When transporting goods from the manufacturer to warehouse, whether it be for storage purposes or as a general step of the supply chain, HS codes are used to make sure the goods within a load are recognised and that they are not restricted in the importing country. The importation stage of goods is a crucial element of the retail supply chain, as goods that are made or produced in a different country will need to reach their retailers or distributors.
What are HS codes?
An HS code (or Harmonised System code) is an internationally recognised coding system for countries to classify traded goods via the labelled coded cargo. An HS code consists of six digits, which can be broken down and translated into information and descriptions of the goods being transported. HS codes are particularly important when importing goods for trade, going through customs clearance, and for warehousing and storage.
HS codes are a minimum of six digits, which match up to product descriptions. These descriptions start as broad categories, narrowing into more specific detailed hyponyms. Starting with 21 categories, these categories are then split into 99 chapters (with the exception of a few chapters, such as chapter 77 for future use, chapters 98 and 99 to be used for national use, and chapter 99 which is limited to temporary modifications).
How do you read an HS code?
An HS code is split into the four following:
Starting with the broadest section, the first two digits of an HS code is referred to as an HS-2, which identifies the type of goods. E.g. 09 = tea, coffee and spices
The second set of digits the HS-4, which directs to a more specific group within the previous chapter. e.g. 09 05 = spices + vanilla
The most specific of all the digits is the sub-heading, HS-6. The sub-heading describes the product in more detail, e.g. caffeinated and decaffeinated coffee are referred to with different numbers in the sub-heading, and instant coffee would be in a totally different heading (HS-4) due to its edibility.
Should there be any additional information to be added, appropriate coded numbers are added after the sub-heading. For example, if a specific country of origin for products such as coffee is needed, further additional numbers can account for this.
Example of an H.S. code:
Avocado: 08 04 40 (00 00 00)
08 04 40 (00 00 00) = Chapter 08: Edible fruit & nuts, peel of citrus/melons
08 04 40 (00 00 00) = Heading 04: Dates, figs, pineapples, avocados etc. Fresh or dried
08 04 40 (00 00 00) = Subheading 40: Avocados
08 04 40 (00 00 00) = These are additional digits or subdivisions for national purposes