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Singapore is a growing economic hub located in south-east Asia and offers numerous products to ship, whether for personal use or business in the US.

However, Shipping from Singapore to US can be complicated due to the many terminologies and strict restrictions enforced.

Fortunately, this guide covers everything you need to know about Shipping from Singapore to US.

Cheapest Way to Ship from Singapore to US

Four modes are available for shipping goods from Singapore to US: FCL, LCL, Air freight, and Express freight.

Each of these modes has its pros and cons, so it would be wise to consider each mode’s factors before making a choice.

FCL Sea Freight

Full Container Load (FCL) means that you hire a container and have your products shipped in them.

It is designated for large volume shipments.

Most carriers argue that shipments don’t necessarily have to be bulky enough to fill an entire container.

As long as a shipper can afford the cost of renting an entire container for shipping, they can book FCL Shipment.

In other words, your products must not necessarily fill the container to ship under FCL Sea Freight.

You should consider FCL Shipment when you need top safety for your products.

In this case, once an FCL shipment is packed and seal, it is not opened until the container arrives in the US.

This is unless US Customs find it necessary to break open the container for inspection.

Note that FCL is cheap if your products fill more than 75% of the container.

LCL Sea Freight

With the Less than Container Load mode, your products and other shippers’ products are loaded on the same container for shipping.

Under this mode of shipping, you only pay the container fee according to the space your products occupy.

Compared to FCL shipping, LCL Shipping is cheap when your cargo is too small to fill a standard shipping container.

It is also considered when you don’t have a tight delivery schedule as an LCL shipment takes more time to deliver to the destination.

This time lag is due to the shipment’s consolidation at the loading port and deconsolidation at the destination port.

These processes take a considerable amount of time.

Air Freight

Airfreight from Singapore takes a shorter time as compared to sea shipping.

However, the shipping cost is high, sometimes even three times that of sea shipping.

Shipping by Air is convenient if you import small quantities and require faster delivery.

Airfreight charges from Singapore to the US vary depending on the shipping and the weight of goods you’re shipping.

Express Shipping

Express shipping, which is a faster form of Air shipping, is another mode you can consider.

As the name suggests, it is faster, more express, to put it simply.

You can receive express shipments at your US destination within three days after ordering in Singapore.

This form of delivery is carried out by Courier Services and is the best when you’re operating under tight delivery schedules.

It is also a suitable form of shipping when you need to transport shipping documents and samples quickly.

When it comes to the cost of shipping via express means, you should brace yourself to pay relatively higher charges.

Express shipping rates from Singapore to US for a 50kg load per sq. meter starts from $800.

Generally, if you’re shipping cargo whose weight is below 100kg to the US, express shipping becomes a cheaper option and saves you on shipping lead time.

Prohibited Items when Shipping from Singapore to the US

Shipping to the US can be tricky because of the many restrictions on what you can and cannot ship.

To be safe, you should verify with the US Customs and Border Patrol (CBP) to better understand the restrictions and prohibitions.

Some of the products the US prohibits you from shipping from Singapore to US include;

• Tobacco products
• Alcoholic beverages
• Dog and Cat fur
• Drug Paraphernalia unless under a special certification
• Fruits and vegetables- you can only ship after declaring with the port of entry before shipping.
• Soil
• Certain food products such as bushmeat.

Some of these listed products require authorization before shipping to the US.

You can get full details from the CBP website on how to treat their shipping.

How much it Costs to Ship from Singapore to US

Shipping cost from Singapore to the US varies depending on the carrier, size and weight of the cargo, and the shipping distance.

Container Shipping Rates from Singapore to the US

The FCL freight charge usually depends on the delivery Port in the US and varies depending on the container’s size.

For a 20-foot container, your FCL shipping cost will range from $1200-$2500.

On the other hand, if your shipping container is a 40-foot container, the shipping prices will be slightly higher and range from $1776 to $3000.

It would help research the rates applicable to more than one carrier to cut shipping costs.

LCL Shipping Rates from Singapore to the US

We have already mentioned that the LCL is applicable when your goods cannot fit one container and plan to save costs.

The shipping rates for an LCL load from the US to Singapore range from $950- $1100 for a load of 200kg/1cbm.

The cheapest route is from Singapore to Los Angeles.

Air Freight Rates from Singapore to the US

The air freight rate for shipping from Singapore to the US varies with the shipment’s average weight.

For door-door shipping from Singapore to the US, the rate ranges from $1700 to $1950.

The more your shipment weight increases, the lower your shipping rates per Kg.

Express shipping Rates from Singapore to the US

Like the other shipping ways, the cost of express shipping also varies from port to port and the shipments’ weight.

The mode of delivery will also influence your express shipping rates.

For instance, door-to-door delivery costs more than that port to port or even port to door delivery.

The average price for express shipping is $800 per 50kg/0.2cbm.

Factors that go into the Cost of Shipping from Singapore to the US

The shipping cost from Singapore to the US is affected by numerous factors such as size, type of product, distance, and shipping mode.

Before settling on any particular shipping method, you should consider your business needs.

Some of the shipping methods are cheap but take longer.

Location

Locations influence the distance from Singapore to the US.

The longer the distance, the higher the shipping costs.

Always ensure the sourcing and delivery location is convenient to your needs and attract affordable shipping costs.

Shipment Size

Shipment size has the most significant impact on your shipping cost.

The larger the shipment size, the higher the shipping costs.

You should use proper packaging to avoid inflating your shipping costs.

Opt to use smaller and lighter packaging to avoid unnecessary weight and volume.

You can also stock several package sizes and use one single consolidated packaging system to reduce your shipping costs.

Shipping Mode

Shipping mode means either using express shipping, air freight, or sea shipping.

There is also the option of door-to-door delivery, port-to-port, and port-to-door and door-to-port delivery modes.

Each of these modes attracts a different cost than the other.

Door-to-door is generally costlier than all the other modes of shipping, while port-to-port is the cheapest.

Whether you’re shipping reefer cargo, bulk cargo, or out of gauge cargo, etc., may also influence your shipping cost.

The more special care and handling procedures your shipment, the higher you pay for shipping and vice versa.

While choosing your shipping mode, remember to factor in your business needs and the cost before choosing a shipping mode.

Shipping from Singapore to USA Time

Shipping time from Singapore to US varies significantly depending on the method of shipping you use.

Sea Freight Shipping Time from Singapore to the US

The sea freight shipping time to the US is the longest and ranges from 25-40 days from FCL.

For LCL, the shipping time is longer due to consolidation and deconsolidation.

Some of the typical shipping durations are;

Air Freight Shipping Time from Singapore to the US

The distance between Singapore and the US is approximately 14 000km, and the shipping time ranging between 5-8 days.

Depending on the airport in the US, some practical shipping times are:

 

Express Shipping Time from Singapore to US

Express shipping from Singapore to US is the fastest.

It takes an average of 1-4 days.

The exact shipping will depend on when you avail your goods for shipping and the exact shipping location in the US.

Cheapest Time to Ship from Singapore to US

Shipping rates from Singapore to the US are greatly affected by seasons.

There are times when freight rates are lower, and there are times, a few times in a year when these rates spike so much.

Usually, the freight rates tend to spike due to a change in seasons.

In particular, peak seasons tend to see an immense rise in shipping rates and other shipping challenges due to increased demand.

Peak Seasons when Shipping from Singapore to the US

Like other businesses, shipping has high seasons when everyone is rushing to deliver their goods to warehouses.

When shipping from Singapore to the US, the main peak season is between mid-August and mid-October.

During the peak season, the shipping rates rise caused by the vast shipping demands.

Getting containers at such times is difficult, and this can significantly affect your business.

What Causes Peak Season?

Peak seasons are caused by high market anticipation and fear of holidays ruining the shipping process.

Also, peak seasons are caused by the back-to-school rush and black Fridays when most people make massive last-minute purchases.

How to Beat Peak Season Prices and Traffic

Peak seasons imply that getting a shipping vessel from Singapore to the US is difficult.

Also, the US demand will be high, and meeting them will be difficult due to a lack of inventories.

However, implementing several strategies can help you bet peak season and remain a valuable supplier to your customers.

To beat peak seasons when shipping from Singapore to US, you can:

Split Shipments

During peak season, the number one strategy is shipping what you can and when you can.

This means that if you are shipping a large consignment, you can split them into multiple bills of lading depending on the agency.

Essentially, this means that if you have three containers, you use three bills of lading and not separating the container’s content.

Also, you can split your products to use different modes of shipping.

Here, you can have some products shipped by air freight and the rest by sea freight.

Use a Reliable Freight Forwarder

Freight forwarders play an unmatched role when it comes to shipping your goods from Singapore to the US.

The nature of forwarding dictates that freight forwarders sign contracts with shipping companies.

So, anytime the forwarder has products to ship from Singapore to the US, they get priority booking in the vessel.

Therefore, choosing a reliable freight forwarder will save you the hustle of finding a shipping slot.

Opting for Slower Shipping Methods

During peak season, the demand is high, and many consumers are willing to meet the high costs of products.

This means that shippers opt for faster delivery methods which are expensive but can deliver their goods on time.

With good planning ahead, you can use slower shipping methods and shipping companies with a lower reputation.

Use Insurance

Insurance is important when shipping from Singapore to the US during peak seasons.

Remember, many people are shipping, and instances of theft and mishandling of cargos due to the rush is high.

To be safe, always ensure that once shipping prices start rising, an indication of peak season, your goods have insurance coverage.

Doing marketing research at this point can help you identify specific goods that your customer requires to avoid delivery delays.

Prioritize what you Ship during Peak Seasons

Not all the products you ship during peak seasons will attract a market.

Some products are consumed during specific times, not necessarily during peak seasons.

You can prioritize your shipping by informing your freight forwarder which container requires faster shipping.

Furthermore, the difference is never significant, and you can still make substantive profits from your products.

Incoterms when Shipping from Singapore to the US

Who pays for shipping costs is part of the international shipping agreements.

Determining who pays, the buyer or seller is based on Incoterms.

Incoterms 2020 provides the latest interpretations of who should pay for the freight on each term.

What are Incoterms?

Hardly will you mention shipping from Singapore to the US without mentioning incoterms.

Incoterms are internationally recognized rules which define the responsibility of the seller and the buyer.

The terms vary from one shipping method to the other, with some specific to a given mode of shipping.

Best Incoterms to use when Shipping from Singapore to the US

The choice of incoterm depends on the total cost you will incur to have your goods delivered from Singapore to the US.

Before settling on an incoterm, you should factor in the supplier’s responsibility and the overall cost you will incur.

When shipping from Singapore to the US, some of the best incoterms you can use are:

Free on Board (FOB)

This is one of the best incoterms to use when shipping from Singapore to the US.

FOB means that your supplier will deliver goods at the port in Singapore and clear all necessary clearance.

You will then hire the services of a freight forwarder to help ship your goods to the US.

Under FOB shipping, you have full transparency of how your goods move, allowing you to effectively plan your delivery schedules.

Ex Works (EXW)

Under the EXW incoterm, your supplier will avail goods at their warehouse, where you will arrange their peaking and shipping.

Though a good incoterm in terms of offering transparency in the shipping process, it is not easy for first-time importers.

If you opt for EXW incoterms, you are responsible for export and import clearance.

Meaning, you must be familiar with the export country laws to ensure smooth shipping.

Otherwise, you’ll have to consider hiring a Customs broker.

Delivered at Place (DAP)

If you fear all the customs clearance and the many overwhelming shipping processes, you should settle on DAP incoterm.

DAP shipping involves having your supplier deliver the goods up to the set destination.

The only worry with DAP is that you will have minimal control of the shipping process.

How Incoterms Affect Freight Prices from Singapore to US

Incoterms dictate the duties of the supplier and the buyer. They define who is responsible for the shipping costs.

When shipping from Singapore, depending on the incoterm you use, your supplier will quote prices that include the incoterm.

You can ask your supplier to quote prices without including incoterms and after including them to help determine a cheaper option.

Essentially, incoterms either increase or reduce the freight prices.

Shipping from Singapore to US Covid Effects

The rise and increase in the number of Covid 19 have had significant impacts on the shipping industry.

Your shipment from Singapore will undoubtedly be affected by the pandemic.

Business is not as usual, and you will have to readjust.

Here are some of the impacts covid 19 will have on your shipping.

High Cost of Goods in Singapore

With the many government restrictions and decongestion of crowds, Singapore’s workforce is not as it used to be.

Suppliers have had to retrench a good number of their employees, sometimes by even a half.

This means that the production is low and satisfying the demand high.

Nevertheless, you can conquer this by resorting to other suppliers or making prompt arrangements.

Shipping Rates are High

The number of sea vessels and flights has reduced dramatically due to the covid 19 pandemic.

Many companies have reduced their working force and the few flights available charge even twice the standard shipping rates.

If you are shipping from Singapore during this period, you might consider weighing all the costs before deciding to continue shipping to the US.

Increased Shipping Time

With the few available shipping vessels, the implication is that getting a shipping space is difficult, and you will have to fight for it or sometimes wait.

The CBP imposed rules in the US ports imply a change of clearance strategy, thus significantly impacting your shipping.

To beat the effects resulting from covid 19, you can hire a reputable freight forwarder to help you navigate the hurdles.

You can also plan your shipping and communicate with your customers when you expect a delay.

Customs Duties and Taxes when Shipping from Singapore to the US

Knowing the basic USA customs clearance is important for all persons shipping from Singapore to US.

Here are the pertinent issues you should know about customs clearance when shipping from Singapore to US.

Applicable Customs Duties and Taxes when Shipping from Singapore to the US

All products whose FOB value exceeds $800 shipped from Singapore to the US must pay customs duties and taxes.

To determine the applicable customs duty, you calculate your products’ FOB value and calculate the applicable duty based on the set rate.

Additionally, your imports to the US attract a Merchandise Processing Fee (MPF).

The MPF is an AdValorem value with minimum and maximum set limits.

Customs Clearance Procedure when Shipping from Singapore to the US

Your products must clear at the US customs before being released.

The clearing process involves a lot of paperwork and sometimes quality checks by the CBP.

CBP requires proper documentation and payment of the applicable customs duties and taxes to release your products.

The first part of customs clearance involves settling the customs clearance fee.

This includes costs to the customs broker or the freight forwarder.

Payment of the customs duties and taxes directly to the customs authority follows.

Note that the time taken for customs clearance depends on several things.

They include the nature of your products, provision of proper documents, and the customs broker you are using.

To swiftly handle customs clearance for your products from Singapore to the US, you need to hire a capable customs broker.

Hiring a Customs Broker

Customs brokers specialize in handling customs clearance by forwarding the necessary documents.

They ensure no delays that may lead to extra costs in the process of clearing with customs.

You need to hire a reputable customs broker.

In this case, your best bet is the freight forwarder that helped you ship your products from Singapore to the US.

Nevertheless, you can hire an independent customs broker different from the freight forwarder.

However, this option is risky because your freight forwarder won’t be responsible once mistakes arise.

Freight Insurance when Shipping from Singapore to the US

When shipping from Singapore to the US, your cargo passes through many hands.

This starts from the loading process, the many risks while shipping, and even the offloading port.

Your shipment is at increased risk, and if anything happens, you can suffer huge financial losses.

Settling for separate marine cargo insurance, other than the carrier’s insurance, can save you in case of loss or damage to your products.

The advantage of this type of insurance is that it will only cost you a fraction of the total shipping costs.

Also, the market is pretty soft now, which makes it ideal for shopping rates and comparing marine cargo insurance providers.

If you already have an annual goods insurance policy, then your rates should be dropping.

Additionally, if you insure shipment by shipment, your charges should be dropping too.

The bottom line is that it doesn’t matter what type of policy you take.

As long you procure coverage for your goods when shipping from Singapore to US, you are safe.

If you want to get the best cargo insurance coverage with affordable premium rates, it is best to approach general-purpose companies for quotes.

You can ask for referrals or recommendations from your shipping agent, supplier, or other reputable business that use this service.

Remember, though, that Cargo insurance is mostly a specialist area.

Therefore, if you need to obtain coverage for your goods, find an expert.

To guarantee a competitive deal, we advise that you work with your freight forwarding expert instead of an insurance broker.

A forwarding agent can deal directly with underwriters hence, gaining lower rates that they then pass on to you.

With a simple click on the internet, you can get your cargo insurance quote.

You can even fill out the order form, submit it, and get coverage for your shipment value.

Your agent can even generate your insurance certificate online, and all you have to do is print and have it ready for when necessary.

Documents you’ll need to ship from Singapore to the US.

Documents play an important role both during shipping and during customs clearance.

Proper import documentation ensures hastened shipping and faster clearance at the US ports.

The major documents you need when shipping from Singapore to the US include:

• Bills of lading
• Packing list
• Certificate of origin
• Commercial invoice
• Letter of credit
• Shipping quote

Depending on your cargo, other documents might come in handy.

You should verify with your freight forwarder or the CBP before shipping.

How to Prepare Shipping Paperwork

Your shipping paperwork is important, and if you are shipping through a freight forwarder, they can help handle everything.

Nonetheless, your shipping paperwork will depend on your supplier and the CBP regulations on clearance.

When shipping from Singapore, your supplier can either send you a digital copy or a manual copy.

All are applicable and can help you save the whole strain of having your goods held sometime before release by the CBP.

How to Ship from Singapore to Amazon US

Selling in Amazon is profitable and, with proper strategies, can be an easy venture for you, with lucrative returns.

If you want to ship to Amazon, you will need to have an Amazon account.

With your account, head over to your profile and create a listing of the products you want to ship from Singapore.

The next procedure is adding the description of the product you want to ship.

Here, you can liaise with your supplier to help you have the correct product description.

After managing your inventories, you set up your shipment and specify how your products are packed and the number of units you are sending.

The next thing is preparing your products for shipping.

You can ship products from Singapore to Amazon FBA in the form of:

• Individual pallets or containers
• Using Amazon Freight forwarders from Singapore to the US
• Packaging and labeling your products.

You should pay close attention to how you are labeling your Amazon products to avoid rejections.

Finally, you can deliver your products to any fulfillment center where Amazon will pick your products.

Ports Guide when Shipping from Singapore to the US

Knowing the loading ports and the ports of arrival is significant when shipping from Singapore to US.

It helps you plan your budget and delivery schedule for the better supply chain management.

The following are some ports you can use when shipping goods from Singapore to US.

Busiest Ocean Cargo Ports in Singapore and US

Singapore has one of the busiest ports in the world, known as the port of Singapore.

This port harbors all types of shipping vessels and can handle any tonnage of cargo.

There are two main commercial terminal operators in Singapore which are:

PSA Singapore Terminals

This port operates four container terminals and can handle mega container vessels.

The port can help you ship large cargo and has gained a fast reputation as a car shipping port from Singapore to the US.

Jurong Port

Jurong port handles mainly bulk cargo from Singapore to the US and other regions.

You can use the Jurong port to ship products that include cement, copper, among other products.

The port operates efficiently and can enable you to meet your shipping needs.

Equally, the US also has very many well-developed shipping ports.

Hence, your port choice should be defined by your shipping needs and the proximity to your warehouse.

Some of the major seaports in the US include:

• Port of long beach
• Port of New York
• Port of Seattle
• Port of Los Angeles

Busiest Air Ports in Singapore and US

You should settle on an airport in Singapore based on its ability to handle your cargo, the reputation it has, and how close it is to your supplier.

The two major airports in Singapore used for cargo shipping are:

• Changi Airport
• Seletar Airport

In the US, nearly every state has a cargo airport that you can use to land your products from Singapore.

Nevertheless, checking with your shipping company will help you know the routes they use and the final delivery point.

The main shipping airports in the US include:

• Los Angeles International Airport
• Memphis International Airport
• Miami International Airport
• Louisville International Airport
• Philadelphia International Airport

Factors to Consider when Choosing Shipping Port from Singapore to the US

As you’ve noted, there are several considerations to make when choosing your shipping ports in Singapore and the USA.

