FAQs

Your Incoterm choice determines who pays for transportation, who assumes risk during transit, and who controls the shipping process. Get this wrong, and you lose control of your own supply chain.

We recommend FOB (Free On Board) terms whenever possible. Under FOB, your supplier delivers the cargo to the port of export. Once it's loaded on the vessel, responsibility transfers to you. That means you choose your own freight forwarder and customs broker. FOB gives you five things CIF and DDP don't.

• Full visibility into your shipping costs
• Control over carrier selection
• Transparent freight pricing
• No hidden destination charges
• Better communication throughout transit

Many suppliers quote CIF or DDP because it looks simpler on paper. In practice, those terms bury freight costs inside the product price and take your logistics decisions out of your hands.

When you compare suppliers, request FOB pricing from all of them. That's the only way to compare true product cost against true product cost.

Most imports require several core documents before U.S. Customs and Border Protection (CBP) can release your cargo.

• Commercial Invoice
• Packing List
• Bill of Lading or Air Waybill
• Arrival Notice
• Customs Entry Information
• Government agency documentation, if your product requires it (FDA, USDA, EPA, CPSC, FCC, etc.)

Some commodities need additional permits or certifications. Send your documents to your customs broker before the shipment departs so they can catch missing paperwork before it costs you a delay at the port.

You can legally file your own customs entries. Most importers don't, because customs regulations run thousands of pages and one filing error can trigger a Customs exam, a shipment delay, additional duties, a CBP penalty, or a record-keeping violation.

Krenz & Hannan is a licensed Customhouse Broker (CHB# 41358). We prepare and transmit your customs entry, classify your merchandise, calculate your duties, coordinate with government agencies, and communicate with CBP on your behalf.

For most commercial importers, a broker saves you time and money while significantly reducing your compliance risk.

Three factors set your duty rate.

• HTS Classification: Every product gets a Harmonized Tariff Schedule number.
• Country of Origin: This means where the product was manufactured, not where it shipped from.
• Customs Value: Usually your transaction value, plus certain required additions.

Additional tariffs such as Section 301, Section 232, Section 201, antidumping duties, or other trade remedies may also apply depending on the product and origin.

Proper classification is critical because the wrong HTS number can lead to overpaid duties or penalties. For instance, a cotton knit shirt and a cotton-blend shirt can carry different duty rates. Classify it wrong, and you either overpay or face a penalty when CBP catches it later.

Three parties touch your shipment. Each one has a different job.

• The Freight Forwarder: moves your cargo. This means booking it, coordinating carriers, preparing shipping documents, tracking it, and managing the logistics.
• The Customs Broker: manages regulatory compliance and clears your cargo through CBP. This means filing your entry, classifying your merchandise, calculating your duties, filing with partner government agencies, and keeping you compliant.
• The Importer of Record: answers to CBP. This means filing accurate documentation, paying your duties and taxes, keeping your records, and staying compliant with U.S. import law.

Krenz & Hannan provides freight forwarding and customs brokerage under one roof. You work with one partner for the whole shipment instead of coordinating between two.

Your Importer of Record is legally responsible for filing accurate customs documentation, paying duties and taxes, maintaining records, and staying compliant with U.S. import law.

Your IOR can be a U.S. company, a U.S. individual, or in certain cases a qualified foreign importer. Choosing the proper Importer of Record is an important compliance decision and should be decided before you ship, not after.

If you're a foreign company without a U.S. entity, see question 12 below.

Most shipments clear electronically within a few hours of arrival. Clearance time depends on several factors:

• Your documentation accuracy
• Government agency requirements
• Whether CBP selects your shipment for exam
• Whether any documentation is missing
• Other random inspections

By submitting accurate paperwork in advance, CBP will often release your shipment the same day it arrives.

An exam doesn't mean something is wrong. CBP examines cargo for many reasons, including:

• Random security screening
• Classification verification
• Country of origin confirmation
• Intellectual property enforcement
• Agriculture inspection.

If CBP selects your shipment for an exam, importers are responsible for examination costs, storage charges, and any resulting delays.

While you can't eliminate the chance of an exam, accurate documentation and a clean compliance history significantly reduce your odds.

Keep your records for five years from the date of entry. This means commercial invoices, packing lists, bills of lading, entry summaries, classification support, country of origin documentation, and duty payment records.

Keep these organized. If CBP runs a Focused Assessment, an audit, or a Request for Information, you'll need to produce them fast.