How to Import Clothes from Vietnam to the USA and Canada?

How to Import Clothes from Vietnam to the USA and Canada?
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How to Import Clothes from Vietnam to the USA and Canada?

Importing clothes from Vietnam presents an excellent opportunity for businesses in the USA and Canada to diversify their product offerings. However, navigating the complex landscape of international trade, ensuring product quality, and managing shipping logistics can be challenging. By partnering with an experienced digital freight forwarder such as Ship4wd, business owners and logistics managers can streamline their import process, allowing their business to grow more quickly and more efficiently than ever before.

This step-by-step guide will walk you through the essentials of importing clothes from Vietnam. It covers key aspects such as understanding the Vietnamese garment market, ensuring compliance with export and import regulations, negotiating contracts, selecting the most suitable shipping options, and leveraging the expertise of a digital freight forwarder to simplify the process.

Let’s get started.

Setting Up and Understanding Your Import Strategy is the First Step

Before embarking on your import journey, it’s crucial to identify the key players involved and develop a clear strategy. Here are the main parties you’ll be working with:

  • Importer: You, the business owner or logistics manager who intends to import clothes from Vietnam.
  • Vietnamese Supplier: The manufacturer or distributor in Vietnam that produces or sells the garments you intend to import.
  • Vietnam Customs: The government agency responsible for overseeing exports from Vietnam, ensuring compliance with domestic laws and regulations.
  • Customs in the USA or Canada: The government agencies tasked with ensuring imported goods comply with local import regulations and collecting applicable import duties.
  • Digital Freight Forwarder: This is us, Ship4wd, your trusted partner in coordinating, managing, and executing all aspects of the shipping process on your behalf.

By effectively coordinating these key players and partnering with a reliable freight forwarder, you can optimize your shipping operations and focus on growing your business.

Understanding the Vietnamese Clothing Market

Vietnam has emerged as a global powerhouse in garment manufacturing, offering a wide range of high-quality, competitively-priced apparel. In 2022, the country’s garment and textile export value reached approximately $44.4 billion, showcasing the strength and significance of Vietnam’s clothing industry in the global market.

Overview of the Garment Market in Vietnam

Vietnam’s garment industry caters to diverse market segments, from fast fashion to high-end luxury brands. The country’s skilled workforce, advanced manufacturing capabilities, and investment in sustainable practices have made it an attractive destination for global fashion brands.

History and Evolution of Vietnam’s Garment Industry

Vietnam’s garment industry has a rich history, with textile craftsmanship deeply rooted in the nation’s cultural heritage. The modern era of Vietnam’s garment industry began in the late 1980s, following the economic reforms known as “Doi Moi.” These reforms opened the country to foreign investment and international trade, setting the stage for the industry’s rapid growth. Throughout the 1990s and early 2000s, Vietnam’s garment industry expanded significantly, driven by the establishment of diplomatic and trade relations with countries around the world, as well as the country’s accession to the World Trade Organization (WTO) in 2007. The industry has since become a key pillar of Vietnam’s economy, with an overwhelming number of businesses and skilled workers contributing to its success. 

Today, Vietnam is widely considered one of the world’s leading garment exporters, known for its high-quality products, competitive prices, and commitment to sustainable manufacturing practices.

Key Industry Events and Initiatives

Vietnam hosts several prominent fashion and textile trade fairs throughout the year, such as the

These events offer businesses a chance to connect with Vietnamese manufacturers, explore new products, and stay updated on industry trends.

Ensuring Compliance with Vietnam’s Export Regulations

When importing clothes from Vietnam, it is typically the Vietnamese supplier’s responsibility to secure the export licenses and manage the export procedures. At this stage, your primary responsibility is negotiating Incoterms, which define the obligations and roles of each party involved in the transaction.

Customs Declaration

When exporting garments from Vietnam, your supplier must provide a detailed customs declaration, which typically includes the following:

  • Consignor and Consignee: Comprehensive details about the Vietnamese exporter (seller) and the importer (buyer) in the destination country.
  • Country of Origin: Verification that the clothes were manufactured in Vietnam.
  • Harmonized System (HS) Codes: These codes classify each type of garment being imported. They are used for customs classification and determining applicable duty rates.
  • Shipping Details: Specifics about the shipping method, such as the name of the shipping vessel or airline, flight or voyage number, and the port or airport of entry.
  • Description of Goods: An accurate description of the garments being shipped, including materials, sizes, and any other relevant characteristics.
  • Labeling and Packaging Requirements: All clothing must be clearly labeled with the manufacturer’s name and address, country of origin, warnings, and care instructions in the language of the destination country.
  • Value of Goods: The total value of the clothes being imported. This is used by customs authorities to assess duties, taxes, and other applicable fees.
  • Purpose of Shipment: A clear statement outlining the purpose of the shipment, such as commercial resale or trade show display.

