/ By che / China Freight News

Importing from China to Uganda: The Ultimate Guide

If you’re importing from China to Uganda, then this is a must-read guide for you.

Because it covers all the basic and fundamental aspects of importing from China to Uganda – from top imports, requirements, customs regulations, shipping process, and many more.

By the end of this guide, you’ll definitely be an expert in importing from China to any city in Uganda.

Importing from Guangzhou to Uganda

Guangzhou is a major manufacturing hub in China.
The city has opened doors for many Ugandan traders dealing in Chinese merchandise.

The city, as most Ugandan traders confess, offers cheap product prices as well as a variety of product alternatives.

This is one of the primary reasons for the influx of Africans in Guangzhou, especially Dengfeng that’s also known as Little Africa.
In other words, Guangzhou is an excellent source for made in China products to retail in Uganda.

The reasons to import from Guangzhou to Uganda

The reasons to import from this city are pretty clear.

One, it is because product prices here are cheap and there is also a variety of product alternatives.

Two, finding products is easy as there are numerous wholesale markets situated next to factories in the city.

And last but not least, the infrastructure in Guangzhou is tremendous.

The road network is superb.

There is also a major seaport as well as several airports from which you can easily and conveniently ship your imports.

Restricted Imports from China to Uganda

These are products whose importation requires authorization from their respective Ugandan authorities.

The restricted products include; live animals, medication, endangered species, hunting weapons, and used cars.

So for instance, if you want to import a live animal/s, you’ll need to have a health certificate along with complete validations and inoculations.

The same applies to hunt weapons; you will have to have authorization from the ministry of interior.

Prohibited Imports in Uganda from China

These are products that are totally prohibited for importation.

In other words, you can’t bring in these products from China or any other country to Uganda.

These products include narcotics, pornography, counterfeit items, henna, explosive material, cultural artifacts and other material of cultural importance, palm tree and any other products thereof.

Also, cosmetic products containing hydroquinone and mercury,

Now for these products, the Ugandan authorities do not allow their importation whatsoever.

They are wholly banned for import into Uganda.

But then, restrictions and prohibitions on product importation are not all there is to the Ugandan custom import regulations.

There is more.

Now, let’s go straight to the main subject of this guide.

Chapter 1: Main Uganda Imports from China

To begin with, Uganda imports a lot of merchandise from China, about 80% of its imports are from China.

As I’ve already mentioned, Chinese merchandise is cheaper and readily available.

This makes it easy for importers to avail a variety of goods to customers in Uganda at more competitive retail prices.

Among the goods that thrive in the Ugandan market include;

  • Textiles and apparel
  • Electrical appliances
  • Toys
  • Petroleum products
  • Vehicles and their parts
  • Foodstuffs such as beverages and oils
  • machinery
  • manufacturing equipment
  • building materials such as ceramic tiles
  • Pharmaceuticals, etc.

Understand that you don’t have to be a big brand to import from China.

With as little as $300 you can quickly get goods from China and resell for a profit in Uganda.

This is because China, unlike many other countries, caters to everyone in the market.

If you serve high-end clients, you can get high-quality merchandise for them from China.

Similarly, if you cater to the low-income earners, China has just the right products for your customers.

So give it a go and don’t be afraid of how much is in your pocket.

Also, carefully study your target market before you decide on a product to import

Chapter 2: Uganda Import Requirements

Like most countries, the Ugandan government strictly regulates the importation of products from other countries.

For instance, the authorities have regulations governing what can or cannot pass Ugandan borders as imports.

These include restrictions and prohibitions on product imports into the country, and they are;

· Uganda Quality Standards Compliance – What Uganda National Bureau of Standards Requires

As I said to you earlier, the market for made-in-China imports in Uganda is rapidly expanding.

Uganda merely is a thriving market for imported products.

Because of this, the Uganda National Bureau of Standards (UNBS) has put forth stringent measures to ensure quality compliance.

Some of these measures and guidelines are:

  • Importers must have a certificate of conformity when importing regulated products
  • Physical inspection of regulated goods before the admission of entry
  • Before admission of entry, UNBS requires that you repackage your imports first
  • All importers are required to use the services of a licensed clearing agent

Other than this, UNBS has also put forth standards that product imports must comply with.

These include measures on design, material, performance, manufacturing, testing, packaging and labeling.

One most crucial regulation on imports to Uganda as I had already mentioned is product inspection.

Here, inspection of products must be done thoroughly before the admission of the imports into the country.

This is done to ensure the health safety of the Ugandan consumers and to protect the environment against dangerous and substandard products.

UNBS also mandates the inspection as a measure to ensure compliance with the set standards and regulations.

The inspection, note, is not just done on the products.

UNBS conducts both document checks as well as physical inspection of products upon their arrival at entry points.

Also note that depending on the value and nature of your imports, the law requires that they are subject to PVoC, undergo destination inspection or both.

Pre-Export Verification of Conformity (PVoC), is an inspection and verification program carried out on goods by appointed inspection agents in the origin country.

Here, imports with an aFoB value of above USD 2000 and are covered by compulsory standards are subject to PVoC.

In this case, you’ll need to present a certificate of conformity at the entry point in Uganda.

PVoC also applies to used vehicle importation.

In this case, the importer is also required to present a certificate of roadworthiness to obtain clearance for entry.

Confusing?

Don’t worry.

You can find all these information in great detail on the UNBS website.

For now, let’s look at the paperwork needed to import to Uganda.

· Documents Needed in Clearance and Forwarding in Uganda

Honestly, the processing of importing from China to Uganda can be hectic.

And, this is especially if you lack a clear understanding of the paperwork needed and procedures.

So here are the documents you’ll need to import goods into the country legally.

  • Suppliers invoice
  • Packing list
  • Air waybill ( for imports by air)
  • Commercial invoice
  • Freight invoice
  • Uganda revenue authority for 1 for motor vehicles
  • Road transit customs document (commonly known as C63) prepared at seaport and entry port in Uganda
  • Certificate of origin
  • Railway consignment note (for import by rail)
  • Bill of lading
  • Trade license
  • Release order certificate of compliance
  • Import declaration form
  • Declaration of customs value form
  • Any other relevant documents

Make sure that you have the all the required documents for your imports.

Otherwise, you will have a hard time getting clearance for your goods.

Chapter 3: Importing from Different Cities in China to Uganda

You should know that initially, Uganda wasn’t importing much from China.

It is until the early 2000s that Ugandan importers started exploring China for goods that can resell at a good profit locally.

Now, 80% of consumer and personal care goods sold in Uganda are made-in-China products.

I believe that you know most of the reasons for this.

Majorly, however, it is because of the ease in importing from China.

Yes!

Importing from China to Uganda is no hustle.

One, it is because China has excellent infrastructures for exports and imports.

And secondly, the Ugandan import authorities have streamlined their processes to ensure the smooth importation of goods into the country.

No matter the city you’re importing from in China, there are a million ways to do it.

So depending on the product you’re importing, here are some popular cities to source your products from in China.

· Importing from Shenzhen to Uganda

Like Guangzhou, Shenzhen is also a significant manufacturing hub in China.

It is in fact known as China’s manufacturing hub.

There are thousands of factories in Shenzhen producing a variety of goods from shoes, kids and women clothing, electronics, etc.

The city simply is a scene of bustling trade with hundreds of retail and wholesale shops spread across entire streets.

Note that Shenzhen is located in southeastern China, it is a major city in Guangdong province.

The city is a modern metropolis that links HongKong to mainlandChina.

This proximity to HongKong has Shenzhen at the center of global trade.

The city benefits from the Pearl River, the third longest in China that runs through Guangdong.

· Importing from Shanghai to Uganda

Shanghai, the largest city in China, is located on the eastern coast of China.

It sits on both banks of the Huangpu River near where the Yangtze (Chang) River empties into the East China Sea.

This is why it is known as Shanghai which means ‘on the sea.’

Geography aside, Shanghai is China’sleading commercial, financial and manufacturing center.

Here, you can find a variety of goods ranging from iron and steel, machinery, electronics, textiles, pharmaceutical and a variety of consumer goods, etc.

The city, note, is also one of the county’s largest printing and publishing centers.

On shipping, Shanghai is home to the largest container shipping port in China.

The ports annual container throughput surpasses all of China’s other ports.

As at this moment, the port of Shanghai has 145 berths, 75 of which can serve vessels of over 10,000 tons.

This port also operates more than 20 major international shipping lines among them lines shipping from China to Uganda.

Shipping by air from Shanghai is also a breeze.

The city hosts a large international airport that is strategically located about 40km away from the city center.

This airport, please note, is the main aviation hub of China.

It is also the central Asian Pacific hub for UPS and DHL airlines.

· Buying from Yiwu to Entebbe and Kampala in Uganda

Yiwu is a remarkable city in China.

The city is regarded as the biggest commodity market in the world where you can buy anything that you want.

This city houses lots of wholesale shops, over 40,000 in total and a majority of the suppliers here are wholesalers.

Also, most goods that you can buy cheaply in Yiwu are small value products such as fashion accessories, shoes, etc.

So if you want to buy directly from manufacturers, you may have to consider going to Shenzhen or Guangzhou.

Most suppliers in Yiwu are just wholesaler sourcing goods from Shenzhen and Guangzhou.

Yiwu is an excellent source for those of you looking to import small commodities with many varieties in small quantities.

The good thing about importing from Yiwu is that you can consolidate all your goods in place.

You don’t have to go through the hassles of commuting, sourcing, and shipping as occasions with most other cities in China.

Please note:

Yiwu is a huge shopping center with very many shops.

It is tough to patronize all the shops by yourself and on time to meet your supply chain demands.

As such, it advisable that new-to China importers seek the services of a professional and reliable import agent.

The agent will help source the right products for you in Yiwu and also help you ship the products successfully to Uganda.

Well, these are main cities to import from China.

As you can see, Shenzhen, Guangzhou,andShanghai are manufacturing cities.

They are best for those looking to import goods in large quantities.

Yiwu, on the other hand, is a wholesale and retail center.

It is an excellent source for small commodities as mentioned above.

Remember that importing from any of these cities has its pros and cons.

To ensure success, however, observe the following tips;

  • Only choose credible traders,e. for Yiwu importers, choose traders with good credit badges. (They always hang these in front of their shops.
  • Always carry out quality inspections on goods to ensure that they meet the set standards for importation.
  • Use a China agent whenever you feel the need to
  • The language barrier may be a limitation especially when sourcing from Yiwu. So either uses a translator or seek out traders that are familiar with the English language.

That is all.

Let’s now factor in the costs of importing from China to Uganda.

Chapter 4: Uganda Custom Tariff Guide – How much will You Pay for Imports from China?

Cost is often something importers have a hard time dealing with when importing from China.

You see,

is quite broad.

Apart from the cost of the product, you’re importing; there are others that you’ll have to incur that make up the total cost of importation.

These include freight charges, surcharges and mostly taxes and duties.

Ultimately, if you’re importing for reselling purposes, this is something you’ll have to consider.

At least then, you’ll be able to estimate the landed cost of your product and know if you’ll be able to make a profit or not.

So then, what are the costs of importing from China to Uganda?

Let’s find out below.

1. Product price

Well, first there is the price of the product.

This is the amount you pay to a product supplier for goods you order.

If you’re trying to calculate the landed cost of a product, the product price is the unit price of the time you’re importing.

2. Freight cost

Freight cost also known as shipping cost is the transportation cost of the goods from China to Uganda.

This cost includes inland transportation and carrier costs from loading port in China to the destination port.

It also includes ports fees and other surcharges such as fuel surcharge.

3. Taxes and duties

So there is the cost of cargo, transportation cost and then the biggest markup which is the import taxes.

You see, it is essential to understand the taxes and duties that apply to your goods when importing to Uganda.

Import taxes in Uganda depends on the VAT of the product as well as the product category as per the harmonized system tariff.

Taxation also depends on the declared value of the imports, the CIF value.

Uganda, note, is a member of the East African Community.

As such, it adopts the EAC duty structure that is three-tiered.

The duty structure is as follows;

Finished products are subjected to an import duty of 25%.

Intermediate products face a 10% levy.

This is on top of a VAT tax of 18% that customs charges on these goods and a 6% withholding tax that’s reclaimable.

According to Ugandan customs taxes, raw materials can enter the country duty-free, apart from foodstuffs.

You can also import capital goods to Uganda duty-free.

The government also charges an additional 1.5% infrastructure tax on all imports.

This is done to raise funds for railway infrastructure development.

Also, certain products imported to Uganda, those deemed as ‘sensitive’ are subject to higher tariffs.

