When you bring goods into the US, of course you expect to pay for transportation. But as you plan an import, remember that it also costs money to clear the cargo through US Customs, even when the product isn’t subject to any duties.
How much does customs clearance cost? As with so much in life, it depends.
Costs that importers always pay
Some fees are standard when you import cargo. They include:
Merchandise Processing Fee (MPF)
US Customs collects this fee on most shipments that enter the country. It’s calculated at 0.3464% of the entered value (the cost of the merchandise, as entered on the commercial invoice you provide to your customs broker), with a minimum of $27.23 and a maximum of $528.33. For example, if the entered value of the shipment is $100,000, the MPF is $346.40.
Harbor Maintenance Fee (HMF)
US Customs collects the HMF on shipments that enter the country via ocean transportation. It comes to 0.125% of the entered value. On that $100,000 shipment, the HMF would be $125.
Through your broker, you pay these fees to a surety company. That company, in turn, guarantees to US Customs that you will submit the Import Security Filing (ISF), and you will pay any duties/fees owed on your cargo. If you import on a regular basis, you’ll probably buy a continuous bond, which covers all of your ISF submissions and customs entries for a year. The premium on a $50,000 continuous bond is about $450 to $500. If you’re a large importer or you bring in high-value cargo, US Customs might require a $100,000 or $200,000 bond, which of course costs more.
If you import cargo only now and then, you can buy a single-entry bond. You’ll actually need two of them, one to cover the ISF and the other for the actual customs clearance. These cost about $75 for the ISF bond and about 0.45% - 0.5% of the entered value for the customs bond.
Customs broker’s fee
A licensed customs broker acts on your behalf in all transactions with US Customs. Using information that you provide, the broker completes and files the necessary documents and oversees the progress of your shipment through customs. It also works with a surety company to obtain your bonds. As with any professional engagement, the broker’s fee depends on the range and complexity of services it provides.
When you ship less-than-containerload (LCL) freight, with shipments for multiple importers consolidated in one container, unfortunately that arrangement doesn’t save you money on import fees. Each shipper with cargo in a consolidation container must complete a separate customs clearance and pay the associated costs.
Costs that importers sometimes pay
Some expenses apply only to certain shipments. They include:
Duty on a product you bring into the US depends on its classification in the Harmonized Tariff Schedule (HS code) and its country of origin. You might owe no duty at all, or you might owe 30% or more of the entered value. If a shipment contains multiple products – for instance, plywood, windows, roof shingles and nylon carpeting – US Customs calculates duty separately for each one.
A few categories of imported products, such as alcoholic beverages, are also subject to additional taxes when they enter the US.
Fees to regulatory agencies
Some imported products are regulated by government agencies such as the Environmental Protection Agency (EPA), the Food and Drug Administration (FDA) or the US Department of Agriculture (USDA). To import certain goods, you must register with, or obtain a license from, the relevant Participating Government Agency (PGA). For other regulated goods, you might simply have to pay your customs broker to complete extra paperwork.
A customs agent might decide to inspect your cargo because something about the import raises suspicions. Or an agent might simply choose your shipment for random screening. To keep bad actors from gaming the system, US Customs doesn’t explain the logic behind its inspections. You’ll just have to live with the fact that now and then, maybe through no fault of your own, Customs will inspect your shipment and charge you for the privilege.
The simplest inspection, an x-ray of your container or other conveyance, costs about $300. If the agent decides to conduct an “intensive exam,” opening a container to look at the contents, your fee could amount to $1,000 or more.
Other fees related to inspection
If an agent chooses your shipment for an intensive exam, you’ll pay a trucker to transport the freight to an inspection facility near the port. If the inspection forces you to keep a container at the port longer than expected, and/or return it to the steamship line later than expected, you could incur storage and detention fees.
If an inspection reveals a problem with your import, that could carry a cost as well. For example, you might pay a penalty for applying the wrong HS code to a product, or for other infractions. If the cargo is denied entry, you would have to bear all costs associated with the re-exportation. In addition, if you fail to provide the ISF details to your broker on time, and so the ISF is not filed at least 24 hours before your cargo is loaded at the port of origin, and US Customs decides to enforce the penalty for that missed deadline, the fine is $5,000.
How much does customs clearance cost if you’re smart and careful?
Many of the costs connected with customs clearance are beyond your control. Duties are defined by law and by the value of the product you import. The MPF and HMF always apply. A customs agent might decide to inspect your shipment even when you and your broker do everything by the book.
But there are some things you can do to avoid unnecessary expense:
- Choose an experienced, reputable customs broker that will attend to all the details and double-check for possible mistakes.
- Work with that broker to make sure you choose the correct HS codes and meet any regulatory requirements that apply to your cargo.
- Give the broker all the information about your shipment well in advance of your sailing, so there’s no problem completing the ISF filing before the deadline.
- If you’re shipping multiple containers, consider putting each of them on a separate bill of lading (BOL). While that strategy will increase your standard customs clearance costs, it could also save you money on potential inspections. When you ship five containers on one BOL and US Customs decides to inspect one of those boxes, that holds up entry for the whole shipment. Then you pay potential storage and detention fees for five containers. When you ship five containers on separate BOLs and Customs decides to inspect only one of them, the other four can continue on their way.
You can’t eliminate the cost, but you can manage it
Customs clearance expenses have an unhappy tendency to snowball, especially for importers who don’t understand every step of the clearance process. An experienced customs clearance agent will guide you through the maze of obligations, helping you avoid costly penalties and delays. You’ll get access to a trustworthy customs broker, help navigating the complex tariff system, and advice about how customs clearance decisions affect the total cost to import your cargo.
Need help controlling the cost of customs clearance? Start with a call to I.C.E. Transport.