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Step-by-step guides and legal documentation help for U.S. businesses involved in international shipping. Avoid fines, delays, and compliance issues.
- Export forms & compliance guides for U.S. shippers.
Export Compliance & Documentation
Step-by-step guides and legal documentation help for U.S. businesses involved in international shipping. Avoid fines, delays, and compliance issues.
How to Fill Out a Commercial Invoice for International Shipping
Learn what to include, who uses it, and why accuracy is essential for customs and payment clearance. Read More
How to Fill Out a Commercial Invoice for International Shipping
CPB Form 5106
A Customs and Border Patrol (CPB) form 5106 is used to create or update a unique number for any importer bringing products with a value over $2,500 into the United States. Any goods arriving in the US are considered an import and, therefore, must be approved by CBP. In order to be processed for approval, all imports must have documentation containing information regarding the contents of the shipment and must include the identification of the receiver/importer, known as the consignee. A consignee is a person or entity in the US that will receive the shipment and is identifiable to CBP by either an Employer (or tax) ID Number (EIN) or a Social Security Number (SSN). The consignee’s ID number must be on file with the CBP in order for the CBP to review and approve the import. This is done by filling out and submitting CBP Form 5106. This form is filed prior to the first time a person or entity imports goods into the US but will expire after one year if no subsequent imports are made. As long as the consignee continues to receive goods on a regular basis, this form will only have to be completed once. If their 5106 importer record is not used for over a year, then they will have to reactivate their number.
Many importers use the services of a freight forwarder or customs broker. The forwarder or broker will usually gather the information from the consignee and fill out and submit the forms as part of their service. Those not employing a forwarder or broker can download CBP Form 5106 directly from the CBP website.
CBP is tasked with ensuring that the US government collects all the required duties pertaining to all imports. But it also has some other important enforcement functions that ensure the safety of the homeland and compliance with all laws and regulations pertaining to importing goods into the US.
Agriculture and Quotas – Import quotas are used to control the volume of various commodities that can be imported into the United States during a specified period of time. Quotas are established by legislation or Executive Orders and are put in place as protections for specific parties.
● Fair Trade – The Department of Commerce prevents imported merchandise from being sold in the U.S. at unfairly low or subsidized prices. To level the playing field for U.S. companies injured by these unfair trade practices, CBP is responsible for collecting what is called the Antidumping and Countervailing Duties (AD/CVD). The goal is to detect and deter circumvention of the AD/CVD law, and to collect final duties timely and accurately, while at the same time facilitating legitimate trade.
● Safety – CBP seeks to ensure that unsafe products do not enter the U.S. by working collaboratively and collectively with partner government agencies and foreign governments by the sharing of information to encourage greater use of partnership and best practices to protect the U.S. consumer.
● Intellectual Property – CBP ensures the protection of intellectual property rights by preventing the trade in counterfeit and pirated goods, which threatens America’s economy, innovation, the competitiveness of our businesses, the livelihoods of U.S. workers, national security, and the health and safety of consumers.
● Trade Agreements – The United States negotiates and signs free trade agreements (FTAs) and preferential trade legislations (PTLs), also known as preference programs, to promote prosperity for the U.S. economy. FTAs and PTLs open up new markets for U.S. exports, protect American producers and workers, and encourage free and equitable trade among our trading partners. CBP’s Office of Trade oversees the implementation of these international instruments.
● Textiles/Apparel – Textiles and Apparel are their own unique category, as there are very specific regulations regarding imports of those products. CBP is responsible for ensuring that the trade community complies with all statutory, regulatory, policy, and procedural requirements that pertain to textile/apparel imports under free trade agreements and other trade preference programs.
Many importers use the services of a freight forwarder or customs broker. The forwarder or broker will usually gather the information from the consignee and fill out and submit the forms as part of their service. Those not employing a forwarder or broker can download CBP Form 5106 directly from the CBP website.
CBP is tasked with ensuring that the US government collects all the required duties pertaining to all imports. But it also has some other important enforcement functions that ensure the safety of the homeland and compliance with all laws and regulations pertaining to importing goods into the US.
Agriculture and Quotas – Import quotas are used to control the volume of various commodities that can be imported into the United States during a specified period of time. Quotas are established by legislation or Executive Orders and are put in place as protections for specific parties.
● Fair Trade – The Department of Commerce prevents imported merchandise from being sold in the U.S. at unfairly low or subsidized prices. To level the playing field for U.S. companies injured by these unfair trade practices, CBP is responsible for collecting what is called the Antidumping and Countervailing Duties (AD/CVD). The goal is to detect and deter circumvention of the AD/CVD law, and to collect final duties timely and accurately, while at the same time facilitating legitimate trade.
● Safety – CBP seeks to ensure that unsafe products do not enter the U.S. by working collaboratively and collectively with partner government agencies and foreign governments by the sharing of information to encourage greater use of partnership and best practices to protect the U.S. consumer.
● Intellectual Property – CBP ensures the protection of intellectual property rights by preventing the trade in counterfeit and pirated goods, which threatens America’s economy, innovation, the competitiveness of our businesses, the livelihoods of U.S. workers, national security, and the health and safety of consumers.
● Trade Agreements – The United States negotiates and signs free trade agreements (FTAs) and preferential trade legislations (PTLs), also known as preference programs, to promote prosperity for the U.S. economy. FTAs and PTLs open up new markets for U.S. exports, protect American producers and workers, and encourage free and equitable trade among our trading partners. CBP’s Office of Trade oversees the implementation of these international instruments.
● Textiles/Apparel – Textiles and Apparel are their own unique category, as there are very specific regulations regarding imports of those products. CBP is responsible for ensuring that the trade community complies with all statutory, regulatory, policy, and procedural requirements that pertain to textile/apparel imports under free trade agreements and other trade preference programs.
EEI Filing Guide: How to Submit Electronic Export Info via AESDirect
When you need to file EEI, how to do it, and exemptions that may apply. Read More
EEI Filing Guide: How to Submit Electronic Export Info via AESDirect
Filling Out the EEI Form of the Commercial Invoice
The EEI is an online form filed through the Automated Export System (AES) for goods exported from the U.S. It includes information about the shipment’s sender and receiver, the goods being exported, and the export control classification number (ECCN). The Census Bureau uses the information to calculate U.S. trade statistics, while Customs and Border Protection (CBP) and the Bureau of Industry and Security (BIS) use the data to help ensure compliance with U.S. export regulations. In September 2020, the U.S. the Bureau of Industry and Security expanded the EEI to include exports intended for China (including Hong Kong), Russia, and Venezuela.
General EEI filing requirements
The EEI must be filed if any of the following apply:
● Any item in the shipment is valued at $2,500 or above (Shipments to Canada are exempt from this measure).
● The shipment contains merchandise that requires an export license or permit.
● The shipment includes self-propelled vehicles.
● “600 series” items, previously listed under the United States Munitions List (USML) are included in the shipment.
● The shipment includes military equipment intended for China, Russia, or Venezuela.
● The shipment contains rough diamonds classified under harmonized tariff schedules 7102.10, 7102.21, or 7102.31.
Exemptions from having to file an EEI
The most common instances of shipments not requiring an EEI are:
● (NO EEI 30.36): Shipments headed for Canada unless: ○ They are subject to ITAR control ○ Require an export license or permit ○ Contain rough diamonds ○ Are shipped via Canada en-route to an alternate final destination
● NO EEI 30.37(a): Shipments valued at $2,500 or less. (Per Schedule B classification for packages shipped from one USPPI (individual exporter or retail store) to a single buyer via a single carrier.
➔ This exemption is not valid if your shipment requires an export license or permit, includes used self-propelled vehicles, is subject to ITAR, contains rough diamonds, or is intended for Iran, North Korea, Cuba, or Syria.
