Customs Clearance & Freight Insurance Services – Tonlexing Global Shipping Experts

Customs Clearance & Cargo Insurance

Tonlexing offers expert customs clearance services and comprehensive cargo insurance solutions.

Custom & Insurance

When engaging in international shipping, two essential elements play a critical role in ensuring smooth, efficient, and secure deliveries: customs clearance and freight insurance. Whether you’re importing goods to the United States, Canada, or Europe, navigating customs regulations and protecting your cargo from damage or theft are key to success.

Customs clearance is the process of ensuring that your shipment complies with the necessary laws and regulations of the importing country, including paying the correct duties and submitting the right documentation. It helps prevent delays, fines, and other legal hurdles.

On the other hand, freight insurance provides protection against the risk of cargo loss, damage, or theft during transit, covering both the physical value of goods and potential additional costs incurred due to these issues.

In this guide, we will dive into the customs clearance process, explain how freight insurance works, and show you why both are indispensable for your international shipments. Whether you’re new to international trade or a seasoned shipper, this guide will help you make informed decisions and ensure that your goods reach their destination securely and on time.

Table of Contents

What is Customs Clearance?

Customs clearance is a critical process that ensures your goods comply with the regulations and legal requirements of the importing country. Whether shipping by air, sea, or land, customs clearance involves several steps to ensure that your shipment is legally allowed to enter or exit the country.

When goods arrive at a port of entry, customs authorities review the shipment’s documentation, inspect the goods if necessary, and assess the customs duties and taxes to be paid. The process ensures that the imported goods meet national security, safety, and regulatory standards.

The main goal of customs clearance is to:

Verify that the goods match the declaration
Ensure all relevant tariffs, duties, and taxes are paid
Release the goods for transport to their final destination

An efficient customs clearance process is vital to avoid delays or penalties. To facilitate this process, many businesses rely on professional customs brokers who specialize in customs clearance services.

How Customs Clearance Works

The customs clearance process involves several stages, each aimed at ensuring that goods comply with the importing country’s regulations. Understanding how this process works is essential for timely delivery and avoiding unexpected costs.

Here’s a step-by-step breakdown of how customs clearance works:

Preparation of Documents
The first step in customs clearance is gathering the required documents. These typically include the commercial invoice, packing list, bill of lading, and any certificates or licenses needed for specific goods (e.g., import licenses for controlled products). A customs declaration is also submitted, detailing the nature of the goods and their HS code.
Submission to Customs Authorities
Once the documents are ready, they are submitted electronically or physically to the customs authorities. The authorities then review the documents to verify the declared value and ensure compliance with customs regulations.
Inspection and Risk Assessment
Customs authorities may select shipments for inspection based on various risk factors. These can include the declared value, the product type, or random selection. If a shipment is flagged, customs may physically inspect the goods to ensure they match the documents.
Duties and Taxes Calculation
The customs broker or importer calculates any applicable duties, taxes, and other fees based on the customs valuation of the goods. These calculations are based on the HS code of the items, their value, and the country of origin.
Payment of Duties and Release of Goods
Once customs approves the shipment and the necessary duties and taxes are paid, the goods are released for delivery. This final stage clears the shipment to continue its journey to the destination.

By working with an experienced customs broker, importers can ensure that all steps are completed efficiently and in full compliance with customs regulations, minimizing delays and additional costs.

Customs Documentation & Declarations

Customs documentation is a crucial part of the customs clearance process. Without the correct documents, your shipment could be delayed, incur additional charges, or even face confiscation. Ensuring that you have all the necessary paperwork in order is essential for smooth customs processing.

