All businesses either domestic or international need to deliver the goods to the customers; therefore shipping has become a major part of the trade business. All the countries have a set of guidelines for import and export.
The following points will guide you on the freight charges in China:
Incoterms
- EXW (Ex works) does not include transportation and export clearance.
- FOB (Free on Board) takes care of most of the documentation and clearances the supplier is responsible for the safe delivery of goods.
- CIF (Cost, Freight and Insurance) takes care of the shipping (and insurance) while local charges are not included.
- DAT (Delivered at Terminal) ships the consignment to the destination and the buyer doesn’t have any payment to make.
- DAP (Delivered at Place) ships the consignment from the origin till the buyer receives it.
Movement from Warehouse to the port
The shipment needs to be sent to the port after the production gets completed, the seller ships to the port. The cost of the transportation mainly depends on the distance, to transfer an FCL 20” container it should cost approximately RMB 3,000 (Around $480). FOB price already includes local transportation and most of the buyers choose FOB terms hence the transportation is already paid off.
Movement from Warehouse to the port: $50 to $480 (Included in FOB)
Export Clearance in China
The export clearance of the goods must be completed before the goods are shipped. Any shipment without proper documentation will be penalized by the customs authorities. The procedures necessary to follow are included in the FOB fee. Ex Works (EXW) terms will not include inland transportation and export clearance documentation hence if you choose to opt for EXW terms considering a freight forwarder for such clearance documentation is better. It might cost from US$100 to US$200.
Export Clearance in China: $100 to $300 (Included in FOB)
Freight Cost
The cost of shipment delivery from the origin to the destination is the freight cost. The local charges are the component that is used to balance the cost if the freight cost is high the local charges are less and vice versa.
The cost of the shipment depends on the weight, size of the cargo and the distance to be covered.
Sample price of FCL shipment for few destinations in Australia, Asia, EU, and the US are as follows:
- Shenzhen – Los Angeles: $2,310 – $2,370
- Shenzhen – Sydney: $700 – $800
- Shenzhen – Singapore: $250 – $280
- Shenzhen – Dubai: $1,350 – $1,400
LCL on the other hand is very low in price as the container is filled as per cubic meter and priced the same way. The LCL rates are very low ranging from US$30 to US$40 per cubic meter.
Freight Cost: Depends on location, volume, weight, and destination
Insurance
Insurance is the most vital element in the shipment, only if the goods are properly insured you will have a safe shipment delivery. There is rarely any shipment without insurance, checking the packaging of the goods before the shipment is sent will prevent huge losses. Low-quality packaging will spoil the goods and the entire consignment will be ruined therefore it is a mandate to not only have goods specifically insured but also check the packaging and the quality before the shipment starts from the place of origin.
PingAn charges 0.02% based on 110% of the FOB price, for example, if your shipment is of US$50,000, the insurance will cost US$110.
Insurance: 0.2% x 1.1 x Cargo Value (Included in CIF)
Document Delivery
Documentation is a crucial factor; all the documents needed for the shipment of goods must follow the necessary regulations. The following are few documents which the buyer needs to pay for, it may come under additional shipping cost for delivery of:
- Bill of Lading
- Commercial Invoice
- Packing List
- Form A or Country of Origin Certificate
The delivery of the above-listed documents through FedEx or DHL delivery will cost around US$40 to US$50.
Document Delivery (DHL): $40 to $50
Port Charges at Destination
As already stated the local charges are applied once the shipment reaches the port of destination where the buyer has to pay some additional costs, there are some kickback rates offered by the freight forwarders to the suppliers which will offer them a good deal but the actual costs are added up at the destination making the shipment invoice a surprise for the buyer.
For FCL shipment the prices are between US$500 to US$1000 per container.
Port Charges at Destination: $100 to $450 (Included in DAP and DDU)
Customs clearance
Before the shipment arrives at the port of destination the customs clearance must be done. The customs bonds can be obtained for one or multiple entries. Single entry bond will cost around US$100 – US$200, and a continuous entry customs bond costs US$250 – US$450. Importers who ship frequently must invest in continuous customs bond.
Customs clearance: $100 to $200 (Single Entry)
Local transportation at the destination
Once the shipment reaches the destination country the delivery can then be locally transported to the warehouse or the customer’s place directly. The local charges will be based on the distance, weight, and other factors involved in the freight cost.
A Sample Shipping Quotation
People without any knowledge in the industry will have trouble understanding the freight cost. The billing information terms and calculations cannot be estimated if you do not have an idea about the charges and the regulations.
Therefore freight forwarders offer a simple quotation like the below mentioned to give insights to the client.
- CFS Charges: $59.50
- Origin Documentation Fee: $40.00
- ENS Fee Exempt: $270.00
- Re-weighting and VGM Sending-Fee – LCL: $16.00
- Export Customs Clearance Fee: $33.00
- Freight: $300.20
- Cargo Insurance: $ 50.15
- Destination – Other Charges: $700.62
This kind of quotation is simple to understand and it shows a fixed price for each fee.
It is recommended to request total DAP or DDU price, based on the following:
- Weight and volume
- Port of loading
- Port of destination
- Final delivery address
The information can be taken as a reference to understand charges and concur with any unexpected fees at the landed cost.
Freight rates are based on the market rates comparing with more forwarders will let you negotiate terms. Beware of scammers as there is very little room for the forwarders to get profit margin you can easily get scammed if you don’t be prudent.
You can request a free real-time quote for your shipping needs.