What do you do if your shipment is exempt from EEI filing? An exemption from having to file an EEI through the AES is an instance in which you do not have to submit an EEI form in order to receive the 14-digit ITN. Instead of the ITN, you should enter the exemption’s section listed under the U.S. Foreign Trade Regulations list on the commercial invoice where the ITN would otherwise show up. What do you, the shipper, need to do? If you are exporting from the U.S. to China, Russia or Venezuela, you must determine the following export classification information for each item in your shipment and fill them out as part of the export license:
● The ECCN for each item
● Which Export License requirements apply
The EEI is an online form filed through the Automated Export System (AES) for goods exported from the U.S. It includes information about the shipment’s sender and receiver, the goods being exported, and the export control classification number (ECCN). The Census Bureau uses the information to calculate U.S. trade statistics, while Customs and Border Protection (CBP) and the Bureau of Industry and Security (BIS) use the data to help ensure compliance with U.S. export regulations. In September 2020, the U.S. the Bureau of Industry and Security expanded the EEI to include exports intended for China (including Hong Kong), Russia, and Venezuela.
General EEI filing requirements
The EEI must be filed if any of the following apply:
● Any item in the shipment is valued at $2,500 or above (Shipments to Canada are exempt from this measure).
● The shipment contains merchandise that requires an export license or permit.
● The shipment includes self-propelled vehicles.
● “600 series” items, previously listed under the United States Munitions List (USML) are included in the shipment.
● The shipment includes military equipment intended for China, Russia, or Venezuela.
● The shipment contains rough diamonds classified under harmonized tariff schedules 7102.10, 7102.21, or 7102.31.
Exemptions from having to file an EEI
The most common instances of shipments not requiring an EEI are:
● (NO EEI 30.36): Shipments headed for Canada unless: ○ They are subject to ITAR control ○ Require an export license or permit ○ Contain rough diamonds ○ Are shipped via Canada en-route to an alternate final destination
● NO EEI 30.37(a): Shipments valued at $2,500 or less. (Per Schedule B classification for packages shipped from one USPPI (individual exporter or retail store) to a single buyer via a single carrier.
➔ This exemption is not valid if your shipment requires an export license or permit, includes used self-propelled vehicles, is subject to ITAR, contains rough diamonds, or is intended for Iran, North Korea, Cuba, or Syria.
What do you do if your shipment is exempt from EEI filing? An exemption from having to file an EEI through the AES is an instance in which you do not have to submit an EEI form in order to receive the 14-digit ITN. Instead of the ITN, you should enter the exemption’s section listed under the U.S. Foreign Trade Regulations list on the commercial invoice where the ITN would otherwise show up. What do you, the shipper, need to do? If you are exporting from the U.S. to China, Russia or Venezuela, you must determine the following export classification information for each item in your shipment and fill them out as part of the export license:
● The ECCN for each item
● Which Export License requirements apply
ECCN Guide: How to Classify Items Under the Commerce Control List
What an ECCN is, how to determine yours, and what export licenses may be required. Read More
ECCN Guide: How to Classify Items Under the Commerce Control List
Filling Out the ECCN for the Commercial Invoice
The ECCN is a five-character alphanumeric code issued by the Department of Commerce to identify dual-use items (products that can be applied for both commercial and military purposes) for the purpose of export control. Items are classified based on their makeup, i.e. the type of product, software, or technology they entail. If the ECCN number corresponding to your item appears on the government’s Commerce Control List, you will need a special license to export your goods outside of the U.S.
How to Determine Your ECCN Number:
Refer to the Bureau of Industry and Security (BIS) to access the Classification Information Table from its website. You will see a listing of companies that have voluntarily provided information for ECCN classifications.
Once you have gathered background information on the item’s technical make-up and format of the Commerce Control List (CCL), you are ready to fill out the ECCN. Here are some basic instructions for getting it done:
The first digit of the ECCN depends on whether it belongs to one of the following categories: Commerce Control List Categories
0 – Nuclear materials, elements, and equipment
1 – Materials, Chemicals, Microorganisms and Toxins
2 – Material Processing
3 – Electronics
4 – Computers
5 – Part 1 – Telecommunications; Part 2 – Information Security
6 – Sensors and Lasers
7 – Navigation and Avionics
8 – Marine
9 – Aerospace and Propulsion
➔ The second digit depends on which of the following product groups your item belongs to:
Product Groups
A. End Items, Equipment, Accessories, Attachments, Parts, Components, and Systems
B. Test, Inspection, and Production Equipment
C. Materials
D. Software
E. Technology
● E.g., If you are shipping electronics technology, the first two digits of the ECCN will be 3E.If your item does not correspond to any of the categories above, consult the CCL.
● If your item does not specify a ECCN in any CCL category, it should be designated as EAR99.
● For a listing of all existing ECCNs, click here.
The ECCN is a five-character alphanumeric code issued by the Department of Commerce to identify dual-use items (products that can be applied for both commercial and military purposes) for the purpose of export control. Items are classified based on their makeup, i.e. the type of product, software, or technology they entail. If the ECCN number corresponding to your item appears on the government’s Commerce Control List, you will need a special license to export your goods outside of the U.S.
How to Determine Your ECCN Number:
Refer to the Bureau of Industry and Security (BIS) to access the Classification Information Table from its website. You will see a listing of companies that have voluntarily provided information for ECCN classifications.
Once you have gathered background information on the item’s technical make-up and format of the Commerce Control List (CCL), you are ready to fill out the ECCN. Here are some basic instructions for getting it done:
The first digit of the ECCN depends on whether it belongs to one of the following categories: Commerce Control List Categories
0 – Nuclear materials, elements, and equipment
1 – Materials, Chemicals, Microorganisms and Toxins
2 – Material Processing
3 – Electronics
4 – Computers
5 – Part 1 – Telecommunications; Part 2 – Information Security
6 – Sensors and Lasers
7 – Navigation and Avionics
8 – Marine
9 – Aerospace and Propulsion
➔ The second digit depends on which of the following product groups your item belongs to:
Product Groups
A. End Items, Equipment, Accessories, Attachments, Parts, Components, and Systems
B. Test, Inspection, and Production Equipment
C. Materials
D. Software
E. Technology
● E.g., If you are shipping electronics technology, the first two digits of the ECCN will be 3E.If your item does not correspond to any of the categories above, consult the CCL.
● If your item does not specify a ECCN in any CCL category, it should be designated as EAR99.
● For a listing of all existing ECCNs, click here.
HTS Code Explained: How to Classify Your Products for Export
Determine the correct HTS (tariff) code to avoid overpaying duties or misclassifying goods. Read More
HTS Code Explained: How to Classify Your Products for Export
Filling out the HTS Code for the Commercial Invoice
The HS Code (Harmonized Commodity Description and Coding System)
Internationally accepted system developed by the World Customs Organization for classifying internationally traded products. This coded arrangement helps customs determine import and export restrictions, as well as duty rates, and decide which ones apply to items being imported into the U.S. The HTS is often referred to as an item’s tariff classification.
➔ How to Determine the HTS Code:
● The first six digits remain identical in all shipments, while different countries add 2-4 supplementary numbers to represent different item categories.
● You can look up the HS Code (also known as the HTS Code) for your shipment using most government websites or via an online search tool.
● To determine your HS Code without accessing a help tool:
We will use a 100% cotton women’s short-sleeved T-shirt as an example. The HS code will be as follows:
❖ Category: Textiles and Articles (62)
❖ Subcategory: T-shirts, singlets and other vests (11)
❖ Material: Cotton (42)
❖ The HS code, in this case, consists of the digits in the previous categories combined, resulting in the number: 621142
➔ The HS is made up of 5,300 articles or product descriptions referred to as ‘headings’ and ‘subheadings.’ Every country worldwide is required to use identical HS sections, chapters, headings, and subheadings, though in reality, differences are known to take place.
➔ Full listing of HTS Codes here. Here is a complete listing of country codes
The US requires a 10-digit HS code, with the final six digits representing the local item categories.
