucial for smooth and timely delivery.

Understanding the Roles in Customs Clearance

The customs clearance process involves several key players, each with a specific role in ensuring that international shipments comply with all customs regulations. Understanding who is responsible for what can make the entire clearance process smoother and more predictable.

The shipper is responsible for preparing all the necessary documentation, such as the commercial invoice and customs declaration. These documents provide customs authorities with essential information about the shipment, including its value, origin, and contents.

A customs broker acts as an intermediary between the shipper and customs authorities. Customs brokers are experts in customs regulations and help facilitate the clearance process by ensuring that all paperwork is accurate and complete. They can also assist with submitting documents, communicating with customs officers, and resolving any issues that may arise.

Customs officers, on the other hand, are government officials responsible for inspecting shipments and enforcing customs regulations. They review the documentation, assess duties and taxes, and may physically inspect goods to ensure compliance with the importing country’s laws.

Effective communication and collaboration between the shipper, customs broker, and customs officers are essential for a successful customs clearance process. By understanding the distinct roles of each party, shippers can better navigate the process, avoid unnecessary delays, and ensure their shipments reach their final destination without issues.

For all things duties and taxes, don't forget to check out our comprehensive guide. Try our Free Tax and Duty Calculator now and unlock sales in over 220+ countries and territories. Easyship has got you covered, for example, shipping a $50 fashion item from the US to the UK.

3 Steps to Ensure a Smooth Customs Clearance

While we know the processes involved in a typical international customs clearance process, here are some key points to note to ensure things go smoothly.

1. Make sure your paperwork is in order

Incorrect paperwork and documentation are one of the primary reasons why your shipment will not cross the border. In such situations, it is always better to be overprepared. Make sure you have all the required documents, including invoices, the air waybill (AWB) as a key document for air shipments, customs declarations, and other necessary documents. Preparing each document accurately is essential to ensure smooth customs clearance.

2. Switch to DDP

While it does not make economic sense to pre-pay the taxes, try looking at the bigger picture. If your shipment is stuck at customs, and worse, takes long time to go through the custom brokers who will first collect the tax from your customer and then take time to release your package, you’re reputation might go for a toss. That is a bigger price to pay than the DDP. 

3. Try pre-determining your taxes with a tax and duties calculator

A tax and duties calculator makes it easier to estimate the taxes you are likely to pay when sending your packages internationally. This helps avoid surprises and makes it easier to add a layer of customer satisfaction.

Solutions like Easyship helps entrepreneurs streamline customs clearance process that:

• Simplifies documentation generation
• Provides pre-payment of import duties and taxes
• Offers expert guidance and support

Working with a Customs Broker

Navigating the customs clearance process can be complex, especially for businesses new to international shipments. This is where a customs broker becomes invaluable. A customs broker is a licensed professional who specializes in managing the clearance process, ensuring that all customs documentation is accurate and that shipments comply with the importing country’s regulations.

Customs brokers have in-depth knowledge of customs duties, taxes, and the specific requirements for different types of goods and destination countries. They can assist with paying customs duties and taxes on your behalf, helping to prevent unexpected fees or delays. If any issues arise during the clearance process, such as questions from customs authorities or requests for additional documentation, your customs broker can handle these efficiently.

When choosing a customs broker, it’s important to select someone with experience in your industry and familiarity with the regulations of the importing country. A reputable customs broker can streamline the entire customs clearance process, reducing the risk of customs clearance delays and ensuring your shipments arrive at their final destination on time.

Additionally, customs brokers can provide guidance on preparing commercial invoices, customs declarations, and other required paperwork. By partnering with a knowledgeable customs broker, shippers can focus on their business while ensuring their international shipments are handled professionally and in full compliance with all regulations.

Navigating Country-Specific Regulations

Every country has its own set of customs regulations and requirements, making it essential for shippers to understand the specific rules that apply to their international shipments. Country-specific regulations can include restrictions on certain goods, unique documentation requirements, and different duty and tax rates.

To ensure a smooth customs clearance process, shippers must research and comply with the regulations of the importing country. This includes understanding which goods are restricted or prohibited, what documentation is required, and how duties and taxes are assessed. Failing to comply with these regulations can result in customs clearance delays, fines, or even the seizure of goods by customs authorities.

Customs brokers and logistics professionals can provide valuable guidance on navigating these country-specific requirements. They stay up-to-date with changes in international trade laws and can advise on the best practices for compliance. It’s also important for shippers to regularly review the regulations of their target markets, as rules and duty rates can change frequently.

By taking the time to understand and adhere to the importing country’s regulations, shippers can avoid unnecessary delays and ensure their shipments clear customs efficiently, reaching their final destination without complications.

Avoiding Delays in Customs

Delays in customs can disrupt your supply chain and lead to increased costs, but there are proactive steps you can take to minimize the risk. The most important factor in avoiding customs clearance delays is ensuring that all necessary documentation is complete, accurate, and submitted on time. Missing or incorrect paperwork is one of the most common reasons shipments are held up by customs authorities.

Working with a reputable customs broker can further reduce the risk of delays, as they are experts in the customs clearance process and can help you navigate any potential issues. It’s also crucial to understand the regulations and requirements of the importing country, as non-compliance can result in inspections, holds, or additional fees.

Be prepared for possible inspections or holds by having a plan in place to address any issues that may arise. Effective communication between the shipper, customs broker, and customs officers is key to resolving problems quickly and keeping your shipments moving.

By taking these proactive steps—ensuring accurate documentation, working with experienced customs brokers, staying informed about country-specific regulations, and maintaining open communication—you can help ensure that your international shipments clear customs efficiently and reach their final destination on schedule.

Make Customs Clearance Simple with Easyship

By leveraging Easyship's marketing-leading shipping tools, store owners can save time, ensure compliance, and optimize their cash flow. With Easyship, store owners can now effortlessly navigate the complexities of customs clearance, expand their business globally, and focus on what matters most – boosting sales.

For all things duties and taxes, don't forget to check out our comprehensive guide. Try our Free Tax and Duty Calculator now and unlock sales in over 220+ countries and territories. Easyship has got you covered, for example, shipping a $50 fashion item from the US to the UK.

Check out our Tax and Duties Calculator

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FAQ

What does custom clearance mean?

Customs clearance is the act of moving goods through customs, so they can enter the country.

How long does custom clearance take?

Typically, a customs clearance takes less than 24 hours. If your paperwork is lacking, however, it could take several days before your shipment clears customs.

What documents are required for customs clearance?

The key documents for customs clearance are the commercial invoice and the packing slip and shipping label.

Can I organize the customs clearance myself?

Yes. This requires you to pre-pay all import duties and taxes, either when you choose your cross-border shipping service or separately. In other words, opt for Delivery Duty Paid shipping options.