Here are the key customs documents and declarations typically required for import shipments:

Commercial Invoice
This document lists the value of the goods being shipped, along with the buyer and seller details, payment terms, and a description of the goods. Customs uses the commercial invoice to assess duties and taxes.
Packing List
The packing list provides a detailed description of the goods being shipped, including quantities, weights, dimensions, and the type of packaging. This is especially important for customs inspections to ensure that the shipment matches the documentation.
Bill of Lading / Airway Bill
The bill of lading (for sea freight) or airway bill (for air freight) is issued by the carrier and serves as proof of shipment and a receipt for the goods. It includes details such as the shipping route, consignee, and consignee’s instructions.
Customs Declaration Form
This is the official form submitted to customs authorities to declare the shipment’s details. It includes the HS code for classification and the declared value of the goods. Accuracy here is crucial to avoid fines or delays.
Certificates of Origin
If applicable, certificates of origin verify the country where the goods were manufactured. This is important for qualifying for reduced tariffs or trade agreement benefits, such as those under the USMCA or CPTPP.
Import Licenses
Certain goods, such as food or chemicals, may require special licenses for import. These licenses are issued by the importing country’s regulatory authorities and ensure that the goods meet safety and regulatory standards.

The key to successful customs clearance is ensuring that all documentation is accurate, complete, and submitted on time. An experienced customs broker can help ensure that all required documents are in place and comply with relevant regulations, preventing delays and additional costs.

Duties, Taxes, and HTS Codes Explained

When shipping internationally, one of the most important aspects to understand is how customs duties and taxes are calculated. These costs can significantly affect the overall cost of your shipment, and understanding how they work can help you avoid unexpected expenses during the customs clearance process.

Customs Duties and Taxes

Customs duties are taxes imposed by the government on imported goods. These duties are usually based on the declared value of the goods and can vary depending on the HS code (Harmonized System code) of the goods, the product’s country of origin, and the importing country’s trade agreements.

In addition to customs duties, import taxes (such as VAT or GST) are also applied. These taxes are usually a percentage of the customs value (the cost of the goods plus shipping and insurance). Different countries have different rates and rules for these taxes, so it’s important to research the specific requirements for your destination country.

How Duties Are Calculated

Customs duties are typically calculated using the following formula:

Duties = Declared Value × Duty Rate

The declared value is the price of the goods plus shipping and insurance. The duty rate is a percentage based on the HS code classification and the tariff schedule of the importing country. For example, the duty rate for electronics might be higher than for clothing.

What Are HTS Codes?

HTS codes (Harmonized Tariff Schedule codes) are used to classify products for customs clearance. These codes are critical for determining the correct duty rate, taxes, and any trade agreements that might apply to your goods. The HS code is an internationally standardized system used to categorize products for customs purposes.

An accurate HTS code ensures that your goods are classified correctly, avoiding delays or underpayment of duties and taxes. Mistakes in HTS code classification can lead to penalties, incorrect duties, or shipment holds.

Trade Agreements and Exemptions

Certain trade agreements, such as the USMCA (formerly NAFTA), can reduce or eliminate duties on eligible products. To benefit from these agreements, it’s important to provide the proper documentation, such as certificates of origin.

The Role of a Licensed Customs Broker

A licensed customs broker plays a critical role in ensuring that your goods are cleared through customs quickly, accurately, and in full compliance with customs regulations. Working with a customs broker helps avoid costly mistakes, delays, and penalties, making them an invaluable partner for anyone involved in international shipping.

What Does a Customs Broker Do?

A customs broker is a licensed professional who facilitates the movement of goods across international borders. Their responsibilities include:

Preparing and Submitting Documents
The broker ensures that all customs documentation, such as commercial invoices, packing lists, and customs declarations, are accurately completed and submitted on time. This ensures that your goods comply with local customs clearance services.
Classifying Goods Using HTS Codes
Proper classification of goods is crucial to determining the correct customs duties and taxes. A customs broker uses the HTS code to categorize goods and ensure they’re taxed appropriately.
Paying Duties and Taxes
The broker calculates and arranges for payment of import duties and taxes on behalf of the importer. This includes understanding the specific tariff rates and any trade agreements that may reduce duties.
Communicating with Customs Authorities
The customs broker acts as the liaison between the importer and customs authorities. They manage the inspection process and resolve any issues that arise during the customs clearance process.
Ensuring Compliance
A customs broker helps ensure that shipments comply with all import/export regulations of the destination country. They provide guidance on required documents, special import restrictions, and handling regulations for sensitive goods (e.g., food, chemicals).
Managing Logistics and Shipping
In addition to their customs-related duties, brokers often offer logistics support—helping to manage the physical transportation of goods, including coordinating with freight forwarders, securing space on carriers, and advising on shipping routes.

