Textiles and clothing are one of a main products imported to Canada.

Hereby, we discuss the

process involved in importing textiles and clothing from other countries while stressing on the
challenges encounter on each step through the process. This evaluation on challenges related to
each step help to identify the step which accounts for the largest challenge. Later, methods that
can be used to make future improvements are discussed.
As per the Government of Canada official web site, following are the steps involved in importing
a certain good or a service to Canada.

1. Preparing to import
i. Gain a Business Number (BN) for an importer account from the Canadian Revenue
Agency (CRA)
ii. Gather product Information:
We must first select the supplier/s by sending Request for Proposals (RFP), get quotations
and choose the right supplier/s and signing contract agreement. Then we must collect
product information from the supplier/s such as, (a) descriptive documentation including
the country of origin (b) composition information (c) samples and we must also obtain the
commercial invoice from the supplier/s which clearly states the value of products with
incoterms (FOB, CIF, CFR etc.), payment method and shipment method.

2. Classification of goods
To pre determine the duty rates of the textile and apparel we import, we must identify the
correct Tariff Classification Numbers (TCN) relevant to them.

3. Determining duties and taxes

Duties and taxes applicable to textile and apparel must be pre determined using TCN.

4. Shipping and reporting your goods

Confirmation of the order and execute the payment through a financial institute (Letter of
Credit), documentary collection, Telegraphic Transfer or any other means as per the
agreement. Then we must select the port of entry of the goods and report the relevant
Canadian Border Services Agency (CBSA) about the arrival of goods.

5. Getting your goods released

To get the goods released we must submit all the relevant documents such as Commercial
Invoice, Bill of Lading/Airway Bill, Insurance Certificate and other documentation to the
CBSA. Clear the goods after paying the required duty and taxes.

6. After your goods are released

By this step we must inform CBSA if there is any discrepancy between accounting
information and if any errors exist they must be brought up within 4 years. All the
documents related to importation must be retained for six years.
Finally, transport imported textiles and clothing to the warehouses.
 What challenges did you face at each of the steps in the process?
Step Challenges
Preparing to import Canadian government only has Free Trade Agreements (FTA) with
USA, Mexico, Chile, Honduras and Costa Rica and has tax releases
for certain types of textile and apparel. But when we import any
material out of these lists or from other countries we have to pay
taxes. This negatively affects our buying capacities.

Finding the best suppliers with quality products and coming to

favourble agreements using most convenient incoterms in pricing is
another challenge.

Inability to physically meet the suppliers to negotiate or to sign the

contract in person. And for this we must rely on other electronic
communication methods.

Foreign exchange rate fluctuations affect agreed amounts in the

commercial invoice.
Classification of To get the correct TCN numbers of the material and products
goods proper coordination and support from the suppliers is mandatory.
Not receiving the proper and accurate information on time would
cause higher taxes, duties and delays.
Determining duties Costs related importation will increase based on taxes and duties.
and taxes
Shipping and Payments terms could be challenging as advance payments requires
reporting your us to make the payment upfront before getting the goods to hands.
goods Also other payment methods involve higher bank charges.

There are challenges in shipment such as Sea shipment takes longer

time and Air shipments are more expensive.

Getting your goods In the absence of all the relevant documents shipment cannot be
released cleared and if buyer has to get shipping guarantee due to absence of
documents it causes additional bank charges.

Additional demurrage charges will have to be paid to the custom if

unable to clear the goods within the stipulated time.
After your goods Any accounting or arithmetic errors could result unfavourble costs
are released and delays.

Proper and safe handling of textile and clothing from the port to the
warehouse.