These are:

Location

You can understand location from different perspectives.

It can be your supplier’s location, the shipping port in Singapore, and the US’s delivery port

It would help if you chose your shipping port in Singapore depending on your supplier’s location to reduce inland transportation costs.

When choosing a delivery port in the US, it should be close to your warehouse for efficiency and reduced costs while in the US.

Nevertheless, whichever location works for you, the further apart the shipping ports are, the higher the shipping costs and time.

Cost

Cost is the price you pay for shipping your goods from Singapore to the US.

Depending on your departure and destination ports, your shipping costs will increase with an increase in the distance.

You can compare shipping costs between different ports in Singapore to the US and decide which alternative has lower costs and serves your needs.

Transit Time

Transit time is the delivery time taken from Singapore until you get your shipment in the US.

The shipping company and the port impact transit time. Again, the longer the distance, the longer the transit time.

Understanding FDA Requirements when Shipping from Singapore to the US

The FDA regulates a lot of the products that you can import from Singapore to US.

Hence, before shipping, make sure you understand the FDA rules and regulations on the specific products you want to import.

This will help you avoid trouble with US Customs

The modern business trend has taken another angle, reducing the strain of manufacturing every product your business sells.

Contract manufacturing allows you to hire companies with economies of scale and manufacturing technology to work on your desired products.

This guide offers a detailed explanation of what exactly contract manufacturing is and why it is a perfect option for your business.

What is Contract Manufacturing?

With the ease of shipping and the emergence of online stores such as Amazon, Business has taken a new angle.

Contract manufacturing is closely associated with outsourcing.

It refers to minimizing operation costs by having some part of your business operations handled by others.

Therefore, contract manufacturing can be defined as the process of hiring another company/manufacturer to produce your products.

In this, the nature of the contract is such that you enter into an informal agreement with the manufacturer.

Manufacturing services include engineering and designing the product and manufacturing the product to required specifications.

How Contract Manufacturing works

The whole intent of contract manufacturing is to reduce production costs and benefit from other manufacturers’ technologies.

In this case, the manufacturer provides the design of either making a new product or improving an existing one.

Your only part is to market your products and sell them to your customers.

The process begins by choosing a manufacturer of choice.

When choosing a manufacturer for your products, you must consider their capabilities.

The right manufacturer must have the right machinery, adequate personnel, technologies, access to quality, and affordable raw materials.

Most importantly, they should possess the requisite certifications for manufacturing your kind of product.

Once you have selected your preferred manufacturer, you sign a contract manufacturing agreement.

The agreement should detail the nature of the contract, the quantities you want, price, and quality desired.

should also specify the manufacturing lead-time and penalties for late delivery.

When to use Contract Manufacturing

Many factors dictate the choice of using contract manufacturing.

Your business needs to operate under minimal expenditures but maximum returns.

The following are instances when you can use contract manufacturing:

When your Business is Just Starting

Starting and setting the pace for your business can be challenging and expensive.

The whole process involved, from developing the product idea, getting the necessary machinery and workforce, and delivering the product to the customers, can be overwhelming.

To reduce the strain and huge capital to manufacture your products, you can opt for contract manufacturing.

Not only does contract manufacturing save you on costs, but it can also help set the pace for your business by having quality products manufactured.

Challenges in Financial or Working Capital

When you are faced with difficulties in your business due to financial constraints, you can choose to hire a contract manufacturer.

Moreover, the arrangement is beneficial to you because anytime you feel stable; you can quit and continue manufacturing on your own.

When you need to Improve the Quality of your Products

Sometimes getting the right product to the market can be difficult.

With the experience and technology contract manufacturers have, they can improve your product in a short span.

Remember, these are companies with long manufacturing history.

They can help improve your product quality as fast as possible.

Establishing your Brand

As a business principle, the customers who matter most are those that come back.

This is only achieved through setting the pace by delivering quality first products.

Additionally, identifying your business with a reputable contract manufacturer taints a positive image to your customers’ eyes and can increase sales.

Seasonality in Demand

During certain peak seasons like holidays, the demand for products is high.

You can use contract manufacturing during these seasons to increase your supply and help meet the growing demand.

Examples of Contract Manufacturing

To understand the concept of contract manufacturing better, it would help to look at a real-life scenario of how it works.

Here is one example:

Suppose company X, a Pharmaceutical company, is facing an increase in demand for Tablets.

As a result, company X wants to increase its production capacity.

To accomplish this, they need an updated conveyor and an additional Tablet compressing machine to handle the overflow.

Together with the operations crew, company X decides the right specifications they’ll need for the machinery.

However, they are unsure how it will look like despite having a rough idea on paper.

To put their plan into motion, company X takes the specs to a capable contract manufacturer that will help them smooth out the details.

Company X and the contract manufacturing company agree and sign a contract for the fabrication of the new machinery.

In the next few months, the contract manufacturer finds the needed material for parts.

They then cut the parts and assemble them all into the required machinery.

The new machinery undergoes thorough testing and product inspection to ensure that they work fine as per company X’s expectations.

Upon passing the tests and inspections, the manufacturer delivers the completed machinery to company X by rail or sea.

The method of delivery will depend on the Incoterms initially agreed upon the signing of the contract.

Company X may also assist in installing the machinery and run some final tests to make sure everything is working as it should.

Note that the contract manufacturing service doesn’t end there.

The manufacturer may continue to service the machinery long after the sale, thereby adding extra value.

Difference between Contract Manufacturing vs. Outsourcing

Contract manufacturing and outsourcing differ in the scope and manner in which responsibility is transferred from one party to another.

In contract manufacturing, the operations hired are always conducted in the manufacturing facility instead of your facility.

Again, in contract manufacturing, the emphasis is on hiring someone with the capacity and ability to handle what you cannot.

Outsourcing, on the other hand, has grown importance when specialization and costs saving are a necessity.

It means hiring other firms’ services to handle particular areas of your operation, leaving you to focus on the more critical areas.

In outsourcing, you have the power to perform the tasks yourself. However, due to various reasons such as complexity, you have others take care of it.

The main difference between contract manufacturing and outsourcing comes in the amount of control you have over the company.

In contract manufacturing, the company operates on your terms.

While in outsourcing, you let the company do what they do best.

Who can seek Contract Manufacturing?

Any company or business can seek contract manufacturing as long as there is a need to have quality manufactured at a considerate cost.

The size of your business doesn’t matter.

Suppose the idea of setting your facility and hiring the needed workforce to manufacturer your products gives you a headache.

Then contract manufacturing can help you.

Who can benefit from Contract Manufacturing?

We have mentioned that contract manufacturing aims to save on costs while having others manufacture quality products for you.

Many businesses can benefit from contract manufacturing, and they include:

Startups

For startups, the cost of setting up facilities can be high, and the available capital inadequate.

By having their products manufactured through contracts, they get to reduce production costs.

Also, starting a business by using the services of contract manufacturing is beneficial.

You get to make a long-lasting relationship.

Finally, startups want to avoid risks associated with entry into a new market.

Contract manufacturing can help provide products to help you test and determine the market potential.

Companies Looking to Improve Profitability

When you are producing products yourself, you incur many costs, from product development, raw materials, and labor.

Contract manufacturing reduces these costs leaving you with only marketing and making deliveries to customers.

In the end, you increase your profit margins.

Companies Looking to Improve Quality

As cliché as it may sound, contract manufacturers hone their technology in production.

They have long experience in product development and offer the best quality products.

If you want to improve the quality of your products, contract manufacturers offer the best alternative.

Companies that Want to Improve Overall Efficiency

By letting contract manufacturers take care of your production, you are left with a simple marketing job.

This improves your supply chain efficiency.

Types of Contract Manufacturing

The nature of contract manufacturing varies from merely having the manufacturer improve your products’ quality to building a completely different product.

Some of the typical contract manufacturing includes:

Manufacturing of Entire Products

Suppose your business has discovered a new market with lucrative potential, and it requires an entirely new product.

In this case, the first thing to do is perform an internal analysis of your production techniques.

Check whether you have the resources and technical know-how to develop the product.

If it turns out that you lack the technology or that making a new product will be costly for your business, then you find a contract manufacturer.

You will approach a suitable contract manufacturer, present them with the idea of the product you want to be manufactured and formally agree on the contract.

Hiring of Service or Labor

Service contracting is common when you don’t require your employees or the existing employees don’t have the needed skills.

Under this, you contract a sub-contractor with the needed labor.

This can range from specialized services such as distribution, manufacturing, or designing.

Using Equipment or the Facility

Sometimes your new market can require the manufacturing of exceptional products that require the use of designed facilities or equipment.

In such a case, the best alternative to constructing or purchasing own facility and equipment is using contract manufacturing.

You will use the facility or the contracted manufacturer’s equipment at a small cost compared to having your facilities or equipment.

Manufacturing of a Part of a Product

Contract manufacturing comes in handy when your product uses more than one component.

An example is in the electronic industry, where products have different components each manufacturer in different companies.

Here, you will hire different contract manufacturers, each with their specialization to manufacture your products’ components.

The Benefits of Contract Manufacturing

Contract manufacturing can be beneficial in several ways.

Whether you’re just starting your business or looking to improve your products’ quality, here is how contract manufacturing can benefit you:

Reduced Costs

The profit margins from sales made are greatly affected by the expenses.

As a business, you want to reduce your operating costs as much as possible to increase profits.

In adopting contract manufacturing, you reduce costs significantly.

This is because you don’t have to purchase machinery, construct facilities or even engineer the product’s prototype.

Additionally, you won’t incur daily operation costs or even service the machinery used.

Reduced costs also mean lower labor costs to your business.

When you hire a contract manufacturer, they will be responsible for the labor, and in turn, this will reduce your production costs.

Since the manufacturer enjoys economies of scale in their production, you will enjoy low prices on the manufactured products.

Quality Products

Customers want quality products at the most affordable rates.

Given the advancement in the technology used by contract manufacturers, you are assured of getting quality products.

Your choice of the manufacturer to use will determine the overall quality.

The more experienced the manufacturer is, the more quality products you will get.

Faster Production Time and Market Time

Settling on hiring a contract manufacturer means that you understand their services, and their turnaround suits your business.

Well-established contract manufacturers have the machinery for hastening the production process and getting you products when you want them.

With equipment such as CNC, developing your product prototypes is speeded.

When you are sure of the delivery process, you can easily schedule other aspects of your business, such as delivering the products to the customers.

Streamlined Business Operations

There are many supply chain agents you deal with before getting the products to the final consumers.

Dealing with the many suppliers, distributors, and even warehousing companies can be overwhelming and consume much of your time.

By hiring a contract manufacturer, you control the business because of the freedom and ease of operations.

Your supplier handles the rest while you only get to wait for the product and work to meet your customer’s deadlines and demands.

Cons of Contract Manufacturing

Although beneficial to your business, contract manufacturing, if not handled well, can have negative impacts on your business.

Limited Control on Important Aspects of your Business

The nature of contract manufacturing lets them deliver on your specifications and demand on hiring a company.

This means that you will have minimal control over the processes they use to produce your goods.

On the other hand, the manufacturer has limited control over suggesting and designing products that can suit your needs.

They are only to deliver as per your demands, no questions asked.

Competition for a single Contract Manufacturer

The choice of using a particular contract manufacturer is influenced by the reputation they have.

This good reputation gives them other clients apart from you.

In the end, the manufacturer may have special clients, and once in a while, the agreed delivery time increases.

Job Displacement and Loss of your Valuable Employees

After factoring in the low costs, you incur when you hire a contract manufacturer, chances are you will lay off your workforce and fully rely on the manufacturer.

In the event of a change in terms of the contract, getting back your skilled employees can become difficult.

This change can, in turn, greatly affect your business.

Risks of Hiring the Wrong Contract Manufacturer

Getting the right manufacturer requires in-depth analysis and careful considerations.

If you land on the wrong contract manufacturer, your products’ quality suffers, impacting your business’s reputation.

Contract Manufacturing Strategy

Whether you have long-term or short-term goals of working with your contract manufacturer, you require a strategy that will benefit your business.

Contact manufacturing strategy refers to a decision-making system that ensures you achieve your true intent of the association. In the process, you also get to achieve the desired manufacturing structure.

The true intent of the strategy is to ensure you achieve the best system of manufacturing.

Contract manufacturing strategy is grouped into the following categories:

Regulations Compliance

Under this, the strategy ensures that the contract manufacturing company understands the industry’s cGMP.

Risk Management

Risk is both accessed in terms of delivering defective products to customers and the likelihood of having the manufacturer infringe the agreement.

You should have strategies to reduce all risks that may arise as much as possible.

Effective Technology

Contract manufacturing should constantly update the technology in use to ensure it is current and efficient.

You should also identify a balance between costs, production time, and quality.

How to use Contract Manufacturing to grow your business

Business is evolving, and you want to have a comparative advantage over your competitors.

To uplift your business, you can use contract manufacturing to:

Produce Quality Products

Quality products attract customers. When your brand gains a reputation based on its quality, your business will generate more sales.

Offer Lower Prices

When you efficiently produce quality products at a cheap cost, you can easily reduce your goods’ prices.

Low-quality products increase total sales, thus an increase in profit margins.

Crucial Supply Chain Strategy

Hiring contract manufacturers make it easy to budget with expected produce, accept orders, and schedule deliveries.

A contract manufacturer can help you when your production capacity is low relative to the demand.

This will put you above your competitors, improving your reliability in the market.

Contract manufacturing lowers your operating expenses.

Different Types of Contract Manufacturers you can Choose

Contract manufacturing is wide and can include different parts of your business production chain.

This leads to the rise in different types of contract manufacturers classified into three distinct categories.

Depending on the Manufacturing Agreement

This category groups the contract manufacturers depending on the types of agreement they use.

Individual Component Manufacturer

Individual component manufacturers are suitable when you need specific components that form part of your complex product.

They specialize in one product and do not take part in assembling.

Private Label Manufacturer

Private label manufacturers specialize in manufacturing and assembling complete products.

They are suitable if you need ready-for-safe products.

They develop the products and deliver them to your specified location.

End-to-end Manufacturing

Although similar to private label manufacturing, they develop a superior quality product and go overboard to seek feedback from you.

They are important when you want simply-the-best products.

Labor Subcontracting

Just like the individual contractor, the labor subcontractor specializes in handling only one aspect.

They are important when you have complex products because they can help develop quality and affordable products faster.

Depending on the type of manufacturing services, tools, and materials

This category classifies contract manufacturers based on the in-house resources they have.

Your manufacturer’s choice will depend on their specialization and the tools they have at hand to speed up your product’s manufacturing.

Some of the common tools used in the manufacturing industry include:

• Laser Scanners
• CNC machinery
• CAD software

Also, not all manufacturers specialize in using all materials.

Depending on the materials you want your products to be made from, you should check to ensure your manufacturer has it.

Common materials include:

• Different types of metals and wood
• Silicon’s such as gels and RTV
• Polyurethanes such as viscoelastic foams.

Besides, your manufacturers should have a qualified team of engineers skilled in machine and equipment operation.

Your manufacturer should have the best labor force to speed up manufacturing and guarantee quality products.

Types of Industries that the Manufacturers Support

Contract manufacturers specialize in different industries.

When you sport a contract manufacturer who operates across different industries, first check their reputation.

This will help you verify if they excel at producing your good.

The contract manufacturer should have knowledge of the latest trends in the industry your products fall under.

They should understand your customers’ expectations and be able to help through product development.

Some of the major industries that contract manufactures can fall under include:

• Electronics industry
• Healthcare industry
• Telecommunication

Elements of Contract Manufacturing

The purpose of contract manufacturing is to ensure improved quality of products and consistency in your supply chain.

This means your relationship with the manufacturers should be guided by prompt communication and ethical behaviors.

The elements of contract manufacturing include:

Information Sharing

To ensure trust and commonality of the contract, your relationship should be transparent through the absolute sharing of information.

The information to be shared in this case includes new production trends, market anticipation, and sales forecasts.

Cooperation

Despite being the boss and deciding the products your manufacturers should deliver, you should see them as worthy partners.

This calls for cooperation at all levels of the agreement.

Integration of Processes

Integration involves setting out everything from the start of the contract agreement.

This can be done by planning and incorporating all parties involved in the manufacturing of the product.

Partnership

Partnership involves linking with all participants in the supply chain, including suppliers, distributors, and customers.

It involves valuing their role and striving to form strategic alliances with them to boost business relationships.

Risk and Reward Sharing

You should not be self-centered when risks occur; you let your manufacturer suffer the consequences alone.

Risk and reward sharing boosts contract manufacturing and allows you to focus on your business’s long-term aspects.

How to select the best Contract Manufacturer

We have mentioned that contract manufacturers are worthy partners in saving you on costs while providing quality products.

Getting such a partner can be overwhelming, and you should pay attention to your choice of manufacturer.

The best contract manufacturer should be able to walk with you through the entire product development process.

They should help you develop the product and give you approximate costs to incur in the whole process of developing a product.

When choosing a contract manufacturer for your needs, you need to first consider their reputation.

You would want to work with someone who knows what they are doing.

You can check their website for reviews and ratings from previous clients.

This will give you a look into what they can and cannot accomplish regarding manufacturing your product.

Finally, don’t settle on the first contract manufacturer who offers pricing rates that seem appealing to you.

While you may want to save on costs, this does not mean you should compromise on quality.

Popular Myths and Misconceptions about Contract Manufacturing

With the rise in the number of companies that offer contract manufacturing, there are many fears about their legality and worth investing in them.

Also, the nature of contract manufacturing in terms of delegating the most important aspect of your business production to others can be tough.

This has led to numerous myths and misconceptions about working with a contract manufacturer.

They include:

Lower Quality

Numerous questions and doubts have arisen on how a third party can surpass or produce quality products as per the given specification.

However, this is not the case; contract manufacturers hone their manufacturing technologies and value your business.

They strive to ensure they produce quality products according to your specification.

Loss of Control

Many businesses fear opting for contract manufacturing because they fear losing control of the whole manufacturing process.

Others fear that making important business decisions such as arranging for sales and controlling the production process may affect their business.

Contract manufacturing should not limit you from having control of your business.

Depending on the agreement, you can be there throughout the manufacturing process.

A good contract manufacturer should allow you to communicate your needs and integrate customer demand in every related aspect.

Low Priority

Not all businesses adopt contract manufacturing because they believe that contract manufacturers serve many customers and prioritize some.

On choosing a contract manufacturer, you should strive to develop a trustworthy relationship by ensuring proper communication.

This way, you will reduce the worry of having other customers favored.

Additionally, the right contract manufacturer should balance their customers’ demand and ensure each of their needs is met as per the agreement.

Furthermore, you are their customers, and they need you as a partner.

Contract manufacturers also understand the repercussions because you can shift to other manufacturers if they misbehave.

Contract Manufacturing Affects Employees

There has been concern that hiring contract manufacturers affect existing employees and can lead to layoffs.

This is not necessarily true because employees are left to focus on fewer remaining responsibilities within the business, increasing their productivity.

Loss of Intellectual Property

Contract manufacturing involves developing your products through third-party facilities.

As such, many have raised concern that processes, technologies, and propriety methods can land in competitors’ hands.

However, this is not the case. Before signing a contract manufacturing deal, the manufacturer signs a non-disclose agreement.

This agreement safeguards your business’ intellectual property rights. Competitors cannot access your production techniques.

Contract Manufacturing Agreement

A contract manufacturing agreement is a binding document between you and the manufacturer.

The agreement specifies every party’s role and that the manufactured goods are as per your specification and should not be manufactured for other customers.

The agreement is applicable when you want your products manufactured once or over a period.

A contract manufacturing agreement entails both your details and those of the manufacturer.

Some of the details include respective addresses, details of the goods, contact details.

After filling the document, every party involved should sign and retain a copy of the document.

The contract manufacturing agreement is legal and is subject to the rule of law.

How to Coexist with your Contract Manufacturer

In as much as contract manufacturing may seem cheap and safe in producing quality products for your business, there are risks involved.

