Last Updated: 12/13/21

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 most common types of holds and 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.

“Why Did Our Shipment Get Chosen for a U.S. Customs Exam?!?”

When you receive notice that your shipment has been put on hold or selected for a U.S. customs exam, your first thought might be, “Why us?!”

Unfortunately, it’s impossible to tell for certain why your shipment was selected. As part of their mission to secure the border, U.S. Customs and Border Protection (CBP) uses unknown algorithms to evaluate the degrees of risk for each shipment entering and departing the United States.

Where does CBP get its information? The details around shipments crossing the U.S. border are entered into systems like CBP’s Automated Manifest System (AMS). For ocean freight shipments, the agent or broker for every shipment submits the mandatory Importer Security Filing and Additional Carrier Requirements (ISF), also known commonly as 10+2. Using that data, CBP’s algorithms evaluate each shipment and flag ones that it judges suspicious.

While no one (except CBP!) can say for certain exactly how those algorithms work, we do know there are certain factors that heighten the possibility of an exam. For example:

U.S Customs may examine your first few shipments to establish your legitimacy. 

 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 U.S. Customs 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. 

Materials that have a history of inaccurate labeling, reporting, or valuing may be targeted for an exam. 

Shipments originating from certain countries, cities, or geographic areas can be more susceptible to inspection. 

 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. 

Were you missing any commercial documents, such as your commercial invoice, bill of lading, packing list, or arrival notice? This can trigger a hold or a request for additional documentation. In many cases, it can also trigger a physical 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 for a hold or inspection, it goes through an established process. The whole thing can be both unclear and aggravating while you’re waiting for your shipment to clear. In addition to adding extra time, customs holds and exams can also add extra 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 or hold, we can help reduce some of the mystery by walking you through how these processes work.

First, we’ll take a look at holds, which are just what they sound like—when your shipment is put on “pause” for a variety of reasons.

What Types of Holds Can Be Put on Incoming Shipments?

When you’re waiting for a shipment to clear in or out of the U.S., you might get word that it’s been put on a “hold.” There are several different types of holds that incoming cargo can be subject to, each with their own purpose and procedure. Below, you’ll find the most common ones we see.

The Customs Exam Process: Selection & Inspection 

Once flagged for inspection, your cargo will likely be subject to one of three common exams, each of which has its own timeline and fees. 

line up of trucks at customs

Finally, 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.

 They’ll also make sure your shipment is properly prepared by ensuring that your Harmonized Tariff Schedule is correct, getting your ISF filed on time, and noting any red flags. Look for a freight forwarder who can connect you with a customs broker who can help your shipment clear in case of a hold or inspection. 

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.  

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 hold or 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 U.S. Customs that you're 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. 

Have more questions about customs exams? Reach out to one of our experts. We’d be happy to walk you through the possibilities and get you the assistance you need. 

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