How to Import Textiles From Vietnam

How to Import Textiles From Vietnam
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How to Import Textiles From Vietnam

Importing textiles from Vietnam to the USA or Canada offers considerable potential. However, this comes with its own set of challenges, including intricate import rules, understanding the cultural and business norms of Vietnam, ensuring textile quality, and overseeing shipping and logistics. While these might seem daunting, the returns for those who adeptly steer through this process can be immense.

Let’s take you through the process of importing textiles from Vietnam, it depends on the imported goods, like importing furniture from Vietnam is different, we’ll cover the subtle details, essential paperwork, potential roadblocks, and most crucially, how digital freight forwarders like Ship4wd can streamline the process, allowing you instead to focus on what you do best- running your business.

Setting up and Understanding Your Import Strategy is the First Step

The initial step in crafting your import strategy is recognizing and grasping the roles of the pivotal players in the process. These individuals or entities, each bringing their own set of skills and values, are fundamental to your import operations.

  • Buyer/Importer: This is you, an SMB aiming to import textiles from Vietnam.
  • Vietnamese Manufacturers or Suppliers: Located in Vietnam, these manufacturers or suppliers provide textiles based on importer requirements. Typically, they’re also in charge of packaging the products and preparing them for transit.
  • Vietnamese Customs: The Vietnamese Customs Authority is in place to supervise and regulate the import and export of merchandise.
  • US and Canadian Customs and Regulatory Authorities: Both CBP in the United States and CBSA in Canada are in charge of ensuring that all goods entering their respective countries comply with local laws, regulations, and standards, as well as for collecting applicable customs duties and tariffs.
  • Freight Forwarders: That’s where we come in. As freight forwarders, it is our responsibility to make sure that all your textiles are transported as efficiently as possible. We help negotiate with shipping carriers, reserve cargo space, handle customs clearance, and coordinate the pick-up and delivery of your shipments.

Understanding the Textile Market in Vietnam

Vietnam is on its way to becoming one of the largest textile exporters in the world. This $44 billion (as of 2022) complex and multifaceted industry witnessed considerable growth and development over the years. Notably, in the first ten months of 2022, the United States alone imported textiles worth almost 14 billion US dollars from Vietnam.

Annually, Vietnam hosts the Vietnam International Textile & Apparel Accessories Exhibition. This event is among the most impactful textile showcases in Asia. It brings together global textile brands, designers, manufacturers, traders, and other sector specialists, offering an all-encompassing hub for business, networking, and tracking trends in the textile industry.

History and Evolution of the Vietnam Textile Market

The history of Vietnam’s textile industry has deep roots spanning several centuries. While not as globally famed as China’s silk, Vietnam has its own rich tapestry of textile traditions, with indigenous fabrics and weaving techniques that reflect its cultural heritage.

The modern development of Vietnam’s industry commenced in the late 19th to early 20th centuries. This period saw influences from French colonial rule, which introduced Western technology and manufacturing methods.

During the 1980s, economic liberalization and “Doi Moi” reforms led to exponential growth in the textile and garment industry of Vietnam. As a result, Vietnam positioned itself as a significant global contender, exporting textiles to various international markets. By the 1990s and into the 21st century, Vietnam became one of the top exporters of textiles in the world, and its internal market witnessed substantial growth.

Overview of the Vietnamese Textile Market

Vietnam’s textile market is among the most dynamic and evolving in Southeast Asia, presenting a broad spectrum of products suited to diverse consumer preferences. The industry has shifted from primarily emphasizing traditional and regional fabrics to embracing global textile trends. This change has been driven by the growing urban populace and an emergent middle class with a keen interest in both local and global textile designs.

Domestic Brands and International Influence

There has been a remarkable rise in Vietnamese textile brands as local designers achieve recognition both at home and on the global stage. Furthermore, Vietnam has become a manufacturing hub for more and more international brands.

Industry Initiatives

Vietnam’s leadership has outlined a comprehensive plan for its textile and garment sector, with 2030 as a significant milestone, with goals extending to 2035. Key aspects of this roadmap revolve around ecological practices, innovative technologies, and reducing environmental impact. By integrating these principles, the Vietnamese government aims to develop a more responsible and efficient textile industry, which will, in the long run, benefit both the environment and the economy.

Make Sure Your Supplier Complies With Vietnamese Export Regulations and Compliance

When considering textile imports from Vietnam to the United States or Canada, it’s generally the responsibility of your Vietnamese supplier to secure the required export licenses and manage export protocols.

At this point, as a buyer or importer, your main task is to negotiate incoterms that specify the roles of all parties involved.

However, it’s prudent to ensure that your Vietnamese partner is fulfilling their duties, as this can have an impact on the entire import procedure. Below is a concise rundown of the regulations and requirements your Vietnamese partners should follow.

