Navigating International Shipping Regulations: A Guide by Scarbrough
International shipping is a complex process – from booking freight space to planning routes – and that’s just the beginning. Businesses must also navigate ever-changing international regulations and compliance requirements. Having the right people on your side can help ease many of the potential headaches that come with these challenges. In this blog, we’ll walk through some of the most common difficulties when dealing with international shipping.
Understanding Complex Regulations
Once space has been booked for the shipment, the regulatory challenges begin. A large part of the challenge is that each country has its own regulations and guidelines. While much of trade is governed by similar rules, there are nuances to be aware of when dealing with different countries. These differences can be procedural, safety regulations, or taxes and tariffs. On top of that, regulations can change frequently, making it even more difficult for businesses to stay on top of everything.
The first challenge lies in the different customs procedures in each country. As covered in the Customs edition of the Scarbrough Journal, even neighboring countries like the U.S. and Mexico have distinct customs clearance procedures.
However, the required documentation can also pose potential problems for businesses. Clearing customs requires extensive documentation and even the slightest misstep can lead to large financial or time ramifications. Proper classification codes are essential to efficiently and correctly clearing customs. Other information, such as country of origin and destination, can become tricky if the goods are routed through multiple countries. Country of origin becomes especially important when determining tariff rates, and incorrect declarations can be extremely costly.
Tariffs and taxes are another area that differs by country. As we’ve seen recently, they can change suddenly, and they have different rates depending on the country of origin of the goods. There are layers of complexity that come with tariffs, as well. Duty rates vary not only by product type but also by country of origin. For example, goods from China may face different tariff rates when entering the U.S. than when entering Canada. On top of that, the rates can change based on the type of goods being shipped. This is another reason why the classification of goods is so important. Misclassification can lead to an incorrect duty rate being applied, which could lead to more payments or fines.
Safety standards and certifications are yet another piece of the puzzle. Safety regulations and required certifications for certain goods can also differ by country. Since each country is allowed to set its own regulations on what can enter its borders, there are multiple sets of rules by which businesses have to abide. This is especially important in industries such as pharmaceuticals, food and beverage, and electronics. Some goods will require specific certifications to enter a country, adding one more layer of complexity to an already difficult process.
Compliance is Key
Maintaining regulatory compliance is non-negotiable when it comes to international shipping. In today’s era of heightened scrutiny around ethical sourcing, even an unintentional violation can significantly damage a company’s reputation. Understanding international regulations and implementing effective risk-management strategies is crucial for businesses to remain efficient and protect their bottom line. Consequences of non-compliance can range from financial penalties, legal action, or even reputational damage to businesses. With the recent emphasis on ethical sourcing and supply chains, it can be difficult for a company to save its image if it is caught skirting any regulations, whether intentional or not.
Staying on top of these regulations is no easy task, either. These rules are fluid and can sometimes change in a day. Keeping up with constant changes, especially when dealing with multiple countries, takes time and a certain level of expertise. It also requires flexibility and proactive thinking to be able to change strategies on short notice if necessary.
Help is Available
Luckily, there are options available to help companies struggling to keep up with all these factors. From human partnerships to technological aids, there are multiple ways to relieve the stress of managing compliance and shipping regulations.
The rise of Artificial Intelligence and machine learning has provided new tools for companies to leverage to streamline their processes and take some of the guesswork out of the equation. Software solutions can provide advanced tracking of shipments and use AI to automatically sort and file paperwork in some instances, saving countless hours in the process. Billing and payments can also be automated to ensure timely invoicing. Not only can these processes save time, but they can also remove some of the risk of human error when completing and submitting paperwork.
Finally, working with reputable customs brokers or logistics providers is another avenue for companies to reduce the headaches of international shipping. The best customs brokers are able to stay on top of trends and changing regulations to come up with solutions before potential problems can arise. They also tend to have existing relationships and partnerships with agencies around the world that allow them to better deal with potential changes to regulations or tariffs. This type of expertise and industry knowledge can often be the difference between a smooth shipping process and potential disaster.
If you’re an international shipper struggling to stay ahead of regulatory changes, contact Scarbrough today. Our tailored solutions can help simplify your operations, ensure compliance, and protect your bottom line.
