Supply chain · 4 August 2015

Knowledge is key in avoiding tricky challenges with customs

Many countries have documentation online to help companies build up their knowledge, but nothing beats visiting the country itself
Many countries have documentation online to help companies build up their knowledge, but nothing beats visiting the country itself

Going into business internationally has never been easier owing to the evolution of ecommerce. Yet even though it might be relatively simple to set up websites, source or make products and start taking online orders, businesses of all sizes still struggle with what happens next.

Many first-time exporters: big, small or micro, can encounter challenges when setting up a supply chain. From our experience, most of the problems that businesses face, when it comes down to the movement of goods, are regulatory – whether it’s different laws or procedures or even different processing times from market-to-market. Either way, most businesses can be slowed down by not fully understanding one customs’ procedure from another.

Getting smart on customs can make or break a budding empire. Therefore, before any complications arise, it’s important to keep calm and seek guidance – not carry on until something goes amiss.

Following on from my “How to develop a successful supply chain” article, if you’re a business ready to take the next step, I’ve put together some specific advice to help you navigate the world of customs successfully.

Understand the process

Customs have an important role to play in today’s world, as customs’ processes protect the health and safety of a country, its citizens and its economy as a whole. The role of customs is to protect the borders of a country against potential security threats and against counterfeit goods. Owing to this, customs procedures are in constant flux, and different products/commodities have different rules associated. The European Commission’s market access database provides a good overview of the differences between countries.

Thoroughly review the paperwork

I can’t stress how important it is to make sure valuations are accurate and goods are clearly labelled in detail and to get advice in this area. When importing or exporting goods, be sure to provide an accurate valuation to calculate duties, along with a detailed description of the contents of a shipment. For example, rather than “bolt of silk”, the description should read “bolt of blue silk with embroidered detail”. These extra details will help customs officials to calculate the duties and taxes to be paid on shipments and help avoid any hold ups while being checked.

The commercial invoice is probably the most important piece of paper for international shipping, and it’s vital to use the right terminology. Here are some key phrases to look out for:

  • Air waybill – Contract between the shipper and the airline that states the terms and conditions of transportation
  • Customhouse broker – An individual or firm licensed to enter and clear goods through customs
  • Harmonised system code (HS Code) – A universally accepted classification system for trade goods, used to classify products and corresponding tariff

Get to know the local market

To achieve a real competitive advantage, you must be able to develop intimate knowledge of the local environment and ensure you meet the requisite local standards. Many countries already have documentation online to help companies build up their local customs knowledge, but nothing beats visiting the country itself. A further option is to use advice provided by companies, like FedEx, which have a wealth of information available and a team of experts to guide you along the way. Make sure you have an inquisitive mind and ask questions such as:

  • Are there any country-specific events you could attend?
  • Are there any in-country contacts who could share knowledge?
  • Is there a local small business organisation you can join to get advice?

Expand at your own pace

Expand your business at a pace that you are happy and comfortable with, and make sure you have the processes and support in place to make your product a success on an international level. Whatever your method, expand one country at a time to ensure a steady, more sustainable and controlled approach to growth.

Sourcing or selling goods internationally can seem complex. However, there are a range of organisations that can assist, from government agencies to transportation partners. Once you’re on your way, talk to your transportation provider to find out how tools, such as FedEx Global Trade Manager, can help estimate duties and taxes, manage documentation and gain up-to-date insights into local market conditions, to improve your efficiency levels even further.

Ensuring you are 100 per cent ready and have the correct support network of advisors in place before entering new markets will enable you to better navigate customs and achieve real and lasting commercial success around the world.

Image: Shutterstock

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ABOUT THE EXPERT

David Poole is managing director of sales, UK South at FedEx Express and FedEx UK. FedEx Express is the world’s largest express transportation company, providing fast and reliable delivery to every US address, as well as more than 220 countries and territories. 

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