This is done as a means to protect the local industry.

*Sensitive products are those that compete with the local industries

All this in an addition to other small levies that customs levies on imported products.

So note that for customs to process your clearance, you will have to pay the requisite tariff and show proof to customs.

Chapter 5: How to Find Best Selling Imports from China to Uganda

Most Ugandan traders find suppliers for Chinese merchandise on the internet.

While there are other means of locating suppliers, the internet remains the greatest of them all- no matter the number of goods you want to import.

But why the internet?

Well, first, visiting China personally is quite costly.

For a first time importer, the cost of air ticket, accommodation, etc. can be overwhelming.

Secondly, finding a good supplier without the right network is a tough task, unless you’re attending a fair.

And lastly, there are lots of middlemen in China that will want to exploit your naivety, especially if you’re a new-to-China importer.

So to avoid all this, most traders prefer going the internet way.

And so might you after going through this chapter with me.

· Alibaba

Searching for Chinese suppliers on Alibaba is always the first choice for most Ugandan traders.

The problem with Alibaba suppliers is that their MOQ is usually high.

So if you’re looking to source products with a less than USD 400 value, finding a willing supplier on Alibaba can be a problem.

On the bright side, you can find anything and everything on Alibaba.

Besides, you get to see the product picture and verify the credibility of suppliers before you make an order on Alibaba.

If you want to learn how to source from Alibaba, please check out this article: Importing from China: The Definitive Guide.

It has great detail of information including a detailed step by step process on sourcing and verifying suppliers on Alibaba.

· AliExpress

Aliexpress is an excellent alternative for traders who can’t meet the MOQ demands of suppliers on Alibaba.

Suppliers on this site offer a variety of goods at relatively low prices, and you can order as little as one item per product.

The site’s interface is very user-friendly just like Alibaba’s.

So navigating through it to find supplier isn’t a hard task.

· DHgate

Apart from Aliexpress, you can also consider finding suppliers on DHgate.

This is another site that tends to small quantity traders importing from China.

So again, if Alibaba’s MOQ is hard for you to reach, try DHgate.

Also, if you’re not too impressed with the prices and demands of suppliers on Aliexpress, DH gate is a great alternative.

· Made in China

Made in china.com works pretty similarly like AliExpress and DHgate.

The site tends to both retailers and small quantity wholesalers whose buying quantity is between Alibaba and AliExpress.

However, unlike Alibaba, AliExpress and DH gate, made-in-China focuses more on industrial and construction products.

It offers very little consumer goods.

Products that you can source from made-in-China.com include;

  • Machinery
  • Electronics
  • Industrial equipment
  • Furniture
  • Sporting goods
  • Auto and mc products
  • Construction etc.

· Sourcing Agents

Have you had bad experiences when trying to find Chinese suppliers on your own?

Or simply need help sourcing for products?

Well, sourcing agents can be a great help to you.

These agents are there to solve all your problems on finding suppliers and sourcing for products in China.

So instead of searching on the internet, you can opt to use a China sourcing agent.

They offer a wide range of services such as purchasing, quality controlling, products repacking and transportation.

By hiring an agent, you won’t have to do anything.

He/she will send purchase staff to work for you.

The good thing is that they are professional.

They know about the products that you want to buy, and they will even help you to bargain the product prices.

All you need to do is tell the agent the kind of products that you want and your price limit.

The rest is theirs to figure out and work on.

· China trade fairs

For those that prefer finding suppliers personally, visiting China trade fairs is a great option.

China holds some great fairs like the canton fair, which is quite popular among traders from Africa.

Here, you’ll get the opportunity to meet a variety of suppliers and even get to see product samples up close.

· Contacting factories directly

Last but not least, there is the option of contacting factories directly.

How do you do this?

Well first, you need to know the product you want to import.

Then, find possible manufacturers for the product.

You can search on the internet for these.

After that, take several contacts manufacturers and contact them with inquiries relating to what you want.

You’ll then compare the responses of those manufacturers that reply and choose the one that’s most suitable for you.

It’s that simple.

Chapter 6: Options of Shipping from China to Uganda

When importing from China to Uganda, you’ll realize that the shipping stage is the most challenging.

This is because of the too many shipping options available, costs, paperwork, and other logistics processes.

But then, regardless of the challenges, goods have to get to your destination in Uganda, whichever way.

Lucky for you, there are several options to transport imports from China to Uganda.

Depending on your patience, budget, type, and quantity of imports, you have the following options to consider;

i. Air freight

Air shipping from China to Uganda is predominant among small quantity traders, those shipping imports below 300kg.

If you’re shipping cargoes above 300kg, you may have to consider other shipping options as airfreight will be costly.

Also, you can’t ship liquid goods, power, and battery products among other hazardous goods by air.

So if you’re dealing in this kind of merchandise, air freight might not be for you.

In other words, air shipping is a fast and convenient way of shipping light and small volume goods.

ii. Sea freight

This is by far the most convenient and cost-effective method of international shipping.

Ocean shipping as you can also call it allows you to ship goods of any size, form or shape.

Besides, the cost of sea shipping is pretty affordable, and you have several options when it comes to shipping modes.

The only downside to sea shipping is the transit time.

Well, ships are quite slow, you may have to wait up to 2 months to receive your shipment from China to Uganda by sea.

Note that this is because Uganda is a landlocked country.

Therefore, goods will be shipped by sea to the port of Mombasa Kenya or Dar es Salaam, Tanzania.

After that, the products will be transported by other means,i.e. road or air to Uganda and its hither lands.

So the delivery will take longer than usual from China to Uganda.

During this wait time, however, you can choose to track the shipment to ensure that transportation is smooth and delivery is on schedule.

iii. Express shipping

Express shipping option falls under air freight.

The thing with express shipping is that it is faster than standard air shipping.

Express shipping to Uganda takes 1-3 days while delivery by standard air freight means can take an average of 3-7 days.

Also, with express shipping, the cost of shipping is relatively high compared to standard air freight shipping.

This is why it is advisable that you consider it for very small and light cargoes such as product samples, valuable docum

/ By che / China Freight News

DDU Shipping: The Complete Guide

DDU, means Delivery Duty Unpaid, whether your supplier is in Shanghai, Shenzhen, Guangzhou or any other place in China, you can just wait for your goods at home, but only one thing you need to take care, you need to pay the duty and VAT ( if your country has the VAT, normally USA has no VAT).

Note: If you use DDU shipping terms, You MUST use your OWN freight forwarder, because your goods are in your own hand. But normally your supplier will not let you use your own forwarder if you are under DDU shipping,  you’d better use EXW or FOB shipping terms.

You can learn more about DDU shipping from the below guide.

What does DDU mean in shipping terms?

The term DDU can be deciphered as Delivery Duty Unpaid.

DDU means that the seller meets all costs except taxes and duties of importing country.

In the case of DDU, the cost of goods includes all delivery expenses to the buyer’s door.

When title transfer takes place under DDU Incoterms?

None of the Incoterms covers title transfer and ownership fact.

The only thing that transfers under DDU Incoterms is the responsibility for products.

Does DDU Incoterms cover revenue recognition?

Remember, Incoterms are not written for revenue recognition and the ICC (The International Chamber of Commerce) guide specifically says that’s not what they do.

Keep in mind that Incoterms cover the supply chain delivery, transfer of risk and very little else.

How are risks reparated between parties signed for DDU Incoterms?

Under DDU terms, the seller has to provide you goods needed to be cleared in import on board of some vessel at your country.

This is the place where all the risks of loss and damage to goods transfer from the seller to the buyer.

So, after your products were delivered to the named port of destination and are ready for import customs clearance, you will be responsible to carry all risks connected with their loss.

Keep reading:

What is DDU (delivery duty unpaid)?

DDU is commonly known as “Delivery Duty Unpaid” and has a considerable impact on the responsibilities of the seller.

For you the buyer, this shipping contract bears very minimal responsibilities.

Now, DDU shipping contracts define that a seller delivers goods to the buyer’s designated destination.

From this point onwards, the buyer becomes responsible for costs including transportation to final destination and insurance.

Everything prior is the seller’s responsibility except import processes.

Here, the buyer must bear the “taxes and fees” and the costs and risks caused by the failure to timely import and export goods.

This can, however, be negotiated so that the seller also goes through import formalities.

The negotiation can also include the seller bearing the costs and risk incurred, as well as the fees that should be paid when the goods are imported.

Note that whatever you agree upon should be stated clearly in the sales contract.

Important note:

The incoterm DDU applies to all modes of transport.

Nonetheless, when the goods are delivered on board or at the destination port, the term DES or DEQ should be used.

Also, the DDU is a part of the initial set of incoterms known as Incoterms 2000.

In 2010, however, the international chamber of commerce made some changes to these terms.

Here, among others, the term DDU was tweaked to include the named destination place.

So currently, the official term that replaces DDU shipping is DAP “delivered at the place.”

In the contract, the term DAP is followed by the designated destination, i.e., DAP: Port of Memphis, Tennessee.

With that understanding, let’s now look at the specific obligations of the seller in DDU shipping.

Seller Obligations in DDU Shipping

As I said, DDU shipping has a huge impact on the responsibilities of the seller.

These are:

1. Provide goods as agreed in the contract

The seller must provide goods and commercial invoices or its equivalent in soft copy as per the terms of the contact.

He/she should also provide any other documents that the contract may require to ascertain the goods compliance with the contract.

2. Licenses and permits

The seller must bear the risks and expenses of obtaining the right licenses and other export documents.

He/she must also handle all customs formalities required for the export of goods and transit through countries where customs formalities are necessary.

3. Transportation

The seller must bear all the risks and costs of transporting the goods from origin country to the designated destination.

If the buyer has not given a named place, the seller is free to choose a suitable destination to which he/she will deliver the goods.

4. Delivery of goods

The seller must deliver the goods to the buyer or other person designated by the buyer at the chosen location on the agreed date.

Note that the seller still bears all the risks of delivery.

5. Risk transfer

Unless stated otherwise, the seller must bear risks of loss or damage to the goods up to the designated delivery point.

6. Cost division

The seller must bear all costs incurred in the delivery of goods at the agreed place and time, and the customs expenses before delivery at the designated location.

7. Notify the buyer

The seller must sufficiently notify the buyer of the shipment.

He/she must also inform the buyer of any other information relevant to the delivery of the goods.

8. Proof of delivery and transport documents

At his/her own expense, the seller must provide the buyer with a bill of lading and the required shipping documents.

And, any other relevant documents that are necessary for the receipt of the goods upon delivery.

These other documents include;

  • Negotiable bills of lading
  • Non-negotiable sea waybills
  • Air waybills
  • Railway bills
  • Road orders

Please note:

If both parties agree that the documents be provided electronically, then all of the above shall be substituted with respective EDIs.

EDIs (electronic data interchanges) are equally suitable for use in this case.

9. Check, package, mark

The seller must bear all costs for checking the quality and quantity of the goods as they should meet the terms of the sales contract.

At his/her own expense, the seller must also provide the right packaging for goods.

Note however that some goods can be delivered without packaging, based on industry practices.

If this is the case, then the seller can forfeit this obligation.

Other obligations

  • The seller can assist the buyer to obtain any necessary orders for import clearance at the destination country.
  • At his/her own expense and risk, the seller must obtain and provide the buyer with all the relevant shipping documentation.
  • In the case of insurance, the seller must provide all documentation required to obtain the insurance coverage.
  • Or, transmit the same electronically if the buyer is okay with it.

Well, that’s it about the seller obligations in DDU shipping.

What of the buyer’s?

Let’s find out.

The Buyer’s Obligation in DDU Shipping

While DDU shipping doesn’t put much responsibility on the buyer, the little he/she has to do is crucial to the shipping process.

So here is what the buyer has to do:

1. Pay for goods

The buyer has to pay the agreed DDU price of goods as stipulated in the contract.

2. Licenses and permits

The buyer, at his own risk and expenses, has to obtain any import licenses and any other permits required for customs clearance.

He/she shall also take care of all customs procedures necessary at the importing country.

3. Receive goods

Once the seller delivers the goods at the agreed location, the buyer must receive them.

He/she can receive the goods personally or nominate someone else to do.

The latter must be stated in the contract.

4. Risk transfer

After goods have been delivered at the designated location, the buyer must assume all risks of damage or loss of the goods.

Note that it is the responsibility of the buyer to notify the seller on a suitable place and time of goods delivery.

Failure to do so will result in the buyer assuming all risks and responsibility of shipping from the date of agreed delivery or the expiration delivery period.

Also, if the buyer doesn’t obtain the necessary documentation, he/she shall bear the consequences that come with it.

