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Importing from China: Organizing Logistics and Storage

LogisticsIn the shipping process, for terms like Delivered Duty Paid or Cost, insurance and freight, there’s nothing you need to do but wait on their arrival.  For some shipping where you use terms like “Freight on Board,” an effort has to be made to keep things organized. Remember, even if you’re lucky enough to take on DDP or CIF at this time, it is not a guarantee.

Like any new task, organizing logistics can be complicated in the beginning.  If you do them well, however, you can save money, so they are worth the extra amount of work.

You must make sure that teach partaker in the process is one upon whom you can rely.   Remember that costs tend to add up as each phase takes place, so it is up to you to make sure that each phase is as easy on the budget as possible.  Do some research to determine the most excellent freight company, shipping and storage alternatives.  In the beginning, it may take you a little time, and appear difficult.  Once you learn the process, augmenting profits will be a breeze.  Here’s how whole process for the importer process goes:

  • Manufacture/Wholesaler/SupplierManufacturers receive payment for the cost of their goods and its packaging.  All documentation required for exporting is prepared by the manufacturer.  Shipping terms like Delivered Duty Paid (DDP) and Cost, Insurance & Freight (CIF) are preferred to Freight on Board (FOB).  The supplier undertakes the inbound risks and have the delivered products paid off.  Whichever shipping term you have, always verify insurance terms.  You need to insure the container for 110% of the FOB cost.
  • Road Haulage CompanyThe collecting from suppliers and delivering these to the docks/airport, is the responsibility of the road haulage company.
  • Sea Freight CompanyYou, or the supplier if CIF, DDU or DDP, will have to negotiate with the sea freight company to determine a rate for the process of having 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, documentation, and loading them into the vessels. Usually, costs range between $1500 and $4500 depending on the volume of the shipment.   Freight associated charges are computed per kilo on the volume weight of your goods and small lightweight consignments are issued with the least charges.  Professional freight agents will advise you of these charges when the quote for shipping of your products is given.
  • Discharging of GoodsWhen you merchandise arrives, it is unloaded.  If your documentation is organized, the merchandise is usually quickly cleared as soon as you verify payment of the necessary duty and tariffs. If you have not established credit facilities with your selected shipping line and Customs ahead of time, you are responsible for paying everything before the goods are discharged.  If there is a delay, you must pay for additional storage fees.

    If you pay the shipping charges by check, it will take working days to clear.  While it is clearing, fees for storing the merchandise are added at approximately $0.14 per kilo per day. It doesn’t sound like a lot, but a delivery of 1000 kilos of merchandise that has to be stocked for four days can have additional storage fees of up to $560.00 of store charges, but the rates vary.

  • Payment Methods: You can choose from the following methods of payment:
    • Cash
    • Deferred payment— Importers with deferred accounts can avail of this payment.
    • Broker deferred — Agents with broker deferred accounts can avail of this payment.
  • Transportation to Warehouse and Warehouse Storage Once the merchandise reaches the docks or the airport, you must have the merchandise picked up and delivered by a freight company to a warehouse.

    For warehouse storage, yet another stage of the import process, you will need a few more hundred dollars, because you will have charges for:

    • Receiving the product
    • Cost of labor
    • Long-term storage costs
    • Broker and/or freight forwarder fees

    Bargaining about the cost of this step in the storage process is usually possible.  If you look and compare, you can probably save money.   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 than others.
    You can obtain a breakdown of the sea freight costs, importing procedures, etc., by visiting  http://www.skymartworldwide.com/t_help_simpleguideimporting.htm.

  • Customs Duties and Taxes Duties and taxes of goods you import will vary from one country to another.  While importing from China, Hong Kong, India and others, you are likely have to pay import duties.  Of course, there are exceptions.  If the goods are items you can’t avail in your own country, usually the tariffs and duties are minimal.  For other goods which are subjected to FDA jurisdiction, you will need to have special licenses.  The process involved is complicated.

    To determine the charges, visit your country’s customs website for information.  Information such as phone and other contact information can be found at these sites: 

    Once you’ve been through the process a few times successfully, you probably can handle the process of importing on your own.  First-time importers, however, should obtain a broker to help with the process.  Classification is necessary, and if your products are not classified properly, you may end up paying inaccurate duties and tariffs.  Through the help of a broker, you can avoid paying the inaccurate charges. Your documentation must also be accurate.  A broker can help with that as well.  If it is inaccurate, it can cause delays and higher charges.  When this happens, you aren’t able to transport the products while obtaining correct documentation.  Items will need to be stored longer than the original agreement, so you are then responsible for paying demurrage.

 

 
 
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