Perhaps one of the most common reasons shippers change their shipping providers is over hidden or surprise fees. Shipping costs already take up so much room in many business’s yearly budgets, and having anything tacked on additionally can be a huge deal breaker.
Unfortunately, not all additional fees are avoidable or the fault of your freight forwarder. From time to time, you may have encountered a Customs Exam Fee as a line item of your freight bill. Do you know what a Customs Exam Fee is?
Customs Exam Fees: What Are They?
Customs Exam Fees aren’t fun for anyone. They come out of left-field, they can be pricey, and they’re simply down-right frustrating. But there tends to be a lot of confusion amongst shippers as to what they are and why they only happen sometimes and not all the time – doesn’t Customs examine all cargo? Well, it’s not quite that simple.
Examining 3% Of Cargo
U.S. Customs and Border Control is pretty strict. You’d assume they must inspect all cargo that crosses the border, right? Actually, out of the 11 million containers that come into the U.S. each year, Customs only examines roughly 3-4% of that cargo.
As you might imagine, inspecting all the cargo would put a major bottleneck in the process and slow international trade down significantly, so the CBP has their own procedures that help them to determine what shipments should be inspected based on shipper history, activity, origin/destination of cargo, type of cargo, documentation, and many other factors.
Customs Exam Fees
As you may have put together by now, a Customs Exam Fee is a fee that is tacked onto a shipment by U.S. Customs and Border Protection (CBP) when they pull your container for inspection. Keep in mind that this is not a flat rate – it could be as low as nearly $50, or extend well beyond $1,500. It all depends on what type of customs exam was done.
Customs exams can be brutal from time to time. Most the time, customs just looks to inspect documentation – they’ll verify addresses, shippers, contents of the container, etc. from the documentation, add a small fee, and send your shipment on its merry way in no time.
Other times, it gets a little more involved than just looking at documents. Sometimes Customs will open a container to see what’s inside, and in less common situations, they may pull every item out of the container to check it.
We even heard a story of U.S. Customs and Border Control taking a knife to the back of brand new leather couches inside a shipping container to check inside them for illegal substances (by the way – there were no illegal substances and we can only imagine how frustrating that was for the shipper if their cargo wasn’t insured.)
What To Do About Customs Exam Fees
Well, at the end of the day the answer is simple – you have to pay them. These aren’t fees added by your freight forwarder for the sake of taking advantage of you or creeping your prices up. They are added by U.S. Customs and they can vary greatly in price depending on the type of exam that was performed on your cargo.
We can say this though – insuring your cargo barely costs anything in relation to the commercial value of the product, but if you fail to do so, you might end up like the furniture company mentioned above. In that instance, you’ll be left paying for a Customs Exam, the entire shipping process, and you’ll be paying all of that twice to get new, undamaged products back into the U.S. (and unfortunately putting yourself at risk for it happening a third time…)
If you have any questions about Custom Exam Fees, U.S. Customs practices, or cargo insurance, please don’t hesitate to just call and ask some questions to one of our team members. We’re always happy to lend a helping hand and offer answers that may be of help to you and your team!