A Guide to the Ocean Import Process – Part 2In our last post, we looked at a typical example of a shipment being imported by sea from China. We saw that there are a number of parties involved: the seller, the buyer, a freight forwarder in China, a freight forwarder in Canada, and the customs broker. There are a lot of moving parts to the process and a lot of paperwork needs to move smoothly around the world, and as you would expect there are a lot of opportunities for something to go wrong.
While most shipments will arrive and clear customs without any problems, every now and then a Canadian importer will encounter a hiccup that needs to be fixed before the import can proceed.
Here are a few of the most common issues that crop up with ocean imports, and how to avoid them:
I. Someone didn’t get paid.
At every step of the process all the different parties involved will be charging for their work, and they will politely but firmly decline to complete their step until their charges are settled. For example, if the Chinese forward hasn’t been paid yet, they may refuse to release the Bill of Lading to the Canadian forwarder; if the warehouse hasn’t been paid, they will not allow the goods to be picked up. When someone is not cooperating, always check whether they have any outstanding invoices!
II. Exams.
We have a whole blog post on exams. They cost additional time and money, but they are a normal part of importing and no cause for panic.
III. Missing paperwork.
You’ll notice this process involves is a lot of passing paperwork around the globe. Fortunately, almost everything can be scanned and sent digitally now. If your customs broker is missing paperwork they need to clear the goods, they will likely reach out to the Canadian forwarder directly. You may need to intervene if something is missing from the foreign forwarder: in our example from our last post, Ocean Imports Part 1, the Chinese forwarder was probably hired by the vendor, Best Quality Widget Express, so you might have to reach out to your sales rep there and ask them to get in touch with the forwarder they hired.
IV. Your broker is out of the loop.
Remember in step 5, when it was useful for the customs broker’s name to appear on the bill of lading? That’s a key step in making your process flow smoothly.
When the foreign forwarder or the vendor creates the BOL, they will have the option to add your customs broker as the “Notify Party.”
If your customs broker appears on the bill of lading, not only will all the parties involved know to send correspondence to them, but they will also be empowered to give direction regarding your shipment. If your broker doesn’t appear on the BOL, you will need to act as a go-between, authorizing them to act on your behalf. Nothing gives a customs broker a knot in their stomach faster than finding out something was shipped to their client two months ago and they’re only finding out about it now!
V. Storage charges.
Ocean imports are a time-sensitive process. Usually, your goods are in a container that belongs to the shipping line. The financial penalties for holding up a container are called demurrage charges.
If you have a Full Container Load shipment, you are responsible for making sure the container is picked up and returned on time. If you have a Less than Container Load shipment, the warehouse that unpacked your goods will usually start charging you storage penalties after five days.
Make sure that there is clear communication and everyone is kept informed of your deadlines.
VI. Restricted goods.
This is a little less common, but every now and then a Canadian importer will purchase goods and have them shipped without realizing that the goods are regulated by the Canadian government.
Some commodities require special licencing or permits to import, and some things are banned altogether.
If you are importing goods by ground and you discover that, for example, the acetone you were trying to buy is considered a regulated chemical and you can’t legally import it, you can often turn the truck around and return it to the shipper. An ocean vessel laden with shipping containers that just departed Indonesia is not quite as easy.
If you accidentally bring in goods by sea that aren’t admissible to Canada, you will need to either re-export them immediately or surrender them to CBSA to be disposed of. Both options tend to be very costly.
To avoid this, check with your customs broker in advance to find out if anything you plan to import is regulated. Look out for anything intended for human or animal consumption, chemicals, aerosol propellants, engines, live plants, wooden articles, or goods that might be contaminated with soil.
Remember, you don’t need to be an expert on any of this to import goods by sea to Canada. A good customs broker and freight forwarder will be able to handle most of this on your behalf. You are very unlikely to invent a new problem that no one has ever encountered before, so whatever happens, there will be a fix for it. Clear communication will prevent many problems before they happen, and an experienced customs broker will be able to guide you through the rest.
If you have questions about importing by ocean, get in touch!
By Robin Smith, M.A., CCS. – Robin is a trade industry professional based in Victoria, BC.