5. Cost division

The buyer must pay for all costs accrued from the time goods are delivered to the named place of destination.

He/she shall also bear all the cost of customs clearances at the importing country as well as other charges related to the shipment from the time of delivery.

6. Notify the seller

The buyer has the first right of determining the suitable time and place of delivery of goods.

This is because DDU obliges the buyer to sufficiently notify the seller about this within the agreed time limit.

7. Proof of delivery and transport documents

The buyer must receive all the shipping documents that the seller provides as long as they comply with the sales contract.

And, if it’s agreed that electronic transmission is used to supply the documents then the buyer to be ready to receive them.

8. Goods inspection

In case of any pre-shipment inspections that the buyer organizes, he/she must pay all costs.

The buyer is however under no obligation to bear any costs associated with inspections mandated by authorities in the exporting country.

Other obligations

Just like the seller, the buyer in a DDU contract must pay all costs incurred in obtaining importation documents.

He/she must also reimburse the seller of the costs incurred by the seller for assistance in obtaining the documents above.

Issues to be Aware of when Using DDU Terminology

Now, DDU as I already said is an international commercial trade term.

This together with 12 others were established help create a happy medium between the buyer and seller.

Without them, the buyer and seller would be at constant negotiation. As such, international trade would simply not be as efficient.

You need to understand that a generic standard set of rules are invaluable and can be thought of as cost-saving measure.

Once a term like DDU is agreed upon, the parties can continue without having to worry who is responsible for freight, insurance or other related costs in the shipping process.

But before that, DDU shipping is quite a comprehensive term and using it requires a lot of considerations.

It requires that both the buyer and seller fully understand its basics and application for successful shipping.

Among the many things that you have to keep in mind when shipping DDU are:

  • DDU applies to trade between free trade zones or customs union countries.

This is because sellers deliver goods after customs clearance, and if they are not free trade zones or customs unions, the risks are high.

  • If the buyer fails to obtain an import license or other official documents as required and handles the customs formalities as are necessary for the import of the goods, it shall bear all additional risks of damage or loss caused by the goods.
  • DDU is the actual delivery , the seller bears the risk before delivery, so not only does the seller has to handle the transportation, but also to apply for insurance and pay the relevant fees.
  • In DDU shipping, the risk and responsibility of the seller end once the goods have been available at the named destination.

The buyer’s risk and responsibilities start after receiving the goods at the named destination.

He/she becomes responsible for the clearance of goods at imports customs, payment of duties and shipping to final destination.

  • The DDU terminology applies to any mode of transport.

DDU Shipping with Tj chinafreight

Don’t doubt it, at Tj chinafreight we handle all kinds of shipping; FOB, DDP, DDU, CIF, etc. however you want it, we do it.

If you want to deliver goods from China to a specific port in your destination country, just let us know.

We will be happy to ensure that the goods are transported safely, timely and affordably to your chosen destination.

Don’t worry about anything.

We understand the stipulations of DDU shipping fully and are ready to execute them to our best knowledge.

So contact us now and let’s give you a free quote.

Conclusion

That’s it!

All you need to know about the DDU shipping term.

As you can see, each risk factor in DDU shipping has been defined so well.

Both parties can clearly understand what their obligations are.

There is simply no room for confusion or misunderstanding if one understands the DDU term well.

So, when you want to ship DDU from China to an international destination, make sure that you understand what the term means to you first.

This will help do away with any doubts or misunderstandings later on.

Good luck!

DDU Incoterms – The Definitive FAQ Guide

There is a lot of confusion when it comes to using Incoterms among inexperienced trade parties.

The reason is that such parties already have to deal with tons of paperwork, and it might be unclear from the first glance why you have to focus on Incoterms.

However, it is extremely important to determine the type of Incoterms with your supplier beforehand.

This guide is dedicated to one of Incoterms – DDU.

Read further to find out, what is DDU and how can you use it when buying goods from China.

Are DDU Incoterms still valid?

DDU rules were introduced to the publicity in the 2000’s version of Incoterms.

However, in 2010, the new set of rules were created which excluded DDU as a thing.

However, it doesn’t mean that you and your supplier can’t use them.

Let’s mention that Incoterms have recommendations spirit only, which means that you can use them as you think will be better for your business.

Following this rule, no one can disallow you to use old Incoterms.

What are the obligations of buyer and seller under DDU Incoterms?

Seller’s obligations:

  1. Arranges the goods and commercial documents as required by the sales contract.
  2. Arranges for export clearance.
  3. Fully pays all goods delivery expenses to the destination point.
  4. Assumes all risks associated with possible damage or loss of goods.
  5. Seller is obliged to notify a buyer that the goods have been delivered to the carrier and provide the buyer with correct arrival information.
  6. The seller has to provide the buyer with transport documents allowing the buyer to take possession of the goods at the named destination point.

Buyer’s obligations:

  1. Buyer must pay the goods according to the sales contract.
  2. Buyer must have all commercial documentation, licenses, and authorizations required for import and arrange import clearance at own cost.
  3. Buyer must take delivery of the goods after they have been transported to the named destination point.
  4. Buyer must assume all risks for the goods as soon as the goods have been delivered at the named destination point.
  5. Buyer pays for all costs of transportation, import customs formalities, as well as all duties from the time the goods have been transported to the named destination point.
  6. Buyer must accept the seller’s transport documents if they accommodate the sales contract and will allow the buyer to take possession of the goods after delivery to the named destination point.

Who will pay the freight charge, local destination, and destination charge if the Incoterms is DDU?

Under DDU Incoterms, all charges connected with the transportation of cargo to the named point of destination will be on the supplier’s side.

However, such goods will be not cleared in customs, so you won’t be able to order this cargo to your doorsteps for example.

This means that after you clear these goods in your country, you’ll have to pay for their later delivery to your premises.

Which Incoterms to choose: DDU and DAP?

At the checkout stage, it seems cheaper to use DDU. DDU does not imply processing fees linked with the duty that the seller must pay.

But it is the seller’s responsibility to inform the customer that duties will apply when the freight arrives in customs.

Often, a customs payment request becomes a surprise to customers.

In this case, customs will contact an independent customs broker and forward them the duties package. 

This leads to additional costs.

DAP fees are fixed and can be 3-4 times cheaper than DDU brokerage fees. 

Additionally, DAP reduces the chances that customers will abandon goods in customs.

This prevents you from paying additional costs for saving the goods.

What is the difference between DDU and DDP Incoterms?

DDP term stands for Delivery Duty Paid. 

DDP means that the seller arranges to pay for import duties and taxes in advance, such as a Goods and Services Tax (GST).

So If you’re using DDP, goods can be released for last-mile delivery immediately upon clearing customs.

It is opposed to DDU goods where the item could be held at customs until the relevant duties and taxes are paid.

Another key difference is that in the case of DDU seller meets all delivery expenses except GST (general sales tax) in importing country.

In the case of DDP seller must pay for GST and other import expenses. 

DDU and EXW Incoterms: how are these two correlate?

EXW (Ex Works) is the simplest of Incoterms.

Under these rules, the seller fulfills his obligations when he provides the goods at his enterprise or in another specified place (for example a factory, warehouse, store, etc.).

In practice, if you buy from a Chinese supplier, you have to be ready to pick up your goods from his premises in China.

EXW is always the cheapest contract because the seller is obliged to do practically nothing to deliver your goods.

However, it is also the way with the most hassle for you, because all the following processes (e.g. transportation to your country, customs clearance, etc.) will be on you.

What is the difference between DDU and CIP Incoterms?

The seller’s DDU delivery obligations are deemed to be fulfilled after he delivered the goods at the disposal in the country of the importer.

The CIP (Carriage and Insurance Paid to) incoterms means that the seller pays the freight to the destination and pays the minimum shipping insurance.

In the case of CIP, the buyer bears the risks for the goods from the moment he obtains the goods from the seller.

In the case of DDU, the seller bears the risks to the place specified in the delivery.

How DDU and CPT Incoterms differ?

iI case of CPT (Carriage Paid To), the seller fulfilled its obligations by transferring the goods to the carrier (confirmation of which is a bill of lading or similar document).

If the goods are damaged or destroyed during transportation, the buyer shall bring an insurance claim.

In the case of DDU, the seller fulfilled its obligations when the goods are delivered to the buyer at the indicated place.

If the goods are damaged or destroyed during transportation, the seller meets all costs.

DDU and FOB Incoterms: how to differ them?

FOB stands for Free on Board.

FOB terms state that the seller has completed the delivery when your goods get on board of certain vessel at the country of origin.

The risks under FOB terms transfer at the same time.

Basically, FOB and EXW terms are quite similar: as a buyer, you have to carry out the delivery from China by yourself.

What is the difference between CIF and DDU Incoterms?

Cost, Insurance, and Freight (CIF) are easy to understand.

Actually, the answer to it lies in the name: under CIF terms the supplier has to pay all costs connected with the freight and insurance.

In particular, the supplier has to pay all fees and duties connected with export customs clearance and delivery to your country, as well as with minimal insurance for your cargo.

But, keep in mind that the CIF terms don’t oblige the supplier to clear goods in your country.

It would be fair to mention that under DDU Incoterms you have to proceed through import clearance procedure as well.

What kind of Incoterms 2010 can be used instead of DDU?

As it was said earlier, Delivered Duty Unpaid (DDU) was actually not included in the most recent (2010) edition of the International Chamber of Commerce’s Incoterms. 

The current official term that best describes the function of DDU is Delivered At Place (DAP).

However, DDU is still commonly used in international trade sphere.

Can you use Multimodal Transport in the Case of DDU shipping?

Multimodal transportation is common in international shipping and arises where one carrier uses various modes of transport.

In multimodal, the contractor can have your goods delivered by land, air, or sea.

Also, the contractor can seek the services of others in delivering your products.

Under DDU terms, it is the role of your supplier to choose a preferred shipping contractor.

The only rule is that the goods have to get to the agreed destination safely and on time.

How long does DDU shipping take?

Generally, shipping timelines vary depending on the mode of transportation used, supplier speed, and shipping distance.

Additionally, under DDU shipping, the customs clearance process tends to delay delivery in most cases.

The delay may be prolonged if you don’t have the requisite documentation and knowledge to go through the clearance process.

Hence, for goods to arrive on-time under DDU shipping, the buyer should employ a good customs broker’s services.

Any slight dela

/ By che / China Freight News

What is FOB Shipping: The Definitive Guide

If you want to know if FOB Shipping is best incoterms for your importing business, then you can check what industry expert recommendations on best incoterms for buyers.

If you want to learn about the FOB shipping incoterm, then you just read this guide carefully.

If you are importing from China and want to get a quote on your shipping cost under FOB shipping, like FOB Shanghai, FOB Shenzhen, FOB Guangzhou, FOB Xiamen, etc, contact Tj chinafreight directly, we will give you all guide and best quote for your shipping.

How FOB Shipping Point Affects the Buyer?

Clearly, FOB shipping point compels the buyer to make an upfront payment before shipping goods.

At the same time, the incoterm enables the importer to order for goods to be delivered to their designated port.

They don’t have to be present in person when the consignment is finally delivered.

When ordering for goods, the buyer gives their billing details to the seller before the order is processed.

As soon as the supplier starts shipping the cargo, the purchaser is billed for it.

Since the transaction is already complete, it is not mandatory for the buyer to be there to accept the shipment from the deliverer.

FOB Advantages

Manage your expenses throughout the whole process without hidden fees.

Your seller ought to know the export documentation they require for their goods.

Easy to use since the majority of suppliers use FOB Incoterms as standard.

ExW Advantages

All the expected charges are clearly outlined from the beginning.

Chance of incurring additional costs is negligible
Price of goods is comparatively reduced.

How FOB Shipping Works?

In order to perfectly comprehend how FOB shipping works, let us look at a typical example.

Presume that you are a toy dealer and you buy 20,000 pieces of toy from seller ABC.

The seller produces the toys in China and you retail them in your shop in London.

Say your purchase contract reads “FOB, London, XYZ warehouse.”
What does this imply?

The seller ABC will pay the charges of loading and shipping to get the 20,000 pieces of toy from its factory in China to the XYZ warehouse in London.

The toys become yours in London.

Meaning in case the toys are lost, stolen, or damaged in transit to London, seller ABC is responsible.

Because, they still own the products while they are being transported to your designated location.

Likewise, in case they are lost, stolen, or damaged after have arrived at XYZ warehouse, you are responsible.

If you want to know if FOB Shipping is best incoterms for your importing business, then you can check what industry expert recommendations on best incoterms for buyers.

