Clearance Instructions: PURPOSE

It is commonly referred to as the Clearing and Forwarding Instructions. Such instructions are made out on a shipment level. There are two components namely 1) Clearing, and 2) Forwarding. The completion of the form is a requirement by the LSP (Logistics Service Provider) for a Trader to ‘instruct’ or inform them of clearing and forwarding requirements.

Product Implementation with your LSP (Logistics Service Provider)

This primarily involves tariff classification and you’re TPL (Tariff Parts Library). It will also involve landed costings, Customs TDN (Tariff Determinations), which purpose codes to use (i.e. whether duty paid or rebate clearances), certificate or permit requirements and how part numbers and descriptions must be captured. Many of these aspects will be communicated on the Clearing Instructions to your LSP on a shipment basis. However, it is a good idea to have a holistic discussion about these on a regular basis. For now, we will delve into the tariffing procedure and your TPL.

Business Implementation with your LSP (Logistics Service Provider)

Most Traders use one LSP (Logistics Service Provider) for both the Freight Forwarding and Customs Clearing components of their business. Some use separate LSP, one for Freight Forwarding and another for the Customs Clearing. The reasons for the latter may be for cost benefits, to meet buyer or supplier requirements or because of the Incoterms (International Commercial Terms) agreed. There may be more reasons for this but, whichever the case, there will need to be a full implementation of both your Freight Forwarding and Customs Clearing requirements with your LSP.