How to Import Clothes From Thailand

How to Import Clothes From Thailand
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How to Import Clothes From Thailand: a Guide for SMBs

Importing clothes from Thailand to the USA or Canada offers notable opportunities. Nonetheless, several potential challenges arise, such as complex import regulations, understanding cultural and business practices in Thailand, guaranteeing product quality, and overseeing shipping and logistics. Despite these obstacles, the rewards for those who adeptly maneuver through this process can be immense.

As the world delves deeper into the digital age, a digital freight forwarder becomes an invaluable asset for SMBs importing clothes from Thailand to the USA or Canada. These digital freight forwarders simplify the import process by delivering a holistic solution for all your international shipping concerns.

In this guide, you’ll learn everything you need to know about importing clothes from Thailand, including the nuances, essential documentation, challenges, and, more critically, how a digital freight forwarder like Ship4wd streamlines the import procedure, allowing you to concentrate on your primary mission – running your business.

Setting Up and Understanding Your Import Strategy is the First Step

The initial step in crafting your import strategy is identifying the roles of the key players in the process. These stakeholders, each with distinct roles and inputs, are at the heart of your import operation.

  • Buyer/Importer: This is you, an SMB aiming to import clothes from Thailand.
  • Manufacturers or Suppliers: In Thailand, these companies are responsible for producing clothing items as requested by importers. Typically, they also handle the packing of the merchandise and prepare them for shipping.
  • Thai Customs: The Thai Customs Department oversees and manages the import and export of goods in Thailand.
  • Customs in the USA or Canada: Both the US Customs Border Protection (CBP) and Canadian Customs Border Services (CBSA) oversee the importation of goods. They inspect incoming items and their documentation for compliance, collect relevant import duties, and enforce trade standards as per respective national laws and guidelines.
  • Freight Forwarders: This is where Ship4wd comes in. Freight forwarders are essential for SMBs dealing with clothing imports. They are in charge of facilitating the shipment of goods from Thai manufacturers to the US and Canada. Furthermore, they are responsible for helping negotiate rates with shipping lines, reserving cargo space, assisting with customs clearance, and coordinating pickup and delivery to the final destination.

Understanding the Clothing Market in Thailand

The Thai apparel market, valued at $6.50bn as of August 2023, is a diverse and intricate industry that has undergone substantial evolution and growth in recent decades.

Every year, Thailand proudly presents the Bangkok International Fashion Fair and Bangkok International Leather Fair. These events underscore Thailand’s prestige and expertise in fashion and leathercraft. Drawing exhibitors and attendees globally, they unite international fashion brands, designers, suppliers, traders, and other key players, providing an all-encompassing hub for business collaboration, networking, and trend exploration within the fashion and apparel domain.

The Thai government has consistently acknowledged the promise of the textile and clothing sector. As a result, they have dedicated efforts to improve its performance and productivity by offering assistance in terms of funding, expertise, and infrastructure. Moreover, the cluster network initiative, sponsored by the Thai Government, has benefited the apparel and clothing industry significantly and resulted in increased productivity, lower production costs, and continuous innovation.

There is a bright future for Thailand’s clothing market, with anticipated growth in both local demand and overseas exports. Technological innovations, sustainability efforts, and enhanced international partnerships are set to influence the direction of the industry in the coming years.

History and Evolution of the Thai Clothing Market

Thailand’s clothing industry carries a legacy deeply anchored in its age-old customs and craftsmanship. The Ayutthaya Era was one of the most influential points in history for fashion in Thailand for almost two centuries. This time period influenced Thai fashion by integrating diverse aesthetics and elevating clothing standards through royal courtly culture, religious motifs, and an influx of global textiles. 

The evolution of Thailand’s clothing industry commenced in the late 19th and early 20th centuries. With exposure to Western designs and manufacturing methodologies, Thailand’s clothing production increased significantly. Integrating traditional Thai craftsmanship with modern techniques created a distinctive blend, fostering a unique and globally appealing Thai fashion identity.