If you want to learn about the FOB shipping incoterm, then you just read this guide carefully.

If you are importing from China and want to get a quote on your shipping cost under FOB shipping, like FOB Shanghai, FOB Shenzhen, FOB Guangzhou, FOB Xiamen, etc, contact Tj chinafreight directly, we will give you all guide and best quote for your shipping.

Ask for the Best Shipping Rate from China

Quick learn: What is FOB
Under FOB shipping terms, your supplier is responsible for all costs involved in the process up until the goods are on a vessel at the designated port. Once goods have been loaded onto the vessel, you are responsible for any costs and risks involved in the onward shipment.
Check below image to make it clear:

Learn more about FOB:

What is Free On Board Shipping?

Freight or Free on Board is an incoterm developed by the International Chamber of Commerce.

 It shows the instant when the risks and costs of shipping cargo is transferred to the importer from the seller.

For example:

In present domestic shipping in North America, FOB shows the moment the supplier no longer bears the responsibility for the shipment.

That is, when the purchaser takes up the responsibility of paying the costs of transportation.

 Basically, FOB Shipping means that the supplier satisfies his responsibility to deliver the moment he or she loads the cargo on board at the port of departure.

This indicates that the buyer has to meet all costs and risk of damage or loss of the consignment from that phase.

What’s more?

The FOB term obligates the seller to do the export customs clearance of the goods.

Therefore, FOB agreement compels a seller to dispatch goods on board a ship designated by the buyer in compliance with the customs laws of the port of origin.

Further, the supplier must as well arrange for and meet the export clearance costs. Conversely, the buyer is responsible for:

  • Sea freight transportation costs
  • Bill of lading charges
  • Insurance coverage
  • Unloading
  • Cost of transportation from the destination port to their warehouse.

The determination of the contract’s party who will be levied the freight costs is normally expressed in the terms of sale.

Of course, in the FOB shipping incoterm, there are specific terminologies we use.

You will learn more about them later in this guide.

Take for example:

When the contract is shown as “FOB delivered”, the supplier will be fully compelled to pay all the fees related to the shipping of the goods.

For “FOB Origin,” the importer has the responsibility of meeting the costs of transporting the cargo from the supplier’s store, to the final point of delivery.

You should note:

FOB does not spell out the ownership of the consignment.

The contract only expresses who is responsible for the cost of shipping.

To know the owner of the cargo, refer to the way-bill or bill of lading.

With that in mind, let me take you through a brief history of FOB.

History of FOB

The phrase “freight on board” has its origin back in the days of ships sailing when consignments were “passed over the rail by hand,” as described in Incoterm.

The phrase “FOB” was applied to refer to cargo hauled by ship, It is because marine transport was the leading method of transportation for goods from far nations.

The term’s application has changed over time and its description differs from one nation and territory to another.

In the 2010 amendment, the clause “passing the ship’s rail” was omitted from the Incoterm descriptions.

Since the introduction of Incoterm FCA in 1980, FOB has been considered mainly for non-containerized inland waterway and marine freight transport.

However, it is common to find people using FOB wrongly for all modes of transportation.

This is in spite of the contractual danger that it brings.

In some common law nations like the US, FOB is not only associated with the transportation of goods via sea.

However, it is also applied in inland transportation on board any vessel, motor car or any other motor vehicle.

That aside – let me walk you through some FOB terminologies.

Terminologies in FOB

Some add-on phrases may be added on the bill of lading, freight invoice, or other types of shipping paperwork.

The add-on terminologies may include, but not limited to the following:

i. Freight Terms

Determine the party with the responsibility of paying the freight and normally denoted as collect or prepaid with other several variations discussed within the article.

ii. Bill of Lading or Waybill

A legal agreement between the buyer and the seller.

This contract also acts as proof of the shipment.

iii. Prepaid

The term means that the consignor or seller assumes the responsibility of paying the freight.

iv. Collect

The term means that the buyer or consignee assumes the responsibility of paying the freight.

v. Prepaid/Collect Beyond

Means that the seller pays the prepayment part with the balance of the fee charged on the freight becoming the obligation of the buyer.

vi. Third Party

Indicates that a different partner who is neither the buyer nor the seller takes up the payment processing role.

The legal responsibility for the payment may or may not be on the third party.

And, the passing on of the legal obligation is dictated by the parties recognized in the Bill of Lading Agreement.

Here, the third party, bear no legal responsibility for the payment.

The “Third Party” term is normally put into use when the freight payment process is outsourced to another party.

vii. Pre-pay and Add

Usually means that the seller transfers the freight fees to the shipper.

And, then sends an invoice to the freight owner for an approximate or equal amount of the actual freight cost.

 viii. Terms of Purchase/Sale

Expresses the transfer of title and are commonly denoted as “FOB, designated place or point”.

In most simple and common instances, they are usually expressed as FOB Destination or FOB Origin.

ix. FOB Origin

This phrase shows that the title to the goods shifts to the buyer at the time and point of pick-up.

x. FOB Destination

The term shows that the title to the consignment is transferred to the buyer at the time and point of delivery.

xi. FOB Origin, Freight Prepaid

The term implies that the seller takes care of the consignment, shipping costs while the buyer bears the responsibility of the consignment at the place of origin.

xii. FOB Origin, Freight Collect

The importer meets the costs of freight and shipping and assumes total responsibility for the shipment.

xiii. FOB Origin, Freight Prepaid and Charged Back

Here, the supplier does not pay the shipping costs, but rather adds the costs of freight to the bill sent to the importer.

This indicates that the importer pays a more expensive bill.

It is because the costs of freight are incorporated on the final invoice.

In addition, the ownership and all liability for the goods are transferred to the buyer at the cargo’s point of origin.

xiv. FOB Destination, Freight Prepaid

The seller settles all the costs of shipping till the goods reach the buyer’s warehouse.

The buyer does not incur any costs for shipping.

xv. FOB Destination, Freight Collect

The buyer settles the cost of freight upon receiving the goods.

The buyer does not take up ownership or liability for the consignment until the goods arrive at his or her premises.

 xvi. FOB Destination, Freight Prepaid, & Charged Back

The supplier assumes liability for the freight till the goods are delivered to the buyer.

Also, the importer discounts the charges from the bill.

The original bill comprises the costs of freight originally paid by the supplier.

xvii. FOB Destination, Freight Collect, and Allowed

The seller adds the costs of freight to the bill and the buyer settles the costs.

The seller is liable for the goods until they are delivered to the buyer.

You should note the following:

The first section of the designation indicates where the purchaser presumes the risk of damage or loss and title for the cargo from the supplier.

It can either be at the time the transporter picks up the goods for delivery.

Alternatively, this can be the moment of real delivery.

The second section expresses who is responsible for the costs of freight.

Further, it is crucial for buyers and sellers to know FOB designations in case of damages.

Some receiving ports will decline delivery of the visibly damaged consignment.

Instead,they will accept receipt if a damage notation is attached for a later claim against the transporter.

Nonetheless, a shipment marked FOB Origin conceptually belongs to the consignee at the very moment it is on board a ship.

So, the buyer would be declining delivery of shipments he or she legally owns and takes responsibility for.

The consignor bears no legal responsibility to accept back those goods and the return shipment might probably attract extra damages.

Buyer’s Responsibility in FOB Shipping

You become responsible for all the mandatory fees and charges as soon as the merchandise is loaded onto a shipping vessel at their place of origin.

Of course, this is up to the arrival of the consignment at your final destination.

You take up responsibility once the consignment is in transit.

Types of FOB

In this section, I am going to walk you through various types of FOB.

With this information, it will be easier for you to read from the same script when dealing with your freight forwarder.

This way, you will settle for a deal that is fair for both of you.

Let me give you a practical example:

For instance, the majority of buyers say “FOB destination” when in real sense, they are asking for “FOB shipping” option.

It can be confusing if you’re new to the FOB shipping from China industry.

As explained earlier, FOB determines who will pay the shipping expenses.

However, the type of FOB indicates the contracting party who will bear the legal obligation for the consignment.

Besides, it determines at what stage when shipping from China the obligation shifts.

Generally, we have two main types of FOB:

 i. FOB destination and

ii. FOB shipping point

By choosing the right term, you will avoid possible service and destination hitches.

Of course, such delays will cost you both money and time.

FOB Shipping Point vs. FOB Destination

Let’s start with

a) FOB Shipping Point

FOB shipping point is the short form for “Free on Board Shipping Point.”

When the term is used in shipping, the goods are considered delivered immediately they depart from the seller’s shipping port.

Consequently, the buyer assumes responsibility and ownership of the goods from that point onwards.

Thus, in FOB shipping point, the buyer is responsible for the rest of the shipping expenses as soon as the supplier loads the consignment on board the carrying vessel.

Normally, the legal right of those commodities is passed on to the purchaser.

Thus, the supplier is not liable for the commodities during delivery.

Here is an example to help you understand what I am talking about here:

Suppose Company XYZ in the UK, orders, promotional products from its supplier in China, and enters a FOB shipping point contract.

Then it happens that the carrier damages the consignment in the process of delivery.

Here’s exactly what happens:

The company assumes total liability and cannot request reimbursement from the seller on the damaged goods.

The seller’s only obligation is to transport the promotional products to the carrier.

· How FOB Shipping Point Affects the Seller

FOB shipping point tends to be a popular term among sellers due to its sense of security in terms of payment.

The ordered goods cost the seller a great amount of money to manufacture and transport.

In fact, it will cost more particularly if they are shipping the consignment to a far destination.

Since it is not guaranteed that the buyer will pay for, once the ordered goods are delivered to them.

They pay for the order in advance.

FOB shipping point enables the seller to collect the sale, payment immediately the goods are loaded onto the ship.

It protects them from failed payments after having already spent their money to produce and transport the goods.

Like I said, here, the buyer is the one responsible for the cost of freight in FOB shipping point.

So, what does this imply to the supplier?

He/she can as well save money in case the products are damaged or lost while in transit.

In all these circumstances, it is upon the buyer to demand for reimbursement by filing a claim.

b) FOB Destination

FOB destination is a short form for “Free on Board Destination.”

The phrase expresses that the goods are considered delivered only after they have docked at the buyer’s port of destination.

The terms shift the entitlement of goods to the buyer from the seller when they are physically taken to the buyer.

FOB destination as well signifies that the seller covers the freight charges. This term establishes the shipment stipulations by:

 i. Mentioning the transaction party responsible for the delivery expenses

ii. Spelling out when the title is passed to the buyer

Consequently, with FOB destination, the right of ownership is normally shifted at the importer’s premises, loading dock or post office box.

Immediately after the products are delivered to the designated location by the buyer, the right of ownership of the products shifts to the buyer from the seller.

As a result, the supplier legally owns the products and is liable for the products during the transportation process.

Let me give you a practical example:

Assume Company ABC in U.K. purchases pharmaceuticals equipment from a Chinese supplier and it enters a FOB destination contract.

Presume the pharmaceutical equipment were certainly not delivered to Company ABC destination.

The seller takes full liability for the pharmaceutical equipment. He/she and must either reship the pharmaceutical equipment or reimburse Company ABC.

FOB destination has four variations, which comprise of:

  • FOB destination, freight prepaid and allowed

The seller meets all the freight fees and possesses the shipment while they are being shipped.

The title of ownership is transferred at the buyer’s port.

  • FOB destination, freight prepaid and added

The supplier pays the cost of freight, but invoices them to the buyer.

Normally, the ownership of the goods on transit remains with the seller.

Title shifts at the buyer’s destination port.

  • FOB destination, freight collect

The importer pays the freight expenses when receiving the cargo, even though the seller still has the ownership of the consignment in transit.

  • FOB destination, freight collect and allowed

The buyer takes care of the freight charges but subtracts the amount from the seller’s invoice.

However, the supplier still has ownership of the goods in transit.

Hence, the essential features of all the FOB destination variations are who is responsible for the freight payment.

Besides, the physical location at the time of transit when the title shifts is also important.

Since the seller is the party responsible for the cost of shipping the ordered item – what does it imply?

In case of damage or loss of products in transit, he or she ought to file a claim with the insurer.

Because the supplier is the owner of the goods at the moment when they were damaged or lost.

Now, here’s yet another side if this Incoterm you MUST know:

For accounting purposes, because the buyer presumes the ownership of the cargo at their port of receipt, the seller should also register a sale at that point.

Further, the buyer ought to register an increase in their inventory at the same place.

Why?

The buyer assumes the reward and risks of ownership, which happens at the place of arrival at their destination harbor.

In reality, the supplier will definitely register a sale immediately the shipment depart from their port of shipping, regardless of the delivery terms.

