Customs Clearance Problems and How to Avoid Them

Everything seems fine, your shipment is packed, dispatched, and on its way to Singapore or Dubai until you get a sudden customs alert: “Clearance Delayed – Physical Inspection Required.” Then, delivery dates are delayed by weeks, storage fees start rising day-by-day and customers’ promises are jeopardized. One of the biggest and most expensive problems that an exporter can face in international trade is customs clearance delays. 

To speed up, streamline and improve shipments all around the world, it is necessary to understand the true cause of these delays.

Why Do Shipments Get Stuck in Customs?

Proper documentation, accurate declarations, and experienced logistics support are essential for smooth and timely customs clearance in international trade. Issues like insufficient paperwork, wrong HS codes, valuation problems, duties not paid for, and missing compliance certificates are just a few of the reasons that shipments languish in customs. Cargo can also be detained by customs officials for country-specific regulatory inspections, restricted goods verification, and random inspections. Small mistakes with the paperwork can cause delays, storage fees and delivery schedules to get confused. 

1. Documentation Errors

Documentation errors are the most common cause of delays, accounting for 35% of them.

Inconsistency will be flagged for physical inspection, such as HS code mismatch, weight discrepancy, invoice description doesn’t match packing list.

Real example: One exporter of textiles sends an invoice to the importer for “100 kg cotton fabric” but the shipping manifest is “150 pieces cotton cloth”. Customs cannot verify the shipment and thus open ALL the packages.

Solution:

• Review the documents prior to departure with the original documents
• Don’t use a random freight forwarder the same person who double checks
• Create a list of documents: invoice, packing list, HS code, origin certificate, weight

Time saved: 3-5 days

2. Improper Commodity Classification

The second problem is “Commodity Misclassification” which accounts for 20% of the delays.

If duty rate is incorrect = customs investigation, if HS code is incorrect.

When electronics are classified as “general goods” they are reclassified as “DG cargo” and reclassification and surcharges are applied.

Solution:

• Please consult with a Customs Broker before booking for HS codes
• The database of Customs HS to be used is: http://tariffline.gov.in
• Please ensure that manufacturer certificates are obtained prior to ordering pharma/chemicals

Time saved: 2-7 days

3. Missing Regulatory Certificates

The missing regulatory certificates are the largest factor in the delays, accounting for 15% of them.

For some products certificates are required: quality certificate, origin certificate, phytosanitary (agricultural) certificate, CE marking (Europe).

A chemical exporter has lost the Material Safety Data Sheet (MSDS). It will not be cleared at customs on the way.

Solution:

• Be familiar with the necessary documents to import into the country before arriving there
• When shipping, collect all certificates required
• Ensure you’re compliant with requirements when working with your customs broker

Time saved: 5-10 days

4. Incorrect Invoice Descriptions

This is one of the most common reasons for delays, making up 15% of the cases.

If the information is not clear (e.g. “textiles”) or there is no unit price or the unit price is in a different currency, then an investigation is conducted.

It should be specific and precise: Example: “clothing” should be “100 units men’s cotton shirts”. There is no way to determine the value – inspection necessary.

Solution:

• Make detailed and specific descriptions when creating invoices
• Be sure to make it clear that unit price and total value are clear
• Match the currency of the invoice with the currency for the customs declaration

Time saved: 2-5 days

5. Port Congestion & Backlogs

This is a problem in port congestion and backlogs, accounting for 10% of delays.

It’s always difficult to get through the documentation, even at the best of times. There are delays of 3-5 days in June-August and November-December.

Solution:

• If possible, make shipments when the volume is not as high as during the peak season
• Please make a few weeks advance booking during busy periods
• Use air transportation for expeditious delivery of goods
• Request priority clearance (where goods are of time importance – it is charged for separately)

Reduction in time: 2-10 days normal time (depending on the situation)

6. Currency Valuation Disputes

The currency valuation disputes problem (5% of delays) is a problem that arises when two parties disagree on the value of a currency.

You state a lower value than the customs values at the destination and customs may think you have done this to avoid duties. They are able to make their own assessment.

In real life, the price of a laptop is SGD300, and Singapore customs considers the market price to be SGD400. They will charge more on that and investigate the matter for any possible fraud.

Solution:

• Record and use market prices as they are at the time of sale on invoices
• If it is indeed the case that prices are low (bulk discount, seasonal sale etc), note the reason
• Include P.O’s from customers to help with price quotation
• Explain why it is necessary to price with customs broker

Time saved: 3-7 days

How long does Customs Clearance take?

Conditions	Timeline
The perfect documentation, low risk goods	2-3 days
Minor documentation adjustments	5-7 days
Physical inspection	10-14 days
Any major differences or DG cargo	20-30 days
Fraud investigation (rare)	60+ days

The Hidden Costs of Customs Delays

• Port storage: ₹500-1,000/day/container
• Demurrage charges: ₹1,000-2,000/day
• Customs broker fees: ₹10,000-30,000 per case
• Damage due to long storage: 1-5% of the value of the cargo
• Late delivery – invaluable loss of sales

The delay charges for customs clearance of an expense of ₹50 lakhs shipment for a period of 10 days can be ₹50,000-100,000 rupees.

Tips to avoid Custom Delays

• Ensure accurate documentation: Double check invoices, packing lists and shipping documents for accuracy.
• Use proper HS/commodity codes:  Proper product classification avoids clearance problems and penalties.
• Correctly value shipment: Misvaluing may lead to delays and inspections.
• Know destination country regulations – Keep up to date with import laws, taxes and banned products.
• Plan Permits and Licenses: Obtain necessary permits and licenses prior to shipment delivery.
• Don’t carry banned or restricted items: Check with local customs on compliance of product.
• Complete shipment details: Be sure to use clear product descriptions, quantities, and origin.
• Use professional customs brokers: They will be able to guide you through the process and clear the goods quickly.
• Ensure compliance: Document for audits and verification purposes.
• Monitor shipments proactively: Keep track of customs clearance and respond promptly to any queries and requests.
• Properly package and label deliveries: Proper labelling reduces problems of inspection and handling.
• Communicate with customs: Budget customs processing time, particularly during busy shipping periods.

Pro Tip – The Power of Customs Brokers

A good customs broker is worth his/her price when traveling to a new country. They:

• Navigate local regulations
• File documents correctly
• Expedite inspections
• Be able to use negotiation with customs officials
• Reduce delays by 50-70%

This investment of ₹10,000-20,000 per shipment is worth the while for international trade as it helps to avoid delays and charges of ₹50,000+ per shipment.

Key Takeaway:

The vast majority of incidents of customs delays are avoidable. However, 90% of clearance issues are solved by proper documentation, proper classification, required certificates and a good customs broker.

Worried about your freight’s customs clearance & shipping on time? The Fak Cargo offers a seamless worldwide cargo shipping experience with easy customs compliance & follow-ups.

Don’t let customs delays end your export aspirations. Because Fak Cargo covers it.

Connect now and let us take care of the international shipping requirements for your business.