A Guide to Shipping
There are typically three popular ways to ship goods from China that trading companies or export agencies will recommend to you. The nature of the recommendations will vary based on the kinds of goods you are shipping and their volume.
Below we will give you a breakdown of these three methods to help you make the best decisions when shipping your goods.
Express courier shipping form China
Express courier shipping is the fastest shipping method from China to other countries, and it is usually a door-to-door service too, meaning you will not have to worry about custom clearance or duty payments. Generally speaking, it is quite easy to place an order with an express courier company from their website where they will clearly state all the costs involved and their terms and conditions. If you agree to these, then the courier company will typically arrange a pick-up of the goods from the manufacturer which will be delivered to your desired destination.
The cost of Express courier shipping is a little more expensive than air cargo, while it is nearly ten times more expensive than sea shipping methods. So ideally, for samples and smaller shipments, the express option is usually the best option in terms of speed. A small amount of high-value goods such as clothing or jewellery etc would be better suited for the express option. It is however important to bear in mind that there exist some seasonal changes to the cost of shipping, and so during the high season, or before a holiday such as Chinese New Year, Christmas etc, the prices will usually escalate.
There are a few options when it comes to courier shipping and so you are able to find good cheap deals as the market is quite competitive. Big names such as UPS, TNT, FedEx, and DHL all offer competitive prices and provide a parcel tracking service too as they ship globally.
Air Cargo shipping from China
Air cargo is a popular shipping method for many businesses, whereby your cargo is shipped to an airport of your choice and is declared at customs at the destination country typically by your export agent.
Local logistics and the export process in China conducted by an agency or a trading company. Air cargo shipping from a Chinese airport to your desired airport with a customs declaration conducted by your export agency, and then local logistics and the import process with a local freight forwarder or service company.
For businesses looking to import goods form China, it is only worthwhile to choose an air cargo shipping method if your goods weigh more than 500kg. It will then become more efficient and cost effective to ship using this method. Air cargo shipping costs are calculated based on both the good’s weight and the cubic metres of space they take up. The freight forwarder will typically quote you the exact cost after they receive the goods to give a more accurate price.
The Air cargo shipping cost is usually calculated based on several factors; the country you wish to import the goods to, the weight and the cubic metre measurement of your goods. Other factors that are considered are the local logistics costs in China, the export cost, the specific air shipping cost from airport to airport, the destination country’s custom clearance cost, and then the logistical costs transferring the goods form the airport to the desired destination.
Be aware there are often several additional fees to bear in mind which can add up such as customs clearance costs, domestic landed costs, terminal handling fees in the Chinese customs warehouse etc. Generally, there are lots of things to factor in when dealing with a shipping company, particularly for a business that is just beginning to import from China. For this reason, many companies employ a trading company or an export agent to aid in these services, as they can also help correspond with freight forwarders, shipping companies and customs declaration institutions etc.
Sea shipping from China
Most international buyers prefer to use a sea shipment method, this is particularly true of wholesalers buying in bulk from China, or many clothing companies purchasing garments manufactured in China. Shipping via sea is usually the most economically efficient method of transporting your goods (if you don’t need them urgently). The delivery time for shipping from China to Europe for example could be around 25-30 days, and 35-40 if it’s to the USA, so it would be wise to factor these times into your business plan.
Generally, the shipping process is similar to that of air cargo, and so it is also, common for export agencies and trading companies to deal with this method too. Many will typically help organise the logistics for transferring the goods from the warehouse, booking spaces on a container, arrange the loading of the container, delivery to the seaport warehouse and of course the customs declaration and the international shipping itself. Mnay export agencies and freight forwarders assist with door-to-door shipping from China too.
For bulk buying and shipping goods, this is generally the most economically viable option, and averages out as much cheaper if you have enough cargo to ship.
There are two methods for sea shipping – Full Container Load (FCL) and Less that Container Load (LCL). LCL is generally more more expensive than FCL, this is because LCL uses cubic metres to calculate the freight shipping fee, and so only if your goods amount to less than 15cbm then it would make sense to use LCL. In most cases, it would male economical sense to ship with FCL. In most cases, export agents or trading companies would help you calculate the volume of goods after you place a bulk order prior to booking a container/vessel space.
When costing, it can be divided into sections, namely the logistical costs in China, the export costs in China, the cost of sea freight from a Chinese port to your desired port, customs clearance and then logistical costs in your desired country.
In terms of saving costs, it would be advisable to control the volume of goods to match that of the container space. As the price of the freight container is fixed, it makes sense to fill it as much as possible, without exceeding the volume the container can carry. Striking this balance will help you save money.
Customs Clearance
Customs clearance process essentially involves four steps. A customs officer will initially examine your customs paperwork. These documents must be accurate and complete, specifically the shipping label and commercial invoice. The commercial invoice is the most important because it lists the contact information for the shipper, the receiver as well as the export date and the airway bill number.
The next step would be the assessment of import duties and taxes using the customs paperwork. Import fees vary depending on the type of goods, their value, and specific import regulations in the receiving country. After this, customs requests payment for taxes and duties (if applicable). If your shipment exceeds the tax threshold, the customs officer checks if duty and taxes have been paid.
Here a choice between shipping with Delivery Duty Unpaid (DDU) and Delivery Duty Paid (DDP) becomes relevant. DDP means that import duties and taxes will already have been paid. Most express courier services like FedEx for example have customs brokers who will process this payment on your behalf at customs. With DD, the price you paid for shipping covers any import fees and this is reflected on the attached shipping label. So generally speaking, using DPP is the best way to ensure a smooth customs clearance process.
DDU means that import duties and taxes are unpaid. In this case, the customs officer forwards the shipment to an independent customs broker to collect the required amount. Customs brokers are middlemen who charge fees for facilitating the custos clearance process. These variable fees can be expensive because they include brokerage, storage and late payment. Often is the custom fee is unpaid, the broker will typically contact the recipient to collect payment, which may upset some customers.
Once all the duties are paid, your shipment clears customs. Your chosen courier service will then transport the shipment from customs to the end-destination. Shipment rarely get stuck at customs, but when they do, it is usually due to faulty paperwork – it is important to bear this in mind.