Therefore, the real effect of FOB destination is the determination of the party responsible for the freight expenses.

Still, a buyer may decide to by-pass the two the type of FOB terms by deciding to privately arrange for the transportation of the products.

The importer organizes how the goods are collected from the seller’s warehouse and take up responsibility for the consignment from that moment onwards.

In this arrangement, the purchaser should ensure that the supplier’s billing personnel know the new terms of delivery.

It is because the freight cost is not included in the seller’s final invoice.

A wise buyer should refrain from using FOB destination terms, but rather opt for FOB shipping point terms.

You’ll have better control of the shipping process.

Nevertheless, for an importer who is engaging with a supplier who is far away from them, here what you should do:

It is in your best interest to make the seller take responsibility for the goods, delivery as close to them as practically possible.

In the contrary, a seller negotiating with an overseas buyer should settle for the type of FOB that compels the buyer to assume responsibility.

Of course, it should include ownership of the cargo as soon as it is off your loading port.

I hope we are together up to that point.

Let’s explore the FOB incoterm.

Why it is FOB Important:

FOB incoterm determines the point where the risk of damage or loss shifts to the buyer from the seller.

The incoterm is vital to parties engaging in international trade and specifically for contracts entailing items that are delicate or susceptible to theft.

Our example shows the concept of FOB Destination since it is the standard and most popular FOB term.

However, other agreements such FOB Origin also apply.

It is where the buyer assumes liability and ownership at the time and location the goods come from.

For example, in the Chinese factory premises in our example.

Purchasers may select FOB Origin when they know they can source for a better contract during the transportation than their supplier.

It is essential, however, to note that the Uniform Commercial Code (UCC) usually presumes a trade agreement terms are FOB Origin.

That is, when there is no distinctive FOB language in a purchase contract.

Applying FOB shipping terms expresses that responsibilities, risks and costs are shared equally between the seller and buyer of merchandise.

FOB incoterm makes the seller responsible for all the expenses associated with your goods till they are loaded on a carrier at their port of origin.

FOB Shanghai, for instance, would indicate that the seller assumes all liability for the goods up to the moment they are loaded onto the shipping vessel at Shanghai.

Subsequently, the responsibility is passed down to you as the buyer after this point.

The FOB term usually includes a phrase referring to a port.

The referenced port is the dock from which the supplier will ship the cargo.

If, for instance, your seller provides “FOB Shanghai” terms, your responsibilities as far as the freight is concerned starts from Shanghai to your final point of destination.

However, it is needful to note that the port of origin must not be the nearest one to the supplier’s location.

It is because the fees and export licenses you may need for every port can vary.

The costs differ from one port to another, with other being more expensive compared to others.

Seller’s Responsibilities in FOB Shipping

When purchasing on FOB shipping terms, the seller’s roles and obligations extend extra further than just carrying the merchandise to the port of loading.

Since it is an issue that regularly comes up, we thought we clearly explained it.

A The Seller Must B The Buyer Must
A1 Supply of Goods in Compliance with the agreement.

 

The seller must supply the products and the commercial bill, or its alternative electronic message, in accordance with the agreement of sale and any other proof of compliance, which may be needed by the agreement.

 B1 Payment of the Price

 

The buyer must settle the price as indicated in the agreement of sale.
A2 Licenses, permits and Formalities

 

The seller must acquire at its personal risk and bill any export license or other legal permits and conduct, where appropriate, all customs procedures required for the export of the products.

 B2 Licenses, permits and Formalities

 

The buyer must acquire at its personal risk and bill any import license or other legal permits and conduct, where appropriate, all customs procedures for the import of the products and, where required, for their transit across international boundaries.
A3 Agreement of Insurance and Carriage
(a) Agreement of insuranceNo obligation.(b) Agreement of carriageNo obligation.		 B3 Agreement of Insurance and Carriage
(a) Agreement of insuranceNo obligation. (b) Contract of carriageThe buyer must enter into an agreement at its personal bill for the carriage of the products from the mentioned port of shipment.
A4 Delivery

 

The seller must do the goods, delivery on the date or inside the agreed duration at the mentioned port of origin and in a way accepted at the harbor on board the vessel designated by the buyer.

 B4 Taking Delivery

 

The buyer must accept delivery of the products when they have been dispatched in conformity with A4.
A5 Transfer of Risks

 

The seller must, depending on the conditions of B5, assume all risk of loss or damage to the products till they have been loaded onto the vessel at the mentioned port of shipment.

 B5 Transfer of Risks

 

The buyer must carry all the risks of loss or damage to the products from the moment they are loaded onto the vessel at the mentioned port of origin and; from the set date or the expiry of the set duration of delivery which results since it fails to

/ By che / China Freight News

Best 100 Product Inspection  and Factory Audit Company in China

Quality inspection is crazy important in your product manufacturing.

If you are looking for an inspection service or a factory audit company in China, then you need to check this top 100 list of the best China inspection agents.

As a professional freight forwarder in China, Tj chinafreight has worked with tons of inspection companies and we know which inspection company is better.

So choose a good product inspection company and partner for your next order.

How Can I Book for Product Inspection and Factory Audit in China?

Once you identify the right company for your product inspection and factory audit, simply send them an email.

Obviously, the company will get back to you.

However, just ensure you contact the right company. For instance, there are inspection companies in China who specialize in certain products.

Take for example; a company may focus on inspecting farm machines, and not food products.

Just ensure you hire a company with expertise in the product you want to inspect.

What is the Cost of Hiring Quality Control Companies in China?

Honestly, there is no fixed cost whenever you want to hire a company to help you with quality control process in China.

Still, you can use this simple trick – get quotations from different quality control companies.

Why?

It is the only way to get competitive rates in the market.

Again, if there is one thing you should be sure of, the price will depend on the quality control procedures you want to perform.

Some of the most common quality control processes include:
1. Lab testing in China
2. Product inspections in China
3. Supplier audits in China
4. Factory audit in China
5. Factory inspection in China
6. More importantly, even as you look forward to cutting cost on this, you must hire reputable inspection companies in China.

When should you Conduct Product Inspection and Factory Audit in China?

You should conduct a factory audit in China before you order for samples or the right products you need.

The same applies to factory inspection.

Remember, it’s through the factory audit and factory inspection in China that you will assess the capability of the Chinese manufacturer.

How will I Pay for the Inspection Fee?

Terms of paying for factory audit in China or product inspection in China varies from one service provider to another.

For instance, there are quality control service providers who will accept online payment, TT, Bank, Western Union, or PayPal. You will discuss this with the quality control service provider.

Also, the terms of payments may differ. For example, there are product inspection and factory auditing companies that will require:

Full payment of the agreed amount before commencing the inspection process.

A certain amount (maybe 35%, 50% or 65% of the total amount), then the remaining amount you pay before they submit the report. This is a common agreement among product inspection and factory auditing service providers in China.

Make full payment after completing the auditing, but before submitting the report.

Here, just choose an agreement that works for you.

Sinovoltaics Group Contact this Company

Sinovoltaics Group is Dutch-German quality assurance, product engineering, and technical compliance consulting firm specialized in de-risking of solar photovoltaic assets and investments, which was headquartered in Hong Kong and with subsidiaries in Shanghai and Virginia (USA). Their services cover factory inspection, factory audits, lab testing, etc.

KRT Audit Corporation Contact this Company

KRT Audit Corporation is held US company, which serves among 65 countries worldwide, they offer China and Asia quality inspections and supplier audits for over 25 years ago.

Amazing Quality Control Ltd Contact this Company

Amazing Quality Control Ltd is a company offering Top Quality Inspection & Factory Audit Services All Around China since 2013. They have teams of inspectors controlling China manufactured products for over 250 customers worldwide in China.

Pro QC International Contact this Company

Pro QC International provides the inspection, audit, measurement& testing, order control, corrective action, engineering, and other services for over twenty years among 88 countries.

AQF Contact this Company

AQF offers Quality Control service, they serve global brands, importers, and retailers of Consumer Products in over 135 countries for more than ten years. Also, they specialize in hardlines, softlines, consumer electronics, and electrical products, AQF delivers Quality Control services in 14 Asian countries.

Eagle Eyes (CHINA) Quality Inspection CO., Ltd. 

Contact this Company

Eagle Eyes (CHINA) Quality Inspection Co., Ltd. which is a professional China Third Party Inspection company, they provide Quality Control, Factory Audit, and Container Loading Supervision service and they have qualified quality inspectors & Auditors in different fields all over China.

QIMA  Contact this Company

QIMA founded in Hong Kong, which is a professional quality control and compliance company that corporate with importers all over the world. They expertise in supplier audit, QC and lab testing for over 120 countries.

Chinawhy   Contact this Company

Chinawhy founded by Chinawhy International Limited and Harbin Dolphin Trading Co., Ltd headquartered in Harbin China, which offers 500 companies who import from China since 2006. Their services include sourcing, factory audit, QC, supply chain management and other services.

InTouch Manufacturing  Contact this Company

InTouch Manufacturing Services is a company part of AQF, with providing quality control solutions. They serve global brands, importers and retailers from over 135 countries since 2007. With expertise in hardlines, softlines, consumer electronics, electrical products, and industrial goods, AQF delivers quality control services in 12 countries throughout Asia.

SGS  Contact this Company

SGS has been called formerly the French Grain Shipment Inspection Institute and was founded in Rouen in 1878, which is global leading product inspection, testing, certification organization, with more than 97000 employees. And they open 2600 branches and laboratories around the world.

V-Trust  Contact this Company

V-Trust is an international inspection services provider registered in China & Hong Kong since 2003, which established Dr. Ted Zhang who has the experience in Audited 600+ factories in the last 23 years. As an independent third-party inspection company, V-Trust has an inspection network covering China, India, Vietnam, Bangladesh & Malaysia. They have over 230 inspectors for a wide product range. In 2018, more than 3,000 importers and buyers all over the world benefited from V-Trust inspection services, and they conducted over 5,800 inspections per month. 

Guangdong inspection  Contact this Company

Guangdong inspection was established in 2007 in Shenzhen, Guangdong Province, P.R.C. They offer you inspection Services, audit, and other services. Their team of 12 inspectors is composed of engineers, technicians, and businessmen, covering plastic injection, electronic, LED, wood, houseware, furniture, leather, sports goods, toys, etc…

AQI Service  Contact this Company

AQI Service was found in 2004, serving as a professional third-party quality control inspection company in China. We have teams of more than 40 active quality inspectors, providing professional quality control service, production monitoring, product development, sourcing, quality control to shipping and delivery in Asia.

The Inspection Company Ltd  Contact this Company

The Inspection Company Ltd was founded in 2007, serve the importers from Asia. They perform professional Quality Control as Factory Audit, Inspections Service and Sample Testing. Their product range covers Consumer Electronics, Multimedia, Fabrics, Garments, Furniture, Car parts, Promotional Items, Tools, Hardware Goods, both Indoor and outdoor Decoration and many others.

CIS  Contact this Company

CIS is delegated by China government company, they offer Factory Audit and Product Inspection services in China for importers around the globe, also provides importers with engineering services such as project management and Part Design based on their Team’s strong technical background. And they have expertise in the fields: Hard Goods,  Electrical & Electronic Items, Soft Goods, Mechanical Equipment and others.

Beijing Veritell  Contact this Company

Beijing Veritell Founded in 2007, headquartered Beijing, China, the company with over 20 branches among most cities of China, which is a leading quality control service provider in China, partners with importers (OEMs) and manufacturers(suppliers) around the world. They offer products inspection, supplier audit, consulting & lab testing services with the expertise in the Automobile, Electronics, Medical device, Aerospace, and other manufacturing industry.

Asia Quality Control  Contact this Company

Asia Quality Control was founded in Hong Kong, which specializes in handling quality assurance, quality control, quality consulting, supplier audits operations and product testing management in Asia. They can help you reduce quality risk when importing from Asia.

PTS  Contact this Company

PTS Founded in 2006, they are the first Sino-European JV company that provides tailor-made quality control solutions，auditing and testing for your supply chain in Asia. They have a central laboratory in Ningbo and headquarters in Shanghai with more than 140 professionals in the labs and main industrial areas.

CCIC SHAANXI  Contact this Company

China Certification & Inspection Group Shaanxi Co., Ltd (CCIC SHAANXI) is a professional company of inspection service, pre-shipment inspection, engineering service and training for the 30-years experience. Their clients include enterprises, organizations, governments, and individuals in the fields of petroleum, chemical product, mining, agricultural products, industrial products, consumer products, foodstuff, automobile, construction, logistics, retailing as well as some other key industries. 

