Part I: Basics and a guide to timing and cost
With thousands of containers shipped out daily, Chinese ports rank among the highest in the world in terms of global shipping volume. In this series of blogs, we’ll tackle the basics of international shipping, as well as secure packing and handling.
First, we’ll discuss the basics.
Basic Shipping Knowledge-Buying Terms
First, decide by what terms you wish to have the goods delivered. A long list of internationally accepted terms for commercial shipping defining the roles of buyer and seller (Incoterms) are available. Here are the most commonly used:
• FOB – (Free On Board) Title and risk pass to the buyer including payment of all transportation, insurance cost, customs clearance and import duty once items are delivered on board the ship by the seller at the port of origin.
• CIF – (Cost, Insurance and Freight) Title and risk pass to the buyer when items are delivered on board the ship by the seller who pays transportation and insurance cost to destination port.
• DDP – (Delivered Duty Paid) Title and risk pass to the buyer when the seller delivers goods to named destination point, usually the final location, having cleared customs and with all import duties settled.
For a complete list of terms, please click here!
Tips:
You can often save money by buying FOB China or CIF at the local port of call and controlling the importing yourself. For moderately experienced importers, this is a good way to go. However, this you must manage customs clearance and local delivery. Be sure to research the product’s Harmonized Tariff Schedule (HTS) number in advance to evaluate potential import duties, and secure the assistance of a highly competent customs agent.
Click here for a HTS on-line reference tool.
Be sure that you receive all required documents, as you won’t be able to import the goods without them. In addition to the standard set of Commercial Invoice, Bill of Lading and Packing list, you may need additional documentation such as pallet fumigation or Country of Origin Certification, depending on the details of your shipment and country. US buyers must pay close attention to the new “10+2 Filing Rule,” which goes into effect in January 2010.
For more information, please click the links below:
- CBP Issues Interim Final Rule on “10+2″ Requirements
- Security Filing “10 + 2”
Timing and Cost
Before shipping, you’ll need to plan your shipping time and cost. Here are some rules of thumb, based on CIF cost:
| Country | Estimate Shipping Time | Estimate Cost (US$) for Full Container loads by Ocean (20’/40’/40H’) |
| North America | 25-30 days for East Coast 15-20 days for West Coast |
$1300/ 1700/ 1800 |
| South America | 25-32 days | $1500/ 1800/ 1900 |
| Australia | 13-15 days | $1100/ 1500/ 1700 |
| Europe | 25-30 days | $900/ 1300/ 1500 |
| Japan | 3-7 days | $200/ 300/ 400 |
*Costs shown are rates to port, do not include customs clearance or local delivery and are highly subject to change according to fuel costs and current market rates.
Tips
• Insurance—Make sure the total value of your shipment is insured, not just the ‘salvage costs.’
• Always allow additional time for potential customs delays, particularly in USA and South America. It is difficult to predict which shipments might be pulled for inspection, but when it happens it will delay deliveries anywhere from 2 days to a week
