Customs Clearance

The shipping Incoterm DDP is the situation where the seller accepts all of the costs and the risks and responsibilities for the safe shipment of the cargo from the point of origination to the agreed-upon destination. This agreement includes the payment of shipping costs, export, and import duties, insurance, and any other related or emergency costs incurred while the cargo travels from one point to the other. With the DDP Incoterm, the seller accepts the maximum responsibility for the shipment. The seller must arrange for all modes of transportation during the shipment including the import and export clearances, negotiations and fees if there are delays, and the security of the cargo through adequate insurance coverage.

Both the FOB and DDP methods of shipping are popular because in one, FOB, the costs of shipping are shared, and this means that both the seller and buyer share the cost as well as the risk of making sure the cargo arrives safely. This can be a good choice for the buyer who wants to maintain some control over the process and possibly even save money if they have a network of transportation options. In the case of the DDP Incoterm, the buyer pays for the reduction of stress that the seller can offer by controlling all aspects of the shipment. Likewise, the seller can save money by good networking and planning, and ultimately the buyer will probably pay a little more because they have given up the responsibility and risk associated with the cargo.

Customs brokers are professionals, licensed by U.S. Customs and Border Protection (CBP), who manage the legalities and logistics of importing and exporting goods for their clients. Brokers handle information and payment submission to CBP on behalf of their customers. A broker can be a single individual, or a licensed corporation, association or partnership, referred to as a brokerage. The CBP licensing process ensures that brokers are knowledgeable in U.S. entry procedures, admissibility requirements, classification, valuation, as well as import duty, tax and rate fees.

In short, a licensed customs brokerage makes importing merchandise and commodities to the United States much easier for their clients. Some of the import steps that customs brokers handle includes customs declarations and additional document preparation, liaising with government authorities relevant to your import, duty, tax, and rate calculation, government agency clearance assistance

Freight forwarders (like Allwin) are professional, third-party entities who arrange and facilitate the logistics and transportation of cargo shipments, including compliance paperwork and documentation. A customs broker, on the other hand, submits any paperwork, information and/or payments required of their clients to the CBP. Where freight forwarders are logistics experts, brokers are licensed masters of import ins and outs, from customs restrictions to entry procedures to admissibility requirements, valuation, classification, and duty, fee and tax rates. Freight forwarders can also be customs brokers—and many are. But, unlike Allwin, not every customs broker is a freight forwarder.

If you're shipping into the United States via air, the answer is a definite yes because, according to U.S. federal law, a customs broker is required to clear your shipment. But there are other cases where you'll need a formal entry filing from a licensed customs broker, including if you're moving high-value goods, like jewelry or electronics (specifically, items worth more than $2,500). Another example where you'll need a broker for filing: if whatever you're importing falls under customs restrictions regarding U.S. regulations (like packaged goods under the jurisdiction of the Food and Drug Administration or vehicles regulated by the Department of Transportation).