Exemptions from HTS Listing
HTS Code 7311.00 – Iron or steel containers transporting for compressed or liquefied gas HTS Code 9804.00 – Articles imported by or for the account of individuals arriving/emigrating to the U.S. including: Books, household items, and personal apparel.
The HS Code (Harmonized Commodity Description and Coding System)
Internationally accepted system developed by the World Customs Organization for classifying internationally traded products. This coded arrangement helps customs determine import and export restrictions, as well as duty rates, and decide which ones apply to items being imported into the U.S. The HTS is often referred to as an item’s tariff classification.
➔ How to Determine the HTS Code:
● The first six digits remain identical in all shipments, while different countries add 2-4 supplementary numbers to represent different item categories.
● You can look up the HS Code (also known as the HTS Code) for your shipment using most government websites or via an online search tool.
● To determine your HS Code without accessing a help tool:
We will use a 100% cotton women’s short-sleeved T-shirt as an example. The HS code will be as follows:
❖ Category: Textiles and Articles (62)
❖ Subcategory: T-shirts, singlets and other vests (11)
❖ Material: Cotton (42)
❖ The HS code, in this case, consists of the digits in the previous categories combined, resulting in the number: 621142
➔ The HS is made up of 5,300 articles or product descriptions referred to as ‘headings’ and ‘subheadings.’ Every country worldwide is required to use identical HS sections, chapters, headings, and subheadings, though in reality, differences are known to take place.
➔ Full listing of HTS Codes here. Here is a complete listing of country codes
The US requires a 10-digit HS code, with the final six digits representing the local item categories.
Exemptions from HTS Listing
HTS Code 7311.00 – Iron or steel containers transporting for compressed or liquefied gas HTS Code 9804.00 – Articles imported by or for the account of individuals arriving/emigrating to the U.S. including: Books, household items, and personal apparel.
CBP Form 5106: A Guide for First-Time U.S. Importers & Consignees
Who needs this form, how to file it, and what happens if your registration lapses. Read More
CBP Form 5106: A Guide for First-Time U.S. Importers & Consignees
CPB Form 5106
A Customs and Border Patrol (CPB) form 5106 is used to create or update a unique number for any importer bringing products with a value over $2,500 into the United States. Any goods arriving in the US are considered an import and, therefore, must be approved by CBP. In order to be processed for approval, all imports must have documentation containing information regarding the contents of the shipment and must include the identification of the receiver/importer, known as the consignee.
A consignee is a person or entity in the US that will receive the shipment and is identifiable to CBP by either an Employer (or tax) ID Number (EIN) or a Social Security Number (SSN). The consignee’s ID number must be on file with the CBP in order for the CBP to review and approve the import.
This is done by filling out and submitting CBP Form 5106. This form is filed prior to the first time a person or entity imports goods into the US but will expire after one year if no subsequent imports are made. As long as the consignee continues to receive goods on a regular basis, this form will only have to be completed once. If their 5106 importer record is not used for over a year, then they will have to reactivate their number.
Many importers use the services of a freight forwarder or customs broker. The forwarder or broker will usually gather the information from the consignee and fill out and submit the forms as part of their service. Those not employing a forwarder or broker can download CBP Form 5106 directly from the CBP website.
CBP is tasked with ensuring that the US government collects all the required duties pertaining to all imports. But it also has some other important enforcement functions that ensure the safety of the homeland and compliance with all laws and regulations pertaining to importing goods into the US.
Agriculture and Quotas – Import quotas are used to control the volume of various commodities that can be imported into the United States during a specified period of time. Quotas are established by legislation or Executive Orders and are put in place as protections for specific parties.
● Fair Trade – The Department of Commerce prevents imported merchandise from being sold in the U.S. at unfairly low or subsidized prices. To level the playing field for U.S. companies injured by these unfair trade practices, CBP is responsible for collecting what is called the Antidumping and Countervailing Duties (AD/CVD). The goal is to detect and deter circumvention of the AD/CVD law, and to collect final duties timely and accurately, while at the same time facilitating legitimate trade.
● Safety – CBP seeks to ensure that unsafe products do not enter the U.S. by working collaboratively and collectively with partner government agencies and foreign governments by the sharing of information to encourage greater use of partnership and best practices to protect the U.S. consumer.
● Intellectual Property – CBP ensures the protection of intellectual property rights by preventing the trade in counterfeit and pirated goods, which threatens America’s economy, innovation, the competitiveness of our businesses, the livelihoods of U.S. workers, national security, and the health and safety of consumers.
● Trade Agreements – The United States negotiates and signs free trade agreements (FTAs) and preferential trade legislations (PTLs), also known as preference programs, to promote prosperity for the U.S. economy. FTAs and PTLs open up new markets for U.S. exports, protect American producers and workers, and encourage free and equitable trade among our trading partners. CBP’s Office of Trade oversees the implementation of these international instruments.
● Textiles/Apparel – Textiles and Apparel are their own unique category, as there are very specific regulations regarding imports of those products. CBP is responsible for ensuring that the trade community complies with all statutory, regulatory, policy, and procedural requirements that pertain to textile/apparel imports under free trade agreements and other trade preference programs.
A Customs and Border Patrol (CPB) form 5106 is used to create or update a unique number for any importer bringing products with a value over $2,500 into the United States. Any goods arriving in the US are considered an import and, therefore, must be approved by CBP. In order to be processed for approval, all imports must have documentation containing information regarding the contents of the shipment and must include the identification of the receiver/importer, known as the consignee.
A consignee is a person or entity in the US that will receive the shipment and is identifiable to CBP by either an Employer (or tax) ID Number (EIN) or a Social Security Number (SSN). The consignee’s ID number must be on file with the CBP in order for the CBP to review and approve the import.
This is done by filling out and submitting CBP Form 5106. This form is filed prior to the first time a person or entity imports goods into the US but will expire after one year if no subsequent imports are made. As long as the consignee continues to receive goods on a regular basis, this form will only have to be completed once. If their 5106 importer record is not used for over a year, then they will have to reactivate their number.
Many importers use the services of a freight forwarder or customs broker. The forwarder or broker will usually gather the information from the consignee and fill out and submit the forms as part of their service. Those not employing a forwarder or broker can download CBP Form 5106 directly from the CBP website.
CBP is tasked with ensuring that the US government collects all the required duties pertaining to all imports. But it also has some other important enforcement functions that ensure the safety of the homeland and compliance with all laws and regulations pertaining to importing goods into the US.
Agriculture and Quotas – Import quotas are used to control the volume of various commodities that can be imported into the United States during a specified period of time. Quotas are established by legislation or Executive Orders and are put in place as protections for specific parties.
● Fair Trade – The Department of Commerce prevents imported merchandise from being sold in the U.S. at unfairly low or subsidized prices. To level the playing field for U.S. companies injured by these unfair trade practices, CBP is responsible for collecting what is called the Antidumping and Countervailing Duties (AD/CVD). The goal is to detect and deter circumvention of the AD/CVD law, and to collect final duties timely and accurately, while at the same time facilitating legitimate trade.
● Safety – CBP seeks to ensure that unsafe products do not enter the U.S. by working collaboratively and collectively with partner government agencies and foreign governments by the sharing of information to encourage greater use of partnership and best practices to protect the U.S. consumer.
● Intellectual Property – CBP ensures the protection of intellectual property rights by preventing the trade in counterfeit and pirated goods, which threatens America’s economy, innovation, the competitiveness of our businesses, the livelihoods of U.S. workers, national security, and the health and safety of consumers.
● Trade Agreements – The United States negotiates and signs free trade agreements (FTAs) and preferential trade legislations (PTLs), also known as preference programs, to promote prosperity for the U.S. economy. FTAs and PTLs open up new markets for U.S. exports, protect American producers and workers, and encourage free and equitable trade among our trading partners. CBP’s Office of Trade oversees the implementation of these international instruments.
