Last Updated: 03/06/2019
Customs exams can be a significant source of frustration and confusion when you’re moving goods in and out of the United States. Additionally, when your shipment is put on a customs hold, it can completely derail its timeline—and cost you money.
To help reduce some of the mystery around these exams, we’ll walk you through the three most common types of customs exams, along with their timelines and fees. We’ll also help you understand why your shipment might get targeted for a customs exam, as well as what you can do to avoid the delays and costs that result.
When you receive notice that your shipment has been put on hold or selected for a customs exam, this might be your first reaction.
Unfortunately, it’s impossible to tell for certain why your shipment was selected. As part of their mission to secure the U.S. border, Customs and Border Protection (CBP) uses unknown algorithms to evaluate the degrees of risk for each shipment entering and departing the United States.
While no one can say for certain exactly how those algorithms work, we do know there are certain factors that heighten the possibility of an exam.
1. Is this your first shipment? CBP may examine your first few shipments to establish your legitimacy.
2. Who is the shipper? How often do they ship goods? Do they have a track record of mismarking or mislabeling goods?
Additionally, what was the chain of custody? Who handled the goods from the time they were packed, shipped or stored? Were the people involved known shippers? Or are they unknown entities?
Know that CBP keeps track of the history associated with your entire supply chain. If one of the players has made errors in the past, your shipment may be more likely to be flagged for investigation.
3. What is being shipped? Materials that have a history of inaccurate labeling, reporting or valuing may be targeted for an exam.
4. Where is the shipment coming from? Shipments originating from certain countries, cities or geographic areas can be more susceptible to inspection.
5. Were your goods consolidated with other shipments? If so, the entire container might get flagged for inspection because of other shipments in the same container. This will affect your shipment—and not just in terms of the timeline. Inspection costs on a consolidation are shared by all parties, regardless of who was flagged for inspection. For this reason, some freight forwarders may counsel you against choosing a consolidation since you might get flagged by no fault of your own.
6. Was your paperwork incomplete? Were you missing any commercial documents, such as your commercial invoice, bill of lading, packing list or arrival notice? This can trigger a hold and, in many cases, an inspection.
However, at the end of the day, many shippers who do everything “right” can still be one of the 3-5% of shipments chosen each year for a customs exam. Unfortunately, it’s simply part of the reality of shipping goods in and out of the U.S.
Once your shipment is selected, it goes through an established process, one that can be both unclear and aggravating whiles you’re waiting for your shipment to clear. In addition to adding extra time, customs exams will also add extra costs to your shipment in the form of fees, which must be paid before the shipment is released. More on that in a moment.
So although we can’t help you avoid every customs exam, we can help reduce some of the mystery by walking you through how the examination process works.
The Customs Exam Process: Selection & Inspection
Once flagged for inspection by CBP’s algorithm, your cargo will likely be subject to one of three common exams, each of which has its own timeline and fees.
Customs Inspection Type #1: VACIS/NII
The Vehicle and Cargo Inspection System (VACIS) or Non-Intrusive Inspection (NII) is the most typical inspection you’ll encounter. Despite the fancy acronyms, the process is quite simple: Your container is X-rayed to give the CBP agents a chance to look for contraband items or cargo that doesn’t match the paperwork provided.
Because this inspection is relatively unobtrusive, it’s generally less costly and time-consuming. The inspection cost is generally around $300. However, you may also be charged for transportation to and from the inspection site, also known as drayage. How long it takes depends on the amount of traffic in the port and the length of the queue, but you’re generally looking at 2-3 days.
If the VACIS/NII exam doesn’t yield anything surprising, your container will be released and sent on its way. However, if the exam raises suspicion, your shipment will be escalated to one of the two more thorough exams that follow.
Customs Inspection #2: Tail Gate Exam
In a VACIS/NII exam, the seal on your container stays intact. However, a Tail Gate Exam represents the next step of the investigation. In this type of exam, a CBP officer will break the seal of your container and take a peek inside some of the shipments.
