Importing clothing from Bangladesh: shipping terms, documents and duty

Importing clothing from Bangladesh is a chain of hand-offs. The factory finishes and packs the order, a forwarder moves it to the vessel or the aircraft, a carrier takes it across, and a customs broker clears it at your end. The shipping term on the quote decides where the factory's part ends and yours begins. This guide is written for a first order and covers terms, documents, modes of transport and the work at destination. It gives no duty rates: those depend on your market and product and should come from your customs broker.

Factories on the Garments Hub BD bench quote FOB Chattogram unless you ask for CIF to your port. A first order is paid by TT, 30 percent with the confirmed proforma invoice and 70 percent against shipping documents, or by letter of credit, and no production starts on a promise. Market specific test reports are built into the timeline when you ask for them on the quote form.

FOB Chattogram against CIF

Under FOB (free on board) Chattogram, the factory's costs and risk end once the goods are loaded on board the vessel at Chattogram, export clearance included. You book and pay the main freight through your own forwarder, insure the cargo, and pay every cost at destination. FOB gives you control of the carrier, the sailing and the freight rate, which is why importers with a forwarder usually prefer it.

Under CIF (cost, insurance and freight) to your port, the factory books and pays the sea freight and buys insurance to the destination port. Risk still passes to you once the goods are on board at Chattogram, so a loss at sea is claimed on the policy. The insurance bought under CIF is usually minimum cover, and destination port charges, clearance, duty and delivery stay with you. CIF can suit a first order placed without a forwarder, at the cost of less control over the carrier and the charges at arrival.

FOB and CIF are terms for sea freight. When an order or a sample ships by air from Dhaka, the point where the factory's part ends, and the costs each side carries, are set out on the quote instead. Read that line before comparing an air quote with a sea quote.

The documents that ship with the order

Four documents travel with every shipment, with any market test reports alongside, and your customs broker will ask for them before the goods arrive. Under TT, the 70 percent balance is paid against them; under a letter of credit, they must match its terms exactly, since a discrepancy delays both payment and the release of the goods.

• Commercial invoice: seller, buyer, description, quantities, unit and total values, delivery term and origin of the goods.
• Packing list: carton by carton, with quantities by style, colour and size, and the weight and measurements of each carton.
• Bill of lading: the carrier's receipt and the document of title for sea freight; air freight travels on an air waybill.
• Certificate of origin: confirms where the goods were made; the form your broker needs depends on the destination.
• Test reports and certificates: the market specific reports you asked for on the quote form, ready before shipment.

Duty: ask a customs broker before you order

Import duty on clothing is set by your market, and the amount depends on how the garment is classified, its fibre and construction, its value and its origin. Knitted garments fall in chapter 61 of the Harmonized System and woven garments in chapter 62, so a knitted and a woven shirt of the same fibre are classified differently. Rates and rules differ by market and change over time. Send your customs broker the fibre content, construction and expected value from the tech pack, and get a written duty estimate before you confirm the order.

Ask the broker at the same time which registrations and advance filings your country needs before the goods are loaded. An importer in the EU or the UK, for example, needs an EORI number. Some filings fall due before the vessel sails, so give the broker the factory's details and the expected ship date early, not once the goods are at sea.

Sea or air, and shared or full containers

Sea freight is the usual mode for clothing. It costs far less per kilogram than air, but transit is measured in weeks, and much of the cargo leaving Chattogram goes by feeder vessel to a transhipment port before the main voyage. Air freight from Dhaka takes days, costs much more, and is charged on the greater of actual and volumetric weight. It suits samples, urgent replenishment and small orders of high value.

By sea, a small order usually ships as LCL (less than container load), consolidated with other cargo and charged by the cubic metre, with extra handling at each end. A full container (FCL) is yours alone and becomes cheaper per piece as the volume nears its capacity. A worked example: 50 cartons of 60 by 40 by 30 cm come to 3.6 cubic metres, which travels LCL.

The forwarder and cargo insurance

Under FOB, you appoint the forwarder. Introduce the forwarder to the factory early, so that the booking, the cargo cut-off date and the collection from the factory are fixed before the goods are packed. Under CIF the factory's forwarder handles the main voyage. Cargo insurance on an FOB shipment is yours from the moment of loading; arrange it before the ship date, because an uninsured loss at sea falls entirely on you.

What the buyer does at destination

Your customs broker files the import entry with the documents, pays the duty and any import taxes on your behalf, and arranges release from the port or the airport. Under both FOB and CIF, destination charges are yours: terminal handling, unpacking of shared containers and document fees. Then the goods are delivered to your warehouse. Count the cartons on arrival and note any damage on the delivery receipt before signing it, since a claim is harder to make afterwards.

Planning the dates for a first order

Work backwards from the date the goods must be in your warehouse. On bench categories, samples typically take 7 to 14 days a round and bulk 30 to 60 days after the PP sample is approved, and 60 to 90 days from order confirmation to shipment is typical. Add the transit time for your route, then clearance and delivery. Labels and test reports for your market have to be settled before bulk, not at the port.

What to settle before the first shipment

• Delivery termFOB Chattogram, or CIF to your named port, written on the quote and the proforma invoice.
• ForwarderAppointed and introduced to the factory before packing, for any FOB shipment.
• Duty estimateA written estimate from your customs broker, based on the fibre, construction and value in the tech pack.
• Origin documentThe form of certificate of origin your broker needs for your destination, agreed before shipment.
• InsuranceCargo cover from the moment of loading on an FOB shipment, or the CIF cover checked and extended.
• Payment and documentsTT or letter of credit, with the documents listed so they can be checked against the terms.
• Carton detailsShipping marks, carton sizes and weights, so the forwarder can book space and the broker can file.

Questions buyers ask