HKQCC  Contact this Company

Hong Kong Q.C. Center Ltd (HKQCC) was founded in 1995, headquartered in Hong Kong, they provide quality control, AQL table, pre-shipment inspection and auditing service in Asia.

Inspection for Industry  Contact this Company

Inspection for Industry provides Industrial Inspection and Testing information including pumps, compressors, valves, pressure vessels, boilers, etc. Their services include Pre-Shipment Inspection, Vendor or Source Inspection and consumer products, also covers site inspection and in-service (plant inspection). And they serve the fields of Oil, Gas, Petrochemical, Refinery, Power, Pulp and Paper, and also consumer products i.e. small air compressors, water pumps, generators, etc.

Tetra Inspection  Contact this Company

Tetra Inspection is a professional leading third-party inspection company. They mainly provide Product Inspection, Supplier Audit Services, Amazon FBA Inspection services, the fields of Hardlines, Electronics, Toys, Softlines, and other products.

Glory QC  Contact this Company

Glory QC is a third-party inspection company founded in 2006. They provide QC Inspection, factory audit, product test for more than 500 importers and buyers from the world, their service covering all coastal areas of China. And they have more than 50 well-trained inspectors, reliable and experienced in inspecting a wide product range.

Shoes Examine Limited  Contact this Company

Shoes Examine Limited is an independent third-party Shoes Quality Control Services Company which operated by Shoes Examine Limited. Shoes Examine Limited is here in China to help you and new importers from all over the world, such as UK, Spain, Australia, and South Africa, etc., who facing shoes quality control problem to relief their concerned.

CCIC  Contact this Company

CCIC was founded in Shenzhen in 1998, which is a third-party professionally quality inspection in China. They mainly help the importers from China, manufacturers, retailers, wholesalers, and logistics reduce the quality risk of good. Their services include Quality inspection; Supplier evaluation and review; Government and trade inspection (National countries such as Nigeria, Kenya, Algeria, Egypt); Return goods identification; lab testing, etc.

GIM  Contact this Company

GIM is a leading company that offers quality control in Asia. Their services include inspection services, audit, lab testing and certificates, video real-time inspection, etc. They have an international team of 38 people mixing Western and Asian and they are Implemented within all Asia. More than 900 importers, brands, e-retailers have taken advantages of their services. 

Luxiberg Inspection  Contact this Company

Luxiberg Inspection provides professional inspection services in China and Asia since 2005. All their inspectors have the qualification of engineer; they are experienced and they have trained them to inspect as per European and American standards. They carry out factory audits, social audits, and product quality inspection services in China for importers coming from about 40 countries.

Sunchine Inspection  Contact this Company

Sunchine Inspection founded in 2005, which is a brand of Sunchine International which is a Hong Kong-based multinational company specializing in export-import consulting and quality management. They are third-party inspections companies in China, serving more than 1,500 regular clients in various fields from all the Continents in the world. To be the most reliable QC partner of clients in China, to help you to buy and produce in China in all confidence and safety, it’s the mission of each member of Sunchine Inspection!

Coze  Contact this Company

Coze connects international manufacturers and importers to top-level quality control technicians in China. They provide exceptional QA, factory audit, lab testing service. Coze is on a mission to connect global manufacturers and importers with qualified local Chinese quality control technicians. Their goal is to provide an Enterprise Grade QA process at any location, for every product, and at every production stage.

C2W  Contact this Company

C2W headquartered in China and regional offices in Bangkok (Thailand) and Ho Chi Minh (Vietnam), they offer competitive and quality manufacturing services including factory audits, sourcing and assistance in building a reliable supply chain.

Leap China Solutions  Contact this Company

Leap China Solutions helps western buyers who importing  Chinese factories reduce quality risk. Their services include QC inspection, China factory sourcing, China factory audit, China visit assistance, and other services. Leap Solutions is your team in China.

NBN  Contact this Company

NBN offers product inspection, container loading inspection and supplier audit services in China to global brands, retailers and importers, for assisting you to improve product quality and control major risks. We have more than 80 inspectors work for you across China to help you create a controlled supply chain environment–from raw material to finished products and then to shipment.

Centre Testing International Group Co., Ltd. 

 Contact this Company

Centre Testing International Group Co., Ltd.(CTI), as a leading third-party inspection company, that integrates testing, calibration, inspection, certification, and technical services to provide one-stop solutions for enterprises worldwide. They have more than 60 branches with almost 130 labs, also open oversea branch among Taiwan, HongKong, USA, UK, Singapore, etc.

INF Inspection Technology Co., Ltd  

Contact this Company

INF Inspection Technology Co., Ltd(INF) is a leading QC service provider for more than 10 years of experiences. The clients are global brands, importers, and retailers of Industry and Consumer Products from more than 135 countries since 2005. Their services include QC inspection services, factory audit, product testing lab, and other services.

TOPWIN

TOPWIN is a professional independent, third-party quality Inspection company. TOPWIN offers a full range of quality related services across China & Asia, including Product QC Inspections at any stage of production, Factory/Social Auditing & Laboratory Testing services. Their services are aimed at minimizing the risks of defective products from your suppliers in China. They try their best to offer the best services to importers, retailers, wholesalers and trading companies from all size and from all over the world, buying from Asia.

Insight Quality  Contact this Company

Insight Quality is a US-owned quality assurance and sourcing company. They have offices in both the USA and China. They offer a wide service of factory audit services, product inspection, lab testing, sourcing services, and others.

Asia Textile Inspections  Contact this Company

Asia Textile Inspections is an independent inspection service provider, having worldwide recognition due to its reliable services.  They are Pakistan-based organization, providing services of quality inspection, quality assurance, quality audit, third-party inspection, production check and QC china for their clients, retailers, importers, trading partners, and manufacturers. 

China Inspection Services  Contact this Company

China Inspection Services has over a decade experience specialized in Quality Control China Inspection Company, Inspection Service Include: ASIA inspection, quality inspection, product inspection, pre-shipment inspection, total quality management.

China Inspection Co., Ltd  Contact this Company

China Inspection Co., Ltd. approved by the State Council, is a comprehensive inspection, testing, certification, and accreditation organization, they are established in Hong Kong in 1982. Now they own 700+ employees serving you.

Top Inspection Limited  Contact this Company

Top Inspection Limited was founded in Hong Kong in 2008, which is an independent third party inspection company, providing you with quality inspections and factory assessments in China for importers worldwide to reduce the quality risks before shipment. And they employ a highly dedicated and experienced team of trained inspectors and auditors, with backgrounds in electronics, toys, household appliances, textiles, garments, furniture, etc. 

AMREP China  Contact this Company

AMREP China was a global leading inspection company to deliver localized responses to our customers’ manufacturing problems in China. They offer QC, supplier quality engineering, supplier production management. And their staffs spread across other key industrial areas in China like Wuxi, Ningbo, Beijing, Suzhou, Xiamen, Hangzhou, Shanghai, Guangzhou, Chongqing, Chengdu, Tianjin, Qingdao, and Dalian.

China Quality Control  Contact this Company

China Quality Control, as a third party inspection company located in China providing Quality Inspection, Factory Audit and Product Testing for buyers and importers. And they provide services of QC services in China, factory audit in China, product testing and certification.

Effition Inspection  

/ By che / China Freight News

Shenzhen Electronics Market: The Ultimate FAQ Guide

If you are dealing with the electronics business, then Shenzhen electronics market is your Must market to go. You will find tons of suppliers and reduce your cost right away.

Check below questions you may have about Shenzhen electronic market.

Which One is the Shenzhen Best Electronics Market

Huaqiangbei is one of the popular and best electronics market not only in Shenzhen but also worldwide.

Here, you will find most of the big brands such as Apple, Acer, HP, Samsung, sony, canon, Nikon just to mention a few.

Can You Use Sourcing Agents when Importing Electronics from Shenzhen?

Yes, you can use sourcing agent when you are importing electronics from Shenzhen.

Sourcing agents will be responsible for all your shipping procedures and this includes negotiating prices as well as quality control and clearance of goods in the port.

Some of the sourcing agents in Shenzhen include;
1. SourcingBro
2. Agent Shenzhen
3. Amanda INTL Group
4. China Source link

What Other Similar Electronics Markets are in China?

Apart from Huaqiangbei market, we have other electronic markets that equally provide the same products.

Some of the markets include:
1. Ming Tong Digital Market
2. Feiyang Times Communication Market
3. Pacific Security Protection Market
4. Sang Da Electronic Market

Which Documents Do You Need to Import Electronics from Shenzhen?

You will need legal documents when performing any type of importation.

In our case, importing electronic products from Shenzhen will require you to have the following important documents;
1. Inspection Certificate
2. Insurance Certificate
3. Import License
4. Country of Origin Certificate
5. International Import Certificate
6. Import Declaration
7. Sales Contract
8. Packing List
9. Commercial Invoice
10. Bill of Lading
11. Delivery Verification Certificate

Is Shenzhen the Biggest Electronics Market in the World?

Yes.

If you are planning to engage in future electronics importation from China, then Shenzhen would serve the ideal place to shop from.

Take a look at this video:

Hundreds of thousands of people import electronics products from Shenzhen every single year. Reason?

There are several electronic manufactures in this area and this definitely equates to discounted prices on electronic products.

What is the Main Electronic Market in Shenzhen?

Huaqiangbei is recognized as the largest electronic manufacturing hub in Shenzhen covering an area measuring around 200,000 square meters.

Here, you will find thousands of different electronic products ranging from original to fake ones, second hand to new ones, sophisticated to simple electronic gadgets and the likes.

You should assess the products before buying.

It will ensure you spot any defects.

One thing you need to know about Huaqiangbei is that you can purchase different electronic devices in both small and medium quantities and have them shipped together as a single package.

Apart from Huaqiangbei, we have Seg electronic market which is a well-known market in huaqiangbei commercial area.

Seg electronic plaza is composed of 70 floors with the first 9 floors occupied by electronic dealers.

Not only will you find computer peripherals here but also consumer products as well as product engineers.

Other electronic markets include;

Yuanwang Digital mall- One of the largets market for refurbished phones.

Huaqiang electronic World- It’s the second largest electronic market in Shenzhen mainly dealing with second hand products such as computers as well as spare parts.

Below are some useful resources about Huaqiangbei Electronics Market:

What Types of Electronics Can You Buy in Shenzhen?

Shenzhen often referred to as the ‘silicon valley of China’ is the hub for all the electronic products you might think of.

Some of the electronic products that you will find include;

  • Laptops
  • Mobile phones and accessories
  • Video cameras
  • Batteries for electronic gadgets
  • Phone cases
  • Computer peripherals
  • Power banks
  • USB flash cards
  • Televisions
  • Brand cameras
  • Robots, just to mention a few

Here is a full documentary Shenzhen, the Silicon Valley of Hardware:

Where to Get Shenzhen Electronic Market Map

Shenzhen electronics market map is available online on platforms such as Google maps.

Note that, once you are in China some sites such as WhatsApp, Facebook, Twitter, YouTube, and Google are blocked.

You can download VPN (Virtual Private Network) to bypass this.

Alternatively, you can talk to a manufacturer or supplier to guide you.

Here are some resources for you:

What is the Shenzhen Electronics Market Open Hours

Most markets operate from 9 am to 6 pm. However, some market malls extend up to 10:30 pm.

However, most Shenzhen electronics markets remain closed during holidays such as the Chinese New Year Holiday.

Most if not all of the electronics market always stay opened during the weekend.

But here are some very important tips before you embark on your visit.

  • Since many stores open at 9am it’s advisable to arrive there at least 20-30 minutes later. It is to allow the sellers to clean up and arrange the area as well as display their items.
  • Do not stay in the electronic market until time of closure. Failure to observe this you will find it hard to get a taxi and to add on that there’s always too much traffic during that time.

How to Ship your Electronic Orders from Shenzhen

Shipping electronics from Shenzhen has actually been made simpler due to its proximity to the port and airport.

There are several other methods in which you can use to ship your electronic orders from Shenzhen including;

  • Air – It’s the most expensive yet fastest method.
  • Rail- Only limited to the surrounding cities or countries that have a well networked rail system.
  • Road- This method of shipping is also limited to the neighboring countries as well as cities.

Shipping companies such as DHL, FedEx, UPS, TNT, and EU also come in handy.

You can learn more about ways of shipping from China:

Where Can You Get Shenzhen Electronics Market Guide?

Several websites offer a lot of information about Shenzhen electronics market.

Some of these websites include;

  • com
  • com
  • com
  • com

To add on that, you can as well get visual guides on YouTube.