Your manufacturer has access to your products together with other customer’s products.

This means that they understand the production process and sometimes have access to intellectual rights.

Your manufacturer can decide to leak your product to other competitors.

Even worse, they may start producing the product and selling directly to retailers and wholesalers.

This can greatly impact your business, reducing your profit margins and sales.

In this case, your solution to be safe is to adopt strategies that can minimize the occurrence and not put your business in jeopardy.

Be Careful what you Source.

You should be careful about what you hire the contract manufacturer for.

They shouldn’t have access to all details of the product you want from the manufacturer.

This involves keeping key details that can make them an equal partner and start producing the same product to rival you.

Here, you should also keep the terms of the agreement private and advocate for professionalism in your dealings with them.

Suit Relationship to the Circumstance

The contract should serve its purpose with your contract manufacturer doing their part and not going beyond the set limits.

When your products are complex to the manufacturer, you would want to have a long relationship with the manufacturer.

This is because the whole process requires devotion of time.

Additionally, when your products are simple to make, shorter contract duration would be appropriate.

This can help to avoid the manufacturer’s cases using alternatives to produce the same product.

Give Trustworthy Partners their Freedom.

Trust is two-way. By having trust in your contract manufacturer, you gain their loyalty and become a valuable partner they wouldn’t want to betray.

When a contract manufacturer is willing to share another client’s procedure of making products, this should be a warning that they can do the same for you.

Deepen your Distributors and Customers Loyalty

The fact that the contract manufacturer enjoys economies of scale does not mean that they can beat you in the business.

You can gain customer and distributor loyalty and have them develop a liking for your product.

This way, when the contract manufacturer faces them, their chances of opting for those products because of low prices

A modular home is a type of home which involves putting together manufactured segments to form a home.

These parts are usually made by a firm that fully specializes in making modular homes.

Afterwards, upon an order, the segments undergo a process of installation on the preferred site.

In lay man’s language, it simply involves assembling parts of a house to form a home.

What Modular Homes Look Like?

Modular homes are not any different from normal homes.

The structures and designs are formulated to suit the need of owning a home.

They come with a range of styles too.

You can as well suggest a house design you wish to own and it is customized to your liking.

Whether, it’s a modern, tradition or even an ultra-modern home, the builders will be sure to attend to your need.

Moreover, these homes are not that much different from the built-on site ones.

Just like a built on site home, you can incorporate utilities such as kitchen drawer, toilets bathrooms and the likes.

Factors such as neighbourhood region, lot size, norms, budget available and customer need greatly contribute to putting up a modular home.

Most of modular manufacturers work hand in hand with architectures to help deliver beautiful modular homes.

How Modular Homes Are Made

If you have seen how car parts are assembled to bring forth a car, then modular homes are no new news to you.

A modular homes has its parts transported to the preferred site of residence.

This majorly done by a large size truck to accommodate the materials.

With the help of the manufacturers and cranes, a house is put together to form a home.

It is quite an easy process to understand.

However, the real work draws much work and efforts.

Benefits of Owning a Modular Home

Modular homes bear a number of benefits. These are;

· Modular Homes have a Shorter Time to giving you a Home

A modular home is faster because its parts are readily available and they just need to be put together.

In a matter of weeks, you can have your home ready for moving in.

· Modular Homes Speak Quality

A modular has its parts made from strong materials.

This is true featuring the fact that during their transport, they arrive while intact.

Moreover, you are bound to live in an air quality proof home.

This is because the materials used are not exposed to bad external conditions like rains.

· Modular Homes Save you Money and Time.

Unlike a home built on site, a modular home is likely to be far way more less costly.

Both financially and time wise.

With a modular home, most of the materials are under bulk purchase.

This means that you will receive a wholesale price for your materials.

Moreover, unlike when you decide to opt for construction, a modular home saves you time.

In fact, a modular home is a good option for someone who wishes to settle in quickly.

· They are Environmentally Friendly

Modular homes are made in factories.

Hence there is little to no waste products lying all over the compound.

In fact, the remainder materials mostly underdo recycling.

· Material Efficient

Most modular home builders know the exact material required in putting up the home of your desire.

Hence saves you the hustle of buying excess or inadequate materials for the construction.

· They have More air Quality Materials

Most build on site houses suffer poor air quality due to accumulation of moisture during construction.

Modular homes eliminate this factor due to their enclosed construction area.

· They offer Flexibility

Modular homes allow you to customize your home to your liking.

Moreover, you are allowed to even disassemble and assemble it all over again.

Modular Home vs. Manufactured Home

A manufactured home is similar with the modular home in that both of these types are manufactured at factories.

However, the difference comes in the final product.

For a modular home, its part is delivered to the site of set up then an assembling team puts it up together.

For a manufactured home, the house is delivered while complete.

It mostly comes in a steel chassis or fitted with wheels.

It is then placed at your choice of residence.

For a manufactured home, it is less expensive compared to the built on site ones.

The same factor applies to modular homes. However, the financing of these two types of homes is different.

For a modular home, the financing is usually almost the same as those for the built on site homes.

The financing of a manufactured home is treated in the same way as owning personal property.

Hence taxation and consumer rights protections guidelines are applicable for this type of home.

Moreover, as modular homes are required to meet the requirement of house codes, manufactured are free from such obligations.

Modular homes are also much more expensive compared to the manufactured homes.

When it comes to customization, modular homes make it easier for the owner to make certain alterations.

Manufactured homes rarely offer the pleasure of working with your space once it is ready.

Did I mention how manufactured homes allow you to move.

Yes, with your entire house.

They come with the possibility of mobility.

The modular homes are more similar to build on-site homes.

They do not come with the laxity of portability.

It is best to define your preferences weighing both the pros and cons of these two homes.

This is because both these homes are different. It all comes down to the type of home that can comfortably accommodate you.

You should also be comfortable with the financial capabilities of owning either a modular or manufactured home.

Downside of Modular Homes

Modular homes carry a few drawbacks.

These are;

· They Suffer Stigmatization.

Modular homes have been there for the very longest time.

Yet, they still remain the least on the purchase list.

People tend to get confused with the mobile homes.

Modular homes are designed to serve the same purpose as the built-on site.

· Need for Renovation.

This applies to most modular homes.

This is because most of these are already built.

Renovations such as paint and some finishing which you as a customer desire.

On the bright side, when these renovations are done, you would not be able to tell it apart from the built-on site.

· Modular Houses do not Come with Land

Yes.

This is probably one of the major drawbacks of modular homes.

Before purchasing a modular home, it is advisable to choose your ideal site and purchase it early in advance.

What modular homes are responsible for is delivering your modular home to where you wish to set up your home.

· They are not all Price Inclusive

This means that you will have to ensure that you have sort out your electricity plans.

This also applies to having a plumbing plan, setting up your septic tank, and other utilities needed to set up.

Due to their nature, some financial institutions are adamant about offering loans to modular homeowners.

Modular Home Standards and Zoning Considerations

A number of factors account for when setting up a modular home.

The main aspects of being the zoning and standards of modular homes.

The zoning simply represents the region where the modular home is being set up.

Areas prone to hurricanes, snowy effects and any other environmental hazard to affect your home.

For standards, modular homes take into consideration the following four aspects;

• Building strength
• CE marking
• Surface and finishes
• Regional differences such as climate, demography and local housing architecture

· Building Strength

The current modular homes incorporate a building strength that incorporates modern designs.

For example, in the case of using nails, modular homes opt for screws.

The joints use glue and there is even an 8-10% increase in the use of lumber compared to conventional housing.

Surprisingly, these aspects prove to make a stronger house compared to those built on site.

Their strength is also evident when transporting the materials.

· CE Marking

Here is where as a user, you are given a guarantee for mechanical resistance and strength.

The persons responsible for the materials used to make your modular home are kept under a record.

This is in order to allow for easier tracing in case of complaints.

These records cover the following;

• The suppliers responsible. They should be bare certifications.
• Recordings of all the materials used in the manufacture of the modular home in batches
• Quality of the elementary products
• Management of the assembly team and the quality of its job
• An overall standards unit check to affirm the quality of your modular home.

Most factories have a set database that ensures that the above recordings are keenly recorded and are up to date.

· Surface and Finishes

It is advisable to choose the ideal space to set up your modular house.

For most, modular houses set up in areas prone to floods, come with stilts.

You can also opt for a crawl space or even the standard slab and full basements.

Did you know you can also set up a storey building of modular?

Well, now you know.

Some countries like Australia allow for more than 24 floors and even more.

When it comes to finishes, this can be done in the factory or even on the site during set up.

However, for the brick and stone veneers, field finishes are applicable.

For the roofs, the finishing’s commenced at the factory, then the final event takes place at the site of residence.

· Regional Differences such as Climate, Demography and Local Housing Architecture

Climatic conditions such as winds, snowy places, hurricanes, and floods, all affect the way you put up your modular home.

The finishing should be customized in such a way they provide extra strength to withstand harsh climatic conditions.

For demography, this mostly depends on the way people have embraced modular homes.

Local housing architecture as well plays a role in this.

Most people will set up a home depending on the prevalent design in their local area of residence.

Hence the reason for the vast range of modular house designs, from traditional to modern designs.

Modular Home Cost

As earlier mentioned, modular homes are less costly compared to the built on site ones.

As much as they save you on time, they offer you a very price friendly aspect.

Here is a breakdown of how much you will spend on your modular home;

· You will need to Purchase a Piece of Land.

Modular homes need a place where they can be set up.

Land prices range with the size and location you wish to set up your home.

This mostly will resonate with your seller.

A good piece of land will fall under the price range of about $14,000 for an ideal three-bedroom mansion.

· You are also Required to Make Site Preparations

This majorly encompasses clearing any bushes and trees that hinder your modular set up ventures.

It also involves making way for proper drainage.

Leveling your land will also be advisable.

This will not be very costly.

On average the price ranges at $7,500

· Setting up a Foundation

This means that you easily choose the type of basement to set up.

Whether it is a full basement or just one accommodating a crawl space.

For a full basement, you might incur a little more costs to help give you a more needed space.

However, if you are comfortable without the extra space, a regular foundation will do you just fine.

· The Setup Cost

This will arise from your manufacturer.

This is majorly the total cost of setting up and mounting your home.

For the earlier mentioned type of home, the price will range to about $94,000.

The price is not inclusive of customizations.

Also this price will differ depending on the design and type of house you are purchasing.

· Customizations

You will want to make your home feel like a real home.

Customizations such as use of more moderns and strong finishes for the doors and windows apply.

You might also want some alterations made to your kitchen and even the garage area.

All these customizations depend on the choice of the buyer and how flexible your manufacturer can be.

They can cost you up to a total of $31,000 or even more depending on your choice of customization.

· Delivery Fees and Taxes

As the buyer, you will be accountable for the cost of transporting the materials to put up your modular house.

Most of the modular factories offer trucks which in turn allow you to pay for the transportation cost.

Hence this price will be clearly defined by your manufacturer

You Will also Have to bear the Costs of the Finishing Works.

Usually it Ranges at About $15000 or even Less.

These majorly accounts for the final touches to your modular home.

You will also Have to Obtain Permits to Allow you to Set up your Modular Home.

The prices definitely are different depending on the region where you decide to live in.

Some of the permits you need to obtain include

• Building permits
• Mechanical permits
• Pre-plan review fee
• Certificate of occupancy

Hence, setting aside an average amount of $2,500 will allow you to have a hold of the permits you need to live in your new modular home.

Without even attracting unnecessary attention from the authority.

· Utilities Cost

This includes the septic tank and the electricity set up, and plumbing services.

An average amount of $2,500 will have you good to go for your utilities.

With the above price ranges, a total of not more than $200,000 dollars will have you set up a nice home with three bedrooms.

A home that comes with a full basement plan, two bathrooms, hardwood floor plans with a beautiful kitchen.

Popular Modular Home Styles to Consider

Modular homes offer a wide range of building styles that are able to satisfy a vast number of customers.

Below are some of the styles available for modular houses.

· Ranch Homes

Ranch home style is among the most common styles used for modular houses.

Maybe they are easy to set up or just have a laxity different than the others.

I guess you will have to ask your manufacturer about all the fuss in modular homes opting for the ranch style.

They are rectangular in shape.

Thus they are wider that they are vertical.

Its finishing is less on ornaments yet it is able to present a modern view.

Surprisingly, this style accounts for more than 60% of modular homes do far purchased.

· Log Cabins

From the name, you can easily tell what these homes are made off.

Log of course.

They are designed to feature a cabin and to offer a rustic feeling for such homes.

If you are looking for a design that will offer you that natural feeling, the log cabins are what you need.

·  Contemporary Homes

The most modern yet technically designed designs of modular houses continue with changing designs with time.

They account for the largest prefabricated homes with a vast growth.

However, they are yet to be commonly embraced with only a 12% total purchase of this type of design.

· Chalet

This design incorporates the use of wood for its construction.

They come with a gently sloping roof with wide eaves which are supported to form a right angle shape at the front.

It is a design that can comfortably give you a nice home for living.

· Cape Cod

This design represents those traditional house designs that date back to the 17^th century.

However, the steep pitched roofs with oversized chimneys has managed to be on trend over the time.

It is becoming common with time.

The Cape cod design is also available as a modular home in case you need one.

· Colonial Style

From just the name, these style of modular homes originates from the 16^th to 19^th century.

It comes fitted with centrally positioned chimneys with steep double hipped roof tops.

They are also fitted with rich exterior ornamentations.

A perfect design for your ideal modular home.

· Two –storey home

It is a traditional modular made home.

It comes with two or even more storey.

The basement is separate from the storey levels.

· Modular Home Mansions

A mansion, unlike the other homes, can accommodate several rooms that seek to satisfy recreational activities.

For a regular built on site mansion, it will take up a space of about 7000 square meters.

For the modular ones, 5000 square feet would fit a mansion of modular style.

· Green Homes

A green home is one that its buildings put into consideration the aspect of providing a resource-efficient living.

This is a style that all modular home manufacturers comfortably put under consideration following the nature of homes they produce.

Getting a green home is much easier for a modular home.

· Duplex-multifamily Homes

From the name, this type of home comes with two separate living areas.

They completely do not share the entrance neither is there a common indoor space.

They are designed to accommodate more than one family.

They range from apartments, man camps, lodges, hotels, townhouses and even oilfield housing.

Similarities and Differences of Modular Home vs. Built-on-site home

A modular home and a built on site home all serve the purpose of providing one a home to live in.

However, as much as they bare similarities, they both are different.

Below are some of the differences between a modular home and a built on-site home.

· Time

They both differ when it comes to the length of time you get to have your home ready.

It is much faster if you are looking forward to getting a modular home, rather than a built on-site one.

This is because, a modular home more or less involves assembling the parts to make a home.

A built on-site home requires time to set up.

· Environment Friendliness

A modular home is more environmentally friendly compared to the one built on site.

This is because a modular home is built in an indoor space.

Moreover, most of the left over materials can easily be recycled.

A built on site home doesn’t offer the luxury of recycling waste materials.

· Quality

Modular homes are now offering a more quality home compared to most built on site homes.

This is because the environment in which they are made in are not affected by external weather conditions.

In fact, they are able to provide a top air quality house compared to the built on site.

Last but not least, Modular homes have a set of guidelines and rules that they must adhere to that does not conform much to the built on site homes.

Modular homes and built on site homes are as well incomparable after set up.

They are similar in the following ways

• The prices of these type of homes appreciate and depreciate in value the same way.
• Financing of modular homes in terms of loans and taxation is no different compared to the built on-site homes.

Modular homes also allow you to apply for homes to help in financing your home.

• Modular homes are available in different designs and styles as outlined earlier.

The same case is in the built on-site homes.

They both allow you to customize your home to your liking.

• Basements and crawl spaces are not limited in a modular home and a built on site home.
• Just like built on-site homes, you can adjust your modular home or even add more accessories to make it more accessible and environmentally friendly.

Modular Home vs Mobile Home

A mobile home is mostly referred to as a manufactured home.

Like a modular home, it is built in a factory.

Later it is mounted on a steel chassis and placed to the new place of residence.

Unlike a modular home, a mobile home is portable.

A modular home will arrive to your new place of residence in pieces.

The assembling process takes place on the site.

This is quite different for a mobile home.

A mobile home comes tour place of residence when it is full complete.

The full manufacturing process takes place in factory.

Much more like the modular home, the mobile homes are placed in land which belongs to the buyer.

Thus you will be required to have land whether on rental or yours to help you set up your new home.

However, unlike the modular home, the mobile allows you to move your home to a new preferred location when the need arises.

When it comes to financing your new home, these two types of homes are treated differently.

A modular home has the privileges of financing your home like a built on-site home.

However, for the mobile home, it is treated in the same way as an individual property.

Hence mortgage loans are not applicable to these type of homes.

Hence financing them might be a little costly.

If you are looking forward to settle between in either a modular or a mobile home, it is best to weigh the pros and cons of these two designs.

Your preference will be a key factor on what home to settle with.

Materials used to Make Modular Homes

The following materials are highly used when constructing a modular home

· Concrete

Precast concrete has become the new modern concrete used in the construction of most modular homes.

Precast concrete offers quality material.

It allows for the possibility of providing alterations like suiting as projects aesthetic among other structural requirements.

Apart from being cost-effective, precast concrete allows for fast design and saves construction time.

· Wood

Most modular houses are made from wood.

This is because wood serves best as an insulator.

Its ability to shrink and expand in the presence of moisture makes it an ideal strong material for modular homes.

Additionally, since its construction is in a controlled space, the wood provides a home that guarantees air quality.

· Steel

Steel offers a wide range of benefits. It is no doubt that the material is being used in the construction of a modular home.

As earlier mentioned, one of the reasons that modular houses are better is because they incorporate the use of quality materials in the construction.

Steel has a high resistance to corrosion.

Moreover, steel guarantees quality and durability.

This material is quite ideal for putting up a fire-resistant home.

For interior furnishes, wooden- frame floors are much in modular homes.

Moreover, for the kitchen, granite floors are highly put in use.

However, as a buyer, you can suggest your preferred style of finishes.

They also offer a steel chassis in which you can mount your home on.

Design Considerations for Modular Home

Below is a few considerations to accommodate when settling for a design for your modular home.

· Layout

What is the purpose underlying the set up of your modular home.

It may range from either a hotel, a home, workshop or even an office.

All these ideas will affect the design of your modular home.

· Dimensions and Space

This is critical in that you should provide room for your social amenities like the septic tanks, piping and wiring.

With all these in place, you also need to define how you want your interior space should be.

After putting all these aspects into consideration, then its safe to make the next consideration.

· Realistic

The design you present to your manufacturer should be producible and something achievable.

That’s why it is best to consult with your manufactutrer on the design you wish for yourself and confirm if they can deliver.

· Time

Well, if you need the modular home and time might be a constraint, it is best to discuss with your manufacturer.

· Budget

It is best to opt for a design that you are comfortable financing.

· Materials

Putting together the modular home of your choice requires the right materials.

This also invilves keeping in mind the kind of climate you are living in.

· Laws

It is important to ensure that you are adhering fully to modular home guildelines.

This involves getting the right building codes for your modular structure.

· Future Modifications

As you design your home, allow rrom for flexibility.

This involves allowing room for future adjustments for your modular home.

How to Customize your Modular Home

When it comes to customization, it all depends on one’s perspective about it.

For some it might represent making modifications to an already existing model of a house.

At times, it might mean making your home to your preferred design.

For a modular home, customizations range from attaching garages, converting bedrooms to study or family rooms.

You can also update your kitchen designs and other luxuries like, luxury bath options.

Most manufacturers have a package which they incorporate to accommodate such and even more customizations.

How Long it takes to build a Modular Home

Modular homes are really efficient when it comes to setting up.

Modular homes have a process in which you follow from the planning to the complete set of your home.

It will only take up the least 20 weeks and at the very most, 83 works.

However, most constructions take between 20 to 40 weeks.

This is about 6 to 9 months’ time frame.