Because this exam is a little more intense than a scan, it may take 5-6 days, depending on port traffic. Costs can be up to $350, and, again, if the shipment has to be moved for inspection, you’ll pay any transportation costs.
If everything looks in order, the container may be released. However, if things don’t look right, your shipment may get upgraded to the third type of inspection.
Customs Inspection #3: Intensive Customs Exam
Buyers and sellers often dread this particular type of examination, because it can result in delays that range from a week to 30 days, depending on how many other shipments are in the inspection queue.
For this exam, your shipment will be transported to a Customs Examination Station (CES), and, yes, you’ll pay the drayage costs for moving your goods to the CES. There, the shipment will be thoroughly inspected by CBP.
As you can probably guess, this type of inspection will be the most costly of the three. You’ll be charged for the labor to unload and reload the shipment, as well as detention costs for keeping your container longer than expected—and more. At the end of the day, this type of exam can cost you a couple of thousand dollars
Additionally, neither CBP nor the employees of the CES are responsible for any damage done during an inspection. They will also not repack the container with the same care it was originally shown. As a result, shipments subject to intensive customs exams may arrive damaged. That’s why it’s important for you to secure adequate coverage against transit- or inspection-related damages.
A Few Notes on Fees
As we mentioned, every type of customs exam will result in fees. Even though CBP is the organization that requests these inspections, under Federal Law, the importer is required to pay the associated fees. For exports, refer to your contract to determine who’s responsible for payment, the buyer or the seller.
Ultimately, these fees are not directly charged by CBP. Instead, you’ll be paying fees to:
- The Centralized Examination Station (CES), which is a private facility that CBP uses to inspect shipments. The staff at the CES will take care of the logistics of your inspection, such as loading and unloading your shipments, and you’ll pay for that service. They may also charge you storage fees for holding your shipment in their warehouse.
- The transportation company who moves your shipment to and from the CES. You’ll see these on your invoice as drayage charges.
- Your shipping company, who may charge you for things like detention and demurrage because you’re using their container for longer than expected. If needed, they may also charge storage fees, depending on your particular situation.
At the end of the day, your shipment will not be released until all fees have been paid, so make sure you arrange for prompt payment to avoid further delays and fees.
How Can You Avoid Customs Exams and Fees?
As we mentioned, sometimes being selected for customs exams is simply luck of the draw. However, there are a few things you can do to minimize your chances of being selected for an exam.
- Get your paperwork in order and make sure it’s clear. An experienced freight forwarder can provide you significant assistance in this regard. They’ll know exactly what documents you need and what kind of language may raise eyebrows with officials. Look for a freight forwarder who can also connect you with an experienced customs broker who can help your shipment clear as promptly as possible.
- Provide accurate valuations of your goods. The staff at CBP do look at these numbers and compare them to similar shipments. If your numbers are way off, you might trigger some interest. Your freight forwarder can offer you solid advice in this area, too. And while we’re on that topic . . .
- Work with established partners. As we mentioned, your supply chain’s past actions matter. Working with an established freight forwarder and a secure supply chain can help you decrease your chances of being subject to a customs exam.
- Avoid consolidated shipments from unknown partners. Although LCL shipments can save you money, they are more likely to be flagged for inspection. At the end of the day, it may ultimately be worth sending your goods in a dedicated container to avoid the possibility of a customs exam. Talk to your freight forwarder to discuss your options.
- Get to be known by CBP by applying for a Continuous Entry Bond or (CEB). This will help expedite your shipments and reduce the risk of exams by showing CBP you are a reliable shipper. If you’re shipping large amounts of goods, you may even consider becoming a CTPAT member with CBP. If you meet the requirements, you can be subject to both fewer inspections and front-of-the-line inspections if you do get chosen.
Although being chosen for a customs exam is never good news, understanding the process can help reduce the associated frustration. Additionally, by following these tips and working with an established freight forwarder, you can significantly reduce your chance of getting chosen, sparing you the time cost and associated expenses.
If you’re looking for a freight forwarder to help with your import/export needs, Approved moves over 4,000 international shipments yearly—and we’d be happy to help. Simply give us a call, and we’ll help make your next international shipment a smooth one.