International shipping can be a serious challenge for small and medium enterprises (SMEs). Unlike their larger competitors, they have a small workforce and limited resources. Few SMEs have an employee who’s dedicated solely to managing cross-border shipping, let alone an entire department for the purpose, but most big corporations do.
One of the biggest headaches around international shipping is clearing customs. Customs regulations tend to be strict and complex, making compliance difficult. Non-compliance results in delays, and often penalties and fines, too. Don’t forget that customs requirements apply both when your goods leave Australia and when they enter the destination country, and often any transit location along the way.
But there’s no reason to allow customs to become a nightmare. The good news is that there are a number of practical actions that SMEs can take to reduce the stress of customs clearance and lower the risks of non-compliance and delays. Here are 7 best practices for SMEs to remove friction from customs clearance and help their shipments to complete their journey successfully.
1. Familiarise yourself with customs requirements
The first step is always to make sure that you know the customs regulations in every country that your goods will pass through. For example, some countries require more extensive reporting for shipments over a certain value. If you know this in advance, you might choose to keep your shipment under the threshold so as to simplify the process.
Some countries have product-specific regulations, such as safety standards, certifications, or import restrictions. Check whether the items you’re shipping fall into the category of restricted products, require specific types of packaging, or need you to complete specific forms and documents.
2. Enlist the right support
SMEs are often at a disadvantage in comparison with large corporations, which have entire departments staffed with shipping experts. To help correct this imbalance, work with professional logistics partners and customs clearance services, who specialise in helping small businesses navigate customs processes.
These partners, including freight forwarders, are always informed about updates to regulations and best practices for each country and are experienced in complying with complex rules and requirements. They also often have connections with customs officials, which enables them to help you clear up misunderstandings and overcome obstacles much more easily than you could on your own. Look for customs clearance service providers who focus on supporting SMEs.
3. Pay careful attention to documentation
Documentation is possibly the most common hazard for SMEs who ship cross-border. It’s all too easy to make a mistake in your paperwork or to overlook a crucial field on a long form. If your paperwork is incomplete or contains errors, there’s a high risk that your shipment will be delayed, at best, or seized for examination. At worst, your goods might be destroyed or sold at auction.
Make sure that you use the right Harmonized System (HS) codes for your goods and that you’ve included a Bill of Lading (BOL), commercial invoices, packing lists, and certificates of origin. You also need to declare the accurate value of your goods.
4. Package your goods appropriately
Packaging is another issue that frequently causes problems for SMEs. Many countries have precise packaging requirements, especially for goods that are considered hazardous or restricted. Customs officials can reject shipments that aren’t labelled clearly and consistently.
Double check your labels before you send any shipment off to be sure that they are correct. You should also ensure that your packaging is strong enough to remain whole and undamaged during the entire shipping process, which effectively protects your goods so that they arrive in perfect condition.
5. Do as much as possible in advance
Many customs processes offer pre-clearance programs, which help expedite approval and shorten the time it takes to clear customs. Consider enrolling in programs like the Customs-Trade Partnership Against Terrorism (C-TPAT) or Authorized Economic Operator (AEO).
With many customs authorities, you can also request advance rulings about tariff classification and goods valuation. This way, you’ll avoid unpleasant surprises during clearance, and you’ll know if there’s anything specific you need to do to ensure your goods clear successfully.
6. Put technology to good use
Today, there are many affordable and easy to use tech platforms and tools that help SMEs to punch above their weight and remove obstacles to clearing customs. For example, electronic documentation like electronic Bills of Lading (eBOL) help ensure that you’ve completed each field correctly, and reduce the risk of losing a vital document.
Small enterprises can also use solutions like customs management software to automate and streamline the documentation and clearance processes. These automatically pull data to populate forms and securely store and share your paperwork. Other tools can generate accurate labels, estimate the best packaging to use, and generate the right insurance plans to cover you in case something goes wrong.
7. Invest in employee training
There’s no substitute for knowledgeable and informed workers. It’s vital to make sure that everyone involved in preparing, packaging, and sending shipments is trained in customs procedures and compliance issues. They need to know about customs requirements in all the relevant countries, to be familiar with the official bodies involved, and to understand the necessary documentation.
Clearing customs doesn’t have to be a headache
Although customs can seem like a big hurdle for small and medium enterprises, it doesn’t have to cause stress and anxiety. By adopting the right protocols, applying the right tools, and working with the right partners, SMEs can cut down on the hassle around customs clearance and reduce friction that can hold up their shipments.