Organizing Logistics and Storage While Importing from China
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With shipping terms like Delivered Duty Paid or Cost, insurance and freight, nothing has to be done. You just have to wait till the goods arrive in your country. But for terms like Freight on Board, you have to exert an effort to keep things organized. You have to take note though that even if you’re fortunate enough to take on DDP or CIF at this time, it is not a guarantee that you can bargain with succeeding imports from various companies.
Organizing logistics may be complicated in the beginning. Yet, if things are done quite well, you save a lot!
The first thing you should do is to ensure that everything goes well and that each partaker in the process can be relied upon. Next, you have to make sure also that every phase is easy-on-the-budget. Remember that costs tend to add up as each phase takes place. Thus, it’s always a good idea to inquire regarding the most excellent freight company, shipping and storage alternatives. At first, you might be having a hard time and so you might not be doing it right. But once you get it right, you can already augment your profits!
Here’s how the import process goes:
1. Manufacture / Wholesaler / Supplier
Manufacturers are paid for the cost of their goods as well as its packaging. Export documentations are also prepared by the manufacturer. Shipping terms like Delivered Duty Paid (DDP) and Cost, Insurance & Freight (CIF) are highly beneficial compared to Freight on Board (FOB). The supplier takes care of the inbound risks and have the delivered products paid off. But if have the DDP, you don’t have to worry about the process. On the other hand, FOB and CIF are frequently availed.
Here’s an important tip. No matter what shipping terms you availed, always verify the insurance terms. Ensure that your container is insured for 110% of the FOB cost.
2. Road Haulage Company
The road haulage company is responsible for collecting from suppliers and delivering these to the docks/airport.
3. Sea Freight Company
You (or the supplier if CIF, DDU or DDP) will have to negotiate a rate with the sea freight company to have your goods transported. If less than a container load is necessary, then you only have to contact a freight forwarder. The Sea Freight Company is responsible for verifying the goods and documentation and as well as loading them into the vessels. Usually, costs range between $1500 and $4500 which depends on the volume of the shipment.
Generally, freight associated charges are computed per kilo on the volume weight of your goods and small lightweight consignments are issued with the least charges. But professional freight agents always advise you about these charges whenever they quote on shipping your consignment.
Merchandise brought to the right destination
As the merchandise arrives in your country, these are unloaded. If the documentations are already organized, the merchandise is then cleared. You’ll be paying the necessary duty and tariffs. Take note that if you have not established credit facilities with your selected shipping line and Customs ahead of time, you will be paying everything before the goods are discharged. In case of any delays, you’ll also pay for additional storage fees.
In case you want to pay off the shipping charges by check, it still needs 5 working days to clear. During these days, the merchandise is subjected to storage fees at approximately $0.14 per kilo per day. A delivery of 1000 kilos of merchandise stocked up for 4 days would be subjected to $560.000 of store charges (Note these amounts are not based on real data. Actual costs will vary.).
Usually, you can choose from the following payment options:
2. Deferred payment — Importers with deferred accounts are the only ones who can avail of this payment.
3. Broker deferred — Agents with broker deferred accounts are the only ones who can avail of this payment.
4. Transportation to Warehouse
You have to organize the gathering of the merchandise from docks/airport with a freight company.
5. Warehouse Storage
Warehouse storage is another stage of the import process wherein you will be paying a lot of charges for receiving the product, cost of labor, long-term storage costs and broker and/or freight forwarder fees (just in case you used one). So, you need to prepare a couple of hundred dollars again for this part.
Probably, you can still bargain with the cost of the stages in the process. If you look around for freight companies, transportation and others, you’ll likely save a lot! For example, you can’t just have your merchandise stored in a warehouse without considering its location. There are a lot of areas in the USA that offer less expensive warehousing compared to others.
To get a complete breakdown of the sea freight costs, importing procedures and others, visit http://www.skymartworldwide.com/t_help_simpleguideimporting.htm.
Customs Duties and Taxes
Duties and taxes of imported goods vary from one country to another. While importing goods from other countries like China, Hong Kong, India and others, you’ll more likely be paying import duties but there are exemptions, of course. Usually, tariffs and duties are minimal on goods which you can’t avail in your own country. But for other goods subjected to FDA jurisdiction, special licenses are required and the processes involved tend to be complicated.
To determine the charges, just visit your country’s customs website and you can already get information there. You can even get phone numbers and contact details whenever you need help to obtain specific information.
- USA http://www.customs.gov
- Australia http://www.customs.gov.au
- New Zealand http://www.customs.govt.nz/default.htm
If it’s your first time to import, you must get yourself a broker. If your products are not properly classified, you may end up paying inappropriate tariffs and duties. Through the help of a broker, you can avoid this scenario. Another possible problem is inaccurate documentations which will really cause too many delays and highly increasing charges. Since you aren’t able to transport the products while the documentations are modified, you may be paying demurrage. When your items are stored for more days than what was first agreed, you’ll be facing the demurrage.
But if you have been doing successive imports and are now well-acquainted with the requirements, you can already do it on your own and save the fees as well.