A time that is more efficient compared to the built on-site which usually takes longer than this time frame for modular.

Financing Options for your Modular Home

Modular homes are much similar to build on-site homes.

This means that even when it comes to financing through the banks, mortgages are applicable to modular homes as well.

As a result, the following loan options are available for modular homes.

· Construction Loans

These loans are issued with an intention of financing the construction process.

It is usually estimated to be between 4 to 6 months, after which the loan is converted to a permanent loan.

· Cash

You can also opt to pay cash.

It is the best way since it saves from you from interests’ charges form loans as well as closing costs and appraisal fees.

If you are looking forward to apply for a mortgage, ensure;

• You have a good credit score
• You have work references
• Your previous bank statements in place
• And a personal financial statement

Ways to Prepare for your Modular Home

• Prepare for the cost

It is important to work within your budget and if possible avoid any unnecessary costs.

• Contact your local planning office, for zoning rules and building regulations

You wouldn’t want to bump with the authority every now and then concerning misconduct of the law.

• Design with all your requirements in mind i.e. adequate lighting, safe and warm flooring, color, roofing design etc.

This will help you avoid any set of misunderstandings between you and the manufacturer concerning your home.

• Inspection, inspect the Modular Home before purchase, assembly and installation

This will help in ensuring there is quality in your work and that your house is as you wanted.

It is also necessary in order to point out any mistakes or damages of the modular house for early fixation.

• Understand the limitation of a Modular Home

Modular Home Assembly Process

The process follows each other as outlined below;

• First and foremost, the floor is set up
• The walls then follow up
• Then the roof and ceilings are put up
• At this point, the modular home is in place. The plumbing and water systems are then set up.
• Electrical wiring the follows up.
• Drywall finishing then takes up followed by insulation and sheathing processes
• Last but not least, the doors and windows are put up and your modular home is complete.
• Additional customizations according to the buyer`s preference follow suit.

Useful Facts to know about a Modular Home

• Modular homes are set up on a permanent foundation
• The financing of modular homes is not that different with the building on site financing
• Modular homes can be accommodated on crawl spaces as well as basements
• They are fast and time-saving to build compared to build on-site homes
• Their designs differ in size and style
• They appreciate in value. They do not depreciate.
• Most companies of modular homes now use computer-aided design technology.

Modular Home Warranty

Modular homes offer good quality home design.

For this reason, they offer a 10-year home warranty on their homes just to prove how good these homes are.

The warranty comes with an additional two-year warranty for mechanical system

I know you’re wondering how Chinese New Year will affect your import from China business.

That’s why I will answer all questions you have about Chinese New Year.

So if you want to learn more, read this guide.

What is Chinese New Year?

The Chinese new year is also popularly known as the Lunar New year.

It is a date in the Chinese traditional lunisolar calendar that marks the beginning of a new lunar year.

According to the traditional setting, the festive was meant to honour the ancestors of the Chinese culture.

However, with the evolving world, the Chinese New Year has become festive that serves to bring people together.

When is Chinese New Year?

Normally, the Chinese New Year falls in between January 21^st and February 20^th.

The actual dates usually vary from year to year. For 2021, the Chinese New Year fell in 12^th February on a Friday.

Nonetheless, these celebrations do not hinder the Chinese from celebrating the January 1^st global new year.

This is after the Chinese adoption of the normal global calendar back in 1912.

Why is CNY such a Big Deal?

The Chinese New Year is a symbol of unity and togetherness that is quite uncommon in the present era.

Thus the Chinese act of maintaining this festive season plays a majorly in terms of strengthening family bonds.

Initially, the Chinese New Year served traditional purposes.

The Chinese New Year originates from the ancient Shang dynasty people.

How long do the Chinese New Year Celebrations take?

Altogether, the Chinese New Year festivals last for 16 days including the eve of the New Year.

Usually, the festival is meant to last until the next full moon appears which is usually after 15 days.

The 15^th day marks the first full moon right after the spring festival.

The Chinese refer to this as the “Yuan Xiao Jie’”, which means the first day of the full moon.

The lantern day festival marks the end of the Chinese new year festivals.

What is the Impact of Chinese New Year on my Supply Chain?

The Chinese year celebrations are certainly one of a kind.

For the Chinese people, the New Year is a time where all the time and attention is redirected to family and friends.

This translates to businesses being shut down for the period.

China being a global supplier of products across the globe, this time of the year creates massive inconveniences in the market.

The shutdown is nationwide, except for extremely prioritized goods and perishable goods.

Even government offices and operations cumulatively join in to partake the celebrations.

The silence from the Chinese market lasts between two to four weeks.

This silence has an enormous impact on the supply chain of the market both internally and externally.

Impact of the Chinese New Year on Internal Supply Chain of the Country

The Chinese new year accounts for the largest ever migration in the country.

This is because most of the family members and relatives are situated in rural areas.

The main agenda of celebrating the New Year festival being mostly family reunions, most Chinese nationals are travelling.

Hence the transport industry is mostly flooded during this time.

Preparations for the events require a lot of materials.

From food ingredients all the way to the decorations such as fireworks, firecrackers and lanterns.

All these materials need to be put together.

Hence the factories and manufacturing agencies in charge are really experiencing a high demand which increases the supply of these products.

Impact of the Chinese New Year on the Supply Chain of the External Market

The external market in this category represents the global market.

China is the leading exporting country across the globe.

With China bagging more than 1.3 billion manufacturers, them being on a three-week break will affect the global market.

Therefore, the Chinese New Year can result to grave inconveniences to businesses dependent on the China supply.

Many people have become aware of this event and have taken up precautionary measures to counter the drawbacks.

Does China Shutdown during the Chinese New Year?

99% of factories in china close down during this time. In fact, closing up shops begins to take place 10 days prior to the actual event.

This is to allow for working staff ample time to make travel arrangements to the rural regions.

The time frame for normal resumption of work might take longer as the factories prepare to have received back their workers.

Majorly the shutdown is effective the first seven days into the festival. However, some businesses extend the days to accommodate a flexible re-opening time.

Compared to other national festivals like that of Vietnam and Tet holiday, China Shutdown period takes longer.

What Happens before the Chinese New Year Holiday?

Preparations towards the Chinese year usually begin long way before the day.

Businessmen are in fact the busiest with keeping their clients up to date on the upcoming event.

Follow ups on ordered goods are keenly taken into consideration months before the Chinese Year begins.

This entails sending invoices to clients to give an early notice on the incoming Chinese New Year.

Months before the CNY, most of the supply factories halt their production procedures.

Additionally, any pending orders for clients are ensured that they get to them before the beginning of the CNY.

Meanwhile the employers and employees in the factories are winding up to get ready for the festivals.

During this time is when most of the employees get most of the work done in order to receive enough incentive to serve the holiday.

Hence deliveries will be hastened in order to receive more incentives.

This is possible because during this time the demand of products is usually high hence the incentives will be on the high.

Chances of experiencing quality hitches are very high during this time.

This is because of the hurriedness from the suppliers to deliver and get as much incentive as possible before the festivities begin.

Travel arrangements need also to be put in place following the expected massive migration.

The travel industry in China is thus at a boom during this time.

Consequently, decor activities are put in place to avoid any inconveniences at that time.

Factories that specialize can date their customers back in the ancient times when the new year began.

Do Factories Outside Mainland China also close during Chinese New Year?

For countries like Malaysia, Indonesia, North Korea, Singapore, Vietnam, and Brunei, they have similar festivities like China.

However, they differ in the time length.

The shutdown from mainland china during the festivities affects neighboring countries.

As a result, these countries as well go for a break although it takes a shorter period for them.

Most Chinese factories will reopen after the official days for taking a break.

Hence the short break from factories outside mainland china.

Which Industries get Affected by the Chinese New Year?

Nearly the entire market suffers the impact of the Chinese New Year.

However, some industries experience a positive impact.

Siting the Travel industry in China, following the massive number of people migrating into the rural region, the industry income is good.

Moreover, the manufacturing and supply industries take the advantage of providing these supplies.

However, when it comes to the imports and exports industry, most of the factories are unable to deliver.

Without the laborers, the production and supply cannot go on.

Hence for those clients waiting from imports from china, they will experience delays in delivery.

Usually up to the time when the festival is over.

Overall, the manufacturing industry stands to be the most affected industry by the Chinese New Year festivals.

Do Freight prices increase during CNY?

For the very obvious reasons, freight rates usually go up towards the dawn of the Chinese New Year and partly after.

For any businessman, this is an opportunity that is there for grabs.

Due to the nature of the festival, that is, the almost month-long vacation, apparently demand is high.

This is both in the country and outcasts.

Ahead of the celebrations which usually occur towards end of January and mid-February suppliers receive massive orders.

This serves the business people, who mostly make the orders, the advantage of having enough stock at the time of the holiday.

Following the high demand, freight rates tend to also be high.

Remember the laborers are looking forward to earn as much incentive as possible to last them the festive season.

Do all Countries in Asia Celebrate the Chinese New Year?

Asia houses a number of Chinese nationals. As a result, the country is subject to celebrate the occasion like fellow Chinese members.

The East Asia especially the south east part of Asia is very active during the Chinese New Year.

Countries such as Thailand, Indonesia, Malaysia and even the Philippines actively engage in the Chinese New Year celebrations.

Why does Shipping from China Cost more during Chinese New Year?

Price changes are subject to the change in demand in the market.

As earlier outlined, the Chinese New Year is accompanied by more demand of products as china still stands as the world’s top exporter.

The need for importers to have enough stock during the vacation creates a demand in the market.

Consequently, the suppliers who are getting ready for the festive season will need to pocket enough to last the almost month-long vacay.

The chaotic rise in demand bombarding with the festive season serves as an opportunity for most suppliers in China.

Hence the rise in shipping freights during this period.

How can I Beat CNY Season Prices?

The CNY season prices always get most of the importers unaware.

This is because the dates to the actual festivals usually differ from year to year.

The price changes during the CNY season are hard to adjust.

The price increase usually increases by 50%.

According to the Chinese, the price increase usually serves as compensation for the long vacations that most workers attend to.

The only way to beat the prices will be to make purchases to cover your stock needs earlier in advance.

However, change being an inevitable factor, you might end up pilling a stock that might not meet your customer needs.

However, there are preparations you can undertake to help you during the price changes in the CNY season.

First and foremost, ensure you are working with a credible and trusting manufacturer.

This goes a long way in ensuring your goods arrive on time and are of good quality.

Always plan ahead. This is one sure way of evading the surging prices in supplies as a result of the Chinese New Year.

Take an account for your inventory.

Comparing it with the previous serves a long way in ascertaining what you require and make earlier preparations as a result.

Prepare a solid plan to help you counter the CNY prices.

This majorly depends on the manufacturer and supplier you will be working with.

Some manufacturers can give biased information to take advantage of the profits that come with increased prices.

How do I Prepare my Shipments for Chinese New Year?

There is every reason for an importer to be worried on how his shipment will arrive amidst the Chinese New Year season.

Spaces are limited and delays are bound to happen due to congestion.

However, there are few guidelines that can help you prepare your shipment during the spring festival season in china.

Keep in Touch with your Manufacturer

This allows you to easily get updates on the production activities in the factory.

As you are now aware, it reaches a point that production processes in china halt in preparation of the festival.

Most workers take an early leave to make travel arrangements for the occasion.

With no workers in the factory, production halts.

Make Early Bookings for your Shipment

Freight forwarder come in handy during such times.

They can easily give you a schedule on reserved spaces.

It is advisable if possible to make arrangements a month earlier to the Chinese New Year.

Opt for the Multimodal Mode of Transport

A lot of importers will certainly opt for transport means offering faster transit time.

Choosing multimodal transport, where you incorporate several modes of transport from air, sea, road and rail.

This is because as multimodal transit is less likely to be full.

You can confirm this with your freight forwarder.

However, it might take longer for your goods to arrive.

Nonetheless, it is more cost-efficient, especially during this season.

Incorporate Partial Truck Load in your Bookings

Not only will this save you from truck fees, but will also save you from the effects of congestion as well as long transit time.

With the partial truck load, you easily evade the stops ate the terminals.

Be keen to Receive the Cargo Earlier than Expected

With the early bookings you have sought for, then there is a possibility for your cargo to arrive early.

This is quite possible especially with the Chinese new year is around the corner.

Do China Customs Work during the Chinese New Year Holidays?

China port customs are available regardless of the holidays.

However, for this particular season, some customs regulators also take a break from their duties.

Majorly there are three known days as off days.

Nonetheless, in accordance with a defined holiday procedure, the customs maintain a few workers to help during the holidays.

Hence this explains the long processing times.

For the small ports, they take a week’s day off while the freight forwarders take a two week leave for the vacation.

What is the impact of Chinese New year on Customs clearance, and freight forwarding?

Customs clearance and freight forwarding agencies experience disruptions as well.

The Chinese new year`s impact is one that cuts across a lot of companies.

Freight forwarders experience a high demand of their services right before and after the Chinese New Year.

The same applies to the custom clearance offices.

How do I Ensure my Shipment Gets through Customs Standstill during CNY?

There are a few guidelines that will make it easier for your shipment to get through customs standstill during the festive season.

1. Ensure you are not shipping restricted goods. They suffer the consequence of delays due to approvals.
2. Ensure you package your items correctly. Wrong packages usually suffer being set aside hence more delays.

The above factors depend on both the parties involved.

What are the Chances that My Order will be Finished before CNY?

It all depends with the production process of your manufacturers and how big your order is.

However, time is a factor considering its towards the CNY.

However, detailed information can be assessed from your manufacturer.

It is important to maintain communications to be aware.

What Can I do if My Order is not Finished before the Chinese New Year?

Making a follow up with your manufacturer is highly recommended.

Thereafter, clear guidelines will be put forward.

However, you should be ready to probably receive your cargo post the CNY festivities.

Which factors Influence Factory Production Lead-times during Chinese New Year?

Experience and Production Planning Skills of the Factory

This one of the major factors that gets to differentiate regular factories from top notch factories.

With proper planning of the materials for production, the menace caused by the CNY can easily be evaded.

Factory Order Books

This is usually well known to the factory.

The number of orders received by a factory directly affect the ability of the factory to deliver.

A factory with a load of orders is bound to experience delays in terms of delivery, especially if it’s during the CNY season.

Number of Components/Raw Materials

It all depends on how complex your product is.

For a very complex product, the raw materials required will determine on how fast it can be made available.

The process of production is a great determinant when it comes to how fast your product can be completed and made available.

Defect Rate and Factory’s Attitude towards Defects

One of the very reasons as to why products come with warranties is to assure of the quality of product. However, defects are sometimes inevitable.

During the CNY, due to large demand in the market, Chinese suppliers do things hurriedly in order to be on the same timeline as the buyer.

As they strive to achieve these, defects are bound to happen.

In fact, it is during the CNY season, that the defect rate shoots.

Usually factories with good credibility on the production sector welcome defects and are willing to fix.

Size of Factory/Warehouse

Size matters especially for the futuristic factories.

Factories with an accommodative and large warehouse space are able to offer storage spaces for their products.

This comes in handy especially when the factory decides to make a massive production for a certain product which is expected to be in demand.

Size does matter when it comes to offering space to the products from the supplier.

Financial Strength/Cash Flow of the Factory

Last but not least, the cash flow in a factory has an impact on the production.

For a factory that has sufficient cash flow, purchasing raw materials for next production is made easy.

Moreover, it becomes easy for the factory to easily pick up from where it left after the CNY festivities.

Does CNY affect small quantity importers?

Yes. If you make an order that is of small quantity, best assured that your cargo will delay.

This is because most factories around this time work with the orders in bulk as a priority.

Not only do they come with more incentives, but they help reduce the workload following post CNY festivities.

How do Factories in China Prioritize Orders in Preparation for Chinese New Year?

A number of factors affect whether your product will among the priorities or not for production;

The Volume of Order

Simply highlights the buying power of a client. Clients with a high volume of order tend to receive first priorities compared to the latter for obvious reasons

Relationship with the Manufacturer

This is where the dinners and good rapport pay off. You are at an advantage of the relationship with your manufacturer is solid.

Physical Presence in China

This just makes it easier since you as a client, can make physical visits to the manufacturers office and mount pressure for the production.

It works wonders since the factory will want to maintain its credibility to its customers.

How do I Choose the right Shipping Partner to avoid Frustrations during CNY?

The right shipping partner especially during the CNY season will go a long way to delivering your goods.

So for this less stressful shipping, it is best to opt for the big shipping companies in the market.

Shipping agencies that have made strides to grow come with great service delivery to their clients although a bit pricy.

Foregoing the cost to the safety of your goods will be a better choice, rather than cheap and later losing your cargo.

International shipping partners serve best due to their vast range of resources.

Local shipping agencies are yet to help you during this strenuous Chinese new year season.

Is it Advisable to Pay Suppliers just before CNY?

No.

Avoid making payments for your products days to the CNY.

Most factories once they go on holiday usually close down and do not come back.

Hence the risk of losing money.

Further, there is no guarantee that you will be given priority once business resumes just because you have made a deposit.

Why is the risk of Quality issues higher during CNY?

One of the major drawbacks of making an order during the Chinese new year is the possibility of low quality.

This is true following the below factors;

Lax Internal Quality Control

This is caused by the rising need for the factory to make deliveries on time, and the need for workers to increase the pay.

Both these priorities lead to the result of quality issues

Subcontracting

With the high demand for goods, some factories just do not accept nos.

As a result, they look for another factory to help out under certain terms.

The problem is the company with the subcontract might not be fully aware of the procedures to follow hence possible defects.

New Workers

Post the CNY celebrations, most workers do not report back to their original work stations.

This prompts the factory to make use of new workers.

With the high demand in place, the factories do not have quality time to train their workers.

Hence with the unprofessional labour in place, defects are quite inevitable at this point.

Unfixed Quality Defects

During shipments, the products usually go through detection at the ports.

The buyers are made know of the defects and due to the rising need, prefer to take the goods as they are.

Can Samples, Prototypes and Negotiations still be Conducted as Normal during CNY?

Yes. This allows the manufacturer to give you details on whether they can deliver the product within the CNY datelines.

Negotiations allow room for clearer and more honest feedbacks concerning your product and how soon you can get it.

Further if it falls in the duration of the CNY the manufacturer enlightens you on the way forward.

Can there be Scenario where Production would not Conform to Samples Ordered before CNY?

Yes. The probability of having something different from the earlier sample is high.

This is due to the hurriedness of product delivery to clients and the need to attend the CNY celebrations.

How do I Ensure Quality Control before and after Chinese New Year?

Ensure the manufacturer you are working with is well certified and adheres to regulations of quality control

Another way is to look into the restrictions outlined by the manufacturer.

The stricter the restrictions the more efficient they are in quality control.

This entails tracking your goods to ensure they arrive on time and to the designated client.

What Can I do if I Need my Shipment to Leave China before CNY?

Earlier bookings go a long in ensuring you receive your shipment earlier in advance before the CNY.

This is made possible by liaising with your manufacturers to give you updates on their production.

Afterwards booking with a direct shipping allows you to receive your shipment earlier even before the CNY begins.

It all calls for a detailed planning on when you place your order and the time to receive it.

Do Ports also Close during Chinese New Year?

No. Ports remain operational during the CNY but little personnel on board.

Should I ship by Air or Ocean during CNY?

Air freight and ocean freights are not directly affected by the CNY.

However, the CNY freight forwarders usually take a leave for the holidays hence your cargo will remain at the warehouse.

Why should I Avoid Trans-shipments during Chinese New Year?

Trans-shipment is cheaper than direct shipping and it is bound for most shipping agencies to opt for this.

However, your cargo risks being rolled twice.

According to most people, this is sort of not worth it.

Opting for direct shipping is most advisable especially during this season.

Why is Cargo Insurance Particularly Important during CNY?

This is important especially if you are dealing with cargos in the Chinese New Year season.

With a lot of orders in place and a lot of them under shipment, chances of getting lost are high.

