Importing for the first time or planning to import, but not sure what to do and where to start..?? Need some guidance on the process to be followed..??
Below is some generic practical advice you can follow to safeguard your interests if you are a first time importer or new to importing..
1) First and foremost, visit your local customs office to find out
- the requirements to become an importer (registration, importers code etc)
- information like whether your cargo is allowed to be imported
- are there are any restrictions, permits, licenses etc that maybe required
- duty structure
If you plan on importing agricultural, wildlife, food products etc, it would be wise to also check with those relevant departments to understand the procedures for such imports..
If you have no clue about all of the above, then seek the advice of a reliable customs broker who should have all this information already or know where to find it for you..
2) Once you have established that your cargo is OK to be imported, CHECK THE REPUTATION AND RELIABILITY OF YOUR SUPPLIER.. Some of the questions you should have :
- How long have they been in business..??
- What type of cargoes they deal in..??
- Have they exported any cargo to your country..??
- Can they give some references in your country..??
- Etc Etc Etc…………
Many an importer has lost everything because they didn’t check this crucial item.. You are bound to have some discussions and negotiations with your seller regarding the payment terms.. When in doubt, choose the relatively safe option of Confirmed Letter of Credit..
3) Once you have established that your supplier is a reliable company, then read, understand and identify the most suitable Incoterms® for your business..
There is nothing worse for a first time importer than choosing the wrong Incoterms® and suffering the consequences later..
In my opinion it is a must that all buyers and sellers own a copy of the Incoterms® which you can buy from the ICC Store..
There are several articles and practical discussions in this blog relating to Incoterms® which maybe of assistance to you in understanding it, but nothing beats the actual book..
4) Once you have checked and decided on Point 3, appoint a reputed, reliable and efficient shipping, clearing, forwarding or removal company (for your personal cargo) as your agent to handle your shipments at destination..
Even if they might cost you a bit, this cost could be negligible when considering the value of your cargo and it is in your interest that it is safely transported, handled and delivered..
5) Ensure that the agent you appoint has the relevant credentials, experience and expertise to handle your cargo.. If you look up Forwarders Associations or International Movers Associations in your area, you may find some reliable agents.. Search the internet for “freight forwarder association” and see what comes up..
6) A starting point to check out the agent could be
- Visiting their website and reading about them
- Check for them in the local shipping newspapers or magazine
- Any recommendations from anyone that might have used them
7) Most importantly, YOU must understand the full scope of work that you are entrusting to your agent and the full breakdown of their costs down to the last cent..
It is prudent to go through each and every item of their quote so that you understand the costs and there are no grey areas between you and your agent at the time of payment or cargo release..
8) There are always a few unscrupulous agents that might take you for a ride.. You are appointing them, so you are entitled to ask them to explain all charges in detail..
There are many customers who have been ripped off because they didn’t check and query the charges in advance and when they do, it is too late..
Would also recommend you to read some articles relating to safeguarding your cargo against fraud and other dubious practices..
9) There are several entities that are involved in an import movement.. Understand the roles of each of these entities..
- Shipping Line – the entity that will bring your cargo say from New York to Durban.. The shipping line will either have agents or own offices at the Load Port and Discharge Port.. Find out who the local agents are in your city..
- Freight Forwarder/Customs clearing agent – who will be handling the customs clearance for your cargo.. Some removal/forwarding companies have a customs clearance license and they will do the clearance for you themselves.. Depending on the scope of work you have given them, they could be delivering the cargo to your warehouse or door.. They will also liaise with the shipping line about the arrival details of your cargo and should keep you updated..
- Destination shipping line office/agent – they are the counterparts of the shipping line at the destination and they issue the final release of cargo to your agent..
10) Even though you have appointed an agent and you leave it to them to take care of all the processes, here’s something that YOU personally must follow, for your peace of mind..
- Insure Insure Insure – this is another important aspect in the entire shipping cycle that must be taken very seriously.. This is YOUR cargo and you need to ensure that it is covered by insurance via a reputed cargo insurance company with international coverage or presence..
- Make sure that you get the original insurance policy from your broker or insurance company (elementary you might say – but there have been cases where people have not done this) and keep it safe..
- If anything does happen to your cargo, this is one of the most important documents you must produce to recoup your losses..
- For personal effects cargo, ensure that the packing company prepares an inventory list of what items they are putting in what package..
- They must give you that final copy which you and the packing company must sign as acknowledgement of what was handed over to them and in what condition.. If there are any obvious external damages to your goods, that must be clearly highlighted..
11) Establish and verify that your goods have actually been shipped.. Ascertain and familiarise yourself with the route that your cargo will take from port of load to port of final discharge, and how long it is expected to take, especially if you are shipping your cargo as LCL and if the cargo is going to be reworked into another container along the way..
12) Documents that you must receive from your agent once the shipment has been loaded on the ship..
- Bill of Lading – this can be either in original or a copy of Waybill depending on the arrangement with your buyer..
- If it is your personal effects, then you can take a Waybill and show the consignee as YOU so that cargo will be released only after proof of identify is verified.. If you are not able to be present at destination when the cargo arrives, then suggest you consign it to your agents at destination for them to take delivery on your behalf..
- Copies of the documents that have been filed with customs..
- Copies of the documents that have been filed with the port authorities for payment of wharfage..
- Weighbridge certificates if any, sampling analysis certificates if any, Certificate of Origin..
Phew..!! Not too much of a hassle heh..
If you have not already read it, there is a similar article if you are exporting for the first time..
Do you have any other information or points to share that will help a first time importer..?? Please do comment if you do..