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A good customs broker can help small businesses streamline the process of moving goods through international customs. But, it's important to choose a customs broker wisely, especially when doing business in China, where the customs authority and culture of doing business can be extremely complex.
A customs broker is an individual or firm licensed by U.S. Customs and Border Protection that helps importers make sure their shipments meet all of the federal requirements for international shipping.
A broker will prepare the documents that customs officials require at the shipping and receiving ports, report the goods to any necessary government agencies, oversee international payments and arrange bonds for moving cargo. This is helpful in countries with intricate customs regulations, such as the Chinese market.
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When looking for a customs broker, business owners want to make sure they choose someone who is licensed, and has expertise in international trade agreements, says Gerhard Peyfuss, principal of Multi-Channel Opportunities, a Philadelphia-based consulting firm specializing in sourcing goods from China.
The broker should also have good connections with the U.S. Customs office, and ideally have global offices or agents in China who can oversee the handling of goods in the shipping ports.
The best way to ensure a broker has the expertise to deal with the complexities of the Chinese customs environment is to ask a lot of questions, Peyfuss says. Find out how long they have practiced and how many containers they typically ship from China every year. "Someone who ships 1,000 containers is going to have more experience than someone who ships a dozen," he says.
The right customs broker will also know how to manage international payments in foreign currencies. But to get extra help, small business owners can leverage a trusted online foreign exchange service that offers a free online currency converter and 24/7 customer service. This service can help business owners wire money transfers overseas and protect their bottom line when they import and export.
If the goods are traveling via ship, the broker also needs to understand how to manage Importer Security Filing (ISF) requirements for vessel shipments, says Rod Ulloa, president and broker at Cargo Import Brokers in Houston. Commonly referred to as the "10+2 rule," this requires U.S. importers to submit documents to U.S. Customs and Border Protection that detail the manufacturer or supplier of the goods, country of origin, tariff classification and final ship-to party. The documents must be received at least 48 hours before they are loaded onto an ocean vessel, Ulloa says. "Penalty for the failure to comply can be $5,000," he says.
Peyfuss also suggests discussing unique security situations to get a sense of the broker's communication style. For example, ask what restrictions might be added if shipping containers hold goods from multiple suppliers, or how moving goods between China and Hong Kong will impact the customs process. "They should be ready to explain in detail what challenges you will face and how they will help you handle it," he says. "If all they say is that everything will be rosy and there will be no problems, you should probably look elsewhere."
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