Why You Need a Customs Broker

Expertise: Customs regulations are complex and frequently change. A licensed customs broker stays up to date with the latest regulations, ensuring compliance and avoiding costly mistakes.
Efficiency: A customs broker helps expedite the customs clearance process, reducing delays and getting your goods to their destination faster.
Cost Savings: By avoiding penalties, reducing customs delays, and optimizing duty payments, a broker can help lower overall shipping costs.

What is Freight Insurance?

Freight insurance is a type of insurance coverage that protects your cargo during transit, providing financial protection in case of loss, damage, or theft while goods are being transported across international borders. Whether you are shipping by air freight, sea freight, or land transport, freight insurance is an essential tool to mitigate risks associated with the transportation of goods.

Why is Freight Insurance Important?

International shipments are exposed to various risks during transit:

Physical damage from accidents, poor handling, or natural disasters
Theft during the shipping process, especially at transit hubs or ports
Loss of goods due to unforeseen events, such as vessel sinking or vehicle accidents

Without freight insurance, you may be left with limited or no compensation for these risks, which can result in significant financial losses. Freight insurance ensures that the declared value of the goods is protected, allowing you to recover the cost of the goods or their replacement value in case something goes wrong.

Types of Freight Insurance Coverage

There are several types of freight insurance policies, each offering varying levels of protection:

All-Risk Insurance
This is the most comprehensive form of coverage, protecting against virtually all risks during transit, including damage, theft, and natural disasters.
Named Perils Insurance
This policy covers only specific risks that are explicitly named in the contract, such as fire or water damage. It is typically less expensive but provides more limited protection.
Carrier Liability
This is the default level of protection provided by the carrier but is often limited. Carrier liability usually covers only part of the shipment’s value, which may not fully reimburse you in case of a loss.
Warehouse-to-Warehouse Coverage
This provides protection from the point of origin (the warehouse or factory) to the destination warehouse, ensuring that the cargo is insured throughout the entire shipping process.

Key Benefits of Freight Insurance

Peace of Mind: Knowing your shipment is covered against risks provides reassurance and security for both shippers and recipients.
Financial Protection: In case of damage or loss, you will be compensated for the value of your goods, reducing potential financial impacts.
Global Coverage: Freight insurance is available for international shipments, offering coverage regardless of the shipping mode or destination.

Types of Freight & Cargo Insurance

When choosing freight insurance, it’s essential to understand the different types of coverage available to ensure your goods are protected according to their value, fragility, and the shipping method. There are several types of cargo insurance policies, each designed to suit different shipping needs.

All-Risk Coverage

This is the most comprehensive type of freight insurance. All-risk insurance covers nearly all potential risks your cargo may encounter during transit, including:

Damage from accidents, weather, and mishandling
Theft or loss of goods
Fire, water damage, and other natural disasters
Shipwrecks or other unforeseen maritime events

This coverage provides peace of mind for high-value or sensitive shipments, ensuring that any loss or damage is compensated at the full declared value of the goods.

Named Perils Coverage

Unlike all-risk insurance, named perils insurance only covers specific risks listed in the policy. Common named perils include:

Fire
Theft
Collision or accident
Water damage or flooding

While this coverage is more affordable, it’s important to carefully review the named perils in the policy to ensure your goods are protected against the risks that are most relevant to your shipment.

Marine Cargo Insurance

This type of freight insurance is designed specifically for shipments traveling by sea. It covers risks such as:

Container loss overboard
Water damage from leaks or floods
Piracy or theft at sea

Marine cargo insurance is essential for sea freight shipments, as the risks of exposure to water, weather, and piracy are much higher compared to air or land transport.

Land Freight Insurance

For goods being shipped by truck or rail, land freight insurance protects your cargo against risks like:

Damage from rough roads, accidents, or weather conditions
Theft or vandalism during transit
Loss from improper handling or packaging

This type of insurance is especially useful for domestic shipments or goods transported through regions with unstable infrastructure.

