A commodity code can be the difference between your cargo reaching its destination on time, or even reaching the destination at all. So It’s safe to say that having the right commodity code is key for anybody engaging in import or export.

In today’s blog, we will answer the question ‘How do I research and decide upon the correct commodity code for my goods?’

Radius Warehouse and Logistics is here to provide you with all the information you need when it comes to the multiple areas of logistics that we provide, from sea, to air, to road freight solutions. Operating from the South West of England for over 20 years, or experience, and service is here for anyone who requires it.

Why are commodity codes important?

Commodity codes are a key factor when it comes to import and export. By having the correct commodity code, you are ensuring you pay the correct fees and taxes up front.

A commodity code can be thought of as a universal language for international shipping. They are a 6-digit code based on the WCO (World Customs Organisation) harmonized system.

By using this system, your goods are identified instantly, this triggers the appropriate effects, like:

• Customs duties, which are the tax you pay on imported goods.
• Import fees, these are additional charges for inspections or processing.
• Special treatments which may be required for certain goods such as agricultural products.
• Restrictions and prohibitions may come into play, as some items are banned or require permits for import.
• Licensing requirements may be needed for certain goods to allow for movement.
• Duty reductions may come into play for certain products under trade agreements.
• Policy coverage may apply to products depending on their code.

Depending on the item and its product code, it may experience one or more of the aforementioned effects.

When did commodity codes become used?

Although international trade had been happening for centuries, albeit on a much smaller scale than what is possible now, it can be argued Britain’s ambitions to establish its commonwealth states began to widen the scale of trade globally.

The need for a standardized system to classify goods for international trade arose in the mid-19th century with the growth of global commerce. However, it wasn’t until the 20th century that a truly international system emerged.

In 1961, the Brussels Convention laid the groundwork for a unified approach. Following decades of negotiations, the World Customs Organization (WCO) finally implemented the Harmonized System (HS) in 1988. This 6-digit code system became the global standard, ensuring efficient customs clearance and facilitating international trade.

Although it was established in 1988, the Harmonized system has gone through updates and revisions over the years, with the latest being in 2022. This ensures that the system stays relevant and is in tune with technological developments, as well as new classifications of items being imported or exported.

Regardless of how long you’ve been importing/exporting, you should always stay up to date with any rule changes or policy revisions that come into play.

How do I research and decide upon the correct commodity code for my goods?

When it comes to researching and deciding on the correct commodity code for your goods, there are resources available to help you navigate it. You should be aware that using the wrong commodity code can result in delays and even penalties. So it’s safe to say that you need to get it right the first time.

Below, we will share two helpful resources you can use for your commodity code research.

• The UK trade tariff tool:

The UK trade tariff tool is the official government resource specifically designed for helping you research and decide upon the correct commodity code for your goods.

You can search for the code for your goods based on the characteristics of your product. You can:

• Search via keyword: By entering a keyword or phrase that describes your product, the tool will return a list of possible codes with descriptions.
• Browse by section: The tariff is organised into sections that are based on product categories. Browsing through this section may take time but allows you to see all the product categories available if a keyword search isn’t helpful.
• Classification decision tree: If you are still struggling, the trade tariff tool has an interactive tool which helps you to narrow down possible codes by asking you questions based on your product.

The UK trade tariff tool is entirely free to use, you can click here to explore the page. 

Here are some additional tips when using the UK trade tariff tool:

• Be as specific as possible: When describing your product in the Trade Tariff tool, use detailed information about the material, function, and any unique features.
• Consider the material composition: The materials your product is made from can play a big role in determining the code.
• Think about the function: What is the primary purpose of your product? This can help narrow down the category.
• Review product-specific rules (for trade with the EU): If you’re trading with the European Union, there might be specific rules for your product category. You can find these rules on the UK government website by clicking here.
• Talk to a customs broker/logistics service:

Of course, a free service like the trade tariff tool can be invaluable for some. However, for others it can be difficult to navigate if you don’t have the time or expertise at hand. However, obtaining the services of a logistics service or customs broker can expedite the whole process of getting commodity codes for you.

Customs brokers/ logistics services are professionals who specialise in customs regulations and procedures. As a result, they will be able to find the correct commodity code that you need. Their services are extremely beneficial, especially for complex or unusual products.

What happens if I don’t have a commodity code?

By not using the wrong commodity code, or neglecting to use one at all, you can experience a few complications, regardless of whether it is import or export to and from the UK. These are:

• Your cargo can experience delays. Customs officials may hold onto your shipment to investigate the commodity code issue, this will likely delay your shipment deadline.
• You can be subject to fines and penalties. By providing the incorrect information, or neglecting to provide it at all, you can face fines.
• The potential for goods being seized. Although this happens in the most severe cases, a discrepancy that raises significant concerns can result in your goods being seized pending an investigation.
• You could end up paying more or less. If you use the wrong commodity code, you could end up underpaying or overpaying on import duties and VAT.

Ensure you have the correct commodity code with Radius

We at Radius Warehouse and Logistics Services encourage you to get in contact with us to see how our services can benefit you. Alternatively, you can get a quote from us directly, or visit our help and advice page for anything further you may need help with.

We hope that our blog highlighted the key elements you need to know when it comes to answering the question ‘How do I research and decide upon the correct commodity code for my goods?’

With over 20 years of experience as an independent freight forwarder, you can expect quality service from us. In addition to being a member of BIFA, and trading under the standard trading terms of BIFA, We are also staffed by a dedicated core of enthusiastic and efficient professionals.

Our staff’s many years of experience in this industry welcomes your enquiries and hope you can join our loyal and superb client base. You can contact us below at:

Address

3 Portside Park,
Kings Weston Lane,

Avonmouth,

BS11 8AR

Phone:

+44 (0)117 9820099

Email:

info@radiuslogistics.co.uk