The United States must really love new shoes – because importing of footwear is continually growing. Last year (2015), the amount of footwear being imported into the country grew by 5.8% according to the FDRA (Footwear Distributors and Retailers of America). In fact, footwear companies in the United States had to pay $2.9 billion in tariffs on their product, which is a $200 million increase from 2014. All we’ve seen in this sector is over the last five years is growth. That’s why importing footwear is a great business choice. Whether it’s an everyday use sneaker manufactured in China or a high-end, Kim Kardashian-approved leather pump hand made in Italy, there are a few things you should know before you begin importing shoes to the US.
Learn HTS Codes
HTS stands for Harmonized Tariff Schedule. This will determine how much you will have to pay in duties when you import your footwear product into the States. The HTS code will also tell the importer what trade agreements are in play and any other regulations you may need to know about your product. The classification for shoes will depend on how the shoe is made - specifically what it is made from and where the shoe began its journey.
You can find out what kind of tariff you might be looking at by searching a government data base here. Find your shoe’s category on the left, click on it, and you’ll be able to see the duty rates for the countries of origin in the first column on the right, if that country has “Normal Trade Relations (NTR)” with the US. Be careful to look for special sub-columns, as many countries will have special duty rates if they have trade agreements with the US. If the country does not have Normal Trade Relations with the United States, you’ll find it in the second column – some industry people refer to these countries as “Column Two” countries. Reading the HTS columns can be confusing, so the US government has written a helpful guide here.
Your product’s HTS code, which is a ten digit code, will be included on forms for CBP (Customs and Border Patrol) such as the customs clearance invoice. The freight forwarder you choose will use it to fill out paperwork destined for both the import and export country. They will also arrange all the travel for your product, so your shoes will end up safely in the US. It’s funny to think of just how far your walking shoes have come before you even put them on.
Besides the tax and duties as identified from the HTS code, for footwear that is shipped as ocean freight, you must pay Harbor Maintenance Fees (HMF) for the destination port. This fee is .125% of the product’s value. And if you are shipping via air or ocean freight, you’ll be responsible for Merchandise Processing Fees (MPF), which is nearly .35% of the product’s value before you are charged for duty, freight fees, and insurance. The MPF will never be less than $25, and can only go up to $485.
Opt for FCL
The ocean journey from China to the US takes somewhere between 15 and 20 days. A full container load of shoes is about 5,000 pairs in a sealed, metal shipping container. You’ll want to use a full container load (FCL) rather than a less than full container load (LCL). LCL shipping takes longer, is pricier, and does not have as much protection, as it is not shipped in a sealed, metal container.