Air Freight Insurance

This insurance type covers goods being shipped via air freight, protecting against risks like:

Turbulence or accidents during flight
Cargo mishandling at airports or transit hubs
Theft during layovers

Since air freight tends to have fewer handling risks compared to sea freight, air freight insurance typically provides more limited coverage but can still be crucial for high-value or time-sensitive items.

When Do You Need Freight Insurance?

While freight insurance is not mandatory for all shipments, it is essential in many situations to ensure that your goods are protected during transit. Whether you are shipping high-value products, fragile items, or goods across long distances, freight insurance is critical for minimizing risks and ensuring financial protection.

Key Situations Where Freight Insurance is Essential:

High-Value Goods
If you are shipping high-value goods such as electronics, jewelry, or machinery, insurance is crucial to ensure that you are financially protected in the event of damage or theft.
Fragile or Perishable Items
Goods that are fragile or perishable, such as glass, pharmaceuticals, or food products, are at greater risk of damage during transit. Freight insurance provides protection against such risks.
International Shipments
International shipments that involve multiple countries or shipping modes (such as sea freight and air freight) face a higher likelihood of delays or damage. Freight insurance ensures that your goods are covered throughout their entire journey, from pickup to delivery.
Remote or Risky Destinations
If your shipment is heading to regions with high risks, such as high theft rates or areas affected by natural disasters, insurance is particularly important. Freight insurance can help mitigate losses due to risks that are beyond your control.
Unreliable Carriers
While most carriers take precautions, there are cases where damage or loss occurs due to inadequate handling or delays. Freight insurance ensures you are compensated if the carrier’s liability is limited or inadequate.
Customs Delays and Storage
Delays in customs clearance can result in additional storage costs or spoilage, especially for perishable goods. Freight insurance can cover the cost of these unforeseen expenses.

Pro Tip:

Even if carrier liability covers a small part of your shipment’s value, it’s often insufficient to cover the true cost of loss or damage. Always evaluate whether the premium cost for freight insurance is worth the protection, especially for high-value goods.

Tonlexing’s Customs & Insurance Services

At Tonlexing, we offer comprehensive customs clearance and freight insurance services designed to make your international shipping process seamless, efficient, and secure. Whether you’re importing or exporting goods, our experienced team is here to ensure your shipments comply with all customs regulations and are fully protected during transit.

Customs Clearance Services

Our customs brokers are licensed and experienced in managing the entire customs clearance process. We help ensure that all your documentation is in order, duties and taxes are paid, and your goods are cleared through customs without delay. Our services include:

Preparing customs declarations and commercial invoices
Submitting necessary import permits and certificates of origin
Handling HTS codes for accurate classification
Paying import duties and taxes on your behalf
Ensuring compliance with both international shipping regulations and specific country requirements

We are committed to providing fast, accurate, and hassle-free customs clearance, so you can focus on your business.

Freight Insurance Solutions

We also offer a variety of freight insurance options to protect your shipments against risks during transit. With Tonlexing as your logistics partner, you can ensure that your goods are covered from origin to destination:

All-risk coverage for comprehensive protection against most risks
Named perils for a more cost-effective option, covering specific, listed risks
Marine cargo insurance for sea freight shipments
Warehouse-to-warehouse coverage for seamless protection from pickup to delivery

Our team works with top insurance providers to offer flexible, affordable, and reliable coverage tailored to your needs. Whether you’re shipping high-value goods or perishable items, we ensure your shipment is protected every step of the way.

Why Choose Tonlexing?

Expertise: We have years of experience in customs brokerage and freight insurance, providing expert guidance on international trade regulations and insurance policies.
Comprehensive Services: We handle everything from customs clearance to freight insurance, offering a complete logistics solution in one place.
Global Reach: With services available for shipments worldwide, we ensure your goods are protected no matter where they are headed.
Customer Focus: Our team is dedicated to ensuring timely delivery and cost-effective solutions, with your satisfaction as our top priority.