Over the past five decades, Thailand underwent significant economic developments that helped to expand its clothing and apparel industry. The nation emerged as a noteworthy contributor to global fashion, exporting unique Thai garments and designs to international markets. With time, Thailand had established itself as a major clothing exporter in Southeast Asia, and its domestic fashion scene flourished.

Make Sure Your Supplier Complies with Thailand’s Export Regulations and Compliance

When considering clothing imports from Thailand to the United States or Canada, it’s generally the responsibility of your Thai supplier to secure the essential export licenses and manage export procedures.

During this phase, as a buyer or importer, your primary task is to negotiate Incoterms, which detail the responsibilities of each party involved.

It’s always a good idea to ensure your Thai partner is fulfilling their obligations, as this can influence the entire import procedure. Here’s a concise rundown of the regulations and criteria your Thai associates must comply with.

Customs Declaration

When your Thai associate exports clothes from Thailand, they are required to provide a detailed customs declaration. This declaration should encompass the following aspects:

  • Consignor and Consignee: The details of both the Thai exporter (seller) and importer (buyer).
  • Description of Goods: A clear and thorough description of the clothing items being shipped, incorporating material composition when applicable.
  • Value of Goods: The total cost or worth of imported clothing, usually employed to determine customs duties and taxes.
  • Country of Origin: This refers to Thailand, where the clothes were manufactured or produced.
  • Tariff Classification: Harmonized System (HS) codes that classify the clothing for customs duty objectives.
  • Purpose of Shipment: This indicates if the clothes are for retail sale, as samples, or for individual use, among other intentions.
  • Shipping Details: Data associated with the mode of transportation, such as the vessel or flight number and the port or airport of entry.

While the exact details necessary might vary depending on the kind of clothing and the destination country’s regulations, these are the general elements typically present in a customs declaration when importing from Thailand.

Export License (Thai Supplier)

Exporting clothes from Thailand necessitates adherence to specific regulations and the acquisition of the appropriate licenses:

  • Business License: Verification of a valid business license is a vital step in ensuring that the business you are working with is legitimate and reliable.
  • Export license: While some products require export licenses, in most cases, it is not necessary for exporting clothing items.

After obtaining the essential licenses and permits, a Thai seller should be aware of the tax implications tied to clothing exports. Here are some of the tax concerns they might encounter:

  • Value Added Tax (VAT): Thailand typically does not charge VAT on clothing exports. This means the exporter might be eligible to reclaim VAT spent on goods and services linked to the exported merchandise.

Negotiating Contracts and Incoterms with the Thai Manufacturer

Incoterms, also known as International Commercial Terms, are a set of standardized commercial terms published by the International Chamber of Commerce (ICC). They play a pivotal role in global trade, establishing a mutual set of rules to bridge understanding between traders from different countries.

When importing clothes from Thailand to Canada or the USA, selecting the appropriate Incoterms with your supplier is paramount. These terms specify who will bear the cost and risk during each phase of the delivery process, from the supplier’s warehouse in Thailand to your establishment in the USA or Canada.

For example, under FOB (Free On Board), merchandise remains the responsibility of the Thai seller until they are placed on the shipping vessel. In the EXW (Ex Works) scenario, the buyer takes responsibility as soon as the items leave the Thai seller’s facility. Conversely, with FCA (Free Carrier), the Thai seller delivers the items to the carrier chosen by the buyer. A comprehensive understanding of these terms is fundamental to ensuring an efficient importation process from Thailand.

Here are 11 commonly used Incoterms as defined by the International Chamber of Commerce (ICC):

  • EXW (Ex Works)
  • FCA (Free Carrier)
  • CPT (Carriage Paid To)
  • CIP (Carriage and Insurance Paid To)
  • DAP (Delivered At Place)
  • DPU (Delivered At Place Unloaded)
  • DDP (Delivered Duty Paid)
  • FAS (Free Alongside Ship)
  • FOB (Free On Board)
  • CFR (Cost and Freight)
  • CIF (Cost, Insurance, and Freight)

Find out more about Incoterms here.

