Cost of Importation/Shipping from China

Discussion in 'International Business' started by Imagineinfinity, Aug 23, 2019.

  1. Imagineinfinity

    Imagineinfinity UKBF Newcomer Free Member

    3 0
    I've recently started to take the idea of importing cheaper products from China more seriously as my sales volumes (furniture) have increased. Clearly there are a number of different methods of shipment all with different abbreviations.

    At the moment I'm trying to work out the cost implications of CIF (Cost Insurance and Freight). The seller pays for the insurance and shipping costs, and there's the VAT to pay on my part, but I'm seeing a clearance fee might also be payable at my end. Could anyone shed some light and potentially outline the fees I might be on the hook for my end?

    Posted: Aug 23, 2019 By: Imagineinfinity Member since: Aug 23, 2019

    MY OFFICE IN CHINA UKBF Legend Full Member

    5,560 1,296
    If you decide to import using CIF terms, then you're liable to pay clearance charges in the UK as well as Import Duty & VAT.

    My advice is to use FOB terms if you are importing a FULL container.

    If you are importing less than a container (LCL), then arrange your shipping with a UK forwarder, so you have ALL the costs known in advance.

    DO NOT import LCL and use your China supplier to arrange the shipping, if you do you are likely to be 'stung' on the UK forwarding costs.

    Get quotes to include ALL charges delivered to your warehouse. Choose the one that ticks your boxes.

    If you need any assistance, feel free to contact me via the website in the link below.
    Posted: Aug 24, 2019 By: MY OFFICE IN CHINA Member since: Nov 16, 2011
  3. GraemeL

    GraemeL Pain in the neck? Full Member - Verified Business

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    Posted: Aug 25, 2019 By: GraemeL Member since: Sep 7, 2011
  4. Mike Foulds

    Mike Foulds UKBF Contributor Free Member

    49 16

    To clarify on this, if your shipper is offering terms CIF, then they are responsible for the costs of getting the goods to the UK port (Including insurance in transit). You would be responsible for UK costs including any Duty/Vat, Clearance, Docs, Port Charges, Terminal Handling and haulage to your destination.

    As My Office in China mentions, if you brought under FOB terms, you would then also be in control of the Freight and Insurance, HOWEVER, it's then more involved and you need to check and compare freight costs, arrange insurance, etc.

    If, as you mention, you are just starting out at this stage, then I would suggest:

    1) If LCL volumes, as above, DEFINITELY arrange using FOB and pick the best freight option, as otherwise, if CIF, your supplier will pay the lowest possible freight cost, and the UK charges will be loaded and you'll end up paying much more than you should.
    2) If FCL, it depends how involved you want to be. By shipping FOB, you can make more savings, and be more in control of your shipping, eta, etc. However, by using CIF, the UK costs WON'T be higher, as they are standardised by the shipping lines, it will be simpler for you, and may be a better option for your first few containers, until you get the hang of things.

    Hope that helps.
    Posted: Aug 27, 2019 By: Mike Foulds Member since: Mar 21, 2018
  5. Imagineinfinity

    Imagineinfinity UKBF Newcomer Free Member

    3 0
    Thanks people. Found a few articles and absorbed some of the info here which clarified a lot of things.
    Posted: Aug 27, 2019 By: Imagineinfinity Member since: Aug 23, 2019

    MY OFFICE IN CHINA UKBF Legend Full Member

    5,560 1,296
    Before arranging any shipping, my advice is to first ensure that factories can handle your order quantities.

    Any bona fide factory furniture will stipulate an MOQ of one container as a minimum order.

    Any supplier offering less is probably not the factory and may add an extra cost for FOB.
    Posted: Aug 27, 2019 By: MY OFFICE IN CHINA Member since: Nov 16, 2011
  7. Mike Godwin

    Mike Godwin UKBF Regular Free Member

    120 24
    Can't add too much more to what's already been said, only to say make sure you understand INCOTERMS 2010 that are used in international trade. This will help you identify who (buyer or seller) is responsible for what charges within the shipping process. A copy will be available at "Know your incoterms".
    Posted: Sep 3, 2019 By: Mike Godwin Member since: Mar 27, 2018

    CHUKTC UKBF Regular Free Member

    166 29
    As per the advice above, whatever you do don't ship part loads CIF - you will almost certainly have a nasty surprise in terms of port charges once the goods arrive. The worst part is you won't know what these charges are until the goods arrive. You should be looking to arrange door to door delivery then you know exactly what the cost are and can budget accordingly. The best way to do this is via a UK shipping agent. If it's a full container life is a little simpler. As said above agree FOB terms and get a good agent to do the rest to get it to your door. It's something we routinely do for all our customers it removes all the stress and it invariably saves them money.
    Other things you should consider is who you are dealing with - are they an agent or a factory (don't trust what they tell you do your own due dilligence)? Have you seen samples? Have you been out to visit the factory? Are there any restrictions on the goods you are looking to import (such as CITES for certain wood products)? Have you arranged for someone to check the goods when the consignment is loaded? These are all very important questions and vital to successfully importing from China and I strongly recommend you have proper answers to all these before parting with your hard earned money.
    Posted: Sep 6, 2019 By: CHUKTC Member since: Jan 2, 2019