Frequently Asked Questions

International Freight Forwarders are international logistics service providers that co-ordinate and handle the international shipment of goods for individuals or companies.

Our company has been licensed and regulated by the U.S. Federal Maritime Commission as an ocean freight forwarder since 1973, to move cargo on behalf of clients to destinations worldwide. In addition, we are approved by the U.S. Transportation Security Administration as an Indirect Air Carrier to handle the export of air freight to destinations worldwide.

As a Freight Forwarder, Labay/Summers frequently acts and performs as the international logistics department of our clients in connection with moving their goods to foreign destinations via air or sea transport. We work closely with all airlines and ocean ship liner services.

A Customs Broker is licensed and regulated by U.S. Customs and Border Protection, U.S. Department of Homeland Security, to conduct business with U.S. Customs on behalf of clients importing products into the United States. Such goods can arrive by air, sea or road ( Canada and Mexico ).

Labay/Summers has held a corporate license with U.S. Customs and Border Protection as a Customs Broker since 1972. Labay/Summers also has individually licensed Customs Brokers directly involved in the daily management of the company.

Customs Brokers prepare and submit all necessary documentation, information and appropriate payments to US. Customs and Border Protection ( CBP ), on behalf of their import clients. In addition, Customs Brokers are also involved on behalf of their import clients with any requirements as may exist that concern other U.S. governmental agencies ( U.S Food & Drug Administration, U.S Department of Agriculture, Fish & Wildlife Service, U.S. Department of State, U.S. Department of Defense ( DOD ), etc. ).

Customs Brokers must have expertise with U.S Customs entry procedures, admissibility requirements, tariff classification, valuation, and the rates of duty and applicable taxes and fees for imported merchandise. In addition, Customs Broker are required to have a deep knowledge of all U.S. Customs Regulations as well as importing regulations of many U.S. governmental agencies. They also frequently perform many other services involved in the importing process. It may involve but not be limited to unloading containers, repackaging contents of containers, cargo distribution services, arranging for the transportation and delivery of the merchandise to final destinations as stipulated by import clients and many other areas.

Requirements for importing specific commodities depend on a wide variety of factors to be reviewed and considered.

Some information, such as whether an item is subject to quota, dumping, or countervailing duty restrictions, or restricted from entry because they originate in an embargoed country, can be determined only if the importer knows the Harmonized Tariff Schedule classification number of the item(s). Even then, it is not always an easy task to fully identify all requirements. As an experienced and knowledgeable Customs Broker, Labay/Summers has the ability to perform such research rather quickly.

Other requirements depend on other U.S. governmental standards. Many of the items governed by these various rules cannot be imported without permits from the appropriate U.S. governmental agencies. These agencies include but are not limited to the U.S. Food and Drug Administration (FDA) the U.S. Department of Agriculture (USDA), Fish and Wildlife, the Environmental Protection Agency (EPA), the U.S. Department of Transportation ( DOT ) or any one or more other entities of the U.S. government. As a note, U.S. Customs and Border Protection ( CBP ) enforces rules and regulations on behalf of virtually all other U.S. governmental agencies.

Another important requirement is to be aware of the fact merchandise and their packaging must comply with country of origin marking regulations. In addition, the importation of trademarked and copyrighted items is restricted by contractual agreements that give exclusive rights to specific companies or individuals to distribute the product. These laws and regulations are strictly enforced by CBP on behalf of other U.S. governmental agencies.

All products and merchandise entering the United States must be classified within the Harmonized Tariff Schedule ( HTS ). The HTS is utilized by almost every country throughout the world.

An HTS Code is a numeric code utilized in a global system of nomenclature that is used to describe merchandise. Through the application of this code, the appropriate U.S. Customs duties ( and any special regulations ) are determined

Power of Attorney

U.S. Customs and Border Protection requires a Customs Broker to have a Power of Attorney ( for use with U.S. Customs only ) from the importer. The Customs Broker must have possession of the Power of Attorney prior to acting on behalf of an importer. In the case of a corporation, the form must be signed by a corporate officer or other individual duly authorized to sign on behalf of the corporation.