This could help you familiarize with the area.

You could end up knowing the market just as much as someone living in Shenzhen.

Do You Need Product Quality Inspection to Import Electronics in Shenzhen?

Yes.

Quality inspection is carried out to confirm the efficiency and state of the electronic product.

Never (and I mean never) purchase from any supplier who doesn’t accept quality inspection.

Below is a useful resource you need:

Product Inspection and Factory Audit in China – The Ultimate Guide

Shenzhen electronics market

It is not a secret that the vast majority of electronics are manufactured in China.

It is hard to mention the IT giant which is not connected with some of the Chinese electronics hubs, which have arisen all other the country in recent years.

One of such hubs is Shenzhen, which is considered by some as the biggest and the most versatile electronics market in the world.

Is it true? Let’s find out.

Is Shenzhen the biggest electronic market in the world?

Shenzhen itself is considered as one of the biggest cities in China, which is also bordering Hong Kong – one of the largest electronic hubs in the world.

Strategic placement and constant financial aid from the Chinese government made this city one of the fastest-growing in the world.

Shenzhen was also ranked as the second on the list of top 10 cities to visit in 2019 made by Lonely Planet.

On its territory, you can find lots of marketplaces dedicated to all popular goods, including electronics.

Shenzhen indeed contains the largest electronics marketplace in the world (we’ll head back to its topic right after).

However, it is fair to say that in Shenzhen you can also find great designer clothes, sportswear, kitchenware and practically every other kind of product that you can name.

The reason why this guide was born is simple – despite Shenzhen’s popularity and advanced status, it is not foreigner-friendly and requires some local knowledge to navigate.

Note: the better part of Shenzhen suppliers are looking for wholesale customers.

What is the main electronic market in Shenzhen?

The rapid success of Shenzhen is mainly explained by the world’s greatest electronics market named Huaqiangbei (pronounced Hua Qiang Bei) situated in the city.

And we have to say that Huaqiangbei is a real consumer’s dream.

This market has grown around the facilities and manufacturing sites of Chinese IT giant Foxconn.

As you may know, Foxconn is the world’s largest electronics manufacturer which produces Apple products, Kindles, Playstations, and Wiis to mention a few.

Each company’s representative prefers to have trading spots at Huaqiangbei because of the popularity of this huge marketplace.

Here you can find lots of separate markets which are known for certain types of electronics:

  1. SEG Electronics Market is a 10-floored building where you can find cables, tools, electronic parts, PC’s, laptops, GPS and all types of gadgets.
  2. Huaqiang Electronic World consists of several multi-floor buildings where parts (new and used), electronics repairs, tools, chips, LED, cables, and more consumer electronics could be found.
  3. Yuanwang Digital Mall is a home for mobile cell phones, computers, gadgets, iPhone & iPad cases, as well as other accessories. There are also several stores around here selling drones.
  4. In Manhar Digital Plaza you can find mainly retail mobile phones and drone stores.
  5. SED Electronic Communication Market is a place for smartphones and Android tablets, with lots of additional accessories and cases.
  6. Longsheng Mobile Phone Market is a great place to buy older phones.

What kind of electronics can you buy in Shenzhen?

It is easier to mention, what kind of electronics you can’t actually buy in Shenzhen.

Here is the list of IT products which can be found in the marketplaces of Shenzhen:

  • cables;
  • tools;
  • electronic parts;
  • PC’s;
  • laptops;
  • GPS;
  • mobile phones;
  • tablets;
  • game consoles;
  • VR glasses;
  • all kinds of gadgets’ accessories, and even more!

Of course, this list can be continued further, but I think we all get the point – in Shenzhen, you can find all kinds of electronics you need.

Why the Shenzhen electronics market gained so much popularity?

# 1. Cheap prices

Manufacturing in China is quite cheap which makes the cost of electronics slightly lower than in other countries.

But keep in mind that the vast majority of Huaqiangbei suppliers work with bulk orders – even cheaper prices and no room for dropshippers.

# 2. Marvelous variety

The amount of sellers available in Huaqiangbei is huge: you can stand before possibly the largest assortment of electronics in the world.

You also have additional categories of goods (such as home decor, clothes, etc.) available for wholesale purchase.

# 3. Original quality

The quality of Chinese goods is an arguable point, but still, you can find original electronics in Shenzhen.

All suppliers who work at the Huaqiangbei are constantly reviewed by authorities, which helps to assure the quality.

You can determine the degree of quality asking for the testing sample – in the vast majority of cases testing products are the same with those packed for your order.

# 4. Automation and smart logistics

Even though Shenzhen is not so friendly to foreigners, the trading processes here are made at its finest.

Because of order automation and smart logistics you can spend less time on annoying order placement and focus on choosing the right product for your purposes.

# 5. Enormously wide inventory

There is no such possibility for you not to find the products you like in Huaqiangbei.

This place is rich in advanced electronics and other popular goods which will help you to skyrocket your business.

# 6. Warehousing options

In Shenzhen, you can also easily find needed warehousing space to store your goods waiting for transportation.

The prices for storage space here are quite low so it would be a good idea to organize your warehouse facility here.

Can I rely on goods from the Shenzhen electronics market?

This is a great question, especially if you are among persons who think that Chinese products are cheap and have low quality.

Maybe this was a case a couple of decades ago, but now there is no doubt left about the manufacturing force of China.

Practically all modern IT brands produce their assortment (or components for it) in China.

This is the reason why you can easily find qualitative products in Shenzhen electronics markets.

Yes, there are a lot of scammers around, but they can be avoided by using simple tips and tricks (we’ll speak about it later in this FAQ).

Even though Huaqiangbei shelves are fully stacked with cheap copies of popular devices, there is no other place in the world where you can buy original electronics in bulk.

Where can I find the latest prices for electronics in Shenzhen?

There is practically no single way to find out the latest prices for electronics in Shenzhen.

The thing is the prices in Huaqiangbei are always moving in both directions due to the high competitiveness and fast development of this market.

Also, the prices differ due to the order’s quantity.

So, if you want to get the latest prices on some kind of electronics in Shenzhen, you have to require them directly from a certain supplier.

This also can be done with the help of Chinese sourcing agents.

How to choose an original brand smartphone in Shenzhen?

The price of smartphones is transparent and produces low profit for the seller.

That is why some Chinese manufacturers produce a bunch of copies, which makes the process of finding a good smartphone quite difficult.

The first and the most effective solution is to find a local partner who knows the market well and tell you the truth about its products.

If you want to learn more about the reliable sourcing agents and how to find them, please become familiar with the related Tj chinafreight guide.

Don’t forget that brand smartphones always support different kinds of languages and work quite fast.

You can also easily differ the original sensor panel and its copy – the speed of response is on another level.

Also, you can check labels on the box and manual, however, they can be counterfeit as well, so it is not always the case.

iPhones, for example, can be checked via the official Apple website using an identification number on the box.

What kind of products can I also find in Shenzhen?

Besides electronic devices and components, there are tons of useful stuff available for purchase in Shenzhen.

Here is the shortlist of such goods:

  1. Clothes.
  2. Leather.
  3. Cosmetics.
  4. Toys
  5. Jewelry.
  6. Kitchenware.
  7. Textile.
  8. Consumables.

Other things come in mind when speaking of products from Shenzhen, but we don’t have the whole life to name them all.

Please, keep in mind that you always have to require testing samples of any goods you wish to buy in the future.

And do not forget to bargain.

What is the difference between the Shenzhen electronics market and Hong Kong electronics markets?

Shenzhen is located 10 miles from Hong Kong, and naturally, everyone tries to compare these two cities.

Another reason for such a comparison lies in the fact that Hong Kong is well known as the worldwide electronics supplier.

As we’ve already figured out, Shenzhen electronic markets are located in Huaqiangbei.

Hong Kong electronics markets are located in Apliu Street, near Sham Shui Po Metro station.

So, the question is the next – which of these two cities is better for you as a buyer?

# 1. Market size

Markets situated in Huaqiangbei cover more than 2.9 square kilometers.

It has a lot of crowded high-rise buildings, and the vast majority of trading spots could be found on the first 3 floors of them.

Other floors contain offices that deal with the trading and financial processes or warehouse buildings that have stocks for the markets.

Also, there are a lot of shipping companies standing behind delivery procedures in Huaqiangbei.

According to the non-official statistics, there are more than 1.000 shipping agents based near the biggest market of Shenzhen.

Speaking of Hong Kong and Apliu Street, it is just a flea market for mostly used electronics gadgets or phones.

It is about 1 km long with a lot of tent booths and stores by the sides of the street.

The marketplace here is much smaller, probably 1/50 of Huaqiangbei.

# 2. Product categories

Huaqiangbei markets are specialized in various product categories.

For example, the SEG Plaza market has a lot to do with makers and hardware startup companies, as well as with PC suppliers.

SEG Communication markets provide their clients with different phone accessories.

The Pacific market is only focused on security products like cameras and alarm systems.

Feiyang market mostly sells used phones, Yuanwan sells only new phones in wholesale, while Longsheng sells phone parts.

In Huaqiang Phases, you can find all kinds of LED products. 

Each market is famous for its product categories, and some markets offer special services (e.g. phone repair).

Also, you can find specialized spots for Chinese brand phone sales.

Apliu Street in Hong Kong is basically one market where you can find various devices and gadgets.

# 3. Manufacturing capacity

On the outskirts of Huaqiangbei, there are tons of manufacturing facilities that produce the vast majority of electronics for Shenzhen markets.

Some of such facilities are situated in the nearest cities, like Dongguan.

When new gadgets are created, the first place where they can be found in Huaqiangbei.

Some of the marketplaces are working more like the exhibition centers that are open 340 days a year.

Needless to say that Huaqiangbei can be considered as the heaven for the hardware makers or developers.

Many international business companies send their managers here to source some new products and organize additional distributing spots.

Hong Kong Apliu street is different – it is a flea marketplace for retailers where the better part of the assortment consists of used electronics. 

/ By che / China Freight News

What is HS Code: The Definitive FAQ Guide

If you are doing international business and have any questions about HS code, then you need to check this guide, you can find your questions below and check our answer.

If you can not find the right answer, then please contact me at any time.

What is the HS Code of a product?

HS Code is an acronym for “Harmonized System”.

It is an international system of naming and classifying commodities that we want to ship.

It gives room for traded products to be categorized regularly.

This will assist member countries for custom purposes.

At the international level, the HS Code (for the classification of products) is usually a six-digit code.

There are specific guides to be followed for importing from China to any other country using these HS Codes.

To broaden your knowledge about HS Codes, you can check out this video.

What is HTS?

This is the Harmonized Tariff Code Schedule (HTS).

It is a 10-digit method of classifying goods specifically imported fromthe United States.

They capture their first digits from the international HS code and add an extra four digits to make it more extensive.

For example, Section 09 is “Tea, Mate, Coffee, and Spices”.

0901 is “Coffee, Coffee Husks, substitutes with coffee”.

0901.11 is “Coffee, Not Decaffeinated, Not Roasted”.

0901.11.0015 is, “Coffee, Arabica, Not Decaffeinated, Not Roasted, Certified Organic”.

That is how this works.

It must be very particular and specific depending on the type of your product, as you can see here.

What do Schedule B codes mean?

US exporters are required to use Schedule B codes.

These codes are a subset of HTS codes.

It makes things more specific.

For a US exporter, you must make use of the 10 – digit HTS subsets called Schedule Bto export your goods.

Failure to classify products appropriately will lead to sanctions, fines, and other penalties.

Checkhere to know more about customs clearance in China

How are HTS codes chosen?

They are usually administered by the United States International Trade Commission.

All US importers need to understand the use of correct HTS-US codes.

This is because custom duties are assessed based on this classification.

Why are HTS codes important to the Government?

HTS codes are used by government officials to determine the type of goods that are exported and imported.

This is done for tax collection.

This tax generates revenue for the government.

How Can I Use Images to Find Related HS Codes?

Visit findhs code to make both textual and visual search for products HS codes.

It is fast and very accurate.

How can I Obtain Better HS Code Results?

Make use of two or more HS code search engines and compare their search results.

Search results that align on both or all used search engines are more likely to be accurate.

What If I Don’t Find What I Am Looking For?

You can contact a fulfillment provider.

He or she should be able to guide you and provide relevant information on your search.

What Are Hs Codes Comprised Of?

These codes are composed of about 5300 article or product descriptions.

They are grouped in 21 sections.

They are also arranged in 99 chapters.

How Are Hs Code Digits Broken Down?

They are grouped into six digits.

It can be further broken down into three parts.

The first two digits (HS-2) reveal the chapters of each product.