Selecting the appropriate Incoterms can empower you to effectively control your expenses, diminish potential risks, and promote a seamless import procedure.

Choosing Your Shipping Options and Handling Logistics

Navigating the intricacies of importing clothing from Thailand demands a systematic assessment of transportation choices coupled with flawless logistics planning. When determining your shipping method, factors such as budget constraints, the volume and weight of your cargo, and desired delivery timelines should be at the forefront.

Although air freight is an option for transporting clothes from Thailand, sea freight often emerges as the preferred method for businesses transporting large quantities or those not bound by tight delivery deadlines.

In terms of ocean freight, businesses typically have two primary options: Full Container Load (FCL) and Less Than Container Load (LCL). Both serve distinct shipping needs. FCL is tailored for large shipments, allowing businesses to book an entire container for their merchandise. On the other hand, LCL consolidates your consignment with others, sharing a single container.

Further, it’s crucial to evaluate various delivery strategies, such as port-to-door, port-to-port, and door-to-door. Employing a freight forwarder to oversee and coordinate these complex operations can make logistics straightforward and eliminate the need to deal with multiple service providers.

Moreover, ensuring your shipment is backed by cargo insurance is essential to mitigate risks of damages or losses during transit.

In conclusion, meticulous maintenance of essential shipping documentation, like the Bill of Lading, plays a critical role in ensuring smooth shipping operations.

How Freight Forwarders Streamline Your Shipping Operations

By utilizing freight forwarders, you can significantly enhance the efficiency of your import activities, especially when navigating the intricacies involved in international trade.

  • Research: Freight forwarders provide a variety of shipping services, which include FCL and LCL, customs clearance, specialized financing solutions crafted for SMBs, and secure payment options. Their established relationships with carriers and various service providers give them greater negotiating power and optimization capabilities that SMBs could not achieve on their own.
  • Execution: Freight forwarders take on the logistics, orchestrating the complete import process to ensure the timely and safe arrival of your clothing from Thailand.
  • Insurance & Advanced Tracking: These professionals often offer cargo insurance to secure your clothing items during shipping. Moreover, they typically also provide sophisticated tracking features, enabling you to oversee your shipment and get immediate notifications about any unforeseen complications.

Import Regulations and Customs Duties When Importing Clothing from Thailand

Following import rules and customs duties is absolutely necessary when importing clothing from Thailand. For SMBs, adhering to these standards is essential for a seamless importation experience. Important considerations to note when importing clothing from Thailand to the US and Canada are:

Compliance Considerations When Importing to the USA and Canada

For Both Countries: 

If you’re considering importing clothing from Thailand to countries like the US and Canada, it’s essential to be well-informed about the prevailing regulations and customs duties:

  • Quotas and Restrictions: Both the US and Canada may have quota limitations for certain types of clothing or textiles from Thailand, controlling the amount permitted for import.
  • Tariff Classification: When importing clothing from Thailand to the US or Canada, it’s imperative to classify products according to their respective tariff codes to determine duties payable.
  • Labeling Requirements: Imported clothing must adhere to strict labeling standards, which typically include details like fiber content, care instructions, country of origin, and size. This ensures consumers in the US and Canada receive essential product information.
  • Product Safety Compliance: Clothing imported to the US and Canada, particularly children’s wear, needs to satisfy specific safety criteria. For instance, they should be free from harmful materials to prevent harm.
  • Intellectual Property Rights: Prior to importing, make sure that the clothing designs or brands from Thailand do not violate any trademarks, copyrights, or patents in the destination country.

For the United States: 

  • US Customs Bond: When importing apparel and other commercial goods into the US, the US Customs and Border Protection (CBP) mandates the acquisition of a bond. This bond ensures the US government receives all due duties, taxes, and associated fees.
  • Flammable Fabrics Act (FFA): The FFA governs the creation and import of clothes with high flammability, especially crucial for specific items such as children’s sleepwear.
  • Consumer Product Safety Improvement Act (CPSIA): The CPSIA delineates specific safety standards that clothing, especially those designed for children, must comply with.

