When customs flags and holds your shipment, it can lead to devastating problems for your business. The World Bank Logistics Performance Index shows that inefficient customs and administrative procedures have become a leading non-tariff barrier that restricts international trade. One of the highest causes of shipment delays globally is customs clearance issues, especially in popular trade routes like China to the USA and China to the EU. Even UN Trade and Development continues to revolutionize customs operations globally to support economic growth.
Customs holds can be confusing and often mishandled, especially by new importers. In this guide, we will explain what causes customs holds, the steps you need to take to fix them, common errors to avoid, and how to stop customs holds from happening in the future.
What Does It Mean When Your Shipment Is Held at Customs?
What are Customs Holds?
When a package is held by customs, it means that the package has been flagged for inspection or additional processing by customs officials in the destination country. This happens often in international shipping and is important for ensuring compliance with import rules, obtaining the right duties and taxes, and confirming that the shipment is legitimate.
Why Do Customs Holds Happen?
- Incomplete or incorrect documentation: Accurate and complete customs declarations are required. The shipment will be flagged if important documents are missing or contain errors. Not stating the item value or country of origin, omitting a packing list or commercial invoice, having unclear or non-compliant product descriptions, and using an incorrect HS code are examples of common documentation errors. You can check for the correct HS codes here.
- Suspicion of misdeclaration or undervaluation: If the declared value seems unusually low or if the shipment description raises concerns, customs holds may occur to verify the actual value or nature of the goods. A major customs violation that can result in fines or the seizure of cargo is willful undervaluation to reduce customs duties.
- Random inspections: Even with correct and complete documentation, many customs agencies use risk-based or random inspections as part of their enforcement strategy. This helps them detect smuggling, ensure compliance with trade regulations, and stop importation fraud. Your products might go through physical inspection, X-ray screening, or laboratory testing (for food, cosmetics, etc.).
- Import of restricted or prohibited goods: Permits or special clearance are frequently required for items that can be used for both civilian and military purposes, such as chemicals, medical devices, food, plants, etc. Your shipment may be delayed if you do not have these documents. So, items like batteries (lithium-ion), dietary or herbal supplements, and surveillance equipment might experience customs holds.
- Unpaid duties or tax discrepancies: Even minor inconsistencies in duties, VAT, or tariff payments can lead to a customs hold. If the importer of record does not pay on time or challenges the duty amount, it will cause delays in clearance.
- System errors or data mismatch: At times, the delay is not your fault. Customs systems might stop shipments because of problems with the barcode or tracking numbers, duplicate entries, or outdated information from the freight forwarder or carrier.
How Long Does a Customs Hold Last, and What Affects the Timeline?
Common Timeframes for Customs Holds
| REASON FOR HOLD | AVERAGE TIMEFRAME |
|---|---|
| Documentation Reviews | 1-3 business days |
| Random Inspection | 2-7 business days |
| Physical or Lab Testing | 5-15 business days |
| Import Licenses or Permit Issues | Until the correct documents are submitted. |
| Undervaluation or Misdeclaration | 7-21 business days |
Average Duration of Customs Hold by Country and Shipping Method
| SHIPPING METHOD | COUNTRY (DEVELOPED) | COUNTRY (DEVELOPING) |
|---|---|---|
| Express courier | 1-2 business days | 2-5 business days |
| Air freight | 2-4 business days | 4-7 business days |
| Sea freight (LCL) | 5-10 business days | 7-15 business days |
| Sea freight (FCL) | 3-7 business days | 5-12 business days |
Check the EU Taxation and Customs Union to know more about customs processes for EU shipments.
What Affects the Timeline for Customs Holds?
- High volume of shipments or port backlog.
- Weekends or holidays off from work in the country of destination.
- Delays in communication between the importer, freight forwarder, and customs.
- Inaccurate or missing Importer of Record (IOR) information.
What to Do Immediately If Your Cargo Is Held at Customs
Confirm the Reason for the Customs Hold
To find out the precise reason for the hold (such as missing paperwork, a valuation discrepancy, or an inspection flag), contact your freight forwarder, customs broker, or shipping carrier. You cannot fix the problem without this information.
