Customs Considerations When Exporting to the USA

Mufaddal K.

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Manufacturers looking to export their products abroad need to consider various factors when evaluating export markets.  One of those factors is the customs clearance infrastructure and processes within a given country.  This article presents an overview of the time and cost it takes for a local partner to clear imported products through customs in United States.  This overview, along with a regional comparison, should help you better qualify United States as an export market for your products.



Country Overview


United States is located within the North America region.  It has a population of roughly 327 million people as of 2018.  83% of the population lives in urban areas.  The World Bank categorizes it as a high income country with a GDP per capita (PPP) of USD $59500 per person.



Regional Comparison


The "World Bank's Doing Business project" publishes an evaluation of countries based on their efficiency of cross border trade.  When assessing import efficiency within a country it primarily reviews four factors:


1.  The time for border compliance (imports):  Compliance time associated with the country's customs regulations, inspections and handling that takes place at its port or border.  Assumes a US$50,000 imported shipment of auto parts weighing 15 tons for calculation purposes.


2.  The cost of border compliance (imports):  Compliance cost associated with the country's customs regulations, inspections and handling that takes place at its port or border.  Assumes a US$50,000 imported shipment of auto parts weighing 15 tons for calculation purposes.


3.  The time for document compliance (imports):  The time for obtaining documents, preparing documents, processing documents, presenting documents and submitting documents.  Assumes a US$50,000 imported shipment of auto parts weighing 15 tons for calculation purposes.


4.  The cost of document compliance (imports):  The cost for obtaining documents, preparing documents, processing documents, presenting documents and submitting documents.  Assumes a US$50,000 imported shipment of auto parts weighing 15 tons for calculation purposes.



When evaluating border compliance time and cost amongst major regional economies, United States ranks 1st regionally in terms of border compliance time and 2nd regionally in terms of border compliance cost.  A US$50,000 imported shipment of auto parts would take 2 hours to clear border customs and cost roughly US$175.


Country    Border Compliance Time (Hours)    Border Compliance Cost (USD)   
Canada 2 $172
United States 2 $175


When evaluating document compliance time and cost amongst major regional economies, United States ranks 2nd regionally in terms of document compliance time and 1st regionally in terms of document compliance cost.  A US$50,000 imported shipment of auto parts would take 8 hours in United States to have documents prepared & cleared and would cost roughly US$100.


Country    Document Compliance Time (Hours)    Document Compliance Cost (USD)   
United States 8 $100
Canada 1 $163


Differences Between Major Cities in United States


The World Bank analyzed two major cities in United States as part of their analysis.  As seen below, the time and cost for both border compliance and document compliance is the same for Los Angeles vs. New York City.


Major City Border Compliance Time (Hours) Border Compliance Cost (USD) Document Compliance Time (Hours) Document Compliance Cost (USD)
Los Angeles 2 $175 8 $100
New York CIty 2 $175 8 $100


Detail for Border Compliance Time and Cost


Border compliance time and cost are calculated as a function of three driving factors: the time/cost related to working with customs authorities, the time/cost related to working with other agencies and finally border handling time/cost.  The border compliance time for both cities is driven by both working with custom authorities and border handling.  But border compliance cost is primarily driven by working with custom authorities.


Los Angeles Overview:


Detail Type    Time (Hours)    Cost (USD)   
Working with Custom Authorities 1.5 $175
Working with Other Agencies 0 $0
Border Handling 0.5 $0


New York City Overview:


Detail Type    Time (Hours)    Cost (USD)   
Working with Custom Authorities 1.5 $175
Working with Other Agencies 0 $0
Border Handling 0.5 $0


Detail of Document Compliance Time and Cost


Document compliance time and cost is a function of the various documents required by the country when importing goods.  For United States, the documents required when importing goods from abroad include an Inland bill of lading, NAFTA - Certificate of origin, Commercial invoice, Packing list, Customs Release Form 3461 and Customs Entry Form 7501.



Transportation Costs


Another factor that influences import trade efficiency is transportation costs.  For Los Angeles, the port where goods would most likely land would be the El Paso border crossing (when coming from Mexico).  When calculating transportation cost for the US$50,000 auto parts shipment, the World Bank calculates that the shipment would need to be transported 1295 km with an average travel time of 31 hours.  This brings the delivery transportation cost for the shipment to roughly US$1931.



For New York City, the transportation cost is higher.  The World Bank calculates that the US$50,000 auto parts shipment, that would most likely come through the Laredo border crossing (when coming from Mexico), would need to be transported 3192 km with an average travel time of 109 hours.  This brings the delivery transportation cost for the shipment to roughly US$4373.



Infrastructure Digitization


Greater use of technology within the customs clearance process helps improve efficiency and lower time and cost associated with customs clearance.  Today many countries use digital systems to streamline the customs clearance process.  Many of these customs systems are known as EDI or Electronic Data Interchange systems.  More recently however, there has been a push to develop even more integrated customs clearance systems known as SW or single window systems.  These systems provide greater integration within a given country and between multiple countries when managing customs clearance.



United States does have an EDI system known as Automated Commercial Environment (ACE).  It is also developing a SW system that is known as International Trade Data System (ITDS).