International Supply Chain: Five Ways to Avoid Getting Stuck at the Border

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Stay compliant and things will run smoothly. Avoid the rules and you’ll be subject to inspection more often causing delays and headaches you’d rather avoid.

By Sandro Piancone

Although we are “Mexperts” in the supply chain logistics for Mexico, the things we will talk about in this article pertain to all of the countries all over the world.

Why should you start exporting in 2016? For starters, the export business may look like a steep mountain that is marred with bureaucracies, expenses, and taxes. This perception to some extent is true with regard to some regions.

Of course, crossing the border means dealing with government regulations — ours and theirs. It’s not complicated, but you must be compliant. Not just because it’s the law — though that obviously matters — but because it can cost you time and money and you can’t afford to waste either.

Five Mistakes that will stop your container at the border

Mistake No. 1: Shipments that are Incorrectly Classified

The World Customs Organization requires that every product you export is in compliance with the Harmonized Tariff Schedule. Essentially, all your products must be classified so when your shipment arrives at the port or border, customs knows exactly what your shipment contains.

Each type of product has its own classification and some classes require permits to cross the border. You want to have the proper forms filled out and the required permits in place. These are simple procedures, but if you don’t get them done, and done correctly, you’ll set yourself up for headaches like delays in shipment, potential additional warehousing costs and missed opportunity.

Information is king. Know what you need in advance, make sure you have it organized, compliant and easy to understand.

Mistake No. 2: Incorrect (or no) NAFTA Certificate of Origin

This must be filled out correctly and include a detailed description of the goods you’re importing. And, the importer needs an original of the certificate in their files. Making sure your importers have exactly what they need to stay compliant, makes it easier (and more appealing) to do more business with you.

North American Free Trade Agreement regulations require that the origin of all products being exported is clearly defined. For example, say you’re importing lamps that are manufactured in South Carolina, but have components imported from China. NAFTA regulations require that you provide complete origin information — including China — to stay in compliance with the law.

Complete your NAFTA certificate with detailed exporter and importer information and be prepared. Again, the details are what count. Being organized and having everything ready in advance oils the wheels of commerce and gets your products where they need to be smoothly and on time.

Mistake No. 3: Unclear and Poorly Detailed Documentation

You need to provide detailed documentation of your shipment so customs knows exactly what’s in each box.

Imagine having a great system in place in your factory for identifying every widget. They’re coded; they’re organized, numbered and inventoried. You go to export those products without defining that an X-902S is an energy efficient light bulb and a Y-903T is an extension cord. You have a customer that needs tens of thousands of your energy efficient X-902Ss.

You load up a truck in Detroit and three days later, your bulbs arrive at the border. The driver presents a commercial invoice showing 30,000 X-902Ss are in 500 boxes. The customs agent has no idea what an X-902S is. The documentation should describe it exactly. It should also say how many of each in a box, how many boxes there are on the truck.

Those are the descriptions that get your shipment through customs without hassles or delays. If you’ve shipped other goods in this order (Y-903Ts for example), avoid confusion and make sure the inside boxes are labeled for easy identification as well.

Your documentation should be readable and easy to understand with product descriptions, part numbers, content of each box, unit pricing, number of units and any other measurements and quantities relevant to your product. Be aware that you can send documents ahead and save valuable time at the border. And, helping the agents do their job more efficiently is always appreciated.

Mistake No. 4: Neglecting to Sign the Required Power of Attorney

You are required to report any shipment with a value greater than $50 that crosses the border; it’s the law. You are legally required to sign a power of attorney document giving your importer, transportation company, freight forwarder or import agent legal rights to act on your behalf, and sign and file the required form named the Shipper’s Export Declaration.

Without a signed POA, you’ll have difficulty getting out of the warehouse and across the border. Having the POA filled out and signed before your material arrives at the border will save time, potential expense and you’ll be fully compliant with the law (and really, you have no choice on that one.)

You want to avoid delays in clearing your shipment, so it’s critical to file the POA before your goods are exported. Neglecting this detail can result in fines. Avoid hassles by having a signed POA in place.

Mistake No. 5: Faulty Labeling and Inadequate Packaging

There are two considerations when it comes to labeling. First, labeling your boxes so the contents are clear to the customs inspector and you get easily across the border. Next, how your individual products are labeled for sale.

Let’s talk packaging first. Make sure you’ve got product information clearly marked in and on your packaging. This includes part numbers and descriptions. Clear labeling makes the contents easy to verify. Bar codes work extremely well as they can be scanned.

Depending on what you’re exporting, you might at times have boxes inside boxes. Make sure each box is packed and marked by part number. Remember too, there are a lot of people who work in the transportation and delivery chain which includes transport companies, warehouses at borders, trucking companies in country, and customs inspections. Your boxes will be handled over and over again, so strong packaging is a consideration as well.

Make sure the labels on the outside of the box match what’s inside. Stay compliant and things will run smoothly. Avoid the rules and you’ll be subject to inspection more often causing delays and headaches you’d rather avoid.

Finally, realize that at first glance it may seem like there’s a lot to know, perhaps a new set of rules that feels like “one more thing to do.” They’re really quite simple. And, the international market place represents so much potential that learning the regulations is a small price to pay relative to the profits to be made.

Sandro Piancone is director of Nery’s Logistics and “Chief Mexpert” Officer of Mexico Franchising Made Easy. Find him at fransocial.franchise.org.