Customs Clearance
Definition
Customs clearance is the process of getting goods approved by government authorities to enter or leave a country, including filing declarations, paying duties and taxes, and satisfying any inspections. Goods cannot be delivered until clearance is complete.
In Practice
Clearance starts with an entry filing, usually by a licensed customs broker, declaring the goods' classification code, value, origin, and applicable duties. Authorities then release the shipment, ask for documents, or select it for examination. Most entries clear in hours; a physical exam can add days or weeks and exam fees.
For planners, customs is a lead-time risk node that behaves well until it does not. Accurate commercial invoices, correct HS classifications, and consistent valuation keep clearance boring, which is the goal. Errors invite holds, penalties, and audit exposure, and a container stuck in customs racks up storage and demurrage while customers wait. Pre-filing before arrival and keeping broker power-of-attorney and bond arrangements current are standard hygiene.
For example, an importer whose container is selected for an intensive exam sees it trucked to an exam site, opened, and released twelve days later, with exam and demurrage fees on top.
Related Calculators
Related Terms
Duties and tariffs are taxes governments levy on imported goods, usually calculated as a percentage of the goods' declared value based on their classification code and country of origin. They are a direct component of landed cost.
Free Trade ZoneA free trade zone is a designated area where imported goods can be stored, processed, or assembled without immediately paying customs duties, which become due only if and when the goods enter the domestic market. In the US these are called foreign-trade zones (FTZs).
DemurrageDemurrage is a charge assessed when a container stays at a port or rail terminal beyond its allotted free time before being picked up. It is billed per container per day and escalates the longer the box sits.
Freight ForwarderA freight forwarder is an intermediary that arranges international shipments on behalf of shippers, booking space with ocean and air carriers, preparing documentation, and coordinating handoffs along the route. Forwarders do not usually operate the ships or planes themselves.