● Textiles/Apparel – Textiles and Apparel are their own unique category, as there are very specific regulations regarding imports of those products. CBP is responsible for ensuring that the trade community complies with all statutory, regulatory, policy, and procedural requirements that pertain to textile/apparel imports under free trade agreements and other trade preference programs.
U.S. Export License FAQs: Do You Need One and How to Apply
Know when licenses are needed, what EAR/EAR99 means, and how to apply. Read More
U.S. Export License FAQs: Do You Need One and How to Apply
FAQs: U.S. Export License
Export licenses are government-issued documents certifying that items leaving the U.S. have been reviewed and granted permission for export.
Q: Do I Need an Export License? A: About 95% of shipments leaving the U.S. don’t need one since only a small number of exports, such as high-end weapon systems, require this document.
Q: Can I sell my products to anyone I please, so long as they don’t require an export license? A: While the rules about export licenses determine whether you can ship products overseas, just because you don’t need one doesn’t mean you can sell to anyone you’re doing business with. It is ultimately up to the exporter to do due diligence regarding the final sale and decide if they are entitled to ship to certain countries or individual users.
Q: Who decides whether a product can be sold to a foreign entity? A: The Bureau of Industry and Security (BIS) and the U.S. State Department’s Directorate of Defense Trade Controls are responsible for deciding which items require U.S. government approval for export. Different products fall under the jurisdiction of different agencies, and the retailer is responsible for determining which ones should review their goods.
Q: What is EAR, and how is it related to getting an export license? A: Most goods that can be applied for commercial and military use, along with certain items intended for only one, are regulated by the Export Administration Regulations (EAR), which BIS administers. EAR is responsible for ensuring U.S.-developed weapons don’t fall into enemy hands.
You can access the Commerce Control List of the U.S. Department of Commerce to help determine if your item must be approved by EAR before export.
❖ If your product is subject to EAR but not listed on the CCL, it is designated as EAR99. Most EAR99 items don’t require a special license before export. EAR99 items may still require a BIS export license depending on their destination, end user, and intended use.
Q: How do you determine the right ECCN? A: You can either:
❖ Refer to the Bureau of Industry and Security (BIS) to access the Classification Information Table from its website. You will see a listing of companies that have voluntarily provided information for ECCN classifications.
❖ Ask the manufacturer or supplier to provide it.
❖ Look it up yourself. (Having information regarding your item’s technical makeup will help with the process).
Q: What concrete steps can I take to ensure EAR is submitted? A: It is extremely important (and costly if omitted) to abide by EAR guidelines. Establishing a regulated process for recognizing products subject to EAR and adapting company software to flag potential issues are recommended steps for ensuring compliance. It’s also important to keep a record of individuals and entities on the U.S. embargo list. You can access the government’s Consolidated Screening List (CSL) for a full listing of these. This list is also helpful for awareness of license requirements outside of EAR.
❖ It is recommended to create an organized compliance plan of action to ensure the process is managed automatically to avoid the risk of omitting key steps.
Q: What information should be included in the EAR form? A: The EAR must include: Export classification and all of your product’s license numbers such as the Commercial Invoice and the Automated Commercial Environment (ACE) AESDirect.
Export licenses are government-issued documents certifying that items leaving the U.S. have been reviewed and granted permission for export.
Q: Do I Need an Export License? A: About 95% of shipments leaving the U.S. don’t need one since only a small number of exports, such as high-end weapon systems, require this document.
Q: Can I sell my products to anyone I please, so long as they don’t require an export license? A: While the rules about export licenses determine whether you can ship products overseas, just because you don’t need one doesn’t mean you can sell to anyone you’re doing business with. It is ultimately up to the exporter to do due diligence regarding the final sale and decide if they are entitled to ship to certain countries or individual users.
Q: Who decides whether a product can be sold to a foreign entity? A: The Bureau of Industry and Security (BIS) and the U.S. State Department’s Directorate of Defense Trade Controls are responsible for deciding which items require U.S. government approval for export. Different products fall under the jurisdiction of different agencies, and the retailer is responsible for determining which ones should review their goods.
Q: What is EAR, and how is it related to getting an export license? A: Most goods that can be applied for commercial and military use, along with certain items intended for only one, are regulated by the Export Administration Regulations (EAR), which BIS administers. EAR is responsible for ensuring U.S.-developed weapons don’t fall into enemy hands.
You can access the Commerce Control List of the U.S. Department of Commerce to help determine if your item must be approved by EAR before export.
❖ If your product is subject to EAR but not listed on the CCL, it is designated as EAR99. Most EAR99 items don’t require a special license before export. EAR99 items may still require a BIS export license depending on their destination, end user, and intended use.
Q: How do you determine the right ECCN? A: You can either:
❖ Refer to the Bureau of Industry and Security (BIS) to access the Classification Information Table from its website. You will see a listing of companies that have voluntarily provided information for ECCN classifications.
❖ Ask the manufacturer or supplier to provide it.
❖ Look it up yourself. (Having information regarding your item’s technical makeup will help with the process).
Q: What concrete steps can I take to ensure EAR is submitted? A: It is extremely important (and costly if omitted) to abide by EAR guidelines. Establishing a regulated process for recognizing products subject to EAR and adapting company software to flag potential issues are recommended steps for ensuring compliance. It’s also important to keep a record of individuals and entities on the U.S. embargo list. You can access the government’s Consolidated Screening List (CSL) for a full listing of these. This list is also helpful for awareness of license requirements outside of EAR.
❖ It is recommended to create an organized compliance plan of action to ensure the process is managed automatically to avoid the risk of omitting key steps.
Q: What information should be included in the EAR form? A: The EAR must include: Export classification and all of your product’s license numbers such as the Commercial Invoice and the Automated Commercial Environment (ACE) AESDirect.
The Complete Export Shipping Documentation Process
End-to-end walkthrough of preparing documents, from inquiry to shipping. Read More
The Complete Export Shipping Documentation Process
The Export Shipping Documentation Process
How to create your own shipping documentation
Face it: As an e-commerce company shipping out to customers worldwide, you’ve faced more than your fair share of painstaking work coming up with piles of documentation for export shipments. It’s not like these will either drive your company’s earnings or guarantee customer loyalty. None of these tasks are helping your bottom line. What they are doing is wasting precious time. To take some of the weight off your shoulders and allow you to focus on the things that will enable your company to thrive, we will:
● Explain what export shipping documentation entails
● Help you alleviate the process of creating documentation for export shipping.
Step 1: Receive an Inquiry The first step in the shipping documentation process is when someone inquires about buying your products. When a potential buyer expresses interest, they will often send a letter of inquiry outlining the terms of their interest along with a request for an informal or formal quote.
Step 2: Screen the Potential Buyer and Country After you receive an inquiry from a buyer, you first need to make sure you can do business with them. That means screening them against the various denied and restricted party lists. You can manually screen their name, their company name, and their address by checking each of the scores of lists published by the U.S. government, or you can automate that process by using software like Shipping Solutions, which automatically checks against the latest version of all the lists.
If your buyer shows up on any of the lists, you cannot do business with them. If they do not show up, proceed with caution. The screening step also includes making sure you can ship your goods to the buyer’s country. In some cases, you can ship only if you apply for an export license. It’s best to complete the licensing process as early as you can to avoid causing delays.
Step 3: Provide a Proforma Invoice
After screening your buyer and their country, you may need to provide the buyer with a proforma invoice for the transaction. The proforma invoice is the first impression you will make on your buyers, so make sure you do it right. It acts like a quote and looks like a commercial invoice, and it can be used to arrange to finance the purchase.
If the proforma invoice results in an order, the final commercial invoice will closely resemble the proforma invoice. That means all of the costs included in the quotation are firm and may not vary beyond the terms outlined in the letter of credit. Certain countries require a proforma invoice if they tightly control their currency, require an import permit, or protect local industry by placing import quotas on certain types of goods. For a deep dive into the benefits and features of a proforma, check out How Does the Proforma Invoice Fit in the Export Process?