Customs Declaration

When your Vietnamese partner exports textiles from Vietnam, they are mandated to submit a comprehensive customs declaration. This document typically contains the following components:

  • Consignor and Consignee: Information about the exporter (seller) from Vietnam and the importer (buyer) in the destination country.
  • Description of Goods: A detailed and precise depiction of the textile products being transported, including information about material composition if relevant.
  • Value of Goods: The aggregate price or valuation of the textiles being imported, primarily used for determining customs duties and levies.
  • Country of Origin: This relates to Vietnam, indicating the place where the textiles were crafted or produced.
  • Tariff Classification: Harmonized System (HS) codes are employed to categorize the textiles for customs duty considerations.
  • Purpose of Shipment: This specification helps determine the intent behind the textile shipment, such as whether it’s for retail, as samples, or for individual usage.
  • Shipping Details: Information concerning the transport method, which can include details like the vessel or flight number and the entry port or airport.

While these elements form the core of a customs declaration when importing from Vietnam, the exact requirements differ based on the type of textile and the regulations of the importing nation.

Export License (Vietnamese Supplier)

When exporting textiles from Vietnam, the textile supplier you’re working with must comply with the following licenses and regulations:

  • Business License: You can determine whether a company operates legally by checking its registered business license.
  • Export License: Exporting goods from Vietnam doesn’t require a specific export license. However, if the item is restricted or controlled, a permit from the relevant government authority will be required.
  • Trading Company: In Vietnam, establishing a trading company is standard practice in order to engage in export operations.

After obtaining the necessary licenses and permits, a Vietnamese seller must be aware of the tax implications that come with exporting textiles. Here’s what they might need to consider:

  • Value Added Tax (VAT): Exports from Vietnam generally have a 0% VAT rate, making it possible for exporters to reclaim VAT paid on items and services associated with the export.

Negotiating Contracts and Incoterms with the Vietnamese Manufacturer

Incoterms, short for International Commercial Terms, are a collection of globally recognized trade terms provided by the International Chamber of Commerce (ICC). They serve a crucial function in international trade by standardizing the rules and terms to foster clear communication between traders across different nations.

In the context of importing textiles from Vietnam to the USA, it’s essential to determine the right Incoterms in collaboration with your Vietnamese supplier. These terms clarify the distribution of costs and risks throughout the transportation process from the supplier’s facility in Vietnam to your location in the USA.

For example, under FOB (Free On Board), the goods are the responsibility of the Vietnamese seller until they are loaded aboard the shipping vessel. In the EXW (Ex Works) scenario, the buyer will take over the responsibility once the goods leave the Vietnamese seller’s premises. As for FCA (Free Carrier), the Vietnamese seller delivers the goods to a transportation method selected by the buyer. 

Below is a list of 11 widely adopted Incoterms as set out 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)

By effectively choosing the right Incoterms, importers can streamline their processes, minimize potential risks, and maintain a firm grip on costs associated with importing textiles from Vietnam.

Choosing Your Shipping Options and Handling Logistics

Managing the challenges of importing textiles from Vietnam demands a careful assessment of shipping options and a coherent logistics strategy. When determining your shipping approach, it’s imperative to weigh factors such as your budget, the quantity and weight of your items, and your desired delivery timeline.

While air freight is an acceptable mode of transportation for shipping textiles from Vietnam, ocean freight often appears as the most preferred method for businesses transporting large quantities or those not bound by tight delivery schedules.

In terms of ocean freight, there are two primary options: Full Container Load (FCL) and Less Than Container Load (LCL). FCL is ideal for large shipments, as it allows you to dedicate an entire container solely for your cargo. On the other hand, LCL consolidates your shipment with goods from other shippers in a shared container.

Additionally, it is important to consider delivery strategies such as port-to-door, port-to-port, and door-to-door. Using a freight forwarder to oversee and orchestrate this complex process can significantly streamline logistics, eliminating the need to collaborate with multiple service providers.

As a general rule, it is important to make sure that your shipment has suitable cargo insurance to protect against potential damages or losses during transit.

Lastly, it is important that all shipping documents are handled appropriately, including the Bill of Lading, to make sure your shipping process is smooth and efficient.

How Freight Forwarders Streamline Your Shipping Operations

Utilizing freight forwarders can significantly streamline the process of importing textiles from Vietnam, especially given the complexities of international trade.

  • Research: Freight forwarders provide a comprehensive range of international shipping solutions. This includes FCL and LCL, handling customs duties, tailored financing options for SMBs, and secure payment options. Their long-standing relationships with carriers and other service providers give them a distinct advantage, offering better negotiation and optimization capabilities than what most SMBs might secure independently.
  • Execution: These experts take care of the entire logistics process, overseeing the full import process to guarantee the delivery of your textiles from Vietnam.
  • Insurance & Advanced Tracking: Such professionals often offer cargo insurance to safeguard your textiles during their journey. Additionally, they typically provide advanced tracking tools, allowing you to monitor your shipment and receive instant updates regarding any unexpected challenges.