Export Requirements and Compliance

To export clothing from Vietnam, your supplier must establish a trading company and have a valid business license. While specific export licenses are generally not required for garments, the supplier must comply with all Vietnamese export regulations and international trade laws, ensuring proper registration and adherence to standard customs procedures.

Export Taxes and VAT

Exporting clothing from Vietnam is generally tax-exempt. While Value-Added Tax (VAT) applies to goods sold within Vietnam, the VAT rate for exported goods, including clothing, is typically zero percent, effectively making them VAT-exempt. Additionally, export duties, which range from zero percent to 45 percent, are mainly applied to natural resources like minerals, forest products, and scrap metal and not to clothing.

Trade Agreements

Vietnam has entered into several trade agreements, notably with the United States and Canada, which significantly impact tariffs and regulations on exported goods. The Vietnam-USA Trade Agreement (BTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) are key agreements that benefit clothing exports from Vietnam to the US and Canada. These agreements help lower tariffs, streamline customs procedures, and enhance market access, making Vietnamese clothing exports more competitive in these markets.

Negotiating Contracts and Incoterms with the Vietnamese Supplier

Incoterms are standardized terms set by the International Chamber of Commerce (ICC) that outline the responsibilities of buyers and sellers in international trade. It is important that you settle on an Incoterm that best reflects your requirements to facilitate the shipping process and clearly define each party’s obligations and liabilities.

The 11 Incoterms, as defined by the ICC, are:

Each Incoterm specifies the point at which the risk and responsibility for the goods shift from the seller to the buyer, as well as the allocation of costs such as transportation, insurance, and customs duties. Here are a few examples:

For instance, under FOB (Free On Board), the Vietnamese supplier is responsible for delivering the garments to the port of shipment and loading them on board the vessel. As soon as the goods are loaded, the risk and responsibility pass to the buyer.

Under EXW (Ex Works), the Vietnamese supplier’s responsibility ends once the clothing is made available at their premises. The buyer takes on all risks and costs associated with transporting the goods from the supplier’s location to the final destination.

With FCA (Free Carrier), the Vietnamese supplier fulfills their obligation by delivering the garments to a carrier or another person nominated by the buyer at a mutually agreed upon location. The risk and responsibility transfer from the seller to the buyer once the goods have been handed over to the carrier.

In contrast, with DDP (Delivered Duty Paid), the Vietnamese supplier assumes all costs and risks associated with delivering the clothing to the buyer’s designated location, including customs clearance and payment of import duties and taxes.

When negotiating contracts with your Vietnamese supplier, it is essential to choose the Incoterm that best aligns with your business needs and capabilities. Consider factors such as your experience in international trade, your capacity to handle logistics and customs clearance, and your budget for transportation and other related costs.

Once you have agreed on the Incoterm, you can streamline the shipping process by using a digital freight forwarder, which simplifies the entire process and effectively manages the responsibilities you assume under the Incoterm, ensuring smooth transportation and customs management.

Choosing Shipping Options and Handling Logistics

The two main modes of transportation used to ship clothing from Vietnam are ocean freight and air freight.

Sea Freight: FCL and LCL

For larger volumes of clothing imported from Vietnam, sea freight is often the most economical and widely used shipping method. When considering sea freight, you have two primary options: Full Container Load (FCL) and Less than Container Load (LCL).

  • FCL (Full Container Load): In this arrangement, you have exclusive use of a container for your garments. In some cases, you will have the option to choose between 20-foot or 40-foot standard containers. FCL is particularly useful for businesses with substantial shipments or those aiming to reduce handling and potential damage to their merchandise.
  • LCL (Less than Container Load): With LCL, your clothing shares container space with cargo from other shippers. Before departure, your garments will be consolidated with other goods at the Container Freight Station (CFS) close to the origin port. Upon arrival, the cargo will be deconsolidated at the destination port’s CFS. LCL offers a practical solution for businesses with smaller shipments or limited storage capacity.

