Protecting Your Supply Chain from Delays and Exercising Reasonable Care Before Importation

Someone smart said it right: “Shipping is all about documentation.” and this statement has proven true time and time again.

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Overview

Moving cargo globally requires serious effort and coordination among exporters, importers, and a small army of supporting entities: freight forwarders, carriers, brokers, customs officials, and various government agencies. The chances of something going wrong is pretty high, even for experienced global players, because exporters and importers must rely on others to support their efforts to move cargo from one corner of the world to another.

In most cases, when an importer or exporter experiences delays, the issue stems from documentation or a crucial piece of information missing. Of course, delays can occur due to unrelated reasons, such as port strikes, volcanic eruptions, flight delays, political events, unexpected embargoes, or customs inspections. While such events are rare, documentation issues remain a consistent and preventable source of delays.

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The Devil Is in the Details

If documentation is prepared correctly, cargo flows smoothly and without interruption. The simple rule is this: Get your documents right, and your shipments will move quickly and without issues. While this might sound straightforward, it often requires significant preparation and planning to get it right the first time.

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International Documentation Basics

Among the most critical documents required for international shipments to clear customs we can list:

1. Commercial Invoice

2. Packing List

3. Bill of Lading

Without these three essential documents, your shipment cannot clear customs, and you will inevitably face delays.

Depending on your industry, additional documents might also be required, such as:

1. Import and Export Licenses

2. Various permits from multiple government agencies

3. Supporting documents, memos, and certificates or statements.

If you’ve been in business for some time and have managed several imports, you likely know what is needed. However, here’s a critical question that many companies fail to ask: 

Is the documentation prepared by your business partner accurate and complete enough for customs clearance?

It is crucial that the exporter provides a full set of accurate documents containing all the necessary information to clear the shipment upon arrival. Missing or incorrect documentation can lead to costly delays - or worse, the shipment might not be received at all.

An Unfolding Drama

Imagine this scenario: Your cargo arrives at the border. The exporter is happy - they’ve done their part (unless they shipped DDP, but who does that these days?). You, the importer, are eager to use the incoming materials to manufacture products or fulfill a client’s urgent order. Now the shipment is in your country, and it should be easy to clear customs, right? Wrong!

Your import team must scramble to collect all the missing documentation and provide details to your customs broker to facilitate clearance. This process could have been straightforward if everything had been prepared correctly in advance. Instead, you discover documentation often related to missing essential details like the country of origin, cargo description, or accurate valuation.

Avoiding the Pitfalls

To avoid such headaches, importers should:

1. Review Documentation Ahead of Time: Work with your exporter to ensure all necessary documents are accurate and complete before the shipment arrives and ask your broker to confirm all is in order.

2. Implement Standard Shipping Instructions: Provide clear guidelines to exporters detailing your country’s import requirements.

3. Establish a Pre-Approval Process: Verify and approve documentation 2-3 days before the planned shipping date to allow for corrections if needed.

4. Provide a Commercial Invoice Template: Help less experienced exporters by offering a standardized template that meets regulatory requirements.

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Building Robust Procedures

It’s wise to build your procedures (e.g., Shipping Instructions) based on customs regulations for your country. For U.S. importers, the contents of Commercial Invoices and general requirements are outlined in 19 CFR 141.86 - an excellent starting point for reference.

Consider adding the following details to your Shipping Instructions:

1. Full address of your customs broker, including full contact information

2. Contact information for key personnel on both the exporter and importer sides

3. Bill of Lading Number

4. License or Permit Number (if applicable)

5. INCOterms details

6. Purchase Order Number and/or Part Number

7. Hazardous shipment indicator

Summary

Shipment documentation can make or break your supply chain. By proactively reviewing documents and maintaining open communication with exporters and your broker, you can reduce the likelihood of delays and associated costs.

Encourage your team to analyze the root cause of delays. You might find that 70-80% of them are due to documentation errors or missing information. Addressing these issues will not only protect your supply chain but also foster stronger business relationships.

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Don’t wait -  Check our main page or ​Contact us today to discuss how BioPharma Trade can help you streamline your trade compliance needs and ensure your global operations are compliant, efficient, and risk-free. We look forward to working with you!

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