Import Regulations and Customs Duties When Importing Textiles from Vietnam

If you’re planning to import textiles from Vietnam to the US and Canada, it’s crucial to familiarize yourself with the relevant import regulations and customs duties:

Compliance Considerations When Importing to the USA and Canada

For Both Countries: 

  • Quota Restrictions: Both the US and Canada might have quota limitations on specific textiles or fabrics from Vietnam, capping the volume that can be imported.
  • Tariff Classification: Textiles must be appropriately classified under their respective tariff codes when entering the US or Canada from Vietnam.
  • Labeling Requirements: Textile products must be accurately labeled, including details such as fiber composition, care guidelines, country of origin, and size, ensuring that consumers are well-informed about their purchases.
  • Product Safety Compliance: Textile products, especially those intended for children, must adhere to specific safety regulations. This can include ensuring products are devoid of hazardous materials or have safe fastenings.
  • Intellectual Property Rights: Be certain that the textile designs you’re importing don’t violate any existing trademarks, copyrights, or patents in the destination country.

For the United States: 

  • US Customs Bond: The US Customs and Border Protection (CBP) requires importers to obtain a bond when bringing textiles and other commercial merchandise into the United States. This bond ensures the US government receives all rightful duties, taxes, and related charges.
  • Flammable Fabrics Act (FFA): This act oversees the manufacture and import of textiles with significant flammability risks. It is particularly relevant for specific products, such as children’s sleepwear.
  • Consumer Product Safety Improvement Act (CPSIA): The CPSIA sets out distinct safety criteria that textiles, especially those intended for children, must meet.

For Canada:

  • Canadian Import Bond: In order to import textiles into Canada, importers are required to secure a Canadian customs bond, often referred to as form D120. This bond, mandated by the Canada Border Services Agency (CBSA), ensures that the importer adheres to all regulations and is accountable for the payment of customs duties, tariffs, and other related charges.
  • Business Number (BN): Any entity or individual importing commercial textiles into Canada needs a Business Number (BN), which is provided by the Canada Revenue Agency (CRA).
  • Textile Labeling Act: Textiles entering the Canadian market need to align with the requirements of this act. It emphasizes bilingual labeling and mandates the precise disclosure of fiber content.

Documents and Other Considerations When Importing to the USA and Canada

Importing to the US and Canada: 

  • Bill of Lading (BOL): This serves as an agreement between the owner of the textiles and the carrier, detailing the terms of the shipment from Vietnam.
  • Commercial Invoice (CI): This document offers in-depth details about the textiles being imported. It includes information about the seller in Vietnam, the buyer in the USA or Canada, and specifics related to the transaction.
  • Packing List (PL): This document provides a comprehensive overview of the shipment. It details the packing techniques employed, the contents of each package, and the overall weight of the shipment.
  • Certificates of Origin (CoO): An essential paper in international trade, this certificate verifies the originating country of the textiles being imported. For textiles coming from Vietnam, this document confirms that the products were crafted or produced in Vietnam.

Importing to the US: 

  • Importer Security Filing (ISF): Often referred to as “10+2”, the ISF needs to be electronically submitted to Customs and Border Protection before the textiles depart Vietnam. This is a measure to enhance cargo security during transit.
  • ACE Import Manifest Documentation: Managed by the US Customs and Border Protection (CBP), this system mandates that importers, as well as carriers and freight forwarders, submit detailed manifest information to the CBP prior to the cargo’s arrival. Through this platform, the CBP can conduct risk evaluations and expedite the customs clearance process for textiles from Vietnam.

Importing to Canada:

  • Canada Customs Invoice (CI1): For shipments with a value exceeding CAD 2500, the CI1 is mandatory. This document offers insights about the textiles being imported, encapsulating information about both the Vietnamese seller and the Canadian buyer, along with other transactional specifics.
  • Import Declaration: A document prepared by the importer describing the specifics of the textiles being imported from Vietnam. The Canadian customs authorities rely on this document to oversee and regulate imports.
  • ACI eManifest: An electronic system mandated by the Canada Border Services Agency (CBSA), which collects pre-arrival cargo details from parties involved in freight movement. This system enables Canadian authorities to assess inbound shipment risks and streamline customs clearance.

How a Freight Forwarder Can Simplify the Process 

Freight forwarders are crucial for small and medium-sized businesses involved in global commerce. They help you deal with a variety of regulatory requirements, as well as customs procedures, making sure your tax and duties are handled correctly. By taking care of these intricate details, they let you concentrate on your core competencies, eliminating the distractions posed by international shipping intricacies.

Ship4wd is Your Trusted Partner for Importing Textiles from Vietnam

As your digital freight forwarder, we specialize in importing textiles from Vietnam, backed by a consistent history of success. Whether you’re shipping to the US, Canada, or virtually anywhere in the world, you can count on us to provide you with competitive shipping quotes.

As an SMB-focused platform, we offer a range of additional services to help streamline your import operation, including customs clearance, FCL and LCL, cargo insurance, door-to-door shipping, advanced tracking, and unique financing solutions designed to support your import operations from Vietnam.

To ensure you reach your goals, we offer 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 textiles from Vietnam. Register with Ship4wd today, and let us handle your shipping, allowing you to focus on moving your business forward.

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