Commercial Invoice

There is no specific format for a commercial invoice but it should be in English or it shall have to be translated at the expense of the importer. The document must show the names and addresses of the buyer and seller, describe the product in enough detail to ensure admissibility and proper classification, terms of sale, purchase price and currency utilized.

The commercial invoice must also indicate the country of origin of each item and contain enough packing details to enable U.S. Customs to readily locate and identify a particular item should they wish to examine the product. The packing information is frequently prepared as a separate document ( Packing List ). The packing information should also indicate the gross and net weight of each line of product In the document. Any selling commissions, assists, royalties, packing and proceeds must be also factored into the pricing information on the commercial invoice. If it is not included in the pricing information on the document, such details should be provided to the Customs Broker prior to entry.

Please note that country of origin and country of export are not necessarily the same. As an example only, goods may be manufactured in China but exported from KoreThose facts should be clearly stated on the commercial invoice.

If the shipment contains returned American goods, additional information will be required.

Based upon the country or origin or merchandise shipped, there may be a request for additional documentation in some cases.

Proof of Ownership

The transport document from origin to destination, such as an ocean bill of lading or air waybill, generally satisfies this requirement.

With most import transactions, U.S. Customs and Border Protection shall require importers to post a bond. The purpose of such bonds is to protect the revenue of the United States ( U.S. Customs duties, as an example ) as well as ensure the importer is in full compliance with all rules and regulations of the U.S. Government.

In lieu of a bond, the importer may post a cash equivalent of the bond amount with U.S. Customs and Border Protection.

There are several types of bonds and the appropriate bond depends upon the importing circumstances. Our company has underwriting authority on behalf of excellent surety companies and can produce any bond that may be necessary.

U.S. Customs and Border Protection does not require an importer to have a license or permit, but other U.S. governmental agencies may require a permit, license, or other certification, depending on the commodity that is being imported and / or the country of origin.

Many exporters and importers are under the false impression air carriers and ocean carriers shall fully compensate them in the event their shipments are damaged, lost or stolen during transit. As a result, exporters and imports often overlook this very critical part of the exporting / importing process.

By international law, ocean carriers limit their maximum liability to USD 500.00 “ per package ) and a “ package “ can be one ( 1 ) 40’ container of merchandise. Air carriers have a limit of liability of approximately USD 9.00 per pound. Further, ocean carriers and air carriers may additionally limit their liability exposure due to acts of God or “unforeseeable circumstances”. If containers are damaged or lost at sea during an ocean voyage, and the carrier declares a condition called “general average”, all the other cargo owners on the vessel must help pay for any lost cargo.

Therefore, we urge our export and import clients to allow us to arrange for cargo insurance coverage to protect their interest. We cover the subject in some detail elsewhere in this website and we are always available to discuss the subject. It is not overly expensive and certainly worth the cost when alternatives are considered.

There are two such fees applicable to most import shipments:

One is the Merchandise Processing Fee (MPF). Effective October 1, 2019, the MPF for formal entries is 0.3464% of the entered value. There is a minimum fee amount of $26.79 per entry and a maximum fee of $ 519.76 per entry.

The second fee is the Harbor Maintenance Fee (HMF) and is assessed only on shipments arriving the United States by ocean carriers. The rate is 0.125% of the entered value with no minimum or maximum.

As part of our services, we calculate these fees on behalf of our import clients based upon information contained in entry documentation.

No.

The decision as to whether to examine imported cargo rests entirely with appropriate personnel of U.S. Customs and Border Protection ( CBP ).

With air freight, a CBP officer may view U.S. Customs entry information and decide to perform an examination to one degree or another based upon the type of cargo, the country of origin or any one or more number of reasons.

