Most suppliers for Western companies are in China and these suppliers majorly help online retail businesses to run smoothly. However, there are many things to look into when business is done overseas. In the recent times, businesses have encountered difficulties moving products from one port to another due to several supply chain restrictions. Hence, understanding international shipping cost is more important than ever so that you can anticipate and solve these issues.
For many importers, the cost of Chinese imports became a significant concern. China is among the largest product producers in the world on several parameters. Many businesses, both large and small, turn to manufacture products in China because of its reputation as a producer. Therefore, it is essential to have a thorough awareness of the cost of trading from China.
An international shipping cost includes a wide range of fees and surcharges. They range from port and custom taxes to additional fees that are only imposed in very specific situations. Aside from basic freight costs, there is a wide range of factors to consider when determining your price for import or export.
Most expenses are included in the standard container shipping rates that freight forwarders and carrier’s quote. Some, however, are not enclosed and will still apply to your goods. In this guide, we will delve into the various charges that could affect the final shipping cost.
Types of shipping and cost involved
Express shipping is the fastest option and is also the most expensive one. These services include UPS, FedEx, TNT, and DHL. You can now receive your products in just 5 days with the express shipping service. Importers use this option when they want their shipment quickly. For instance, you might be about to run out of your best-selling product during the holiday season. To capitalize on the high demand, you, therefore, fly in more of that product as soon as you can.
Usually, respectable companies like DHL, UPS, and FedEx offer a variety of shipping options. They will even fly goods in on the short notice. However, the cost of shipping varies depending on how fast you need the shipment. After all, getting this product through the airports requires a lot of planning. All necessary customs documentation and monitoring processes must be expedited in China.
You should be aware that express orders may be subject to additional fees. To expedite your order, you need to pay these extra fees. Due to the numerous controls that air freight involves, such as customs and terminal handling, you might have to pay a hefty fee to move your cargo in front of the queue.
The only thing that sets air freight apart from express shipment is that it does not expedite shipping. If you’re looking for air freight this means, you won't be in a rush, and therefore you won't have to spend more to get these services. The most cost-effective option for packages weighing between 400 lbs and 1200 lbs is air freight, which is 30% to 40% less expensive than express shipping. You benefit from fast shipping at a lower price.
To finish your orders appropriately, you still need to understand the nature of the products you're shipping. You should keep in mind that your shipment is subject to the law. The international shipping cost of air freight varies considerably and the price per kg decreases as you ship more. There are a ton of fixed costs for air freight.
Keep in mind that there are various fees you can anticipate. These include fuel fees, which have recently been rising steadily. Moreover, you will have to pay for airport security to inspect your goods because airports and airplanes require high levels of security. Not to mention, your order is subject to numerous airport and terminal fees.
Shipping goods from China by the ocean is a fantastic option because it has many top seaports on its coast. Especially if you're shipping to locations along the western coast. Importers choose this feature when they need to ship heavy-load items.
One thing that each business should be aware of is the difference between full-container hundreds (FCL) and less-than-full container loads (LCL). When your container consists only of your items, then it is best to choose an FCL shipment. However, if you share a container with someone else's products, then it is your ship in an LCL shipment. Additionally, LCL might require you to wait on a different shipping partner before the company ships your goods, which could result in a protracted delay.
There are several ways to reduce international shipping cost when shipping by ocean. To save money, you can choose the right container type, port, and insurance. During the off-season, ocean freight is less expensive. During this time, hiring a full container load is less expensive and quicker.
No matter what freight service you choose, it is difficult to handle protocol from overseas. Moreover, language is the biggest barrier which always results in discrepancies, confusion, and delayed shipment. Hence, many business owners after facing a lot many issues have always relied on sourcing agents from the same nation as the supplier.
A local sourcing agent can provide product sourcing service and help them deal with the supplier as they both speak their native language. Most sourcing agents speak English which is also easier for the importer to narrate their concerns and requirements easily. Dealing from China, these sourcing agents know all the regulations and laws of their country. Thus, they deal with all documents and protocols beforehand for a smooth transition.
Import costs from China
Merchandise processing fees (MPF)
According to Customs and Border Protection (CBP), the merchandise processing fee is a charge that you will have to make upon importing into western countries. The amount you pay is determined by whether the value of your cargo exceeds $2,500. For less than $2,500 value of items, importers will have to pay automated imports of $2.22, manual imports of $6.66, or automated or manual imports of $9.99 per shipment. For more than $2,500 value of items, importers will have to pay 0.3464% of the price of the goods.
Customs taxes are due on almost all imported goods from China. This rule is applicable if the imported product's total value is $800 or more. Products that you are shipping from China to USA are exempted from duty and taxes if their worth is less than $800 (except for products like alcohol and tobacco).
AD/CVD (Anti-dumping and countervailing duties)
On imported goods, anti-dumping and countervailing duties are required to protect domestic industry. Antidumping duties will be implemented if it is discovered that a foreign country is "dumping" goods into the US at prices substantially below what they are being sold for here. Countervailing duties are also imposed on goods for similar reasons. When export subsidies render the sale of certain goods uncompetitive for domestic industries, countervailing duties are implied.
Section 301 tariffs
In 2018 Section 301 was signed as a result of the ongoing trade conflict between the United States and China. The agreement mandates tariffs on $550 billion worth of commonly imported goods from China to the United States. The tariffs are divided into four different lists, each of which includes a wide range of products as well as exclusions and tariff rates.
Harbour maintenance fees (HMF)
You need to pay a Harbour Maintenance Fee if your items are shipped by sea. The rate is 0.125% of the total price of the cargo imported. There is no maximum or minimum HMF in this case.
Procedure for importing from China
You will need certain documents to verify the entry of the products into the country if you want to import goods from China.
Bill of lading: The transport document used by the ocean is the bill of lading. It is customary to demonstrate the products' state upon the carrier's receipt and delivery of them.
Commercial invoice: The business invoice includes crucial export information and enables you to compute customs duties and other taxes that will be owed once the products arrive at their destination.
Packing list : The packing list is used to identify shipping packages by type and provide combination data like weight, volume, and package count.
Conformity certificates, origin certificates, Test reports, etc.
The cheapest way to import from China
As a result of importing goods from China, FCL ocean freight is by far the most affordable. The more you ship, the less you must pay, so importers who purchase large quantities of goods from their suppliers enjoy much better freight rates than their smaller competitors, who are frequently caught between LCL shipping and air freight.
Remember that shipping costs are determined according to market price. There is little scope for negotiation with freight forwarders because they operate on little profit margins. Therefore, you shouldn't anticipate one forwarder to quote a price that is significantly lower than the other company. Rather, you should be wary of "forwarders" that promise to offer freight rates below the present value because they are con artists.
Therefore, it is much simpler to hire a sourcing agent and leave the rest with them. Since it is their job to handle the sourcing of products thus, they have a large network of suppliers and freight services. The documentation and international shipping cost vary for every country. Therefore, do your homework beforehand to keep your terms clear.