Step 4: Finalize the Sale After you send the proforma, the buyer will either reject or accept your proposal. As part of the acceptance process, they will most likely want to negotiate the terms of the sale. This will result in a verbal or written contract. Not only should these negotiations include a discussion of the price to be paid, but they should also include a discussion of:
The payment terms you’ll be using, whether it’s cash in advance, open account or something in between.
● The term of sale you’ll be using, which is typically one of the 11 Incoterms 2020 rules.
● How your goods will be shipped.
● Who’s responsible for shipping the goods.
● Who’s responsible for hiring the freight forwarder or carrier.
● Who’s responsible for filing the electronic export information through AES.
● How the transaction will be paid. If you’re using a letter of credit, you must ensure you have the necessary documents to satisfy its requirements.
● What documents need to be provided by which party. As the exporter, you’ll need to meet whatever regulations your buyer may have in their own country as well as the documentation and regulation requirements of the U.S.
By taking care of all these important details before you ship any goods, you’ll save a lot of time and avoid potential headaches—especially if you have specific deadlines to meet.
Once you’ve reached an agreement on these points and any others you or your buyer wants to discuss, you’ll receive the order, which may appear in the form of a purchase order.
Step 5: Prepare the Goods and the Shipping Documents Once you have finalized your sale and prepared your goods for export, you need to prepare the proper shipping documents. Your export shipment may require you include these five export forms:
Commercial Invoice The first form you almost always need to include is the commercial invoice, and it is used by several parties throughout the shipment. U.S. Customs and Border Protection may review it for export control purposes. The customs authority in the destination country requires the invoice to clear the goods for import. The buyer may use the invoice to release funds through its bank to the seller. And the exporter may need it to make an insurance claim if any damage occurs during the shipment. The commercial invoice includes these important data elements. An exporter typically includes three copies of the invoice with the original signed in blue ink.
Packing List In addition, you would typically include a packing list, which provides the freight forwarder, carrier and ultimate consignee with information about your shipment, the packing details and the marks and numbers noted on the outside of the boxes. A packing list is also used by customs authorities in the importing country to assess security and compliance. And it is a required document to file a claim with the carrier or insurance company in the event of cargo damage or loss.
Certificate of Origin While some countries will accept a statement of origin on the commercial invoice, the customs authorities of other countries may require a separate document titled a certificate of origin. The certificate of origin is documentary evidence that the goods originated in the country stated on the certificate, commercial invoice or packing list.
If the United States has negotiated a free trade trade agreement (FTA) with the country to which you are exporting—and if your goods qualify for reduced tariffs under the terms of the agreement—you may want to provide the specific form for that trade agreement. You’ll find free PDF samples of many of these FTA certificates of origin on the Shipping Solutions website.
Shipper’s Letter of Instruction
Based on the discussions you had with your buyer in step four about the type of export and who is filing through AES, you may need to prepare a Shipper’s
Letter of Instruction (SLI). An SLI provides your company with a written record of who received the shipping documents, who to contact for questions, who to contact for proof of export and who issued the export control information that was used to support the decision to export the goods.
Unless you specifically negotiate for filing, the forwarder/buyer will most likely file through AES in a routed export transaction. Otherwise, you can file through AES yourself or your agent will file through AES for you. If your agent files, you must provide an SLI and power of attorney to file on your behalf.
Bills of Lading You will need at least one—but you may need several—bills of lading to accompany your export. For example, you may need an inland bill of lading to move your goods to a port or airport. For moving goods out of the United States you will need a separate bill of lading, usually filled out by your freight forwarder. If necessary, you will also need to complete a dangerous goods form at this point.
> Download the Bill of Lading Template
Step 6: Run a Restricted Party Screening (Again) Right before the goods ship for export, run one last restricted party screening to ensure nothing has changed on any denied or restricted party list. If you use Shipping Solutions Restricted Party Screening Wizard to do this, your screenings will automatically be documented in the software, providing a paper trail of your due diligence in the event of an audit.
Step 7: Miscellaneous Forms and Ship Your Goods There may be other specific documents to prepare before exporting your goods. These may be identified in the sales contract you negotiated with your buyer, documents required under the terms of a letter of credit or other payment options, or forms requested by the freight forwarder. These additional documents may include a bank draft or, for temporary export, an ATA carnet.
Once all your documents are accurately completed, and you fulfilled the other steps of this export process, go ahead and ship your goods!
One Last Tip: Record-Keeping Don’t forget that you must not only prepare various documents for your export shipment, but it is also your responsibility to keep copies of all of your documents, as well as all other correspondence throughout the sale, including phone calls, emails, etc. After all, it is your job—not your buyer’s, forwarder’s, or anyone else’s— to document the whole process.
How to create your own shipping documentation
Face it: As an e-commerce company shipping out to customers worldwide, you’ve faced more than your fair share of painstaking work coming up with piles of documentation for export shipments. It’s not like these will either drive your company’s earnings or guarantee customer loyalty. None of these tasks are helping your bottom line. What they are doing is wasting precious time. To take some of the weight off your shoulders and allow you to focus on the things that will enable your company to thrive, we will:
● Explain what export shipping documentation entails
● Help you alleviate the process of creating documentation for export shipping.
Step 1: Receive an Inquiry The first step in the shipping documentation process is when someone inquires about buying your products. When a potential buyer expresses interest, they will often send a letter of inquiry outlining the terms of their interest along with a request for an informal or formal quote.
Step 2: Screen the Potential Buyer and Country After you receive an inquiry from a buyer, you first need to make sure you can do business with them. That means screening them against the various denied and restricted party lists. You can manually screen their name, their company name, and their address by checking each of the scores of lists published by the U.S. government, or you can automate that process by using software like Shipping Solutions, which automatically checks against the latest version of all the lists.
If your buyer shows up on any of the lists, you cannot do business with them. If they do not show up, proceed with caution. The screening step also includes making sure you can ship your goods to the buyer’s country. In some cases, you can ship only if you apply for an export license. It’s best to complete the licensing process as early as you can to avoid causing delays.
Step 3: Provide a Proforma Invoice
After screening your buyer and their country, you may need to provide the buyer with a proforma invoice for the transaction. The proforma invoice is the first impression you will make on your buyers, so make sure you do it right. It acts like a quote and looks like a commercial invoice, and it can be used to arrange to finance the purchase.
If the proforma invoice results in an order, the final commercial invoice will closely resemble the proforma invoice. That means all of the costs included in the quotation are firm and may not vary beyond the terms outlined in the letter of credit. Certain countries require a proforma invoice if they tightly control their currency, require an import permit, or protect local industry by placing import quotas on certain types of goods. For a deep dive into the benefits and features of a proforma, check out How Does the Proforma Invoice Fit in the Export Process?
Step 4: Finalize the Sale After you send the proforma, the buyer will either reject or accept your proposal. As part of the acceptance process, they will most likely want to negotiate the terms of the sale. This will result in a verbal or written contract. Not only should these negotiations include a discussion of the price to be paid, but they should also include a discussion of:
The payment terms you’ll be using, whether it’s cash in advance, open account or something in between.
● The term of sale you’ll be using, which is typically one of the 11 Incoterms 2020 rules.
● How your goods will be shipped.
● Who’s responsible for shipping the goods.
● Who’s responsible for hiring the freight forwarder or carrier.
● Who’s responsible for filing the electronic export information through AES.
● How the transaction will be paid. If you’re using a letter of credit, you must ensure you have the necessary documents to satisfy its requirements.
● What documents need to be provided by which party. As the exporter, you’ll need to meet whatever regulations your buyer may have in their own country as well as the documentation and regulation requirements of the U.S.
By taking care of all these important details before you ship any goods, you’ll save a lot of time and avoid potential headaches—especially if you have specific deadlines to meet.
Once you’ve reached an agreement on these points and any others you or your buyer wants to discuss, you’ll receive the order, which may appear in the form of a purchase order.