For Canada:

  • Canadian Import Bond: For the importation of apparel to Canada, the Canada Border Services Agency (CBSA) may require certain importers to secure a Canadian customs bond, often referred to as form D120. This bond ensures that the importer adheres to all stipulated rules and covers any import taxes, tariffs, and additional duties.
  • Business Number (BN): It is necessary to have a Business Number (BN) for commercial imports. This number is provided by the Canada Revenue Agency (CRA).
  • Textile Labeling Act: All clothing imported into Canada must comply with this act’s regulations, which demand bilingual labeling and precise disclosure of the fabric content.

Documents and Other Considerations When Importing to the USA and Canada

When importing clothing from Thailand to the United States and Canada, several essential documents are required to ensure a seamless and compliant transaction. Here’s what you’ll need:

Importing to the US and Canada: 

  • Bill of Lading (BOL): Serves as a contract between the goods’ owner and the carrier, outlining the terms of the shipment.
  • Commercial Invoice (CI): This provides comprehensive details about the clothing items being imported, including information about the seller in Thailand, the buyer in the US or Canada, and specifics of the transaction.
  • Packing List (PL): This list offers information regarding the packing methods, the contents of each package, and the total weight of the shipment.
  • Certificates of Origin (CoO): This vital document is used in international trade to confirm the originating country of the clothing being imported. When importing from Thailand, this certificate authenticates that the garments were manufactured or produced in Thailand.

Importing to the US: 

  • Importer Security Filing (ISF): Often referred to as “10+2”, this filing needs to be electronically submitted to Customs and Border Protection (CBP) before shipping the clothing cargo from Thailand. This protocol ensures enhanced security measures are in place for goods entering the US.
  • ACE Import Manifest Documentation: Managed by the US Customs and Border Protection (CBP), this platform mandates that importers, carriers, and freight forwarders supply CBP with their manifest specifics before the clothing cargo arrives from Thailand. Utilizing ACE aids the CBP in conducting risk assessments, thus streamlining the customs clearance process.

Importing to Canada:

  • Canada Customs Invoice (CI1): Necessary for all clothing shipments valued above CAD 2500, this invoice offers comprehensive details about the items being shipped. It includes information about the seller in Thailand, the buyer in Canada, and other pertinent data.
  • Import Declaration: This is a critical document filled out by the importer detailing the specific goods being imported from Thailand. Canadian customs authorities rely on this declaration to oversee and regulate clothing imports effectively.
  • ACI eManifest: A mandatory electronic submission system under the Canada Border Services Agency (CBSA), which requires pre-arrival shipment details from parties involved in freight movement. It facilitates risk assessment and expedites customs clearance for inbound shipments.

How a Freight Forwarder Can Simplify the Process 

Freight forwarders are pivotal for small and medium-sized businesses participating in global commerce. In addition to coordinating shipping, in many cases, they are also responsible for handling customs duties, ensuring everything runs smoothly. The fact that they handle these intricate aspects allows you to focus on your primary obligations as a business owner, free from the challenges of dealing with international shipping.

Ship4wd is Your Trusted Partner for Importing Clothing from Thailand

As your digital freight forwarder, we specialize in importing clothing from Thailand, backed by a consistent history of success. Whether you’re shipping to the US, Canada, or elsewhere, we are here to provide you with competitive shipping quotes. 

Additionally, our platform offers a range of services, including customs clearance, cargo insurance, door-to-door shipping, advanced tracking, and unique financing solutions designed to support your import operations from Thailand.

Aside from that, you’ll also be able to benefit from our 24/7 professional customer support, always ready to assist with any questions about your shipments or our platform. 

By choosing Ship4wd, you can simplify the process of importing clothing from Thailand. Register with Ship4wd today, and let us take care of your shipping so you can focus on what you do best – growing and running your business.

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