With sea freight, our computer system may indicate a shipment is being released and a “ hold “ is placed on the shipment without warning. The “ hold “ usually advises of a physical examination pending. It may be a minimal examination with opening of the container doors or could be an “ intensive “ examination with removal of all or part of the cargo. In the event of “ intensive “ examinations, the labor costs are for the account of the cargo ( meaning the importer pays for the labor costs ). As with air freight, the reason the CBP officer or officers decide to perform an examination could be based upon the type of cargo, information on any available documentation, the country of origin or any one or more number of reasons. As a note, container terminals do not extend credit and require payment before the container is allowed to leave the container terminal.

U.S. Customs and Border Protection reviews all import entries at some point after merchandise is released. They examine the HTS Code as well as any notes made at time of physical examination ( if applicable ) and all details in import documentation.

If it is determined everything on the U.S. Customs entry is correct, the entry is then “ liquidated “ or permanently closed. This process usually takes place within 314 days of the release of the cargo by U.S. Customs and Border Protection.

U.S. Customs and Border Protection requires importers, exporters, air / sea carriers and Customs Brokers to keep or maintain all entry documents on file for a minimum of five (5) years from the entry date or the date of the last activity that required the maintenance of records.

Yes,

Labay/Summers is a member of Global Transport Organization ( GTO ) and has direct access to extremely professional logistics agents in 150+ countries throughout the world. In most cases, Labay/Summers has maintained relationships with a majority of the agents for 40+ years. They frequently act as the branch offices of Labay/Summers and vice versa.

In addition, Labay/Summers has long and productive relationships with hundreds of very professional agents outside the GTO Network. We can move cargo to and from anywhere worldwide.

Yes.

As mentioned in the previous question, Labay/Summers is a member of Global Transport Organization ( GTO ) and has direct access to extremely professional logistics agents in 150+ countries throughout the world. In almost all cases, Labay/Summers has maintained relationships with a majority of the agents for 40+ years. They frequently act as the branch offices of Labay/Summers and vice versa.

In addition, Labay/Summers has long and productive relationships with hundreds of professional agents outside the GTO Network.

Yes.

As many exporters / importers may be aware, “ Cross Trade “ logistics Involve movements that are moving from one foreign location to another foreign location without touching the United States.

As an example, Labay/Summers has an excellent client in the Kingdom of Saudi ArabiThey have purchased products from suppliers located in China, Indonesia, Mexico and elsewhere. Our company worked closely with our trusted agents in the foreign points of origin to complete all arrangements to transport the cargo from the points of supply to the Kingdom of Saudi ArabiAll of it arrived timely and in perfect condition with a savings in freight costs for our dear client.

As another example, we have a good client in Singapore. We arranged the transport of many shipments from points in Europe, Asia and South America to Singapore and none of the cargo touched the United States. The movements involved both air freight and sea freight and it was handled efficiently and with savings in freight costs for our customer.

This service is becoming more and more common as the world moves forward with an expanding global economy with major companies having manufacturing locations everywhere.

Yes.

International transactions take place with selling and buying under “ INCOTERMS “.

Incoterms® is an abbreviation for “International Commercial Terms”. This term represents a very useful way of communication and it's actually aimed at reducing confusion between buyers and sellers. We shall provide additional information in the next question following this one.

They are extremely important as the terms of sale or terms of purchase identify exactly where liability begins and ends and, additionally, which party is responsible for given costs in the transaction.

In the United States, many exporters maintained terms of sale of “ ex-works “ for almost two centuries as it was traditional. As the United States was created late in the 18th century and gradually expanded Westward , it was very traditional for manufacturers to produce given products and make them available at the door of their manufacturing facilities. In such cases, the buyers were responsible for taking delivery of various products at the doors of manufacturers and arrange delivery to final destinations. That practice or policy remained in place for much of the 20th century even though U.S. companies began to develop international markets for their products. However, in the last quarter of the 20th century, U.S. exporters began to frequently sell their products on a C&F or CIF basis in an effort to penetrate markets and offer “ delivered pricing “.