Air Freight

Air freight is a viable option for expedited shipping of clothes from Vietnam to the USA or Canada. This method is commonly employed for smaller, lighter, or time-critical shipments. Although air freight significantly reduces transit times, it’s essential to take into consideration the likelihood of higher costs and potential size and weight restrictions for your shipment.

Delivery Strategies: Port-to-Port, Port-to-Door, and Door-to-Door

When selecting between sea and air freight, it’s also essential to consider the optimal delivery strategy for your needs. While air freight typically offers only door-to-door service, sea freight provides multiple delivery options. The options illustrate varying levels of freight forwarder involvement in the shipping process, starting with basic port-to-port services to more comprehensive door-to-door services.

For sea freight, there are three primary options:

  • Port-to-Port: In this scenario, you or your Vietnamese supplier will transport the clothing items to the port of exit. As the importer, you will be responsible for managing import customs clearance and organizing transportation from the destination port to the final delivery point. The freight forwarder’s role here is primarily to help you book and manage the main journey while you handle other elements of the import process independently. In some cases, additional services can be added as needed.
  • Port-to-Door: You or your Vietnamese supplier must deliver the garments to the origin port. From there, the freight forwarder will handle the primary freight transportation to the destination port, manage customs clearance, and oversee the final delivery to your specified location. This option reduces your direct involvement in the shipping process, allowing the freight forwarder to manage critical logistics and customs procedures.
  • Door-to-Door: With this option, your freight forwarder takes care of the entire shipping process. This starts with picking up the garments from your supplier’s premises or another agreed-upon location in Vietnam and ends with delivery to your specified address. Door-to-door service offers the greatest convenience for importers, as it minimizes your involvement in logistics and customs clearance, allowing the freight forwarder to handle all aspects and ensuring a seamless and efficient shipping experience.

The Importance of Cargo Insurance

When importing clothes from Vietnam, it is crucial to ensure that your shipment is sufficiently protected with cargo insurance. Cargo insurance safeguards your business against potential losses or damages that may occur during transit, providing financial protection and peace of mind.

When selecting cargo insurance for your clothing shipment, take into account factors such as the total value of your goods, the chosen mode of transportation, and the specific risks associated with your designated route and destination.

The Role of Freight Forwarders in Streamlining Shipping Operations

Freight forwarders serve a crucial role in streamlining the logistics and shipping process for businesses that import clothes from Vietnam. By collaborating with a trusted freight forwarder like Ship4wd, you can leverage their expertise, network, and resources to enhance the efficiency and cost-effectiveness of your import operations.

Key benefits of working with a digital freight forwarder include:

  • Execution of shipping operations on your behalf.
  • Access to competitive freight rates online, making it easier to book shipments.
  • An extensive global network of carriers, agents, and partners, guaranteeing reliable and efficient transportation of your merchandise.
  • Support with customs clearance, documentation, and adherence to import regulations.
  • Risk management and cargo insurance options to safeguard your shipment.
  • Pre-shipment inspections to verify the quality and quantity of your garments before shipping.
  • Advanced tracking and visibility tools to monitor your shipment’s progress and keep you informed.

By harnessing the expertise and resources of a freight forwarder, businesses can optimize their shipping operations, minimize costs, and mitigate risks related to importing clothes from Vietnam.

Understanding Import Regulations and Customs Duties

When importing clothes from Vietnam to the United States or Canada, businesses must comply with a complex system of regulations and customs duties. Following these requirements is crucial to a successful import process.

It is imperative to understand the various aspects of import compliance, including trade agreements, tariffs, quotas, restrictions, and other elements that might seem complex but can be effectively managed with the right assistance and guidance.