Step 5: Prepare the Goods and the Shipping Documents Once you have finalized your sale and prepared your goods for export, you need to prepare the proper shipping documents. Your export shipment may require you include these five export forms:
Commercial Invoice The first form you almost always need to include is the commercial invoice, and it is used by several parties throughout the shipment. U.S. Customs and Border Protection may review it for export control purposes. The customs authority in the destination country requires the invoice to clear the goods for import. The buyer may use the invoice to release funds through its bank to the seller. And the exporter may need it to make an insurance claim if any damage occurs during the shipment. The commercial invoice includes these important data elements. An exporter typically includes three copies of the invoice with the original signed in blue ink.
Packing List In addition, you would typically include a packing list, which provides the freight forwarder, carrier and ultimate consignee with information about your shipment, the packing details and the marks and numbers noted on the outside of the boxes. A packing list is also used by customs authorities in the importing country to assess security and compliance. And it is a required document to file a claim with the carrier or insurance company in the event of cargo damage or loss.
Certificate of Origin While some countries will accept a statement of origin on the commercial invoice, the customs authorities of other countries may require a separate document titled a certificate of origin. The certificate of origin is documentary evidence that the goods originated in the country stated on the certificate, commercial invoice or packing list.
If the United States has negotiated a free trade trade agreement (FTA) with the country to which you are exporting—and if your goods qualify for reduced tariffs under the terms of the agreement—you may want to provide the specific form for that trade agreement. You’ll find free PDF samples of many of these FTA certificates of origin on the Shipping Solutions website.
Shipper’s Letter of Instruction
Based on the discussions you had with your buyer in step four about the type of export and who is filing through AES, you may need to prepare a Shipper’s
Letter of Instruction (SLI). An SLI provides your company with a written record of who received the shipping documents, who to contact for questions, who to contact for proof of export and who issued the export control information that was used to support the decision to export the goods.
Unless you specifically negotiate for filing, the forwarder/buyer will most likely file through AES in a routed export transaction. Otherwise, you can file through AES yourself or your agent will file through AES for you. If your agent files, you must provide an SLI and power of attorney to file on your behalf.
Bills of Lading You will need at least one—but you may need several—bills of lading to accompany your export. For example, you may need an inland bill of lading to move your goods to a port or airport. For moving goods out of the United States you will need a separate bill of lading, usually filled out by your freight forwarder. If necessary, you will also need to complete a dangerous goods form at this point.
> Download the Bill of Lading Template
Step 6: Run a Restricted Party Screening (Again) Right before the goods ship for export, run one last restricted party screening to ensure nothing has changed on any denied or restricted party list. If you use Shipping Solutions Restricted Party Screening Wizard to do this, your screenings will automatically be documented in the software, providing a paper trail of your due diligence in the event of an audit.
Step 7: Miscellaneous Forms and Ship Your Goods There may be other specific documents to prepare before exporting your goods. These may be identified in the sales contract you negotiated with your buyer, documents required under the terms of a letter of credit or other payment options, or forms requested by the freight forwarder. These additional documents may include a bank draft or, for temporary export, an ATA carnet.
Once all your documents are accurately completed, and you fulfilled the other steps of this export process, go ahead and ship your goods!
One Last Tip: Record-Keeping Don’t forget that you must not only prepare various documents for your export shipment, but it is also your responsibility to keep copies of all of your documents, as well as all other correspondence throughout the sale, including phone calls, emails, etc. After all, it is your job—not your buyer’s, forwarder’s, or anyone else’s— to document the whole process.
- Reduce shipping costs and streamline fulfillment.
Shipping Strategy and Cost Optimization
Cost-saving strategies for parcel shipping, 3PL, and freight planning. Learn how carriers price your shipments and how to optimize your logistics.
5 Tips to Stay on Top of Shipping Costs
Real-world methods to reduce costs based on weight, zones, taxes, and fulfillment. Read More
5 Tips to Stay on Top of Shipping Costs
5 Tips to Stay on Top of Shipping Costs
It’s no secret that consumers are turning to eCommerce in record numbers. In turn, sellers have had to reconfigure their sales models, focus more attention and resources on logistics. Large companies like Amazon and big box retailers like WalMart are best situated to reduce shipping costs by owning their own fleets of trucks, planes and warehouses. Everybody else is left scrambling to figure out how to compete and stay competitive without reducing profits. Below are 5 tips to help you stay on top of your shipping costs.
1 – Does a Parcel’s Weight and Dimensions Affect Cost?
The answer to that is obvious, of course it does. The heavier the package the higher the delivery cost. There is little that can be done to reduce the weight of a package; 2 lbs of coffee is still 2 lbs of coffee. But carriers also price shipping costs based on the dimensions of the parcel. We’ve all gotten those deliveries from an online store of 2 tubes of toothpaste packed in a case the size of a shoebox stuffed mostly with bubble wrap. That too large a box for that delivery just took away a few inches of space on a truck or plane that the carrier could use for more packages. Multiply that inefficiency by a whole truckload and we’re talking about a lot of money.
In an effort to be more efficient and reduce costs, carriers came up with something called Dimensional Weight or Dim Weight. Basically, Dim Weight is the actual amount of space a package occupies in relation to its weight. The smaller you make the package the lower the cost.
2 – How Does the Distance a Parcel Travels Affect Price?
Again, the answer is obvious, the farther a package has to travel the more it costs to ship it. Carriers set prices according to zones. Zones are not always just geographical areas like it sounds; zones are often set up as units of miles. So if a carrier has 8 zones and your parcel needs to travel 5 zones to be delivered, it is costlier than if it had to travel 3 zones. The concept of zones and how they are set up are different for each carrier and a bit more nuanced but our conclusion for how to best save money on shipping based on distance still applies.
Let’s say you had to ship a package from Baltimore to San Francisco. The package has to travel 8 zones to reach its destination. What if the same package is shipped from Minneapolis? It now only has to travel 2 zones. The package leaving from Minneapolis costs considerably less than the package from Baltimore.
The easiest way to reduce the cost of shipping based on distance is to shorten the distance you ship from 1 zone to another. For the big players that’s easy; they set up warehouses all over the world and get the product from point A to point B with the shortest possible distance.
Companies that don’t have the wherewithal to set up multiple warehouses are now using a service called 3PL or Third Party Logistics. 3PL is a service that warehouses your inventory closer to where you need to ship to and fulfills your orders on your behalf. The cost of having 3PL is less than setting up your own warehouse or shipping all those packages from farther away.
3 – How Do I Save on Taxes and Custom Duties?
Delivery taxes and customs duties apply in every point around the world, so being aware of local rates will prepare you for extra fees prior to shipment. You cannot get a price break on taxes or customs fees but you can be meticulous in your preparation. So for example, let’s say you are shipping wigs. Wigs made from human hair are priced higher than wigs made from synthetic materials. If you fill out your international shipping invoice and don’t specify what type of wig you are shipping you can be overcharged. If you fail to plan, you plan to fail.
The simplest way to keep costs down on international shipping is to fill out the commercial invoice correctly. Read our instructions on filling out a commercial invoice also known as an airway bill.
4 – How Does Insurance Affect the Cost of Shipping?
You are responsible for providing your carrier a declared value for your shipment. This needs to be as accurate as possible. On the one hand, you want to be compensated in full if the package is lost or damaged. On the other hand you want to be sure you are not overcharged on any customs or duties which are based on the declared value of the shipment.
It’s also important to keep in mind that customs officials are informed and savvy. They have a very accurate idea of what things cost. Another thing to keep in mind, things sometimes go wrong, shipments are lost or get damaged. If you undervalue your product on your shipping invoice, the insurance company will only compensate you on the declared amount. To avoid costly delays or compensation disparity see #3.
5 – What’s With All of Those Surcharges?
Carriers incur additional costs that they pass on to their customers. Some of these costs are predictable and some are based on changing factors. For example, shipping’s busiest season is between Thanksgiving and Christmas, so the Peak Season Surcharge is predictable. However, a redelivery surcharge is not. A Redelivery Surcharge might be incurred when the delivery is rejected by the receiver, no one being present to accept the delivery, wrong address, or the lack of necessary equipment to handle the package.
