When it comes to fast deliveries, having your paperwork in order is one of the best ways to keep your international shipments on schedule. How can you ensure you have the right documents and that they're filled in correctly? Let's take a look!
Your T-shirt webshop is booming. A customer on a distant continent just bought one and now you need to get it to them. For that to happen the T-shirt needs to travel from your country to theirs, passing customs clearance twice on the way. If your documents don't meet the strict customs requirements, then your parcel may be delayed, sent back or even seized.
A well-organized paperwork process helps avoid such logistical hiccups. It may be challenging at first, but becomes much easier once set up. On this page we explain the eight basic steps to follow.
The commercial invoice is a key shipping document that always accompanies a shipment. You can get a template from your carrier, however the formatting may not suit your specific wishes or may not be accepted by customs in some countries (a company letterhead is sometimes required).
By far the most common and accepted way to get a commercial invoice is to make one yourself. By setting up your own commercial invoice template you can include only fields that are relevant to your shipment. Make sure to name this document 'Commercial Invoice' as some customs authorities will reject it if it has a different title, such as 'Proforma Invoice'.
Key fields on a commercial invoice:
Extra details you may want/need to include:
The goods description on the commercial invoice is important because it allows customs to accurately assess the goods, confirm the HS code classification, and then determine the exact duties and taxes on the shipment.
The description must be detailed, accurate and match the HS code. Ambiguous descriptions such as 'gift' or 'nuts' may cause customs authorities to delay the shipment or charge additional costs (e.g. storage fees) as they wait for a sufficient description.
A goods description often includes:
The HS code is an international commodity code that's widely used to classify products. Usually 8 or 10 digits long, the first six digits are the same worldwide, while the last digits depend on the destination country. An example HS code for a unisex cotton T-shirt is 61091000. Always state the HS code on the commercial invoice.
You can ask your carrier to help you classify your product catalogue with the right HS codes. You'll need information about where your products come from, how they were made and what materials they contain. Subtle differences can result in different codes, so take care in selecting the right ones. For example, leather shoes with leather soles (640359) are different from leather shoes with rubber soles (640399).
State the country of manufacture on the commercial invoice. This is the country where the goods were made or where the last manufacturing took place. This may be different from the country where you're sending them from. You can do this by adding a 'Country of origin' field, by including the manufacturer's name and address, or both.
Sometimes you need to state the country of manufacture so the shipment can be exempt from duties under a trade agreement – learn more in the next step.
Goods that enter a new country may be subject to duties and taxes. This applies to an increasing number of e-commerce shipments too. Research duties and taxes in advance so no surprise costs bite into your profit margin. It's also important to define who's responsible for paying them using the Incoterms®.
Thanks to international trade agreements your product might qualify for a duty exemption or reduction in the destination country. This depends on the type of goods and where they were manufactured. Check with your carrier if your goods are eligible. If they are, then you'll need to prove it in your shipping paperwork by including proof of origin. The most common types are:
The statement of origin, also known as an invoice declaration or preferential statement, is a few lines of standard text on the commercial invoice. The correct text depends on the product and the destination. You can obtain it from your carrier or local customs authorities. If the text is altered or missing from the commercial invoice then customs won't accept it.
Period: from _______ to ______ (dates)
The exporter of the products covered by this document (customs authorisation No ________) declares that, except where otherwise clearly indicated, these products are of ___________ (country name) preferential origin.
_________________ (Place and date)
_________________ (Signature and printed name of exporter)
The Incoterms® define who pays for shipping costs and any duties and taxes on a parcel. As the seller, it's your responsibility to state this on your website (often at checkout) and on the commercial invoice. Clearly communicating this to customers helps prevent abandoned checkouts and negative customer experiences. The most common Incoterms® used in e-commerce shipping are:
With DDP (seller pays) you cover all costs yourself. You may charge the duties and taxes to the customer at the webshop checkout, and then pay them directly to customs.
With DAP (buyer pays), previously called Delivered Duty Unpaid or DDU, the receiver is responsible for paying the customs charges when the goods arrive in their country. This can sometimes result in a customs delay if high-value duties and taxes need to be collected before a shipment can be cleared and delivered.
Product regulations in a destination country can influence what extra paperwork, if any, you need to include with your shipment. You may need to register with a government authority, request a licence or permit, or translate labeling on your product into the local language.
This usually applies to food, drugs, apparel, electronics, toys and many other goods. For example, to send shoes to the US, a footwear declaration is required by the US customs authority. Contact your carrier to find out which authorities regulate your product in your destination country, and what documentation they require.
Once you have identified all the documents you need, then you can create or gather them. Some documents you can generate yourself, such as the commercial invoice. Others, such as a certificate of origin or CITES certificate, you will need to obtain from the relevant authority and pass on to your carrier.
How often you need to provide documents also varies. Some documents will only need to be shown once with the first shipment of a product, while others must be provided with every shipment.
If you're providing physical versions of your paperwork then include three copies with your shipment. Attach the originals and one set of copies in a pouch to the outside of your shipment. Give the third set directly to the courier when they collect the parcel.
Customs clearance has seen a rise in the use of electronic customs documentation in recent years. These are digital or scanned versions of documents that are sent to customs authorities when a parcel is shipped. You do this by submitting all documents electronically when booking a shipment with your carrier.
The benefit of electronic documents is that they can be accessed anywhere at any time, which reduces delays and allows customs to clear a shipment even before it arrives. Some e-commerce sellers also choose to use them so their customers don't receive all the paperwork with their purchase.
Not all countries accept paperless solutions, however. Physical paperwork on some selected shipments may still be required. Check with your carrier if documents should be provided in digital or physical form, or both. Best practice, according to carriers, is to use electronic documents (where possible) while still attaching a backup paper set to the shipment.