The congestion creates confusion which bring unforeseen drawbacks.

Having a cargo insurance on standby helps you reduce the damage and easily recover your money in case of such misfortunes.

Should I Avoid Importing Restricted Items from China during Chinese New Year? Why?

Yes.

You should definetley avoid purchasing restricted goods especially if you do not have the right certifications to cover you.

The delay during inspection takes longer hence delays in your goods.

It is most likely the approval will take place later as the priority will be more lenient on the legal goods.

When is the Best Time to Visit my Supplier in China before CNY?

Months before the eve of the CNY begins will be perfect to make a visit to your manufacturer.

However, if your schedule does not allow, it is best to await the CNY to be over.

What are the Consequences for not Preparing your Shipments for CNY?

Delays and even failure of delivery for your shipments are quite possible.

Most of the manufacturers will not be available to help you follow up hence the very reason you should make shipments arrangements.

What are the Other Chinese Holidays I should be aware of?

Other than the CNY, china has other six major public holidays.

These are

• The new year for January 1^st
• The Tomb sweeping day
• Labor day
• Dragon Boat festival
• Mid-Autumn festival
• The National day

The other major long holiday in mainland china is the Golden week which runs from 1^st to 7^th October.

What Should I do if I Run into Shipping Issues due to Chinese New Year?

Shipping issues are usually caused by the congestion in the shipments due to the massive orders.

Having an insurance on standby saves you a great deal.

Moreover, it is important to get in touch with the shipping agency you chose and get full details concerning your shipment.

What is the Usual CFS cut-off during Chinese New Year?

CFS

Today, I will answer questions on yet another freight and logistics term – clean truck fee.

So, if you have any question on clean truck fee, you will find the answer right here.

Keep reading.

What is Clean Truck Fee?

This is a fee that arises after assessment by Los Angeles and Long Beach marine terminals.

It is a component of the US Clean Air Action Plan, aimed at reducing air pollution.

It may be conjoined with or separate from the Pickup and Delivery Fee.

Clean truck fee might also appear on your Flex Port quote or invoice as a destination charge.

The fee is paid by drayage truck drivers that are either entering or leaving marine terminals of either Los Angeles or Long Beach.

The drivers that specifically pay this fee are those that employ the use of old, polluting trucks.

These do not conform to the heavy-duty truck emission standards of the Environmental Protection Agency.

When was Clean Truck Fee First Introduced for US Shippers?

The Clean Truck Fee was originally set to be introduced on 17^th November 2008.

However, due to certain delays, it was initially rolled out on 18^th February 2009.

However, the levying of the clean truck fee came to a halt in 2011.

This was after meeting resistance from the side effects that came with levying the fee, before being reinstated again in 2020.

What is Clean Trucks Program?

It is a program that exchanges aged diesel trucks for ones that adhere to the US EPA 2007 heavy-duty truck emission standards.

The program endorses the reduction of greenhouse gas emissions and aids the sustainable movement of cargo.

The program considers the high emissions due to trucks that enter or leave the marine terminals, particularly during peak hours.

This is when there are several trucks that idle in the ports while waiting for loading or off-loading of cargo or related procedures.

When is the Expected Start Date for Collecting the Clean Truck Fee?

With the revamping of the clean truck fee in 2020, the ports are to adopt the Clean Truck Fee on 9^th March 2020.

They should also propose the development of a collection system and related software.

Why was Clean Truck Fee Halted in 2011?

Implementation of the fee led to decrease in cargo volume as shippers opted for ports that did not impose clean truck fee.

It led to increased costs for draymen in ports, since they had to buy new trucks due to the initiative.

This cost was passed onto the shippers as draymen began charging a fee to recoup losses.

The added costs led to noticeable decrease in cargo volume that entered and left the Los Angeles and Long Beach marine terminals.

Shippers chose to divert their shipments to ports that did not levy the clean truck fee.

As a result, the Los Angeles and Long Beach marine terminals registering among the lowest trade among the ports of the US.

In turn, this led to the suspension of Clean truck fee in 2011.

Who is Responsible for paying Clean Truck Fee?

The person responsible for the fee is the owner of cargo or his/her legal representative.

This is as per the program of ports levying the clean truck fee.

What is PierPass and what is its Relation to the Clean Truck Fee?

PierPass is a non-profit organisation created to address certain issues; congestion, security and air pollution at terminals, particularly during peak hours.

It imposes a traffic mitigation fee to shipments at the ports.

The owners of cargo pay the fee levied to have their shipments transported during off-peak hours.

PierPass website allows owners of cargo to log in, claim their respective shipments and proceed to pay any arising fee.

It works to improve air quality in ports which usually worsens during the peak hours of the day.

During these peak hours, ports normally have many trucks entering and leaving while hauling containers.

This leads to heavy congestion, which in turn leads to pollution from idling trucks, more so old diesel trucks.

It is part of ports initiative to curb congestion and air pollution (by idling trucks) through encouraging cargo pickup during off-peak hours.

How do you Register on PierPass?

You can register on PierPass by logging onto their website.

You then follow the instructions in place to create an account.

To create an account with PierPass, you will be required to provide certain details.

These details include demographic data and individuals to be notified upon the occurrence of certain events within the account.

The instructions are simple, easy to follow and comprehensive enough to capture any details required for claiming of cargo and fees payment.

How Much is PierPass now?

As of 1^st August 2020, the PierPass traffic mitigation fee is $33.47 per twenty-foot equivalent unit.

However, for other container sizes that are more than twenty feet, the fee is $66.94.

What is the Purpose of the Clean Truck Fee?

As part of the Clean Air Pollution Plan, role of the fee is to help ports pay for Clean Truck Program implementation.

Most of the air pollution in ports is due to the fumes released by trucks loading and offloading cargo.

Thus, the essence of the fee is to encourage truck drivers to mitigate pollution by switching to eco-friendly vehicles.

Moreover, the fee facilitates funding of the Clean Trucks Program.

It funds the replacement of old diesel drayage trucks with newer ones that are eco-friendly and adhere to environmental standards.

How Much is Clean Truck Fee?

The fee for a twenty-foot container is $35 and $70 for any container size that is larger than twenty feet.

How will Clean Truck Fee Affect Shipping Fees to the US?

Shipping fees to the United States may increase as a result of imposing the clean truck fee.

It is the drayage driver who bears this cost, who in turn, increases their charges towards shippers.

Shippers will in turn pass down the extra cost to customers seeking to ship cargo to the United States.

Therefore, Clean Truck Fee will increase the cost of shipping goods to the US.

How will the Clean Truck Fee Impact Shipping to US via the Ports of Long Beach and Los Angeles?

Clean Truck Fee implementation in Los Angeles and Long Beach marine terminals may make these ports more expensive than others in the country.

Shippers may have to indirectly bear more costs from drayage drivers who are responsible for paying the fee.

Thus, shippers may divert their cargo to other US ports that have none or lower expenses for cargo entering or leaving them.

This will cause a noticeable reduction in cargo volume at Los Angeles and Long Beach marine terminals.

Reduction in cargo volume may in turn lead to severe loss in revenue.

Are there Exemptions to the Clean Truck Fee?

It is mandatory that all trucks entering marine terminals to comply with the clean truck fee.

This includes all types of cargo trucks configured to haul containers.

There are no exemptions for these types of drayage trucks.

Trucks that do not pay the fee will not be allowed to enter the Los Angeles and Long Beach ports.

Exemptions are only there for trucks that are not structured or modelled to freight containers.

These vehicles should have exempt stickers in order to enter or leave marine terminals during drayage.

How will the Clean Truck Fee Impact the Drayage Trucking Industry?

The clean truck fee will encourage truck drivers to replace old, polluting trucks with newer models that adhere to environmental standards.

However, the costs incurred by drayage drivers may increase due to payment of the fee.

The drayage industry will become more streamlined as registration and claiming of cargo is before cargo can enter or leave marine terminals.

Furthermore, due to PierPass, there will be less congestion in the Los Angeles and Long Beach marine terminals, especially during peak hours.

This will also help in the curbing of air pollution within the ports.

 Is the Clean Truck Fee Rate Fixed or are there Chances for Review?

The rate is fixed for a year.

Resolution approving it mandates an annual review to determine whether it is too high or too low in its impact on volumes.

What kinds of Trucks Are Subject to the Clean Truck Fee?

Any and all drayage trucks that are designed to freight containers are subject to the clean truck fee.

This is without exception, disregarding heavy-duty trucks that are not structured or modelled to freight containers.

What are the Acceptable Payment Methods for Clean Truck Fee?

You can pay the clean truck fee either through credit or through electronic funds transfer.

Payment can only be made after claiming the cargo but before the shipment can enter or leave the marine terminal.

Where can you find Updates on Clean Truck Fee for Long Beach and LA Ports?

You can find updates on Clean Truck Fees from the Freight Market Update newsletter and any other market trends.

How does Clean Truck Fee assist in Port Management?

The fee helps fund replacement of old, polluting trucks with cleaner, eco-friendlier trucks, which in turn reduces air pollution within the ports.

Port operators can use funds accrued from the fee to ensure old trucks are taken out of circulation and scrapped altogether.

Additionally, the fee helps in decreasing congestion in ports during peak hours through PierPass.

Owners of cargo are encouraged to pay for transportation of their shipments during off-peak hours.

This initiative helps port operators in handling of incoming or outgoing cargo.

This makes it easier to keep track of the payment of cargo once it has been claimed.

Does the Clean Truck Fee Apply to Containers Entering or Leaving the Ports by Train?

Containers that enter or leave the ports by train are not subject to the clean truck fee.

The fee solely targets drayage truck drivers in relation to containers that enter or leave the through drayage trucks.

The fee applies to old diesel trucks that do not adhere to environmental standards.

Therefore, cargo brought to or taken from ports through trains is not considered to be contributing toward air pollution within ports.

Who will be Collecting the Clean Truck Fee?

The clean truck fee from ports is collected by PortCheck.

This is a non-profit company established by marine terminal operators for the purpose of fee collection.

The aim of this is to streamline the process of payment of the clean truck fee.

PortCheck enables fee collection by one entity instead of being paid upon entry of ports by drayage truck drivers.

What happens to Unclaimed Cargo in relation to Clean Truck Fee?

Any cargo that goes unclaimed, will be barred from entering or leaving the terminals.

It will be allowed only after owner of the cargo or a legal representative comes to claim it.

Payment of the clean truck fee only occurs once cargo has been claimed by the owner and not before.

Until payment, the cargo will be held by the port.

How do you Claim Cargo through PortCheck?

You can only Claim cargo once you have registered under PierPass.

Upon registration, you will be uploaded onto PortCheck.

There are several options when it comes to claiming cargo through PortCheck:

I. If you do not have a PierPass account, you can sign up and process the cargo through the PierPass website yourself.

II. You can you can let PortCheck handle the claiming of the cargo, along with payment of the clean truck fee.

III. You can create your own PortCheck account. Here, PortCheck will claim the shipment but you will be billed directly for any fees required.

What are the Clean Truck Program Requirements for Trucks Entering the Ports Terminals?

It is a requirement that all drayage trucks entering port terminals to adhere to all state law administrating drayage trucks.

Also, the model year of the trucks should be 2007 or newer engines.

Additionally, all trucks that enter terminals must have valid RFID tags and should be registered under the Port Drayage Truck Registry.

At Tj chinafreight, we make the process of shipping from China to USA easy and simple.

We will handle all your logistics operations.

If you have questions on any freight term, feel free to contact Tj chinafreight team right now.

In this guide, you will find all information you’re looking for about the commercial control list.

So if you have any questions on the commercial control list, you will find the answer right here.

Keep reading.

What is Commercial Control List?

This refers to a comprehensive outline of product categories and groups used to determine the need for licenses to export to the US.

You can get the license to export from the U.S Department of Commerce.

It is from CCL that ultimately generates the alphanumeric code (4E001), also referred to as the export Control Classification Number(ECCN).

The commercial control list has ten categories and five groups of products.

What is the Background and Purpose of Commercial Control List?

The Commercial Control list was established after the Second World War.

It is used in the classification of goods and services, which is important in identifying the required export license.

What are Export Controls?

Export Controls are the federal laws that prevent any unlicensed export of information or some commodities.

These are the laws that seek to restrict any transfer of military or useful technology, goods, services, and information.

These include any technology and equipment used in researching foreign policy and national security.

Some of the export transactions will require written approval or licensing from the government of the United States before exporting.

This happens for the protection of trade or national security reasons.

Export controls can occur for more or any of the following reasons:

• The nature of export either has economic protection issues or has potential or actual military protections.
• If the government has any concerns about the organization, individual, or the destination country.
• The government has concerns about the suspected or declared end-use or even the intended user of the export

Why do I need a Commercial Control List?

You will need the Commercial Control List (CCL) whenever you need to classify your items for export.

This will help you understand which licenses you will need to successfully export your products.

If your item is missing on the CCL, then it will be considered EAR99.

Where can I find the Commercial Control List?

You can get the Commercial Control List in the EAR Supplement from1 up to part 774.

What is the Export Control Classification number in relation to Commercial Control List?

An Export Control Classification Number or ECCN is an alphanumeric key that comprises five characters.

It is vital in a Commerce Control List to help in the classification of goods being exported from the U.S.

The classification number enables you to find out if you require an export license from the Department of commerce.

The ECCN categorizes products based on software, technology, or commodity.

There are 10 categories of ECCN in the CCL, which are further put into 5 product groups.

The initial character on the ECCN identifies broad characteristics like electronic, nuclear materials etc.

The second character on the ECCN represents the product group such as software, material, etc.

What is a Dual-use Product?

A dual-use product is a technology, good and software that you may use for both military and civilian applications.

The European Union controls brokering, export, and transit of dual-use products from the EU.

This helps to prevent an increase in the number of Weapons of Mass Destruction.

It also ensures that they take part in maintaining international peace and security.

It is possible to trade dual-use products freely within the European Union.

This however has an exception to some sensitive items whose transfer requires prior authorization.

How do I determine the ECCN number for my Product?

You can determine your products ECCN number by:

• The product’s ECCN
• The exporting destination
• The intended user
• And finally the product use

Start by identifying the right classification of your product.

There are three ways of determining the ECCN of your product:

Going to the Source

Contact the manufacturer, developer, or producer of the product.

Find out if their product is classified and if they are able to give you the ECCN.

They likely have the ECCN if they have exported before.

However, you must know that ECCN may change over a while.

Self-Classify

For you to perform self-classification, technical knowledge of your product is very key.

You must understand the structure and format of CCL.

With the category and group of your product, match functions and particular characteristics of the product to a specific ECCN.

Request the Bureau of Industry and Security (BIS) for the Official Classification

Submit commodity classification requests on the internet via the Simplified Network Application Process – Redesign (SNAP-R) system.

You must have theCompany Identification Number (CIN) to access this system online to submit the request.

What are the Parameters of ECCN?

ECCN will categorize depending on the nature of the item i.e. technology, software, commodity type together with its technical aspects.

What Happens if my Product doesn’t Fit the Parameters of the Commercial Control List?

If after careful review you get convinced that your product is not fit for ECCN parameters, it might be set as EAR99.

No agency controls it.

You may then export your product under the license exception NLR with the emphasis that it requires no license.

For this to happen:

• The product should not be destined to a sanctioned destination, restricted end-user or a sanctioned entity
• The product is not meant for an end-use subjected to higher controls

How is the Commercial Control list Classified?

Commercial Control List (CCL) is classified into categories labeled from 0 to 9 with each category having 5 groups.

Each of these groups is labeled from letter A to E.

The groups are the same across all the ten categories.

The list of the ten categories has the first number used in identifying the primary category.

The list includes:

• Category number 0 – Nuclear facilities, materials, and equipment
• Category number 1 – Special materials together with their related pieces of equipment
• Category number 2 – Materials processing
• Category number 3 –The Electronics
• Category number 4 –Laptops and Computers
• Category number 5 – Information security and Telecommunications
• Category number 6 – Lasers and Sensors
• Category number 7 – Navigation and avionics
• Category number 8 –The Marine
• Category number 9 – Aerospace and Propulsion

The next number identifies each group as a sub-category. The group includes:

• A – Systems, components and equipment
• B – Tests, inspection, and production equipment
• C – Materials
• D – Software
• E – Technology

The third number classifies the regime from which the item/s originates.

This includes:

• 0 – Wassenaar Arrangement
• 1 – Missile Technology Control Regime
• 2 – Nuclear Suppliers Group
• 3 – Australia Group
• 4 – Chemical Weapons Convention

The goods are further classified for a more detailed report on the goods which can be followed by subcategories.

They include:

• A  to mean Australia Group
• C to meanCWC (Chemical Weapons Convention)
• M  to mean TCR (Missile Technology Control Regime)
• N  to mean (Nuclear Suppliers Group) Dual-Use List
• T to mean Nuclear Suppliers Group (NSG) Trigger List
• W to mean The Wassenaar Agreement
• WVS to mean Wassenaar Agreement Sensitive List

• WVS – Wassenaar Agreement Very Sensitive List

The majority of IT items will fall under “4A002a” or “5A002a”– but may not be entirely exclusive.

What are the Licensing Requirements for Items Listed in the Commercial Control List?

For Dual Use/Commercial Technologies, you will need a license from:

• “Friendly Countries” like all others (South/Central America, European countries, etc.)
• “Terrorist Supporting Countries” such as Syria, Sudan, North Korea, Iran, Cuba and Libya.
• “Countries of Concern” such as former Soviet Republics, Vietnam and China.

Licensing Policy (Space Technologies/Military)

• The policy of Denial: States that sponsor terrorism (Syria, Sudan, North Korea, Iran, Cuba, and Libya) and arms embargo (Haiti, Liberia, PR China, Sudan, Somalia, and Burma). Others include Vietnam, Belarus, and Iraq.
• The policy of Denial will be based on the item or the end-user: Congo, Rwanda, Iraq, and Afghanistan.

How do I determine if my Products require Licensing?

If the items you intend to export are listed in the Commercial Control List, you need to have an export license.

The process of obtaining it can be lengthy probably two to three months.

If you manage to get the approval, it may come with restrictive conditions.

What is EAR99 in relation to Commercial Export Control?

EAR99 is a way of classifying a product.

It is essential in indicating that a particular product can be subjected to the Export Administration Regulations (EAR).

However, the product may not be specifically defined by the ECCN (Export Control Classification Number).

Even though this classification is used in describing the item, the shipment authorization for the product might change.

This will depend on the circumstances of the transaction.

You can export EAR99 products without the license.

As the exporter, you may still have to perform proper and careful due diligence to ensure that you understand the product.

License will be necessary if you are exporting to an embargoed country, restricted end-user or is meant for use in prohibited end-use.

How do I Export an EAR99 item from the US?

EAR99 items can easily be exported without necessarily having to apply for a license.

Therefore, it is important to exercise due diligence to avoid exporting to these destinations.

What is Commercial Control List Index?

Commercial Control List Index is a list of items that are controlled for trade.

How do I navigate the CCL using the Commercial Control List Index?

To navigate the CCL using the Commercial Control List Index, you should start by finding your product on the CCL Index.

Once you have a potential ECCN, take time and read through the ECCN on the Commercial Control List index.

Continue and determine if your product is suitable for the parameters of that ECCN.

Check to find if the ECCN entry does have a list under the “Items” heading, which is then divided into subparagraph(s).

If so, check whether your product meets the technical parameters listed in the ECCN category.

Before you find the correct ECCN entry, you may have to review several ECCN descriptions.

How do I apply for an Export License in the US?

Here is the procedure for applying for export license in the US:

Obtaining your CIN

You must have a company identification number (CIN).

CIN is the unique identifier used by the Department of Commerce to track all your international trade activities and liabilities.

You can get the CIN by filling company registration request form at the Department of Commerce’s Bureau of Industry and Security website.

Research Export Controls

You have to make yourself familiar with the Department of Commerce’s export controls.

The federal government does not allow the export of products that may be used for military purposes in other countries.

