Global shipping doesn’t have to be daunting for U.S.-based online businesses and consumers. New innovations and services are shrinking our borders every day, making it a great time for international shipping.
If you want your package to arrive at its destination without any hiccups, you’ll need to make sure that you’re selecting the correct customs clearance process. That way, you can declare relevant information about the package’s contents, so that customs can determine the amount of duty to be paid — and the recipient can get the package quickly.
To decide what international shipping customs clearance process is right for you, you’ll first want to understand who you are as a shipper.
Chances are you can relate to one of the following identities:
- B2B – A business selling to another business for reselling purposes
- B2C – A business selling to a consumer for personal consumption
- C2C – A consumer shipping to a known consumer (sending a birthday gift to Aunt Rita)
It’s important to determine if the sender and recipient are businesses or consumers, because that will impact the correct customs clearance to use. Businesses typically receive bigger, more expensive packages filled with merchandise to resell, so these imports are regulated differently than the ones for consumer enjoyment.
International packages that are headed to businesses or consumers can fall into three different customs clearance categories:
- Formal — For importing businesses that are reselling goods
- Express (informal) — Mostly businesses selling direct to consumers (not for resale)
- Postal — Mix of selling direct to consumers and shipping to a known consumer
The particulars of international shipping vary by country. For this example, we will look specifically at the different clearance processes into Brazil.
The formal customs clearance process is for businesses importing goods into Brazil for another business to resell (B2B). You should also use this clearance if you are shipping goods valued over $3,000 or you are shipping something that requires an import license (such as alcohol or tobacco).
Keep in mind the value is calculated using CIF (Cost + Insurance + Freight), so if the fees for shipping and insurance plus the price at which you sold your goods totals more than $3,000, formal clearance is required.
Express (Informal) Clearance
This express customs clearance process is common for B2C shippers and is the go-to option for goods traveling with commercial carriers, such as FedEx and UPS. Businesses of all sizes will want to use this process if they are sending goods valued at less than $3,000 that also don’t need an import license. A commercial invoice is required (which is like a customs form). The good news is that the customs clearance process typically takes one day, and there are normally options to pre-pay duties and taxes.
Sticking with the Brazil example, delivering international goods via the local Post Office is the best option for consumers sending packages to friends and family in Brazil. Packages valued $50 or less that are shipped via the USPS and Brazilian Post (Correios) are duty-free for consumers.
It is also a good channel for businesses to ship direct to consumers. The rates are very low and the customs clearance documentation is fairly uncomplicated. However, the speed of customs clearance can vary by shipment and not all buyers are charged for duties and taxes. This can lead to an inconsistent experience.
Before sending a package, make sure you’re following all of the policies of the U.S. Postal Service and Brazilian Post to prevent lost packages or additional fees.
Here are additional details to keep in mind with each customs clearance process:
*Formal product classification is required to calculate the exact import duties.
** Duty Threshold is minimum product value where taxes are required. In the case of Brazil, all items are taxed regardless of value. Some exceptions to this rule include consumer-to-consumer shipments valued at less than $50.
Choosing a Carrier
For B2B shippers, both FedEx and UPS are good options. They have the necessary processes in place to help you with all that you need to secure the proper licenses and navigate rules for importing to businesses. If you are a larger company, you are probably at the point where you should consider multiple carriers. Depending on your product mix and buyer needs, you may find it helpful to have a few logistics options, so you can mix and match carriers.
B2C shippers have many options. There are a lot of other providers in this space that offer very competitive services. For example, Endicia recently partnered with one such logistics company to create Endicia Global Service, offering express clearance service at discounted rates. With Endicia Global Service, shippers receive faster service, end-to-end tracking, price transparency and less risk of undeliverable packages.
Entry shippers will want to consider using the USPS, since it offers good pricing, no surcharges, accessible drop-off locations and simplified export processes.
For more details on FedEx, UPS and USPS, visit our shipping carrier comparison page.