Surcharges also known as accessorials are the single biggest factor in shipping costs going up or being unpredictable. There are multiple variables that go into accessorials and sellers cannot possibly be expected to know all of them. The SPL Group has a team of experts whose only job is to be on top of accessorials and surcharges. Contact us for a free analysis of your shipping costs and start saving TODAY!
It’s no secret that consumers are turning to eCommerce in record numbers. In turn, sellers have had to reconfigure their sales models, focus more attention and resources on logistics. Large companies like Amazon and big box retailers like WalMart are best situated to reduce shipping costs by owning their own fleets of trucks, planes and warehouses. Everybody else is left scrambling to figure out how to compete and stay competitive without reducing profits. Below are 5 tips to help you stay on top of your shipping costs.
1 – Does a Parcel’s Weight and Dimensions Affect Cost?
The answer to that is obvious, of course it does. The heavier the package the higher the delivery cost. There is little that can be done to reduce the weight of a package; 2 lbs of coffee is still 2 lbs of coffee. But carriers also price shipping costs based on the dimensions of the parcel. We’ve all gotten those deliveries from an online store of 2 tubes of toothpaste packed in a case the size of a shoebox stuffed mostly with bubble wrap. That too large a box for that delivery just took away a few inches of space on a truck or plane that the carrier could use for more packages. Multiply that inefficiency by a whole truckload and we’re talking about a lot of money.
In an effort to be more efficient and reduce costs, carriers came up with something called Dimensional Weight or Dim Weight. Basically, Dim Weight is the actual amount of space a package occupies in relation to its weight. The smaller you make the package the lower the cost.
2 – How Does the Distance a Parcel Travels Affect Price?
Again, the answer is obvious, the farther a package has to travel the more it costs to ship it. Carriers set prices according to zones. Zones are not always just geographical areas like it sounds; zones are often set up as units of miles. So if a carrier has 8 zones and your parcel needs to travel 5 zones to be delivered, it is costlier than if it had to travel 3 zones. The concept of zones and how they are set up are different for each carrier and a bit more nuanced but our conclusion for how to best save money on shipping based on distance still applies.
Let’s say you had to ship a package from Baltimore to San Francisco. The package has to travel 8 zones to reach its destination. What if the same package is shipped from Minneapolis? It now only has to travel 2 zones. The package leaving from Minneapolis costs considerably less than the package from Baltimore.
The easiest way to reduce the cost of shipping based on distance is to shorten the distance you ship from 1 zone to another. For the big players that’s easy; they set up warehouses all over the world and get the product from point A to point B with the shortest possible distance.
Companies that don’t have the wherewithal to set up multiple warehouses are now using a service called 3PL or Third Party Logistics. 3PL is a service that warehouses your inventory closer to where you need to ship to and fulfills your orders on your behalf. The cost of having 3PL is less than setting up your own warehouse or shipping all those packages from farther away.
3 – How Do I Save on Taxes and Custom Duties?
Delivery taxes and customs duties apply in every point around the world, so being aware of local rates will prepare you for extra fees prior to shipment. You cannot get a price break on taxes or customs fees but you can be meticulous in your preparation. So for example, let’s say you are shipping wigs. Wigs made from human hair are priced higher than wigs made from synthetic materials. If you fill out your international shipping invoice and don’t specify what type of wig you are shipping you can be overcharged. If you fail to plan, you plan to fail.
The simplest way to keep costs down on international shipping is to fill out the commercial invoice correctly. Read our instructions on filling out a commercial invoice also known as an airway bill.
4 – How Does Insurance Affect the Cost of Shipping?
You are responsible for providing your carrier a declared value for your shipment. This needs to be as accurate as possible. On the one hand, you want to be compensated in full if the package is lost or damaged. On the other hand you want to be sure you are not overcharged on any customs or duties which are based on the declared value of the shipment.
It’s also important to keep in mind that customs officials are informed and savvy. They have a very accurate idea of what things cost. Another thing to keep in mind, things sometimes go wrong, shipments are lost or get damaged. If you undervalue your product on your shipping invoice, the insurance company will only compensate you on the declared amount. To avoid costly delays or compensation disparity see #3.
5 – What’s With All of Those Surcharges?
Carriers incur additional costs that they pass on to their customers. Some of these costs are predictable and some are based on changing factors. For example, shipping’s busiest season is between Thanksgiving and Christmas, so the Peak Season Surcharge is predictable. However, a redelivery surcharge is not. A Redelivery Surcharge might be incurred when the delivery is rejected by the receiver, no one being present to accept the delivery, wrong address, or the lack of necessary equipment to handle the package.
Surcharges also known as accessorials are the single biggest factor in shipping costs going up or being unpredictable. There are multiple variables that go into accessorials and sellers cannot possibly be expected to know all of them. The SPL Group has a team of experts whose only job is to be on top of accessorials and surcharges. Contact us for a free analysis of your shipping costs and start saving TODAY!
Dimensional Weight Explained: How Box Size Impacts Your Costs
Why shipping a half-empty box costs more than you think. DIM weight calculations demystified. Read More
Dimensional Weight Explained: How Box Size Impacts Your Costs
Dimensional Weight (Dim Weight) Explained
We’ve all gotten those packages from Amazon with a couple of tubes of toothpaste packed into a 2 foot box stuffed with bubble wrap or those styrofoam popcorns. Those packages take up space the carrier could use to ship more packages if only they were packed more efficiently. It also costs the shipper more than they need to spend. In essence they are paying to ship air in addition to goods in a highly inefficient and unnecessary way.
image source: UPS Daily Rate PDF
In order to create more space for shipping, carriers calculate the dimensional weight, which is the actual amount of space a package occupies in relation to its weight. So, if the toothpaste delivery came in a smaller box with less filler, the carrier has more space for other packages and the deliverer saves money on shipping. Carriers will charge you either the dimensional weight or the actual weight – whichever is higher.
The calculation for dimensional weight is length x weight x height divided by the dimensional divisor (DIM Divisor). The DIM divisor was once as high as 166 but today is 139. The higher the DIM divisor the lower the shipping cost. This is because when you multiply the dimensions and divide the total, if the number you divide by is higher, the total will be lower. As you can see, this indicates that shipping has gotten costlier over the years as the carriers lowered the DIM Divisor, thus raising rates.
Let’s see how DIM weight is determined using a DIM Divisor of 139 (standard today)
Example 1:
Length 10 inches x Width 8 inches x Height 6 inches = 480. We then divide the total 480 by the DIM Divisor 139 to get our DIM Weight. 480/139 = 3.45 lbs. Carriers always round up the weight. So if the DIM Weight is over 3 lbs as it is in this example, the final DIM weight is 4 lbs and therefore the cost of shipping this package is based on a weight of 4 lbs.
What happens if the same exact item that is being shipped in Example 1 is packed in a box larger than dimensions we used? Let’s look at the example below. Same item, larger box.
Example 2:
Length 12 inches x Width 10 inches x Height 8 inches = 960. We then divide the total 960 by the DIM Divisor 139 to get our DIM Weight. 960/139 = 6.9 lbs. We round up as we did in Example 1 and get a DIM Weight of 7 lbs and therefore the cost of shipping this package is based on a weight of 7 lbs.
It is cheaper to ship a 4 lb package than a 7 lb package.
Let’s explore one last example. Let’s say that you are a customer of the SPL Group and SPL negotiates a discount on your shipping costs with a major carrier. Finally, let’s use the dimensions in Example 1.
Example 3: Discounted DIM Divisor
Length 10 inches x Width 8 inches x Height 6 inches = 480. We then divide the total 480 by the discounted DIM Divisor of let’s say 165 to get our DIM Weight. 480/165 = 2.9 lbs. Here we see how a higher DIM Divisor results in lower DIM Weight and creates the discounted price. We round up as we did in Example 1 and get a DIM Weight of 3 lbs and therefore the cost of shipping this package is based on a weight of 3 lbs.