For example, the Department of Energy does not allow the export of any products that can be used in the creation of nuclear weapons.

Applying for the Export License

Some products like the basic consumer goods that have no particular technological sophistication, may be exported without necessarily having a license.

Otherwise, you will need to visit the Department of Commerce’s SNAP-R website to apply for the license if it is necessary.

You must be careful to read all the specific instructions.

Export licenses are additional licenses to normal business requirements that are necessary and are not meant to replace any of them.

What is a Sanctioned Country?

Sanctioned country refers to a country restricted from trading with certain countries like the US.

Several sanctions may be placed for a country.

For trade sanctions, commercial and financial penalties are imposed by the sanctioning country to target an individual, organization, group, or country.

What is Considered a Foreign Entity for Purposes of Export Control in the US?

They include:

• The foreign government
• Any foreign organizations not incorporated or organized for doing business in the U.S
• Any individual not registered as a U.S citizen or a lawful permanent resident in the U.S.

What does ‘Deemed’ Export mean in US Export Control?

‘Deemed’ export is disclosure or export transfer for controlled items, including technology and information to someone l or foreign entity within the U.S.

The releases are considered as an export to the home country of the foreign individual.

It can happen by such means as:

• Touring to laboratories
• Involving foreign students or foreign researchers in the research
• Visual Inspection, emails or oral exchanges

What are the Common Export Laws in the US?

There exist several laws that are meant to control the export of goods and services from the U.S.

Some of the government agencies responsible for the implementation of these laws are:

The EAR is the one that regulates the export of “dual-use” goods and services identified on the Commerce Control List.

State Department’s Directorate of Defense Trade Controls (DDTC) implements the International Traffic in Arms Regulations (ITAR) laws.

The laws apply to goods and services that are military in nature.

The Treasury Department’s Office of Foreign Assets Control (OFAC) is responsible for implementing the trade and economic sanctions.

What are the Consequences for Violating Export Control Rules and Regulations in the US?

Violating Export Control Rules and Regulations in the US can lead to very severe actions and penalties.

Some of the administrative penalties are:

Warning Letter

these are administrative determinations indicating that a violation has occurred.

It also indicates there is a “good faith effort” or mitigating factor in trying to comply with the required laws.

It shows that an investigation has been indicated and that there are no aggravating factors.

Interim Suspension/Denial Order

This denies the sanctioned party privileges of exporting from the U.S.

It also denies any other access to any goods and services originating from the U.S.

The sanctions are supposed to exist for a specified period.

These restrictions can apply to specific goods or specific destinations.

Seizure and Forfeiture

This applies to any commodities or technical data intended for export from the U.S.

They are goods that have violated the export control rules and regulations and are held by the authorities.

They are seized and forfeited, including any vehicles that were carrying the commodities or the technical data.

Debarment

This is the exclusion from practicing or denial of exporting privileges.

It involves revoking contracts, denial of funding, debarring from government contracts as well as implementing extra measures of compliance.

How do I prevent Potential Export Violations when Shipping from the US?

Whenever you are exporting from the US, you should be very careful not to break the laws associated with exports.

You shall breach the law if, for example, you mistakenly export to Iran products intended for the UAE.

You carry the risk associated with exportation.

It is therefore necessary that you do the due diligence to prevent any situations from coming up.

For that matter, it is important to:

• Make sure you comply with the regulations
• Get to understand the laws and regulations that may affect where you are exporting
• Understand your customers
• Understand the fines and penalties you are likely to face if you break the law

Are there any Exemptions to US Export Control Requirements?

Yes, there are some exemptions. They include:

• Fundamental Research Exclusion
• Educational Information
• Publicly Available Information

How do I ship a Controlled Item or Commodity out of the United States?

There is control by the export regulations in the transfer of equipment and commodities whenever you are shipping products out of the U.S.

There are licenses that you will need to have even if the product results from the fundamental research.

However, you can have a valid exception license (EAR) or License exemption (ITAR).

You will require a license to ship from the US if your product is under the control of ITAR.

Under the EAR, the item and country you intend to ship to will determine whether you will need a license or not.

Sometimes is not mandatory to have an approved license from the Department of Commerce to ship outside the country.

However, you will still be required to maintain other administrative requirements.

This is in addition to maintaining records about the shipment of EAR-controlled products outside of the United States.

What is the Impact of Export Controls on the US Shipping Industry?

Since the end of World War II, the U.S remained top producer and exporter of highly demanded goods and services globally.

Export controls have however contributed to competitive difficulties in the United States.

This has imposed a very significant burden on the economy of the U.S.

Apart from the Export Controls; other factors collectively contribute to the competitive challenges in the U.S.

However, unlike the other factors, the export controls can be largely modified by the changes in the U.S.

This ameliorates the negative effects if not totally eliminating them.

Terms and conditions for the export controls will change from time to time.

This requires agencies to keep on adjusting as well as modifying the regulations to apply and enforce the new laws.

There is also the impact brought about by the presidential executive orders.

They can instantly change whatever export control is or how some activities are regulated.

Although sometimes there are specific exclusions from export controls, the exclusions come with attached terms and conditions.

Many SMEs are not able to strictly comply with the export control enough.

Many businesses do not have the money, time, or staff resources to adhere to the export control requirements.

I hope you got all information you need to know about the commercial control list.

However, in case you have any questions, feel free to contact the Bandar team.

If you’re importing from China or shipping from China, most probably you have come across the freight term consignee.

Remember, correct use of terms will save you the unnecessary cost that comes with a misunderstanding of freight terms.

That’s why today I will answer all questions you have about the consignee.

Let’s dive right in.

What is Consignee?

The recipient of the goods being shipped is the consignee.

This can either be the buyer or the agent of the goods being shipped.

Their details must appear on the bill of lading.

What is Consignment?

Consignment is the act of issuing over to another person care or custody of material or goods while still retaining the legal ownership.

The ownership of the goods is ceased once the goods are sold.

Consignment can be done in order to ship the commodities, transfer goods to an auction or place the goods on sale in a given store.

Is Consignee the Shipper or Receiver?

The receiver of the goods being shipped is the one referred to as the consignee.

In this case, it is the consignee who will be the receiver since they are the ones to whom goods will be delivered to.

The details of the person or agent to receive should be entered on the ‘consignee’ field when filling the forms.

Can Shipper and Consignee be the same?

The answer can be “yes” and “no.”

The two parties can be the same.

This can happen if one company has a branch in another country.

Since the name of the company is one, the name will appear both on the shipper and the consignee.

The shipper’s address and the consignee’s address will however be different since the locations are different.

Another instance where the shipper and the consignee can be the same is where one party is involved.

This is to say, the buyer buys their goods and sends them to him/her in their own country.

The names will be the same.

The addresses will however be different since the place at which the shipper is sending the goods, is different from where they will pick the consignment.

What is the difference between Consignee and Consignor?

Both the consignee and consignor are common terms used in the trading as well as the transport sector.

In a consignment, the one receiving the goods is referred to as the consignee.

The consignee is only a receiver but not the owner of the goods.

Once the consignee undertakes to pay the consignor the full amount for the shipped goods, then the ownership is transferred.

In many cases, a consignee happens to be an agent to receive goods from the consignor.

The person receiving goods will always be the consignee no matter the circumstances.

Whether the receiver is the buyer, the agent, or even an agent who intends to receive goods and sell them later.

This does not concern the carrier as they will enter their name as the consignee in all documents pertaining to that consignment.

When goods are being sent by the producer or the manufacturer, they are sent as a consignment.

The sender of the consignment in this case is referred to as the consignor.

Their name as the sender will be entered in all official documents by the consignor.

What are the Duties of Consignee in International Shipments?

The duties of a consignee are generally payment of duties as well as covering any charges that accumulate on top of them.

It is upon the consignee to ensure that the goods are in good order as illustrated in the bill of lading.

They will inspect the shipment to ensure that there will be no broken or missing items once the cargo arrives.

In case the items are found to be over, short and damaged (OS&D), it is upon the consignee to immediately file a claim with the carrier.

They will be required to carry the request for reimbursement or the incorrect shipment be removed.

After the consignee has signed all the required documents, they take over the responsibility and the ownership of goods.

To this extent, the carrier will have nothing to do with the shipment, excluding any duties relating to transmission of paperwork or returning the items to headquarters.

Who Does a Consignee Interact with During Shipping?

A consignee is part of a large team of contracts that must work together in harmony for a shipment to be complete.

Below are some of the people other than the consignee must interact with when the shipment is being processed:

• Consignor: This is the sender who is in control of releasing items from a warehouse to the destination.

He puts the bill of lading together as well as ensuring that items are in the best condition before getting to their destination.

• Carrier: A carrier is in charge of delivering items to their destination.

This can be an independent owner-operator or someone who is working with a large fleet.

He is also in charge of receiving the bill of lading as well as transiting the goods to the consignee safely.

• Notify party: Sometimes the consignee may not be able to physically inspect as well as receiving all the shipments.

At this point, notify party which is responsible for receiving notification once a shipment gets to its destination come into play.

The notifying party will arrange customs clearance in case of an international shipment.

• OS&D Clerk: Large shipping companies may sometimes employ a dedicated clerk for over, short, and damaged.

The OS&D clerk is in charge of receiving, inspecting and managing claims.

They typically work out of the consignor’s warehouse together with the other members of the shipping department.

Why is Consignee Important in International Shipping?

The consignee is important in any shipping transaction.

This is simply the customer-the individual whom the carrier must please in order to receive the compensation.

Customer experience is everything.

The shipping company must therefore please the consignee as he forms part of the most important business metrics.

The consignee has the power to take the business somewhere else if they are not happy with the services.

Businesses will therefore need to go beyond keeping the consignee happy in all transactions.

It is for this reason that the fleet managers are required to be in direct contact with the consignee or the team during the whole process.

The company should provide all updates regarding shipping to create a strong customer experience.

During Shipping, Does the Carrier have to Listen to the Consignee?

Sometimes consignees can be hard to work with and they may have excess demands.

If the carrier finds it hard to work with the consignee, they may choose not to listen to them by sticking to the words of the bill of lading.

In case of a dispute, it should be handled by the management back at the warehouse.

The carrier should not negotiate with the consignee as this will violate the contract terms.

It may result in a complicated legal situation.

Is Consignee the same as Delivery Address?

The Bill of lading form will have both the consignee and deliver-to fields.

The two may look similar but they are not the same when there is an export.

The consignee will be the customer’s ship-to address.

A delivery address will be indicated as the physical location where the goods will be delivered.

The consignee address may be different depending on who will receive the goods.

What is Third Party Consignee?

This is a service for clients who may not want to reveal the real commercial value of a shipment to the consignee.

With this service, you are allowed to ship goods to consignees without attaching a commercial invoice.

This allows for faster shipments and eliminates additional handling and warehouse costs at the destination.

Is Consignee the Importer of Record in Shipping?

Consignee is not the Importer of Record.

A consignee can assume the duties of an Importer of Record (IOR) but this can only serve the interests of an individual or the company.

Professional Importer of Record facilitates the import of shipments for any client who has no connections in the destination country.

How do I tell my Supplier who the Consignee for my Shipment is?

The consignee will be the party who will end up with the ownership of goods once the cargo gets released at the final destination.

For example, if you have a registered business in the U.S and you intend to ship to Amazon, you will be the consignee.

Therefore, ownership of goods will be transferred to you once the cargo gets to its final destination.

What is the Role of a Consignee on a Bill of Lading Shipping?

The consignee in a bill of lading is very important.

They are the receiving party for the shipment and their details must be clearly and correctly captured on the Bill of lading.

They are responsible for the collection and verification of the goods.

Who keeps the Bill of Lading between Shipper, Consignee, and Buyer?

The Bill of Lading gives ultimate control of the shipment to different parties along the route

As such, the Bill of lading can be kept by the shipper, buyer, or even the consignee.

If a carrier or shipper has not been paid the full amount of money for transport services, then they can keep the bill of lading.

They can hold it until such a time that the payment for the shipment is paid for before they can release the bill of lading.

If the goods are being delivered to the consignee, the bill of lading will be transferred to the consignee.

This is what they will use to collect the shipment.

There are several types of bill of lading. They include but not limited to:

• Straight
• Shipper’s order
• Air Waybill
• Originals
• Inland
• combined /Multimodal transport
• Through
• Switch

How Do you Make an E-waybill if Buyer and Consignee are Different?

When transferring goods to a different location of the same buyer, you will only be required to generate one e-way bill.

In a situation where the addresses are different along with the buyer and taking delivery of the same, you will be required to generate two e-waybills.

Generating two e-way bills was brought having in mind instances where the delivery location is located in a different state away from the buyer’s state.

This is done in order to complete the transaction and taxes cycle that changes with inter-state transactions.

How Do I Change the Consignee on a Bill of Lading Document?

The supplier may realize a discrepancy in the consignee’s bill of lading after releasing the Bill of Lading by the carrier.

If the discrepancy is realized before the documents are submitted to the supplier’s bank, changes can be effected through the submission of all originals with the vessel owner’s agent.

Also, at load port who issued the Bill of Landing or with the supplier’s bank.

The freight forwarder carrying the goods can be able to amend the consignee named in the bill of lading for the export shipping documents that are authorized by customs authorities.

If the name of the consignee to be amended was not indicated in the export shipping documents, the carrier is not permitted to amend it.

In such a situation, the exporter or his customs broker will be required to amend the consignee named in the shipping documents with the customs.

They can then approach the carrier for amendment of the consignee’s name on the Bill of Lading.

How Do you Build Trust with Your Consignee?

Below are some of the factors you need if you want to build a trustful relationship with your consignee:

• Settling on the responsibilities of incoterms
• Protecting the goods through Insurance
• Duty of storage-Convince the consignee to pay for proper storage fees to avoid losses.
• Buy out and stock rotation: It is your responsibility as the consignee to sell off the goods.

Are all Consignees Buyers?

The answer is yes.

It can be that a consignee has signed a contract with the seller or the original consignee has transferred the rights of ownership for the goods being shipped to a new party.

The new party will then become the rightful owner of the goods.

What is a Shipping Bill?

A shipping Bill is a document required by the customs authorities in order to clear the goods.

Is Notify Party and Consignee the same?

Normally the notifying party and the consignee will be the same.

On other occasions, the two will be different parties.

The notify party can be the clearing agent, the consignee, or even a third party with a promise of goods by the buyer or consignee.

Why do I need a Notify Party During International Shipping?

When shipping internationally, you will need a notify party to be notified on the arrival of a consignment.

They will be arranging for the formalities of the consignment.

Notify party understands the custom laws of the destination and will therefore handle everything.

Also ensuring your consignment follows the required procedures in order to comply with all laws.

Who is the Consignee if Shipping to a 3rd Party Like Amazon?

Whenever you are shipping to a 3rd party like Amazon, or when your goods will stop at an inspection center before going to the final destination.

The inspecting or 3rd party like Amazon will not be the consignee.

The consignee will be the importer.

Is the Consignee Responsible for Freight Charges if Shipping EXW or FOB?

The consignee is the importer.

When you are shipping EXW or FOB, it is the responsibility of the consignee to handle the freight charges once the consignment is handed over to the consignor by the forwarder.

What is an Ultimate Consignee?

The ultimate consignee will be the intended recipient of the imported goods sold by the shipper.

In most cases, the consignee will be the same party as the ultimate consignee.

U.S businesses will have to act as the ultimate consignee for the foreign importer.

What are the Considerations for Appointing a Consignee?

Before appointing a consignee, make sure they have the following:

• They must have an EORI number for their business
• Their business must be VAT compliant

If they do make any taxable transactions in the country of import, they must have a VAT in that country.

The EORI and VAT number will be linked and will be used by your carrier in the customs documentation on the section for the consignee.

What are the Possible Issues of Working with a Consignee?

Many challenges may occur when using a consignee.

They include:

• You will receive revenue that is much less compared to if you had sold directly to the end-user. Working with a consignee will reduce the revenue that you could have earned.
• The ownership and the risk will be retained and any goods that are not sold will be returned at no cost on the side of the consignee.
• The goods that are on consignment may not get enough promotion or exposure by consignees.

How Much do Consignees Earn?

Consignees earn based on the percentages.

The rates are agreed and stated in written consignment agreements and signed by both the consignor and consignee.

The commission charged is subjective and will depend on:

• How adept the management of the store is in getting the highest prices for the goods

The overhead costs for the store.

Also, the store must charge enough to cater to its cost and make profits as well.

• The relationship that exists between the consignee and consignor- They may be neighbors, friends or even relatives who call for some discounts.
• The total value of every item- Some of the high-end items like Porsche might call for large splits among consignors than other items.
• The locale and clientele-Wealthy people may not be so much concerned about their share of sales compared to clients at the bottom of the spectrum. who may hope to turn their merchandise into the much-needed dollars.

Some of the percentages that consignee charges are:

• Clothing items at 40-60%
• Furniture goods 50-70%
• High-end goods: 80-90%
• Mall Vendor Goods: 80-90%
• Sporting items: 50-70%
• Vehicles/Automotive: 70-80%

What Does ‘Gouging the Consignee’ Mean in Shipping?

This is a situation where the agents for the carriers, the agents for the port, and even agents of the CHB may pass extra costs belonging to them.

These are their costs involving the customization of a shipment that was not initially rubber-stampable.

They charge for items such as transfer charges, collection charges, processing charges, notification charges, or anything they can charge.

It cannot be agreed whether these actions truly mean gouging the consignee or covering their costs which may be caused by the shipment challenges or even a “slow” consignee.

Can a Shipment have Multiple Consignees?

A shipment can have multiple consignees.

For instance, if a freight forwarder acts as the intermediary and steps to complete the delivery of the goods will be an intermediate consignee.

There can also be the ultimate consignee who acts as the final recipient of the goods.

For cross-border transactions, the importer of records was considered as the ultimate consignee.

They will be considered as the owners of the goods for purposes of declaring customs as well as payment of taxes and duties.

What Happens if a Consignee is not Available During Shipment Delivery?

At times the consignee may not be available when the shipment arrives at the port of destination.

It can happen if the importer did not receive the Cargo Arrival Notice from the carrier.

Depending on the situation, immobile shipping containers can lead to financial losses.

The containers will become a burden to the freight forwarder or the shipping line.

Since they cannot hold them for a long time, they will need to get rid of them to avoid additional expenses.

In most cases, the company gets rid of the cargo by holding auctions to sell the goods.

Once the cargo has been abandoned, the shipping company will have the right to:

• Unpack and remove the goods from the container
• Taking the cargo and storing it in a bonded store
• Selling the cargo
• Recovering any costs incurred from the money they get after the sale
• Taking legal action in order to recover any remaining amount that couldn’t be recovered after the sale.

How Do I Find a Consignee who will Receive the Cargo on My Behalf?

You will first need to find out who is the Ultimate consignee as per the customs and border protection definition.

Once you have that, look out for their identification number.

Once the merchandise is bought from the seller, the ultimate consignee becomes the buyer.

Find out if by the time the shipment was getting into the United States had not been bought.

If so, then the ultimate consignee will be the individual or entity which was consigned the goods by the shipper.

If the ultimate consignee is one individual, contact them and request their social security number.

You will use this as the consignee number.

You can also do this if it is an organization.

If you find it convenient enough, you may obtain Employer Identification Numbers from the online database of the Securities and Exchange Commission.

If shipping to the US, can I appoint a Foreign Consignee Without a Social Security Number?

When you are shipping to the U.S and you need a foreign consignee, sometimes they may not have a Social Security Number.

In such a case, they can use their passport number, their country where they got the passport and the date of birth.

This will be accepted and they will be able to act as your consignee.

What Does ‘Consigned to Order’ mean in Shipping?

‘Consignee to Order’ is taken to mean that the BOL was consigned as the order of the shipper.

It means the shipper will decide on who is supposed to collect the shipment once it gets to the port discharge.

They should give the carrier at least one original copy for the shipment to be released.

The endorsement is the one that helps the shipper to make this determination.

