16 · Freight, Duties & Labelling
Week 17 · 25 hours
Objective
Get your goods from the factory floor to your door legally and at a cost you predicted, with the correct labels on them.
Why it matters commercially
Import duty and freight commonly add 20–40% to FOB on footwear. Brands that discover this at the port face a bill they cannot pay while their inventory sits accruing storage charges. And incorrect labelling can get a shipment held or refused.
Core concepts
Incoterms 2020 — who does what
An Incoterm defines where risk and cost transfer from seller to buyer. The ones that matter to you:
| Term | Seller pays until | You handle | Use when |
|---|---|---|---|
| EXW (Ex Works) | Factory door | Everything, including export clearance | Rarely — export clearance in a foreign country is a hassle you don’t want |
| FCA | Delivered to your carrier, export cleared | Freight onward | Good, flexible, often better than FOB for small air shipments |
| FOB | Loaded on the vessel | Sea freight, insurance, import, duty | The industry default. Quote everything FOB so you can compare |
| CIF | Freight and insurance to destination port | Import clearance, duty, inland | Convenient but you lose control of freight cost and often overpay |
| DAP | Delivered to your address, duty unpaid | Duty and import clearance | Simple; you still owe duty |
| DDP | Everything, delivered, duties paid | Nothing | Simplest, most expensive, and you learn nothing. Acceptable for a first tiny shipment if you’re overwhelmed |
Recommendation: get all quotes FOB so they’re comparable, then decide freight separately. For a first 200–300 pair shipment, FCA + air freight or courier is often cheaper and far faster than sea LCL once you account for LCL’s fixed charges.
Freight modes and what they actually cost
| Mode | Transit (Asia→US/EU) | Economics | Best for |
|---|---|---|---|
| Courier (DHL/FedEx/UPS) | 3–7 days | Priced by chargeable weight; simple, includes customs handling | Samples always; small first runs often |
| Air freight | 5–10 days | ~$4–9/kg plus fixed charges | 100–400 pairs when speed matters |
| Sea LCL (less than container load) | 30–45 days door to door | Cheap per unit but $400–900 of fixed origin/destination charges regardless of size | 300+ pairs when you have time |
| Sea FCL (full container) | 30–45 days | Cheapest per unit | Thousands of pairs. Not you yet |
A pair of sneakers in its box is roughly 1.2–1.8 kg and a shoe box is bulky, so volumetric weight usually governs air pricing. Get real quotes from two freight forwarders with your actual carton dimensions and counts — don’t estimate.
Packing and cartons
Specify in your tech pack:
- Inner box: dimensions, material (typically E-flute or corrugated), print, closure
- Tissue paper, inserts, silica gel (yes — humidity in a sea container will mould leather; specify desiccant for sea freight)
- Polybag with the required suffocation warning, if used
- Master carton: dimensions, wall strength (e.g. 5-ply for sea), how many pairs per carton, and the pack ratio (which sizes in which carton — solid-size cartons are easier for a small brand than assorted)
- Carton markings: brand, style, colour, sizes, quantity, carton number of total, gross/net weight, dimensions, country of origin
Customs: the essentials
Classification. Every product gets an HS/HTS code. Footwear is Chapter 64, and the sub-classification depends on the material of the outer sole, the material of the upper (by external surface area), whether it covers the ankle, and in some lines value per pair. US footwear duty rates vary widely — from low single digits to over 30% — and additional country-specific tariffs may apply on top. Rates and trade measures change; never rely on a number you read once.
What to do: hire a licensed customs broker before you ship, send them photographs, material percentages and a sample if asked, and have them classify your actual shoe. In the US you can also request a binding ruling from CBP for certainty — free, but takes weeks. Do this in Week 17, not Week 25.
Registration. In the US you need an EIN and, for commercial imports, a customs bond (a single-entry bond is fine for one shipment; a continuous bond is cheaper if you’ll import 3+ times a year). In the UK you need an EORI number; in the EU likewise. Get these early — they take days to weeks.
Other fees. US: Merchandise Processing Fee and, for sea, Harbor Maintenance Fee. EU/UK: import VAT on the landed value, which you generally reclaim if VAT-registered, but you must fund upfront.
Documents your factory must provide: commercial invoice, packing list, bill of lading or air waybill, and a certificate of origin if a trade preference applies.
Labelling requirements
| Requirement | Where | Detail |
|---|---|---|
| Country of origin | US and most markets | Must be permanent, conspicuous, legible. Conventionally printed on the sockliner and on a label sewn into the quarter lining, plus on the box |
| EU footwear material labelling | EU | Pictograms identifying the material of the upper, lining/sock and outer sole, using the standard symbols, on the shoe and at point of sale |
| Size marking | Everywhere | On the shoe (sockliner/label) and the box. Show multiple systems |
| Brand / style / colour code | Everywhere | Box label and shoe label |
| Barcode (GTIN/UPC/EAN) | Retail | One per SKU. Buy prefixes from GS1 — do not use resold or made-up barcodes if you ever want to sell wholesale |
| Care instructions | Best practice | Not always mandated for footwear the way it is for apparel, but expected |
| Importer identity | Varies | Some markets require the importer’s name and address |
Verify current requirements for your specific target markets before you print anything — these rules change and vary by jurisdiction.
Do this
1 · Get classified (4h). Contact two customs brokers. Send them your product details and get a classification opinion and duty estimate in writing. Compare the two answers; if they differ, ask each why.
2 · Register (3h). Obtain your EIN / EORI as applicable. Investigate customs bond options and costs.
3 · Freight quotes (4h). Two freight forwarders, three scenarios: courier, air, sea LCL, for your actual expected carton count and weight. Build the comparison.
4 · Update the landed cost model (3h). Replace your Module 13 placeholders with real numbers. Note how much your landed cost moved. This is often a nasty surprise; better now than in Week 25.
5 · Labelling spec (5h). Write the complete labelling specification into the tech pack: country of origin placement and method, EU pictograms if selling there, size marking in three systems, barcode placement. Buy GS1 barcodes if you intend wholesale.
6 · Packing spec (3h). Master carton spec, pack ratio, markings, desiccant for sea. Into the tech pack.
7 · Tech pack V04 (3h). Reissue with sections 14 and 15 complete.
Deliverable. Written HS classification and duty estimate from a licensed broker; customs registration obtained; a three-way freight comparison with real quotes; an updated landed cost model; complete labelling and packing specifications in tech pack V04.
Self-check
- What does FOB cover, and why quote everything FOB?
- Why might air freight beat sea for 250 pairs?
- What four factors drive footwear tariff classification?
- Where must country of origin appear, and how permanent must it be?
- What is a GS1 barcode and why not just make one up?
- What do you need before you can legally import as a business?
Traps
Discovering duty at the port. The most common and most painful small-importer error.
Letting the factory arrange freight on CIF. You will overpay and have no visibility.
Sea freight without desiccant. Mould on leather uppers in a container is a well-known and entirely avoidable loss.
Printing boxes before confirming labelling requirements. Boxes have minimums and lead times. Get the requirements right first.