Review All Documentation
Verify the accuracy and consistency of your certificate of origin, packing list, HS codes, commercial invoice, and other documents. The majority of holds are caused by paperwork issues.
Communicate with Customs
Give your broker permission to respond or negotiate on your behalf if you’re using one. If not, get in touch with the customs office directly. A quicker reaction translates into a quicker release.
Submit Missing and Corrected Documents on Time
Submit the documents again promptly if any were rejected or missing. Confirm that every detail corresponds with the packing list and the bill of lading. Until customs receives the necessary information, they will not process your shipment.
Where Necessary, Prepare for Physical Inspection
Make sure you are prepared for container unloading, inspection costs, and delays if your cargo has been flagged for inspection. Physical inspection usually adds two to five or more days. Stay proactive.
Pay All Applicable Taxes, Duties, or Fines
You might have to pay fines or resubmit payments if your customs declaration misclassified or undervalued goods. The final obstacle to the release of your cargo is often financial compliance.
Maintain Continuous Communication with All Parties
Until the cargo is cleared, stay in contact with your broker, supplier, and freight forwarder. Repeated delays and misunderstandings can be prevented with coordination.
Read U.S. Customs and Border Protection tips for new importers and exporters for more information on customs inspections, documentation, and importer responsibilities.
Types of Customs Holds and What They Mean
Manifest Hold
A manifest hold, according to the U.S. Customs and Border Protection (CBP), is an action that stops a shipment from being released right away because the electronic manifest data, which includes information about the cargo, the carrier, and the importer, has been flagged for further scrutiny. The main goal of a manifest hold is to give customs time to carefully examine the shipment’s documents and possibly the cargo too, to make sure there is compliance with customs regulations.
VACIS Hold (X-ray Inspection Hold)
This is an x-ray system that uses gamma rays to see what is inside a package or container without opening it. VACIS scans the entire surface of the cargo containers and can find everything from big, hidden compartments to small packages. If customs holds your cargo for this X-ray check, it will be taken through an X-ray machine at the port. A customs officer will look at the X-ray images and decide to either release the container or move it to a tailgate exam or an intensive exam.
Agricultural Hold
An agricultural customs hold happens when a shipment is detained by customs or the Animal and Plant Health Inspection Service (APHIS) of the USDA. It is usually for shipments suspected to carry plant pests or diseases that could damage crops or natural resources. This hold enables customs to inspect and ensure that a cargo has been treated properly and comes from countries without known biosecurity issues.
PGA Hold (Partner Government Agency Hold)
A Partner Government Agency (PGA) is a government organization that oversees certain goods coming into or leaving a country. These agencies are important for international trade because they ensure that regulations on health, safety, and security are complied with. When it comes to freight and shipping, PGAs are key players in the customs clearance process. They work with customs to supervise cargo importing food, medicine, or hazardous goods. Check the FDA’s Import Alert Database to know if your shipment is safe.
How to Respond Effectively to Customs Holds
Who to Contact When Dealing with a Customs Hold
- Broker: Your licensed customs broker should be your first point of contact. They can access hold-related information that might not be available to the general public because they have developed relationships with the local customs officials.
- Logistics Provider or Freight Forwarder: Your freight forwarder will usually receive the hold notice if there is no broker involved, and they can communicate with customs on your behalf. Make sure they are authorized to act as your representative. Check out our guide on how to tell if your freight forwarder is reliable.
- Port or Terminal Operator: The port authority and the terminal operator play important roles during customs holds. The port authority ensures overall compliance and cooperation with customs. The terminal operator ensures the temporary secure storage of the cargo and assists customs in inspecting the cargo. During customs holds, you may need to work with them to manage your cargo.
- National Customs Office or Helpdesk: Find the relevant inquiry or importer assistance channel on the destination country’s official customs agency website when direct action is required.
What to Do with the Customs Authorities
- Identify your shipment: Always begin with a clear reference to your shipment. Show the authorities the bill of lading or tracking number. If available, the import entry number, date of arrival, country of origin name, and contact of the consignee.
- Acknowledge the hold: State that you are aware that the shipment is being held and that you are contacting them to confirm the main reason for the hold. Request any paperwork, declarations, or documents required to address the problem.