In our last post, we looked at a typical example of a shipment being imported by sea from China. We saw that there are a number of parties involved: the seller, the buyer, a freight forwarder in China, a freight forwarder in Canada, and the customs broker. There are a lot of moving parts to the process and a lot of paperwork needs to move smoothly around the world, and as you would expect there are a lot of opportunities for something to go wrong.
While most shipments will arrive and clear customs without any problems, every now and then a Canadian importer will encounter a hiccup that needs to be fixed before the import can proceed.
Here are a few of the most common issues that crop up with ocean imports, and how to avoid them:
I. Someone didn’t get paid.
At every step of the process all the different parties involved will be charging for their work, and they will politely but firmly decline to complete their step until their charges are settled. For example, if the Chinese forward hasn’t been paid yet, they may refuse to release the Bill of Lading to the Canadian forwarder; if the warehouse hasn’t been paid, they will not allow the goods to be picked up. When someone is not cooperating, always check whether they have any outstanding invoices!
II. Exams.
We have a whole blog post on exams. They cost additional time and money, but they are a normal part of importing and no cause for panic.
III. Missing paperwork.
You’ll notice this process involves is a lot of passing paperwork around the globe. Fortunately, almost everything can be scanned and sent digitally now. If your customs broker is missing paperwork they need to clear the goods, they will likely reach out to the Canadian forwarder directly. You may need to intervene if something is missing from the foreign forwarder: in our example from our last post, Ocean Imports Part 1, the Chinese forwarder was probably hired by the vendor, Best Quality Widget Express, so you might have to reach out to your sales rep there and ask them to get in touch with the forwarder they hired.
IV. Your broker is out of the loop.
Remember in step 5, when it was useful for the customs broker’s name to appear on the bill of lading? That’s a key step in making your process flow smoothly.
When the foreign forwarder or the vendor creates the BOL, they will have the option to add your customs broker as the “Notify Party.”
If your customs broker appears on the bill of lading, not only will all the parties involved know to send correspondence to them, but they will also be empowered to give direction regarding your shipment. If your broker doesn’t appear on the BOL, you will need to act as a go-between, authorizing them to act on your behalf. Nothing gives a customs broker a knot in their stomach faster than finding out something was shipped to their client two months ago and they’re only finding out about it now!
V. Storage charges.
Ocean imports are a time-sensitive process. Usually, your goods are in a container that belongs to the shipping line. The financial penalties for holding up a container are called demurrage charges.
If you have a Full Container Load shipment, you are responsible for making sure the container is picked up and returned on time. If you have a Less than Container Load shipment, the warehouse that unpacked your goods will usually start charging you storage penalties after five days.
Make sure that there is clear communication and everyone is kept informed of your deadlines.
VI. Restricted goods.
This is a little less common, but every now and then a Canadian importer will purchase goods and have them shipped without realizing that the goods are regulated by the Canadian government.
Some commodities require special licencing or permits to import, and some things are banned altogether.
If you are importing goods by ground and you discover that, for example, the acetone you were trying to buy is considered a regulated chemical and you can’t legally import it, you can often turn the truck around and return it to the shipper. An ocean vessel laden with shipping containers that just departed Indonesia is not quite as easy.
If you accidentally bring in goods by sea that aren’t admissible to Canada, you will need to either re-export them immediately or surrender them to CBSA to be disposed of. Both options tend to be very costly.
To avoid this, check with your customs broker in advance to find out if anything you plan to import is regulated. Look out for anything intended for human or animal consumption, chemicals, aerosol propellants, engines, live plants, wooden articles, or goods that might be contaminated with soil.
Remember, you don’t need to be an expert on any of this to import goods by sea to Canada. A good customs broker and freight forwarder will be able to handle most of this on your behalf. You are very unlikely to invent a new problem that no one has ever encountered before, so whatever happens, there will be a fix for it. Clear communication will prevent many problems before they happen, and an experienced customs broker will be able to guide you through the rest.
If you have questions about importing by ocean, get in touch!
By Robin Smith, M.A., CCS. – Robin is a trade industry professional based in Victoria, BC.