Compliance Considerations for Importing to the US and Canada

Documents and Other Considerations When Importing Clothes to the USA and Canada

Importing to the US and Canada:

  • Bill of Lading (BOL or B/L): A legally binding document that functions as an agreement between the goods’ owner and the carrier responsible for transportation. The BOL contains details about the type, quantity, and destination of the goods being shipped.
  • Air Waybill (AWB): An essential document for air freight shipments, acting as a contract between the shipper and the airline. The AWB includes information such as shipper and consignee details, origin and destination airports, goods description, and applicable transportation charges. It also functions as a receipt for the goods and a handling guide for airline personnel.
  • Commercial Invoice (CI): A document prepared by the seller and given to the buyer detailing the transaction details. The CI includes the prices, descriptions of the goods, delivery and payment terms, and the names and addresses of the involved parties.
  • Packing List (PL): A detailed list that outlines the contents of each package in the shipment, including the description, quantity, and weight of each item.
  • Certificate of Origin (CoO): A document that confirms the country where the goods were manufactured or produced. The CoO plays a crucial role in determining applicable tariffs, duties, and trade agreements.

Importing to the US:

  • Importer Security Filing (ISF): Also commonly referred to as “10+2,” the ISF is a requirement for shipments entering the US by ocean carriers. The importer or their designated agent must electronically submit specified information about the cargo to CBP through the Importer Security Filing before the shipment departs from the country of origin.
  • ACE Import Manifest Documentation: The Automated Commercial Environment (ACE) is an electronic system managed by CBP. It mandates that all parties involved in the import process electronically submit manifest data before the shipment reaches the US border. This system allows CBP to perform advanced screening and risk assessments, thereby streamlining the customs clearance process.

Importing to Canada:

  • Canada Customs Invoice (CI1): The CI1 is a document for all shipments entering Canada with a value surpassing CAD 2,500. This document includes essential information about the shipped goods, such as a detailed description, seller and buyer details, and other necessary information required by CBSA for customs clearance purposes.
  • Import Declaration: The importer is obligated to complete and submit the Import Declaration. This document offers a comprehensive overview of the goods being imported into Canada, enabling CBSA to effectively regulate and control the import process. The provided information is utilized to assess applicable duties, taxes, and ensure compliance with Canadian import regulations.
  • Advance Commercial Information (ACI) eManifest: The ACI eManifest is an electronic system used by the CBSA for all shipments entering Canada. It necessitates that all parties involved in the transportation of goods electronically submit cargo information before the shipment’s arrival at the Canadian border. By providing necessary data in advance, the ACI eManifest system enables CBSA to conduct risk assessments and streamline the customs clearance process, which is very similar to the ACE system employed in the United States.

Depending on the specific type of clothing being imported from Vietnam to Canada or the US, additional documents and requirements may be necessary. These requirements can encompass compliance with product safety standards, materials regulations, and other import-related compliance requirements.

How a Freight Forwarder Can Help Streamline Import Regulations and Customs Duties Process

The complex nature of import regulations and customs duties can pose challenges for businesses, especially those new to international trade. Freight forwarders like Ship4wd play a crucial role in streamlining the customs clearance process and ensuring compliance with all necessary regulations.

Freight forwarders can support businesses by:

  • Conducting the customs clearance process on your behalf.
  • Offering guidance on tariff classification, customs duties, and import requirements.
  • Assisting with the preparation and submission of essential import documents on behalf of the importer.
  • Providing advice on potential issues or delays and working to resolve them promptly.

By leveraging the skills of a professional freight forwarder such as Ship4wd, businesses can move through the customs clearance process with confidence, minimize the risk of delays or penalties, and ensure a smooth import process.

Importing Clothes From Vietnam is Made Easy and Convenient With Ship4wd

Importing clothes and related fashion items from Vietnam presents great opportunities for businesses seeking to expand their product offerings. However, the challenges of international trade can be overwhelming, especially for those who are new to it.

Business owners and logistics managers can minimize the risks and costs associated with importing clothes from Vietnam by partnering with a trusted digital freight forwarder like Ship4wd.

Ship4wd offers a wide range of services suited to the specific requirements of businesses seeking to import clothing from Vietnam, including:

  • Competitive freight rates and flexible shipping options
  • Customs clearance and compliance assistance
  • Comprehensive cargo insurance solutions
  • Advanced tracking and visibility tools
  • Financing options for eligible businesses
  • Dedicated 24/7 customer support and expertise

Using Ship4wd’s platform and services, business owners can concentrate on running and growing their businesses while we take care of their shipping logistics for them.

How to Get Started with Ship4wd

Sign up with Ship4wd today and experience the benefits of a streamlined, efficient, and simple way to import fashion items from Vietnam. With Ship4wd as your trusted partner, expand your business and product offerings confidently, knowing that your international shipping operations are in good hands.

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