- Offer to cooperate with them: Inform them that you are prepared to take immediate action.
- Ask for a timeline and provide your contact information: Get information on how long the process should take and whether there is anything you can do to expedite it. Use tools like ParcelLab and the customs portal to track the hold and release.
Risks of Ignoring a Customs Hold
Risk Overview
| RISK | CONSEQUENCES |
|---|---|
| Financial Risks | Fees like daily port or warehouse storage fees, demurrage, penalties for noncompliance, and other unexpected charges totaling thousands might make the shipment lose its financial viability. |
| Legal Risks | Import regulations being breached or products being misdiscleared could lead to import restrictions or fines, delays in obtaining necessary licenses or documentation, and the possibility of blacklisting or seizure of shipment. |
| Operational Risks | You might miss deadlines for deliveries and receive outdated or spoiled goods when your cargo is finally released. Also, you could suffer a logistics chain breakdown, strained relationships with suppliers, and a decline of your customers’ confidence in your brand. |
Can Customs Seize or Destroy Your Goods?
- Seizure: A customs seizure is an enforcement action where goods are detained by customs officials due to suspected violations of import laws or international trade agreements. Your cargo could be permanently taken into custody if there is no compliance with import regulations. Read what you can do when customs seizes your goods.
- Auction: This is a way for the government to dispose of seized, abandoned, or forfeited goods. After the holding period is over, unclaimed commercial shipments may be auctioned.
- Destroy: Customs might destroy your goods if they are illegal, controlled, or prohibited.
How to Avoid Future Customs Holds
- Ensure that your documentation is accurate and complete. Use the correct HS codes, do not underdeclare your goods, and double-check your packing list, commercial invoice, and shipping label for consistency.
- Work with a licensed customs broker that is familiar with the destination country’s import laws and tax classification.
- If available, use pre-clearance programs like Authorized Economic Operator (AEO) and Customs-Trade Partnership Against Terrorism (C-TPAT).
- Choose a reliable freight forwarder and carrier. Check out our guide on the top 10 reliable freight forwarders in China.
- Avoid red flags that trigger customs holds, like generic product descriptions and inaccurate weights or dimensions.
- Use a third party to conduct pre-shipment inspections to confirm compliance with import regulations.
When Should You Seek Legal Help for a Customs Hold?
- If customs threatens to seize or forfeit your goods. Your lawyer might file a petition or mitigation request and help prevent permanent forfeiture.
- If you receive a formal notice of violation or non-compliance. This could be a Notice of Action, penalty letter, or audit request.
- If you are accused of misclassification or undervaluation. Your lawyer may justify your classification or valuation methods, prepare and submit corrected entries, and protect your business from being blacklisted.
- If it is a PGA hold. If a government agency is involved, legal counsel will help you determine if you have met the requirements correctly.
Conclusion
Customs holds are stressful, but they can be handled. With proper documentation, quick response, and taking proactive steps to prevent issues, you can avoid delays and extra charges and keep your logistics running smoothly.
Siyuan Freight is here to guide you on how to avoid and navigate customs holds. We do not just transport cargo, but we remain in charge of the entire supply chain. It is our duty to ensure that your goods move smoothly from the port of origin to the destination port, avoiding obstacles like customs holds. Contact us today and ship with confidence.
FAQs
Does Cargo Insurance Cover Customs Holds and Delays?
Yes. Some insurance policies specifically provide coverage for costs associated with customs holds, including inspection and storage. Customs is an unpredictable part of international logistics. So, ensure that your freight forwarder or broker offers this coverage in advance. You can read more about this here.
Am I going to Pay for Storage and Demurrage During Customs Holds?
Yes. Usually, it is the importer that is responsible for storage and demurrage fees during customs holds. You have to pay the port, airport, or bonded warehouse where your cargo is temporarily held. Demurrage fees are paid to the shipping line, not customs, and are charged per container and per day.
What Documents Are Required to Release a Held Shipment?
You will need a commercial invoice, packing list, bill of lading/airway bill, HS codes, and identification documents like your tax ID, business registration certificate, import license, or customs power of attorney. You might also need a proof of payment, certificate of origin, and inspection certificate.
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