It is different from ‘Blank endorsement’ in that the person having the original bill of landing cannot claim the shipment from the carrier once they arrive at the port of discharge.

What does ‘Container to Consignee’ mean?

This is a shipping term that can be applied during the handling of cargo whenever the carrier hands over the shipment to the consignee.

This takes place either by loading the consignment from the warehouse or by discharging the consignment from the port directly to the consignee’s transport means.

The term can also be used whenever the carrier is handing the loaded container of goods to the consignee at the port of discharge.

This happens when the container gets loaded from the warehouse to the means of transport being used by the consignee.

When using this term, the ‘container’ will also be taken to mean any large units of the load.

What Does Consignee Billing Mean in International Freight?

Consignee billing is an agreement in form of a contract where the receiver of the gods pays for their shipping charges.

This includes oversize as well as the DIM weight.

The receiver is also obligated to pay for any additional handling fees that may be charged.

All other charges are paid for by the shipper.

Now, I would like to hear from you – If you have any questions or inquiries about this shipping from China, contact Tj chinafreight now.

In this guide, you will find all information you’re looking for about container yards.

From basic definition, functions, classification to ownership, among other critical aspects.

So, if you want to learn more about container yards, read this guide.

What is Container Yard in Shipping?

Container Yard refers to a place specially designated for the storage of containers before loading or offloading from a ship.

Also referred to as a container depot, CY provides the space for aligning containers ready for loading onto a ship.

You can also use it to store all the containers being offloaded from the ship.

You keep the cargo until it’s time to shift them either to the rail yard, Container Freight Station, or delivering to the consignee.

Where is Container Yard Situated?

The location of container yard must be a very convenient place for business.

The best location of a container depot is normally near the terminals to reduce movement to and from the terminal.

You can also choose container yard located closer to the port and the hinterlands commonly known as inland container depot (ICD).

What are the Functions and Uses of a Container Yard?

Container depot has many uses all of which ensure that there is smooth flow of trade among various ports and countries.

Among their functions is the storage of empty containers after unloading them at the warehouse of the receiver.

It would be expected that every shipping company should have its container yard.

However, this was seen to cause congestion in the areas surrounding the port.

As such, there came the concept of private entities and ports to offer storage services at minimal charges.

Some of the large shipping lines however have their secured storage facilities.

The main benefit of having a private container yard is the ability to have easy cargo movement from one port/depot to another.

It helps you avoid the storage issues as well as bottlenecks which may be as a result of improper planning.

Other auxiliary functions of container yards include:

• Repair services
• Maintenance services
• Security/Protection Services
• Cleaning services
• Transportation services
• Fumigations services among others

Organisms or moulds can enter and start breeding inside the containers especially when you leave them still for some time.

To prevent this from happening, Container yards will clean and fumigate containers regularly.

Lashing may come loose when containers are in transit and this can lead to damage of goods inside the container.

Container yards will undertake the duties of repairing and maintaining the damaged or broken containers.

The damages may range from small dents to even major overhauls.

Reefer containers require regular maintenance of the cooling systems to avoid any short-circuiting risks during transit.

Shipping container yards come in handy for shoppers who are able to get such services within the yard.

Another useful service is short-distance free transport services.

Container yards can give incentives such as transport from the container yard to other pick-up locations.

These services may attract charges if you hire a Logistics Company.

But with container yards, you will be able to save the extra cost.

What is the Layout and Design of CY?

The construction of container yards employs a standard layout in order to offer security as well as enough storage space.

Offering security to large units can sometimes be challenging, thus proper measures must be put when setting a container yard.

The container yard design must consider the use of pilfering machinery for containers like the cooling systems for reefer containers.

They must ensure easy detection of trafficking of illicit goods using the containers.

The entry and exit points should have a large boundary wall with round-the-clock security.

They should also have facilities and equipment to test for any traces of drugs and other substances for empty containers.

Container yards should also feature larger spreader cranes or straddle carriers.

These help in piling of containers high in the air.

They are very useful in lifting containers and stacking based on their entry and departure times.

Some yards also stack containers by the company they belong to.

Therefore, there may be a separate region for each company.

The allocation of size and location of this region is often through bidding.

Proper arrangement of containers is key in reducing the turnaround time.

Large container yards should also have an in-house rail for sending and bringing containers.

Some yards can also have a customs office that oversees the unloading and loading of containers as well as performs a regular inspections.

How Does a Container Yard Work?

A container yard receives containers from the client or agent and stores them waiting for delivery or shipping.

At the entrance, your containers must be inspected before being given entry.

Some yards can offer maintenance and other services for the time the container will be held inside.

Once all the plans to move it are in place, the yard then releases the container.

However, there must be proper checks to make sure that only the authorized container moves out.

What is Inland Container Depot (ICD)?

Inland container Deport is a dry port well equipped to handle temporary storage containers with cargo as well as empty containers.

This helps hinterland customers in receiving all the port services closer to their premises and in a more convenient manner.

Their main purpose is to help customers enjoy the benefits that come along with containerization.

What is the Difference Between Inland Container Yard and Container Freight Station?

It can sometimes bedifficult to distinguish between Inland Container Depot and Container Freight Station.

This is because both of them serve as points of consolidation.

In many instances, you will find Container Freight Stationlocated closer to the port of entry.

It helps in storing any cargo that cannotfill a container as they wait arrival for more cargo tofill the container.

This is to say that it mostly deals with Less than Container Load (LCL) cargo.

CFS greatly helps in reducing congestion at the ports, and they feature rail and road connections.

Conversely, the location of Inland Container Depot (ICD) is on hinterlands, a distance from the ports that they serve.

ICDs will mainly serve the Full Container Load (FCL) and also have rail and road transport connections.

Although closely associated with ports, Inland Container Depot acts as a separate entity with the same authority as any other customs station.

What is the Difference between ICD and CY?

An ICD is like a seaport though its location is away from the actual seaport.

It helps in bringing port services closer to importers and exporters.

You can be able to import, export as well as pay for all the customs duties at the Inland Container Depot.

On the contrary, a container yard is commonly close to the seaport.

Is where you store all the cargo offloaded or to be loaded onto the ship.

It is permissible to store the goods until it is time to move them to the consignee or the ship.

Who Owns Container Yards?

Container yards may be owned by states, private-public or private entities.

For example, in North America and Europe, different parties have assumed ownership of rail companies, port operations as well as shipping companies.

The state owns most of the container yards in China, Asia, and India.

Container yards in India are under the management of the Container Corporation of India (CONCOR).

The private sector owns the majority of Inland Container Depots in Africa.

What does CY Cutoff Mean?

CY cutoff refers to the set date on which a given container will be checked-in (gated-in) in the container yard.

The checking in is to prepare the consignment for its sailing schedule.

What does CY/CY Indicate on a Bill of Lading?

CY/CY is a shipping term used to mean “container yard to container yard” when dealing with international shipping.

It means that the carrier will accept the goods once they get to the container yard located at the port of lading.

They will then deliver the goods to another container yard located within the discharge terminal/port.

What does CFS/CY mean on a BOL?

The CFS/CY is read as ‘CFS to CY’.

It is a container service used in shipping to mean port-to-door container service.

Simply, it implies that when delivering the loose cargo to carrier’s container freight station, it will be packed into a whole container.

The carrier will then deliver the whole container to the premises of the consignee.

What does CY/CFS mean on a BOL Document?

The CY/CFS is read as ‘CY to CFS’.

It is a container service used to mean door-to-port container service.

Once the whole container gets to the carrier, it will be packed at the premises of the forwarder or the shipper.

This whole container will then be emptied at the freight station of the carrier at the port of destination.

It is the responsibility of the consignee to organize for transportation of the loose cargo to their premises from the container freight station.

What are the Implications of Using CY/CY Terms on a Bill of Lading?

CY/CY has two major significant effects statements on the bill of lading.

They are:

Unstuffing and Stuffing Responsibility

When a carrier declares CY/CY term, they will be certifying that unstuffing and stuffing of the container will be under the shipper.

Also, any responsibility relating to the wrong stowage of containers will belong to the consignee.

For that matter, the insurance may not handle any claims relating to such a loss.

Delivery Place

If the carrier declares CY/CY on the bill of lading, the shipper will deliver goods to your designated destination based on chosen incoterm.

How are Container Yard Activities Managed?

The management of a yard has very significant effects on a port’s competitiveness on the shipping network globally.

Once a ship arrives at the port, the manned quay cranes will offload the containers from the ship.

The quay cranes will then transfer the containers from the ship to vehicles like Automated Guided Vehicles (AGVs).

These vehicles normally travel between the ship and the stack.

They help in dropping the containers at the storage point where you can keep them for some time.

From there, cranes pick the containers from the stack.

The AGV will then transport them to their respective modes of transport, which can be trains, trucks, barges, deep-sea ships, etc.

Loading containers for export onto a ship is one process executed in reverse order.

Which Types of Containers can be Stored in a Container Yard?

There are no restrictions on the type of containers that container depots can accept.

You can store all the containers from or heading to the ship.

However, there is a thorough check and clearance of the containers for the next shipment stage.

How Much do Container Yard Services Cost?

Container Yards normally offer free services.

This is so to give importers and exporters time to organize their logistics.

How Long Can a Shipping Container Stay in CY?

Normally the container yard is a place to store the containers for a short period of time awaiting clearance.

The container yards offer free service during this time, normally 3 to 7 days.

The duration gives you time to organize for the collection of your cargo.

The goods can remain in the container depot until it is time to transfer them to the final destination.

However, the container yard can recover its dues through an auction if the container owner cannot take the cargo due to financial challenges.

This can take around 30 days of non-commitment.

Do I Need to Pay for Insurance on Shipments in a CY?

Normally you won’t need to pay for extra insurance for your goods.

This is because normally, the cargo insurance covers them until their final destination.

How Secure are Container Yards?

Container yards are very secure.

They have monitoring equipment all round the clock.

Any entry into the container yard is thoroughly checked.

Whenever there is a departure, proper checks must be conducted to ensure only authorized persons leave with approved cargo.

There are seals and tracking devices to ensure that all goods are safe within the container yard.

Broken seals are an indication of a container that has been tampered with.

Most CY has CCTV cameras installed around to monitor activities going on.

Moreover, well-trained guards control the gates to ensure that only authorized entry and exit takes place.

Are there Restrictions on Containers Arriving and Departing CY?

Container yards have restrictions on the containers that may get in or leave.

Containers carrying illicit goods can never be allowed inside a container yard.

Other cargos that may be denied entry into a container yard are:

• Any cargo that may be carrying dangerous goods or substances unless they are stored in a properly designed DG block.
• Any container carrying explosives without approval

What are the Operational Hours of Container Yards?

Container yards operate from 8 AM to 5 PM every Monday to Friday.

They open from 8 Am to 12 Pm on Saturdays and are normally closed during the weekends.

How are Containers Delivered to CY?

How you intend to use your container will greatly determine the best delivery option to choose for your container.

You may need to consult your container vendor or agent for advice.

Below are the delivery options that you can choose from:

Tilt-Bed

This is the most popular option for delivering your container.

You can transport either with a tractor-trailer combo or a straight truck.

The trailer will be driven back to the exact place you need your container stored.

This is because once you place the trailer, you may not have the ability to move it again.

The trailer then tips down and a winch will be lowered at the end of the container until it reaches the ground.

The truck will then pull to the front with the winch lowering the other end of the container.

Pros: Once your container arrives, it is slid down exactly where you need it on the ground.

Cons: This method is very expensive compared to other methods.

Although the trucks can easily lift a lightly loaded 20’ container, it may not be possible to do so with a 40’ loaded container.

Flat-Bed Delivery

Trucks that have a long flatbed are able to hold either two 20’ containers or a single 40’ container.

They will use a crane or forklift to lift your container and set it on the truck as the journey starts.

The system will then lift the container off after it arrives at your site.

Pros: Flatbed delivery may prove to be an alternative low-cost method.

This is because your container will be loaded onto a truck that will also carry other cargo.

This is especially key when you are shipping the cargo over a long distance.

Cons: You must ensure that you have equipment for loading and unloading your container.

Chassis Delivery

Chassis is a metal frame that has wheels well designed for carrying containers in a secure manner.

A trailer pulls the chassis.

Shipping lines tend to use chassis together with special forklifts to deliver containers to their customers for offloading as well as loading.

Pros: It is a cheaper way to transport your container.

The truck will easily disconnect from the chassis.

This will give you some more flexibility in case you need more loading time and do not want to keep the driver waiting.

In some cases, this is the only means of delivery that is acceptable to rail lines or ports.

Cons: You must have the means to lift the container off and on the chassis.

Otherwise, you will be required to load the container while still on the chassis.

You may need a crane to lift a 40’ steel container off the chassis.

You must load the container while it stays on the chassis or has some means of lifting the container on and off the chassis.

What is FA Date in Relation to Container Yard?

FA date refers to the first date available for the pick-up of an imported container.

Typically, you enter the date on the terminal system at the end of business hours.

It implies that your cargo has been discharged and is at the terminal.

The cargo has the shipping line and custom releases but not yet ready for pickup.

The FA date will be the following day of business after vessel discharge.

8 AM is the time when the business day starts.

What is Does it mean when CY Issues an OOG Hold?

When a container yard issues an OOG Hold, it means that they require extra handling fees for such a container.

OOG Hold signifies that the standard container dimensions will require special stowage together with special gears when handling it at the terminal.

An out-of-gauge container at the terminal will require an equivalent space of at least six standard containers.

These special handlings require extra charges and are payable through the issue of an OOG Hold.

Do CYs help with Exporting Containers?

Container yards can help exporters in exporting their goods to different countries.

What is the Procedure of Export Containers through CY?

As an exporter, it is your responsibility to take the cargo to the container yard or the container freight station.

You will then file the Shipping Bill among other necessary documents.

The goods must be inspected by the officer in charge of customs before stuffing inside the container before sealing it.

After that, the containers get transported to the gateway port.

At the port, you load them onto the shipping vessel ready for delivery to the destined port.

Can I Import Containers through CY? What is the Procedure?

Yes, it is possible for you to import containers through the Container Yard.

If you intend to import your goods through the container yard, the specific container yard should advise you.

So that your suppliers are able to manifest the containers to that specific container yard.

To import cargo through a container yard, instruct your supplier to manifest the containers to your designated CY.

After landing at the seaport, the cargo will be sorted and transported to your chosen container yard through your forwarding agent.

On arrival at the container yard, the consignment will be transported to the Container Freight Station.

You will file a Bill of Entry and other necessary documents before releasing of the containers.

How do I Export Containers that are to be Loaded at the Supplier’s Premises through CY?

You need to have the empty container delivered to your supplier’s premises if you intend to stuff it with goods there.

Your agent will help you seek permission from the customs authorities to take the container from the yard to the premises.

The permission is vital since the containers are of foreign origin and necessary measures must be taken by taking a guarantee/bond.

The bond will ensure that you take the containers ack to the CY.

It will be necessary to requisition the central excise officers’ services to help in examining the cargo being stuffed.

The officer will also aid in supervising the loading of goods into the container.

The officers will inspect the goods based on the export invoice and other documents before allowing them to be loaded.

Once the loading is complete, the sealing of the container with the central excise seal is done.

The central excise officer will sign the export invoice together with other necessary documents.

He/she will then forward a sample copy and other documents to the customs officers at the container yard.

After receiving the container, shipping bill, and other documents, the officers will verify the seal and allow the exporting to proceed.

There is no inspection of goods as long as the excise seal is intact.

However, there can be a delay if there is evidence that you have tampered with or broken the seal.

This will warrant suspicion on the correct value, quality, or quantity of the goods insider.

There will be a need to re-examination the container before the customs authority allows you to continue with exportation.

What is a Container ID and why is Important in CY?

A container ID is a unique code on the container issued based on international standards.

The code consists of a sequence of letters and numbers.

The unique ID acts as a unique identifier in a container yard.

It helps organize the containers based on goods contained when they should move out or specific owner.

This not only helps in easy access to containers but prevents any misplacement of the containers.

Their likelihood of misplacement is very high if proper identification and organization is not in place.

Can I buy a Shipping Container from a Container Yard (CY)?

Yes, you can buy a shipping container from a container yard near your port.

Simply make your inquiry with the department in charge of selling equipment at the yard.

You will get a good deal buying directly from a container yard than buying from brokers.

What are the Advantages of Container Yard?

There are many advantages to a container yard.

They include:

• The container yards tend to provide some facilities like clearance of customs. They also bring import/export service near the industrial complexes in the mainland away from the seaports.

After the cargo gets clearance,it doesn’t need to go through the customs at the port and will be cleared for export.

• Reduce the overall logistics of empty containers through the provision of consolidation facilities for LCL shipments in the mainland.
• Container yards are able to maintain the importing and exporting costs at competitive rates.This is through the provision of the necessary facilities in the mainland.
• Container depots greatly increase the export business of a country through the construction of feeder infrastructure for ports.
• Container yards come in handy when it comes to creating more space in the port spaces.

The advantages of containerization cannot be fully experienced without a proper network of container yards.

With this, the exporters are able to enjoy exporting cargo via the container yards.

At Tj chinafreight, we will help you in all your freight forwarding needs from China to any global destination.

In case you have any questions about the container yard, feel free to contact Tj chinafreight team.

This guide will cover yet another important freight term – chassis fee.

So if you want to learn more about chassis fee, read this guide.

What is Chassis Fee?

A chassis Fee refers to the amount paid in case your cargo is visiting through truck, that is, after your cargo arrives at an ocean port and it’s being transported via truck to a China warehouse.

Basically, it is a flat rate which varies by trucker and the charge is calculated based totally on the quantity of the cargo.

That extra transportation amount charged is the chassis fee.

What is a Tri-Axle Chassis Fee?

A tri-axle chassis fee is the amount classified if a cargo journeying with the aid of truck is so much heavy.

Generally, a 20′ field above 36,000 lbs and a 40′ box above 44,000 lbs requires a tri-axle chassis.

If the cargo weighs below this, there’s no tri-Axle Chassis Fee charged.

What is Chassis Split Fee?

A chassis Split Fee happens whilst the field isn’t always located within the same location as the chassis.

In this scenario, the trucking agency may also verify a chassis cut upcharge.

Generally this fee takes $50 to $110 – to cover the price of taking the chassis to the box area.

Is Chassis Split Fee the same as Chassis Repo Fee

No.

The Chassis Repo Fee is the amount charged for the cost of transporting the empty containers to the nearest hub for the purpose of reusing.

Also, the Chassis Split Fee is charged for the cost of taking cargos to the boxing area. In this case, the cargo is not empty.

How is Chassis Fee Calculated?

A chassis rate is assessed in case your cargo is touring via truck.

That is, after your shipment arrives at an ocean port it’s being transported via truck to a warehouse.

This is generally a flat price which varies by means of trucker.

The total amount of fee is calculated primarily basing on the extent of the shipment.

This entirely depends on the shipment process and the distance the truck has to cover to the warehouse.

What is the Average Cost of Renting Chassis per Day?

In acquiring the chassis from the brand -new proprietors who sold or are shopping for the chassis from the provider’s ranges among $25 and $30 per day on average.

Those are extensive expenses.

Who charges Chassis Fee?

Fee charged is done via ocean companies, for example at certain ports for using their chassis.

This price is to inspire you.

That is, shippers and truckers to provide their personal chassis for pick-up and transport of ocean containers.

This also applies to the usual chassis pool which is now supplied via a few ports on the U.S. East Coast.

Is Chassis Fee negotiable?

You are allowed to generally negotiate the top charge of the assignment and/or the wide variety of days that chassis is out of port.

However, they hardly ever negotiate the chassis price.

Unlike port fixed offerings, many companies will negotiate with you.

They will allow you to further lessen your costs.

This makes it easier and fair.

How do I reduce my Chassis Rental Fee?

Generally, you could get a chassis for round $35 per day (or $75 in keeping with day if it’s a 3-axle chassis).

Those costs may additionally differ a piece relying on which port your items are kept at.