Dealing with insurance firms for material insurance in

transportation and warehousing.
 II. What steps created the biggest challenge?
Preparing to import, Shipping and reporting goods and Getting goods released are comparatively
more challenging steps. However, we find Preparing to import as the most challenging.
The textile and apparel industry have witnessed a high increase in the year 2019. Therefore the
competition is high. Firstly, sourcing best suppliers is a challenging as they are from different
countries with different cultures, backgrounds and business strategies. And national sales and
local taxes, and in some instances customs fees, are often charged in addition to the tariff. The
tariff, along with the other assessments, is collected at the time of customs clearance in the
foreign port. Tariffs and taxes increase the cost of suppliers’ product to us and affect our
competitiveness in the market. In addition, suppliers’ may quote an estimate of these costs before
making the purchase for a limited time and other conditions could apply. This estimate can be
made via email, phone, or in the pro forma invoice. Therefore, effective communication is a
bigger challenge too.

III. What improvement could you make for the future?

Nowadays, everything is changing in our world, trade structure, and tax regulation for many
countries. To this situation we need to implement innovative strategy for business. Sourcing is a
division of procurement that handles in locating a corporation’s goods and their services in the
textile Industry/market. Apparel sourcing is taking a drastic step towards its right destination for
their product around the world.

Suggestions for improvement are:

1. Inspect the required need of sourcing: you need to inspect the need of sources to your
business. Notice the current company outline/framework. Mark the present scenario as
guideline and examine the need of sourcing for the textile industry.

2. Investigation on market performance: after realizing your business sourcing, then you
have to conduct a market strategy and gather information on a market where you enter.
After gathering information from many countries set a most favorable market for your
Goods and services.

3. Estimate the distributors market: be wise in choosing the supplier, and check their
investment affirmation, credit data, and credentials. Analyze their working strategies and
how better they could perform with you in your business. better the supplier, better the
result you get. Have a conversation with the supplier you choose inquire their experience
on field and capture more about them from website and also with their customer.

4. Gather few details on the supplier: most of the garment companies is witnessing few
issues with the provider such as Contact details, Prospective in the making, Agreement ,
By-product details and Production statistics
 Understand the provider by working on- personal and professional details of them.
Moreover, make sure you gather the information accordingly to know the performance
and create stability.

5. Reach an agreement with supplier: at the moment you have a plan and also to execute it
with the help of supplier. Spend time with supplier and have a conversation based on the
new strategy and try to get best deal out of it
For many textile companies, having a conversation based on the price is a very pivotal step to
practice, and also generating maximum value from a minimal budget is very much important
as well. Major ideas to discuss

 Cost organization
 Scope of work in industry
 Time for dispatch
 Terms and condition

6. Impose the sourcing: firstly, understanding the category and the products with them. Data
must be arranged, analyzed and finally validated. Details in raw material and other cost in
labor, transportation and later check negotiated amount. The ideas must be suitable with
the business requirement and to your capability and resources. Always keep a transition
plan to keep the sourcing on track.

7. Record the sourcing scheme: understand the strength and weakness of the product and
provider. In that case, next you can work on it.
 Well timed transportation
 Operation that supplier practice
 Issues faced by the supplier
 Description of the product.

8. Update the game plan: while renovating your ideas in sourcing. Think about these
factors.
 Requests from market about the product
 Buyers’ reaction towards the product
 The lead times
 Secret/hidden prices
Moreover, improve your sourcing ideas with better plan, high technology, better
understanding and improved quality standards.
References
Alex. (n.d.). Top 3 biggest challenges the fashion industry will face in 2019. Retrieved October 04, 2021,
from Medium: https://medium.com/@alexwritesastory/top-3-biggest-challenges-the-fashion-industry-
will-face-in-2019-7af9fd583751

Government of Canada. (2021, March 12). Canada Border Services Agency-Importing commercial goods
into Canada. Retrieved October 4, 2021, from Government of Canada: https://www.cbsa-
asfc.gc.ca/import/guide-eng.html

Government of Canada. (2021, October 1). Global Affairs Canada-Textile and Clothing. Retrieved
October 4, 2021, from Government of Canada: https://www.international.gc.ca/controls-
controles/textiles/index.aspx?lang=eng

Official Website of the International Trade Administration . (n.d.). Import Triff's overview. Retrieved
October 4, 2021, from Official Website of the International Trade Administration :
https://www.trade.gov/import-tariffs-fees-overview