Incoterms
Shipping Incoterms are international standard codes that decide and states when and where cargo shall be transferred between the supplier and the importer .
For example , FOB ( Free on Board ) includes transportation from the factory , to the port of destination . FOB also includes all export procedures , which are required to ensure that the cargo can be legally exported . However , from the port of destination , the importer must arrange to forward to the final destination . On the other hand , the importer can book DAP ( Delivered at Place ), which includes shipping from the factory in China , to a specified address overseas , such as importer ’ s warehouse .
FCL and LCL Shipping
Sea freight is not excluding importers from importing small volumes from China . If importer buys by the container load , then FCL ( Full Container Load ) shipping is the right choice . FCL is also the cost-effective freight method available if counted by cost per volumetric unit and weight unit .
However , many smaller buyers don ’ t buy full container loads . As already said , Air freight is then a viable solution for importing small volumes . However , some shipments are stuck in the twilight zone between air freight and FCL cost viability .
Then the solution spells LCL , or Less ( than ) Container Load which is basically shared container freight . Cargo from multiple buyers gets stored in the same container .
Freight Insurance
Insurance is included , by default , when importer select the incoterm CIF , standing for Cost Freight ( and ) Insurance .
If importer orders according to DAT ( Delivered at Terminal ) or DAP ( Delivered at Place ) then , the importer must inform his shipping company that the cargo must be insured . As shipping insurance is cheap , and rarely costs more than US $ 50 to US $ 100 . Shipping insurance generally covers the value of the cargo , in case of transportation damage . It will not cover lost sales or product development costs .
Export Packaging
Cargo must be sufficiently protected , from the dusty factory floor to a damp warehouse , and finally stacked in a container for up to a month .
A lot can happen in this time , an importer needs to be sure that his export packaging is up for the task . To ensure that cargo is protected during transportation , the importer can use the following checklist :
Inner cartons layers – 5 Outer cartons layers – 5 Plastic wrapping ( on Outer carton ) Pallets ( ISPM 15 EU Standard ) Freight remark ( Printed on outer carton ) Be sure to provide the supplier with explicit and clear export packaging specifications and do not leave anything to their interpretation .
But there is more to export packaging . There are various export packaging regulations to take into consideration , such as ISPM 15 and Lithium battery restrictions . Before shipping from China , the importer needs to confirm which shipping regulations apply in this country , and to the product .
Should Importer get a Freight Forwarder or Let the Supplier Manage the Freight Process ?
The importer has basically two options , either the supplier administers the shipping process , or importer itself do it via a freight forwarder .
Letting the supplier administer ( i . e ., book the shipment ) the shipping process gives less transparency . However , then importer is far better off working directly with a reputable freight forwarder .
Freight forwarders are normally part of international trade , but many have their own offices in major Chinese port cities , such as Shanghai and Hong Kong .
A freight forwarder generally offers a wide range of shipping services , including FCL , LCL , and air freight . They also provide a designated contact person that keeps informed importer and answers his questions .
Do Importers Need to Pay any Taxes in China ?
No , importer doesn ’ t need to pay any “ export tax ” when importing from China . However , they need to pay for transportation to the port of loading in China and the cost for export clearance papers . Both of these costs are included if importer order shipping according to the following terms : FOB , CIF , DAT , and DAP .
What Happens After the Cargo Arrives at the Destination port ? And How it can be Accessed ?
The importer will be notified a few days before the arrival . After the container vessel arrives , the containers are first unloaded . In some cases , some container may be inspected by the local customs authorities , but most are not .
Regardless of whether importer or the supplier managed the freight , importer ’ s forwarder or customs broker starts customs clearance procedures . This process takes 1 to 3 days , depending on the cargo and the applied process . The importer has two options : either pick it up by them or by asking their shipping agent to load it on a truck and deliver it to a specific location . When the cargo arrives at the Port of Destination importer will be notified by the port agent . In most cases , the importer can book the transportation directly through the port agent .
23