As a Freight Forwarder, our company suggests export clients sell their products on a CIF basis with freight and cargo insurance included in the pricing. The reason is the exporter is able to confirm delivery through the forwarder and, in the event of any damage or loss associated with transit, the U.S. exporter is fully assured of obtaining compensation as well as the opportunity to be of service to their overseas clients in handling such claims. The insurance process would be initiated in the United States.

On the import side, it was traditional during the same time periods mentioned above for importers to purchase goods on a C&F or CIF basis. Importers in those days were usually been focused on the factory prices of the product as well as quality control during the manufacturing process. The transportation expenses from the point of supply ( and cargo insurance premium, if applicable ) were usually accepted as the “ cost of doing business “ while receiving little attention. However, that began changing late in the 20th century and is really changing in the 21st century.

One of the main reasons is the fact importers have began to be aware of the fact foreign suppliers, at times, treat transportation costs ( and insurance premiums, if applicable ) as “ profit centers “. That is particularly the case with sea freight. It is not unusual for foreign suppliers, in some cases, to increase the “ cost “ of ocean freight if they are selling on a C&F or CIF basis. It is as simple as increasing the pricing of the ocean freight on the commercial invoice and a profit is created. If it is a CIF transaction and there is an insurance claim, the insurance company is virtually always located in the country of origin and may have limited resources with regard to surveyors and claims adjustors at destination in the U.S. That is one of the reasons many import clients of Labay/Summers prefer that we arrange cargo insurance on their import shipments.

In addition, there is a constant and growing problem on import shipments moving by sea freight to the U.S. with regard to the “ transfer fees “ of U.S. “ destination agents “. They are companies in the U.S. that are agents of the origin forwarding companies in other countries and they do little more than turn over a shipping document. Very often, the fees can be outrageous and result in unexpected costs for the importer. That is another reason for Labay/Summers to route inbound cargo from the foreign factory or port or airport of export to the United States. We obtain the best rates possible and also manage to avoid the destination agents and their “ transfer fees “ unless it is a small amount agreed upon in advance.

Under no circumstance do we wish to have it said we are issuing negative or unkind comments concerning foreign suppliers wanting to sell their products to buyers in the United States. We are simply informing our import clients and potential import clients of areas to consider when negotiating with foreign suppliers. We want our dear import clients to generate as much profit as possible.

As always, Labay/Summers is most willing to discuss the areas above.

Incoterms® is an abbreviation for “International Commercial Terms.” This term represents a very useful way of communication and it's actually aimed at reducing confusion between buyers and sellers.

INCOTERMS involves the International Chamber of Commerce and we are aware of their copyright rules and regulations.

Rather than risk any exposure to violation of their copyright, we are pleased to provide a link to the website of the International Chamber of Commerce with regard to INCOTERMS 2020.

https://iccwbo.org/resources-for-business/incoterms-rules/incoterms-2020/

Yes.

If your company is an exporter or importer or potential exporter or importer and has questions, we would be delighted to speak with you concerning your questions.

In most cases, we do not charge a fee for simple questions or even a few questions.

It is our desire that inexperienced individuals and / or companies that have not previously exported or imported ask questions before they engage in such activities. The reason is simple. The slightest mistake or error with either exports or imports can be very, very expensive.

Like anything else, the entire process of exporting and / or importing is constantly changing. Air carriers and ocean carriers are frequently changing routes and, in many cases, terms and conditions of carriage. U.S. Customs and Border Protection is frequently changing rules and regulations as well as some procedures. That applies to most ( if not all ) of the various U.S. governmental agencies with whom we are in contact on virtually a daily basis.

In our position as a freight forwarder and customs broker, we also remain aware of constantly changing conditions in other countries. There are frequent changes with ports and airports as well as foreign governmental entities. We are frequently exposed to information that is not commonly known to the general public.

It is our responsibility to our export and import clients to protect their interests whenever and wherever possible. We are very proud of our ability to use our knowledge and experience on behalf of our valued clients.