However, shippers hardly ever take note of how many tons they’re spending on chassis rentals until they get a freight bill.

This can averagely sum to $140-$200 and doesn’t appear too “insignificant”.

When it comes to chassis rentals, it normally goes for five+ days, meaning those small charges stack as much and make a distinction ultimately.

The longer the items are kept the higher the Chassis Rental Fee.

Hence, you can reduce this by picking up your items as earlier as possible.

Also, ship less regularly and ship a fixed volume of commodity at off-peak times to reduce the Chassis fee.

What Factors Influence Chassis Fees?

Various aspects determine the range of the Chassis Fees.

This Factors include;

• The price of fuel – Both maritime and land transport heavily depend on the cost of fuel.

If it is low, the cargo shipment becomes cheaper and truck transportation cost is low as well. When high, the Chassis Fee rises.

• Loyalty of the client – If you as a customer regularly does business with the shipment company.

You are more likely to be charged a lower rate of the Chassis Fee as compared to that who does it once in a while.

• Government policy – The regulation of the transport activities by the government greatly impacts on the Chassis Fees rate.

For instance, the limitation of transportation to a maximum of the given hours makes the Chassis Fees expensive.

• Reputation of the merchant –If you are a well-known merchant who packages the cargo well and within the given time, you might be charged a lower rate of Chassis Fees.

However, those who take more time and does the job badly is charged more

• Insecurities – Issues such as sea piracy and other endangering aspects call for more security and change of routes for the shipping companies.

Leading to a rise of the Chassis Fees eventually.

Will I pay Chassis Fee if I Bring my Own Chassis during Shipping?

Basically, Chassis Fee is charged for the transportation of the cargo by truck.

Therefore, if you bring your own chassis you avoid the high cost of the Chassis Fee.

This is way much convenient rather than waiting for the company’s chassis usage which operates according to the company’s schedule and will.

However, it might not be suitable in cases where fragile objects are being transported.

In such event, you should use the company’s Chassis instead.

This is because each company has the needed equipment to safely transport all types of loads. Including the most fragile ones.

What are Split Pick-up and Split Return and how does it affect Chassis Charges?

Split Pick-up refers to a situation in which the truck picks up a given fraction of the various places and transports to the respective destinations.

Split Return is when the truck comes back for the remaining fraction of the load and transports it to the given destination.

Both of these do raise the Chassis Charge since the truck covers more distance and the fuel consumed is also higher.

This can be avoided by choosing to use a way bigger truck that suits the size of the given load that needs to be transported.

What is ‘Free Day’ in Relation to Chassis?

This generally refers to a day on which the cargo transportation is not charged.

This applies to both the pick-up and returning process.

However, the size and weight of the cargo is limited to a certain amount. Extra size and weight need to be paid for.

On such a day, the deliveries are done free of charge.

This is however draining to the shipping company and is thus not economical.

Is there Free time Included for Chassis?

When it comes to chassis, there is no free time.

Maybe a free day.

The Chassis Fee is calculated from the time the container is picked up till the time it is returned.

All is calculated depending on the distance covered by the truck and size of the load.

Every minute and distance covered is accounted and paid for.

A delay in pick-up and return might also be charged due to the inconveniences caused to the company.

On a free day, which happens once in a while, the customers are lucky to enjoy free pickups and deliveries.

Again, this is limited to the size of the load. Extra wait beyond the given one incurs charges.

Do Intermodal Trucking Quotes include Chassis Fee?

Intermodal Trucking Quotes cater for the transportation of the load via railway transport.

After that the load needs to be transported by trucks on the road to the given destination.

This road transport cost is charged separately.

The Intermodal Trucking Quotes expense is separate because the railway transport sector operates on its own while the road transport sector operates on its own.

The two have costs that are different too.

This is excluded when it comes to free days when the transport cost is not charged on customers.

Either way, if you use the company’s Chassis, they are allowed to pay the total amount of the transport cost once.

Note, the Chassis fee is calculated on its own and then added on the total amount.

Do Chassis Term Leases Protect Against Chassis Fee Spikes during Peak Seasons?

The shipment and trucking companies benefit a lot during on- peak times.

This is not influenced or changed by the Chassis Term Lease.

During the on-peak seasons, the Chassis Fee highly rises because of the high rate of demand in the market.

Chassis Term Leases only ensure that the Chassis Fee is well paid to the right receiver and in time.

It might cover for the average range of the Chassis Fee

What cost Benefits does Using an Asset-Based Carrier Provide as Compared to Using a Non-Asset-Based Carrier?

An asset -based Carrier is way cheaper since the company has their own equipment and works directly with you as the merchant.

The fact that the company already has equipment saves you time too.

To you as a business person, time is money.

On the other hand, the Non -asset-based Carrier is more expensive since it involves brokers who need a little more pay.

It also takes much time to access the Chassis.

In addition, the truck found might not be favorable to transport the given goods.

It might be way smaller than the size of the load.

This will incur a lot of unrealistic charges since the track has to make many laps.

You can however cut the cost if you used an Asset-based carrier and was provided with a bigger and convenient truck instead.

How can I Pay my Chassis Fees?

Chassis Fee is paid to the shipment company involved. Each company has its own payment procedure and method.

Payment can be done through the till or to the account given by the company.

You should always alias with the company before making payment to avoid confusion or even losing cash to scammers.

Confirming with the company before making payment ensures security of the goods too.

It proves that you have received your goods safely and in good condition.

Will I still pay Usage Fees if I Cancel my Chassis Booking?

Chassis Fee calculation starts from the time the container is picked until it is returned.

It is only paid for after the load is transported to the given destination.

Therefore, as long as transportation has not occurred, nothing is paid for.

In cases where the delay was way much over time, you might be required to pay some fee for keeping them waiting.

This might be because of the inconvenience one has caused the company.

The Chassis in My Possession has been Impounded; Will it Affect the Total Chassis Fees I Am to Pay?

The time the you spend while in possession of the Chassis reflects the total charge of the Chassis Fee to be paid at the end.

However, in cases where the chassis is impounded, the company might be responsible for it.

This only happens if the problem is with the truck and not you as the customer.

The company should be responsible for such issues.

It is the company’s role to ensure the customer receives the load safely.

Does Chassis Fees Include Liability costs?

The Chassis Fee caters for the whole transportation process.

Liability issues might however call for additional costs.

It depends with weight and impact of the issue at hand.

If the liability is your fault such as overage and other illegal actions, you are totally responsible for these actions.

And will also pay for the over time charges.

What are the Possible Fees Involved with Late Chassis Pick-up or Return?

Since the Chassis Fee is calculated from the time the container is picked to the time it is returned.

A delay in pick-up or return increases the total cost of the fee charged.

If you delay to pick up your load, your rental Chassis Fee definitely increases as well.

To avoid this, you should pick up the load on time.

Late Chassis pick-up or return might also lead to discontinuation of various customer favors such as low Chassis Fee charge due to customer loyalty and reputation.

You might henceforth be charged normally or even higher because they stopped being loyal customers after all.

Is it Illegal to overage for Chassis?

An additional amount of weight might be added to the chassis more than the required one.

This should not be too much since overloading is prohibited.

In cases of overage, legal actions might be taken.

It is advisable for you to load the Chassis only with the required maximum weight.

If the load is too big, you have a choice of using a larger container or carrier that has more space and accommodates a bigger load.

If the truck is small, then the load transportation process can be done in bits.

It is better to pay more Chassis Fee than to face legal confrontation by the law.

For example non-adherence to transportation rules and regulations.

Can I avoid Chassis Fees?

Yes. If you bring your own chassis, then you are not charged.

In this case, you only pay for the shipment process.

This is easier as you simply pick up your goods from the company once they arrive.

Alternatively, you can depend on the company for transportation where you have to wait because the company does it depending its own schedule and operations.

If you use the company’s chassis then you must pay for the Chassis Fee.

In addition, if you opt to use a Non-asset-based carrier, you are more prone to paying more Chassis Fee because a broker must be involved.

Should I Include Chassis Fee in Total Landed Cost?

If you deal directly with the company, you can include the Chassis Fee in Total Landed cost.

This is because you use the company’s Chassis for transportation means.

You can therefore pay the total cost once together.

But if you have your own Chassis or using a broker then you should not include it at all.

However, you always have a choice of paying both the Chassis Fee separately in the Landing Cost.

This might be appropriate if there is a delay in picking up your load.

Are there any Accessorial Charges Involved in Chassis Usage?

This entirely depends if you are dealing with the Non-asset -based carrier or asset-based carrier.

In asset- based carrier, accessorial charges are avoided since the company has its own equipment.

They deal directly with you, unlike in Non-asset based scenarios where you have to pay the broker to access the Chassis.

In addition, you might be required to pay more charges since brokers usually do not have their own equipment.

This is way much expensive to the customer or merchant.

I hope this guide has clarified everything you need to know about Chassis fee.

However, in case you have any question, feel free to ask us.

Tj chinafreight will help you with all your freight forwarding services.

In today’s guide, I will answer all questions regarding yet another important freight term called countervailing duties.

So if you want to learn more about countervailing duties, read this guide.

What are Countervailing Duties?

Countervailing duties (CVD) is a form of import duty imposed by the government so as to protect its domestic manufacturers/producers.

By doing this, the government is able to counter the negative impacts brought about by the import subsidies.

This way they make their products cheaper and are able to export to other countries at competitive prices.

Who Imposes Countervailing Duty?

Countervailing duties are import taxes on imported goods set by the International Trade Administration’s (ITA) Commerce department.

The importing country is able to protect its locally produced goods from competitive prices.

They eliminate and nullify the low-price advantage enjoyed by imported products once it is exempted from tax in their manufacturing country.

ITA is responsible for the calculation of countervailing duty rates as well as establishing the scope of orders for the same.

It is also responsible for enforcement and compliance with the set orders.

Customs and border protection enforces decisions made by the ITA and collects the CVD that have been assessed on all imported goods.

When can Countervailing Duty be Imposed?

Countervailing duty will be imposed once importing country feels that price of locally produced commodities isn’t competitive enough with those being imported.

The government however cannot impose the countervailing duty based on price difference alone.

It must be able to prove that the imported goods are cheaper because they are being subsidized from their country of origin.

Once this is evident, the countervailing duty will then be imposed as per the guidelines set by the World Trade Organization.

What is Subsidization?

Subsidization is the act of subsidizing goods done by the government or any other organization.

When subsidization occurs, the prices of commodities are affected by a decrease in price.

There are many reasons why the government may choose to adopt subsidization.

Some of the subsidization measures are mostly taken in developing countries to cover commodities such as food, electricity, water and education.

Subsidization may also be done to protect local manufacturers from unfair competition from imported products that may be enjoying better manufacturing terms.

Once that is done, it means that the prices of locally produced goods will become cheaper compared to imports.

Are all Subsidies Countervailable?

Not all subsidies will be countervailable.

For a subsidy to be countervailable, it must be specific.

A countervailable subsidy must include the government’s financial contribution.

Government support must confer benefit that is very specific to a certain type of industry, enterprise or region in the country.

What is the Purpose of Countervailing Duty Laws in International Trade?

The purpose of Countervailing Duty is to offset the value of subsidization to avoid its misuse.

Countervailing Duty Laws have been put in place to ensure that unfair trade policies are not introduced.

They are created to also fix any disputes that may arise from the introduction of countervailing duties by different countries.

It also seeks to ensure that developing countries are given room for growth without strict policies.

Which Countries have Countervailing Duties?

Many countries across the world have countervailing duties. Importing countries are the ones that impose countervailing duties on the goods entering their market.

This measure may be seen more in developing countries which do not enjoy a lot of benefits in their products like developed countries.

They do this in a bid to try and boost their manufacturing sector and protect it from exploitation by incoming foreign goods.

Why do Countries Impose Countervailing Duties on Imports?

The purpose of countervailing duties on imports is to protect their domestic industry from getting a material injury.

This is the injury caused by the subsidization of imported commodities from their countries of origin.

For a country to be competitive in the international market, it should be able to offer good products and at affordable prices.

This may not however be achievable when other countries are having low costs of production compared to another country.

To compete, the government may subsidize production costs or other fees that may be pushing price above-average global market price.

Once this is done, the producers or manufacturers are able to export their goods at a cheaper price than other countries.

When these products are exported to other producing countries, they may slow down the sales of locally manufactured products in those countries.

This may cause adverse effects on the economy of the importing country.

This may include collapsing of industries due to lack of market as well as unemployment caused by layoffs due to low sales.

To prevent these adverse effects, the importing country will conduct research on the subsidization of the product.

It then adds the same subsidy on the product which will be known as a countervailing subsidy.

Without countervailing duties, some countries especially developing countries may not be able to grow.

This is due to cheaper imports that block the locally produced goods from selling.

To prevent these adverse effects, the importing country will conduct research on the subsidization of the product.

Then, add the same subsidy on the product which will be known as a countervailing subsidy.

Without countervailing duties, some countries especially developing countries may not be able to grow.

This is as a result of cheaper imports that block the locally produced goods from selling.

How do Countervailing Duties Work?

Countervailing duties normally work through an increase in price for a given commodity.

The commodity’s price is believed to have been lowered by the producing country through subsidies making it sell at a cheaper price.

The cheap price may mean lower sales for the locally produced goods.

Therefore, government can therefore carry out the subsidy investigation before filing a countervailing duty petition.

The countervailing duty petition can be filed by the affected companies as well provided there is proof of injury.

The countervailing duty, therefore, seeks to establish a level playing ground where products can compete fairly based on the price.

Without countervailing duties, local industries may collapse due to a lack of market for their products.

What is the Difference between Countervailing Duties and Antidumping Duties?

Antidumping duties are imposed when a government realizes that some foreign suppliers are selling their goods at unfair market price.

It is considered dumping when the product is sold at a lower price compared to that of the exporter’s home country.

Moreover, it could even be sold lower than its actual cost of productions.

To issue anti-dumping duty, there must be proof that the product has a harmful effect on another local company in importing country.

The duty cannot however be put at any figure.

The amount is calculated so as to offset the dumping margins and prevent the dumping from happening.

Countervailing duties on the other hand applies when the foreign government offers assistance to their local industries or provides subsidies.

This can be given in form of tax exemptions, loans at low rates as well as indirect payments.

This government aid enables manufacturers/suppliers to sell their goods at affordable prices in comparison to domestic industries of exporting country.

This kind of government assistance enables their manufacturers and suppliers to export and sell their goods at less and affordable prices.

This is compared to the domestic industries of the exporting country.

The International Trade Commission conducts investigations so as to assess amount of subsidy offered by their government before imposing countervailing duty.

Which Products are Currently Subject to Countervailing Duty?

Some of the most common items that are subjected to countervailing duties include but are not limited to:

• Plastic Bags
• Wooden Furniture
• Steel
• Household Supplies such as Tissue Paper.

How do you Calculate Countervailing Duty?

Countervailing duty cannot be placed at any general figure.

There must be proof of an existing subsidy on the product from the producing country’s government.

From this subsidy, the countervailing duty will be calculated.

The duty must be the same as the subsidy that is being enjoyed by the product.

The countervailing duty should not come in to take advantage and create another unfair price competition from imported goods.

What are Countervailing Measures and Subsidies?

These are measures that are set by the World Trade Organization that seeks to discipline the application of subsidies.

The measures also seek to regulate the actions taken by countries to counter the effects arising from subsidies.

A country may use the dispute-settlement procedure under the WTO to seek withdrawal of a subsidy.

Moreover, it can seek removal of the adverse effects brought by the same.

The country may also launch its independent investigation and charge extra duty on the subsidized goods.

How are Countervailing Duty Orders Imposed?

The countervailing duty order is imposed by having the department of commerce inform the bureau in charge of Customs and Border Protection.

The bureau will assess the countervailing duties on the imports for the product in order to offset the detected unfair trade practice.

How can you Find the List of Products Covered by Countervailing Orders?

The Automated Commercial Environment has modernized trade processing on all trade capabilities including exports and imports as well as Partner Government Agencies.

Through ACE, you can find a comprehensive guide on every case of Countervailing Duties.

The International Trade Centre (ITC) also publishes a comprehensive list of countervailing duty case.

The list of products subjected to the countervailing Duties can also be found on the International Trade Administration’s (ITA) website. This list is comprehensive and list products based on their countries of origin.

What is the Difference Between Countervailing Duty and Import Duty?

Import duty is the tax that is imposed on imported goods and some exports by the authorities of a given country.

Conversely, countervailing duty is the tax imposed on imported goods to offset the subsidization benefits they enjoy from their countries of origin.

The amount of countervailing duty charged is dependent on the amount of subsidy offered to the product by the government.

The import duty on the other hand is based on the value of the imported good.

The import duty may sometimes be referred to as import tariff, tariff, customs duty or import tax depending on the context.

Are there Exemptions to Countervailing Duty?

There may be exemptions on the application of a countervailing duty that are aimed at safeguarding the exporting country.

Products exported from developing countries are safeguarded if has little or no effect on the developed country’s economy.

Also, developing country could be exempted from CVD when it supplies less than 3 percent of a given product.

The product should have less than 9 percent market share.

If the members of a developing country supply less than 3% of a given product with a collective share of less than 9% market share, they may be exempted from countervailing duties.

What are the Acceptable Payment Methods for Countervailing Duty?

The U.S Customs and Border Protection (CBP) will accept only payment methods that have been authorized by the Department of Treasury.

The payment methods include credit cards as used in payment of other fees, taxes, non-commercial entry duties as well as other charges.

Is there a Difference Between Countervailing Duty and Safeguard Tariff?

Safeguard tariffs is also known as safeguard duty or safeguard quota.

It is imposed if there is a sudden increase in imports posing a threat to the local industries.

Safeguard tariffs are normally set at a level similar to the average imports for the last 3 years.

This can be taken as a temporary measure put in place to shield domestic industries from foreign exporters.

Unlike countervailing duty which only focuses on products of one or several countries, safeguard tariffs are concerned with all the imports.

For European unions, for example, the countervailing tariff may include imports from third world countries.

What is Countervailing Duty Petition?

A countervailing duty petition is a request made for consideration of a countervailing duty.

One must provide a reasonable basis for authority to believe that indeed subsidization of the product in question is happening.

In order for a countervailing duty petition to be successful, you must provide a reasonable basis for the authority to suspect.

Or believe that indeed subsidization of the product in question is happening.

You must prove that the local industries are suffering or has suffered a material injury.

There must be a clear link between suffering and subsidization.

Who can Submit Countervailing Duty Petition during International Trade?

A countervailing duty petition can be filed by any local industry that has been affected.

Any company can file a countervailing duty petition irrespective of the number of players in the affected sector.

The statute will define specific criteria to be followed by various interested parties that may want to file a petition.

Those filing the countervailing duty petition must prove that they have the support of the industry as per the statutory criteria.

How do you file a Countervailing Duty Petition?

All petitions must be filed simultaneously at the International Trade and the Department of Commerce.

The draft petitions must also be sent to the Petition Counseling Office in Enforcement and Compliance’s Office of Policy.

Is Countervailing Duty and Additional Excise Duty the same?

Yes, this because the countervailing duty is an additional import duty imposed on imported goods by the importing country.

Is Countervailing Duties Tariff or Non-tariff Barrier?

Non-tariff barriers are trade used to restrict the import of goods through other means apart from the tariffs.

As such, countervailing duties are considered non-tariff barriers.

Other non-tariff barriers include quotas, embargoes, licenses and import deposits.

Non-tariff barriers are often used by developed countries to control trade between them and other countries.

Can you avoid paying Countervailing Duties?

Countervailing duties are unavoidable since they are charged at the port of entry by the Customs and Border Protection.

They are put as additional import duty which means that the product must be cleared before being granted entry.

It is also illegal to evade payment of duties and taxes and nobody would want to fall into trouble with the authorities.

Always ensure that the payments are made correctly as per the requirements.

As a leading freight forwarder in China, Tj chinafreight will help you ship from China at affordable rates.

Contact us today for any inquiries when importing from China.