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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 aU.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:
1. Is this your first shipment?
U.S Customsmay 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 thatU.S. Customskeeps 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 holdor a request for additional documentation. Inmany cases,it can also trigger a physicalinspection.
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.
Manifest Hold
This type of hold happens when there’s something wrong with your documentation. Either there’s some type of paperwork missing—like a bill of lading—or the documentation appears to be incorrect. Usually, under a Manifest Hold, U.S. Customs will request corrected or additional documentation.
CET Hold / (A-TCET)
This is a hold placed by the Anti-Terrorism Contraband Enforcement Team, a specialized division of CBP. This team can place a hold on a shipment under the suspicion that it may contain some type of illegal items, such drugs, weapons, currency, or other illicit contraband.
Commercial Enforcement Hold
This is a blanket term that covers a number of different issues. The hold might be for customs issues or it might be executed on behalf of a number of different government agencies. These include the Food and Drug Administration (FDA), the U.S. Department of Agriculture (USDA), the Consumer Product Safety Commission (CPSC), or the Federal Communications Commission (FCC), all of whom ensure that goods entering the United States comply with federal regulations.
PGA Hold
The Participating Government Agencies (PGA) hold is very similar to the Commercial Enforcement Hold. However, if your shipment is under a PGA hold, your shipment wasn’t flagged for customs reasons but for compliance ones related to the agency that placed the hold.
Statistical Validation Hold
You might get flagged for this type of hold if there’s a mismatch between your manifest and your shipment. For example, if the weight is significantly different than expected for the type of commodity you’re shipping, you might be subject to a Statistical Validation Hold.
In some cases, you or your customs broker can resolve the issues raised as a result of the hold. Submitting a piece of missing documentation, for example, might allow your cargo to continue on its way without an inspection.
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.
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 U.S Customs 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 costs 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.
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.
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.
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 acustoms 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.
Tell us about your move!
I'm an expert in international trade and customs procedures with a deep understanding of the complexities involved in moving goods across borders. Over the years, I've gained first-hand experience dealing with customs exams, holds, and the associated challenges faced by importers and exporters.
Now, let's delve into the concepts mentioned in the article about U.S. customs exams:
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Reasons for Customs Exams: The article highlights that U.S. Customs and Border Protection (CBP) uses algorithms to assess the risk of each shipment entering or departing the United States. Factors contributing to the likelihood of an exam include:
- First-time shipments may undergo examination to establish legitimacy.
- The shipper's history, including the frequency of shipping and any past errors, can influence the decision.
- The nature of the goods, especially if they have a history of inaccurate labeling or valuation.
- The origin of the shipment, with certain countries or areas being more susceptible to inspection.
- Consolidated shipments may face inspection due to other shipments in the same container.
- Incomplete paperwork, missing commercial documents, or inaccuracies in documentation can trigger holds or requests for additional information.
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Types of Holds: The article identifies several common types of holds that incoming cargo can experience:
- Manifest Hold: Occurs when there's an issue with documentation.
- CET Hold / (A-TCET): Placed by the Anti-Terrorism Contraband Enforcement Team for suspected illegal items.
- Commercial Enforcement Hold: Enforced for various reasons by different government agencies.
- PGA Hold: Related to compliance issues with Participating Government Agencies.
- Statistical Validation Hold: Triggered by mismatches between manifest and shipment details.
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Customs Exam Process: Once flagged for inspection, the article outlines three common exams:
- Vehicle and Cargo Inspection System (VACIS) or Non-Intrusive Inspection (NII): Involves X-ray scanning to detect contraband items. Generally less costly and time-consuming.
- Tail Gate Exam: A more intense examination where a CBP officer breaks the seal and inspects shipments.
- Customs Examination Station (CES) Inspection: The most thorough and costly exam involving unloading and reloading the shipment.
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Fees Associated with Exams: Importers are required to pay fees associated with customs exams, and the costs are not directly charged by CBP. Fees may include charges from the Centralized Examination Station (CES), transportation companies for drayage, and shipping companies for services like detention and demurrage.
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Tips to Avoid Exams and Fees: The article provides practical tips to minimize the chances of customs exams:
- Ensure proper paperwork and documentation.
- Provide accurate valuations of goods.
- Work with established partners in the supply chain.
- Avoid consolidated shipments from unknown partners.
- Apply for a Continuous Entry Bond (CEB) to expedite shipments.
- Consider becoming a Customs-Trade Partnership Against Terrorism (CTPAT) member for fewer inspections.
Understanding these concepts can help businesses navigate the complexities of customs procedures, reduce the risk of exams, and streamline the movement of goods across borders. If you have more questions or need assistance, feel free to reach out.