It is cheaper to ship a 3 lb package than a 4 lb package.
Contact the SPL Group to see how to cut your shipping costs, from the actual transport charges to surcharges and accessorials.
We’ve all gotten those packages from Amazon with a couple of tubes of toothpaste packed into a 2 foot box stuffed with bubble wrap or those styrofoam popcorns. Those packages take up space the carrier could use to ship more packages if only they were packed more efficiently. It also costs the shipper more than they need to spend. In essence they are paying to ship air in addition to goods in a highly inefficient and unnecessary way.
image source: UPS Daily Rate PDF
In order to create more space for shipping, carriers calculate the dimensional weight, which is the actual amount of space a package occupies in relation to its weight. So, if the toothpaste delivery came in a smaller box with less filler, the carrier has more space for other packages and the deliverer saves money on shipping. Carriers will charge you either the dimensional weight or the actual weight – whichever is higher.
The calculation for dimensional weight is length x weight x height divided by the dimensional divisor (DIM Divisor). The DIM divisor was once as high as 166 but today is 139. The higher the DIM divisor the lower the shipping cost. This is because when you multiply the dimensions and divide the total, if the number you divide by is higher, the total will be lower. As you can see, this indicates that shipping has gotten costlier over the years as the carriers lowered the DIM Divisor, thus raising rates.
Let’s see how DIM weight is determined using a DIM Divisor of 139 (standard today)
Example 1:
Length 10 inches x Width 8 inches x Height 6 inches = 480. We then divide the total 480 by the DIM Divisor 139 to get our DIM Weight. 480/139 = 3.45 lbs. Carriers always round up the weight. So if the DIM Weight is over 3 lbs as it is in this example, the final DIM weight is 4 lbs and therefore the cost of shipping this package is based on a weight of 4 lbs.
What happens if the same exact item that is being shipped in Example 1 is packed in a box larger than dimensions we used? Let’s look at the example below. Same item, larger box.
Example 2:
Length 12 inches x Width 10 inches x Height 8 inches = 960. We then divide the total 960 by the DIM Divisor 139 to get our DIM Weight. 960/139 = 6.9 lbs. We round up as we did in Example 1 and get a DIM Weight of 7 lbs and therefore the cost of shipping this package is based on a weight of 7 lbs.
It is cheaper to ship a 4 lb package than a 7 lb package.
Let’s explore one last example. Let’s say that you are a customer of the SPL Group and SPL negotiates a discount on your shipping costs with a major carrier. Finally, let’s use the dimensions in Example 1.
Example 3: Discounted DIM Divisor
Length 10 inches x Width 8 inches x Height 6 inches = 480. We then divide the total 480 by the discounted DIM Divisor of let’s say 165 to get our DIM Weight. 480/165 = 2.9 lbs. Here we see how a higher DIM Divisor results in lower DIM Weight and creates the discounted price. We round up as we did in Example 1 and get a DIM Weight of 3 lbs and therefore the cost of shipping this package is based on a weight of 3 lbs.
It is cheaper to ship a 3 lb package than a 4 lb package.
Contact the SPL Group to see how to cut your shipping costs, from the actual transport charges to surcharges and accessorials.
What’s the Difference Between 3PL and Freight Forwarding?
Understand which model fits your business — and how both services affect fulfillment speed, cost, and complexity. Read More
What’s the Difference Between 3PL and Freight Forwarding?
What’s the Difference Between 3PL and Freight Forwarding?
Your customers have come to expect that items they purchased will be delivered to their homes or businesses without so much as giving it a second thought. However, that expectancy is enabled by a complex shipping and logistics system that, for the originator, can be a painstaking affair with many unexpected obstacles along the way.
Your customers give little thought to items being damaged in transit, delays due to weather conditions, supply chain issues or worker shortages. They have come to rely on a seamless logistics ecosystem that gets them a product delivered in a timely manner with the click of a button. They also expect that any issues that arise including returning items is as seamless as getting them. Meeting customer expectations can be a costly and arduous affair that also eats into profits.
Here are two possible solutions that take the heavy lifting off of your shoulders cost-efficiently, freeing you up to do what you do best, selling your goods.
Freight Forwarding Freight forwarding is the service most importers use to arrange freight shipments. Forwarders are licensed experts who understand how the entire shipping process works and act as agents on your behalf to get it done. Like any experts, freight forwarders specialize in different areas so finding the right one is crucial to ensuring your shipment comes through without a glitch.
You can expect the freight forwarder to prepare all the necessary paperwork and arrange payments with tax and customs authorities. They are also the point person with air carriers and trucking companies once the shipment arrives and is unloaded onto the dock. Finally, they are whom you turn to for troubleshooting any issues that may arise in shipping.
It is also important to know what freight forwarders do not do. Once the shipment arrives at its destination (from ship to dock to truck [or plane] to warehouse) the job of the freight forwarder is done. Warehousing and fulfilling orders is left to you or a third party you have retained to manage your warehousing and order fulfillment.
3PL – Third Party Logistics Third Party Logistics providers act on your behalf with receiving and warehousing your product. It takes care of distribution and order fulfillment and manages any returns. Basically the 3PL is the face of your company from that point on.
Think of your 3PL provider as a travel agent who looks after every detail of your travel – or in this case, your shipment. Remember, as we discussed above – customer expectation is for a smooth process from ordering to receiving.
A good 3PL will increase the efficiency of your shipping process, make sure your goods arrive on time, in one piece and make you look good to your customers.
The SPL Group’s 3PL team has over 50 years of combined experience. Contact us to find out how we can help streamline your operation while saving you money and increasing your profits.
Your customers have come to expect that items they purchased will be delivered to their homes or businesses without so much as giving it a second thought. However, that expectancy is enabled by a complex shipping and logistics system that, for the originator, can be a painstaking affair with many unexpected obstacles along the way.
Your customers give little thought to items being damaged in transit, delays due to weather conditions, supply chain issues or worker shortages. They have come to rely on a seamless logistics ecosystem that gets them a product delivered in a timely manner with the click of a button. They also expect that any issues that arise including returning items is as seamless as getting them. Meeting customer expectations can be a costly and arduous affair that also eats into profits.
Here are two possible solutions that take the heavy lifting off of your shoulders cost-efficiently, freeing you up to do what you do best, selling your goods.
Freight Forwarding Freight forwarding is the service most importers use to arrange freight shipments. Forwarders are licensed experts who understand how the entire shipping process works and act as agents on your behalf to get it done. Like any experts, freight forwarders specialize in different areas so finding the right one is crucial to ensuring your shipment comes through without a glitch.
You can expect the freight forwarder to prepare all the necessary paperwork and arrange payments with tax and customs authorities. They are also the point person with air carriers and trucking companies once the shipment arrives and is unloaded onto the dock. Finally, they are whom you turn to for troubleshooting any issues that may arise in shipping.
It is also important to know what freight forwarders do not do. Once the shipment arrives at its destination (from ship to dock to truck [or plane] to warehouse) the job of the freight forwarder is done. Warehousing and fulfilling orders is left to you or a third party you have retained to manage your warehousing and order fulfillment.
3PL – Third Party Logistics Third Party Logistics providers act on your behalf with receiving and warehousing your product. It takes care of distribution and order fulfillment and manages any returns. Basically the 3PL is the face of your company from that point on.
Think of your 3PL provider as a travel agent who looks after every detail of your travel – or in this case, your shipment. Remember, as we discussed above – customer expectation is for a smooth process from ordering to receiving.
A good 3PL will increase the efficiency of your shipping process, make sure your goods arrive on time, in one piece and make you look good to your customers.
The SPL Group’s 3PL team has over 50 years of combined experience. Contact us to find out how we can help streamline your operation while saving you money and increasing your profits.
Carrier Rate Changes