For instance, 09 represents Tea, Spices, Coffee and Mate.

The subsequent two digits (HS-4) deals with the groupings within that chapter.

For example, 09.02 represents Tea.

This does not tell us about its flavor.

The next two digits (HS-6)tell us more about the product.

For example, 09.02.10 tells us the tea is non-fermented Green tea.

It is important to note that all countries categorize products in similar ways up to the HS-6 digit level.

There are only a few exceptions.

Where Are The Hs-6 Digit Level Exceptions Applied?

This system of classification does not apply to all countries.

Some countries still utilize the old and obsolete versions of the HS code.

What Are These Digits Called?

The first two digits are called ‘Chapters’.

The first four digits are called ‘Heading’.

The last six digits are called ‘Sub heading’.

How Is The Hs Structured?

The Harmonized System is arranged in a simple logical way.

For instance, animals and its products are located in one section of the HS.

Machine parts and appliances can be found in another section.

They have Chapter and Section titles describing wide categories of goods.

Headings and subheadings describe the products in more specific terms, as shown clearly here.

What Is HS Tariff Classification Number?

This is a number that is shown on import documentation.

It is necessary for determining the type of product that is being imported.

It is a 10-digit number.

Typically, every good has its own unique HS tariff classification number.

An agency called the Canada Border Services Administration ‘CBSA’ makes it compulsory to have an H.S. Tariff Classification Number.

This number is provided in Box 27 on B3 Customs Coding Form.

This is a method of identifying products to be imported.

The number is also required on various other (CBSA) forms.

Are Hs And HTS Codes Different?

HS stands for Harmonized System.

HTS stands for Harmonized Tariff System.

HS has 6 digits while HTS has 8-10 digits.

They are the same.

The difference is that HTS codes are used to specify the country you are importing from.

The HTS code takes the same form as an HS code for the first six digits.

The subsequent four digits differ.

What is the difference between Schedule B and HTS codes?

The Schedule B codes are subsets of the HTS codes for U.S. importers.

This implies that they are made up of 10 digits.

Schedule B codes are used by the United States government.

They use it to monitor U.S. exports for statistical purposes.

Just as the HTS codes, the first six digits of the Schedule B codes should be equivalent to that of the HS codes.

However, the subsequent four digits may be different from that of the HTS code.

To know more about their differences, watch this video.

What Is An Hs Code For Exporting And Importing?

HS Code is an international system that is used for product classification, especially for shipping.

It gives room for member countries to categorize traded goods on a general basis.

They are unique numbers that are used in the identification of various types of products all over the world.

They are utilized by custom officers to correctly recognize and clear products in the importing and exporting sector.

The custom agent or the individual in charge will apply for this number when submitting to customs in the importing country.

This is done to approve the rate of import tariff when importing into that country.

For instance, if you need help importing tea from China using HS codes, Tj chinafreight can assist in recommending the best Chinese tea supplier.

What Happens When Your Hs Code Is Wrong?

It is very important to provide the customs clearance agent with as many details as possible about the products to be imported.

This is to ensure that goods can easily be cleared through custom.

However, if the HS code is incorrect, then importers will be required to pay more in import duty.

In some rare cases, they may not pay import duty at all.

If an incorrect HS code is used to clear goods at the custom, you can be prosecuted.

You can be asked to pay fines or serve other forms of punishment.

What Are Commodity Codes?

When importing and exporting goods, it is required by law to pay a certain amount of money as tax.

This amount varies depending on the types of products.

Commodity codes are used for the classification of various goods.

This is to ensure that the appropriate amount of tax can be paid.

Every product will be assigned a unique commodity code as dictated by the International Harmonized System (HS).

Are Hs, Hts, Schedule B And Commodity Codes The Same?

Yes, they are basically the same.

The Harmonized Tariff Schedule (HTS) is used for Customs import Declaration as a product classification.

Commodity codes (also known as Schedule B numbers) are the product classification used for Customs Export Declaration.

Each of them is dependent on the commonly agreed numbering schemes.

This scheme was introduced by the World Customs Organization (WCO).

They all have something in common which is their first 6 digits.

The same cannot be said for the subsequent ones.

Are Hs Codes The Same For All Countries?

The first 6 digits of the HS code of a product are the same but subsequent digits vary for individual member countries.

For instance, the HTS Code in the USA is up to 10-digit level.

The HSN Code in India is 8 digits and that of China is also up to 8-digits.

What Is the HSN Code for Gold?

The HSN Code for regular gold jewelry is 7113 19 10.

Gold jewelry set with pearls is 7113 19 20.

Gold powder is 7108 11 00 and for other unwrought forms of gold is 7108 12 00.

For other semi-manufactured forms of gold, the HSN code is 7108 13 00.

For monetary gold, it is7108 20 00.

For gold base metals or silver clad with gold is 7109 00 00.

More on this can be found here.

What Is the HS Code for IP Camera?

For an IP Camera, the HS Code is 852580.

This comprises a video camera and digital camera record.

IP is an abbreviation for Internet Protocol and an IP Camera is an electronic item.

Chapter 85 incorporates electronics items.

Products such as digital camera, video recorder cameras and television camera all come under the HS code 8525.

Is Hs Code A Benefit in Import and Export?

The HS code is not necessarily a benefit.

In fact, it is more of a requirement.

It is used to label the particular type of product after shipping.

This is necessary for the determination of its import duty rate in the country of import.

What Is the Hs Code of Diammonium Hydrogen Phosphate?

This product called Diammonium hydrogen phosphate belongs to Fertilizers under HS code 31.

It is specifically a chemical fertilizer under HS code 3105.

Is 8 Digit HSN Code Mandatory?

As earlier stated, the HSN code is an 8-digit number while the SAC code is a 6 digit number.

The digits are to be included in the GST Return and GST Invoice.

Later on, I will expatiate further on the meaning of GTS and what it entails.

How Hs Codes Affect Custom Duty?

It is a tradition for tariffs and duties to be imposed on exports and imports based on the classification codes assigned to them.

For a duty rate to be assigned to an item, you must ensure that the product is assigned a classification number which is used by the receiving country.

You can familiarize yourself with customs clearance policy in China and Nigeria,

Are HSN Products Classification Simple?

No, they are not simple.

They can be confusing.

The large number of products that we classify with HSN makes it confusing.

Categorization is done by placing several factors into consideration.

Some factors include form, composition, and use.

Let’s take potato as an example.

Merely looking on the surface, its classification would seem pretty straightforward.

Unfortunately, it is not.

For fresh potatoes, they are categorized under the header “Potatoes, fresh or chilled” with the code 0701.90.

On the other hand, frozen potatoes are placed under the category ‘Vegetables’ (cooked or uncooked by boiling in water),‘frozen’ and under the subheading of ‘Potatoes’ with the code 0710.10.

From these, we can conclude that the HS is very comprehensive and not so straightforward.

Let’s look at another example: the classification of picture frames.

Wooden frames are given the HS code 4414.00.

They are under the heading Wooden frames for mirrors, photographs, paintings, and other related objects.

On the other hand, plastic frames are assigned the code 3924.90 under the heading Kitchenware, tableware, and other plastic household articles.

Finally, we examine “dogs” which are assigned the code 01.06 under the heading “residual” and are classified under “Other live animals”.

This is because its code isn’t within the range under headings 01.01 – 01.05.

In essence, every product for import or export must be carefully assigned an appropriate HS code to avoid sanctions and punishment.

Do not assume when assigning codes to products.

Take your time to make sure it is right.

Are There Consequences For Using Wrong Hs Codes?

Of course, there are consequences for using wrong codes.

  • You can miss out on a free-trade arrangement.

For instance, the wrong code you use may not be part of the items included in the list.

This means you will pay duty on a product that you should have traded duty-free.

  • You may be overcharged on customs duty.

Different products bear varying custom duties.

  • Choosing a wrong HS code may result in paying more as duty charge.
  • You may also face certain penalties from custom authorities.

They may think you want to cheat their government.

Furthermore, your products may be delayed, and your customers are made to wait for long.

This could piss off your customers and earn you a bad reputation.

What Are the Benefits of Using HS Codes?

The benefits include:

  • opportunity to enjoy duty-free trade in free-trade zones;
  • easy clearing of products from customs office;
  • positive business outlook; and

you can avoid delaying product delivery to your clients.

How Can I Determine the Customs Duty for a Product?

You can ask your local customs office.

You can also use freightos search engines to determine the customs charge on your products.

How Does Service Accounting Code (Sac) Relate to GST?

Just like products, services are uniformly classified for identification and taxation purposes.

Codes used for services are referred to as Services Accounting Code (SAC).

An example is given below.

Legal services (such as documentation and certification of intellectual property, patents, and copyrights) are coded 998213.

The first two digits (99) are generic for all services.

The next two digits (82) indicate the primary nature of the service.

This is legal services in this example.

The last two digits (13) indicate a clearer explanation of the nature of services, such as legal documentation for patents or copyright.

To learn more about SAC and its relationship with GST, click here.

How Can I Classify My Product Correctly?

There are a lot of resources available on the internet to assist in determining the correct HS code for your impending imports or exports.

They include:

What Is GST?

This is an abbreviation for Goods and Services Tax.

It is a value-added tax placed on many goods and services which are sold for consumption domestically.

The GST is paid by the consumers.

The GST is paid to the government by the business.

Therefore, in essence, the Government rely on GST for revenue.

The GST is also a form of tax.

It is an indirect tax that is added to the cost of a particular good or service.

Every business adds this GST to the price of each of its products.

A customer who acquires the product will pay the sales price plus GST.

The GST is collected by the seller and paid to the government as a form of revenue.

In some countries, GST is known as Value Added Tax (VAT).

What Countries Use GST?

The first country to implement the GST scheme was France in 1954.

Ever since several countries have adopted this tax system since it is quite profitable.

Some of these countries include Vietnam, India, Spain, Italy, South Korea, Canada, Monaco, Australia, Nigeria, Singapore, Brazil, and the United Kingdom.

How Does the GST Work?

Most countries use the single unified GST system.

This implies that a single tax rate is used throughout the whole country.

A country with a single unified system merges all taxes (central taxes and state-level taxes) and collects them as a single tax.

Some of these taxes which are merged include sales tax, service tax, excise duty tax, entertainment tax, transfer tax, entry tax, luxury tax, and sin tax.

These countries place a tax on almost every single product and service at the same rate.

What Is HSN Code In GST?

Now that we know what GST is all about, the link between HSN and GST can now be properly explained.

In some countries such as India, HSN codes are used for the regular Customs, Excise, and Value Added Tax (VAT) laws.

Recently, there have been proposals to use the codes under Goods and Services Tax (GST) law to categorize goods and products.

The HSN code has to be declared on the tax invoice.

It should also be stated when filing the GST returns.

WHAT IS THE HS CODE FOR SHIPPING COST?

It is important to note that HS codes are not needed to calculate the shipping cost.

The HS Code is only needed by the importer to determine the amount of import duty.

Shipping cost is the element that is put into consideration when custom duty is calculated.

Where Can Hs Codes Be Applied?

As of 2018, 220 countries were utilizing the Harmonized System worldwide.

HS Codes are used by several people to oversee the import and export process.

This includes statistical agencies, custom authorities, and other government regulatory bodies.

They oversee imports through the following:

  • Transport statistics and tariffs
  • Custom tariffs
  • Trade negotiations (for instance, the World Trade Organization schedules of tariff concessions)
  • Collection of international trade statistics
  • Monitoring of controlled goods (e.g. ozone layer depleting substances, wildlife trade, narcotics, endangered species, wastes, and chemical weapons).
  • Collection of internal taxes
  • Rules of origin
  • Areas of Customs procedures and controls, including information technology, compliance, and risk assessment.

Some companies use HS codes to locate good sources of items and good selling opportunities abroad.

They also use it to calculate the total cost of imported parts and products.

What Is the HSN Code for Work Contracts?

Work Contracts are categorized under SAC (Services Accounting Codes) for GST.

The SAC (Services Accounting Codes) list is used to classify services.

On the other hand, HSN (Harmonized System of Nomenclature) list is SAC’s equivalent for products.

Work Contracts Service is coded 9954 based on SAC classification.

It is further classified as:

SAC 99541 indicating Construction Services related to Buildings.

SAC 99542 indicating General Construction Works of Civil Engineers.

SAC 99543 indicating Site Preparation Services.

SAC 99544 indicating Assembly and Erection of Prefabricated Constructions.

SAC 99545 indicating Special Trade Construction Works.

SAC 99546 indicating Installation Works.

SAC 99547 is indicating Building Finishing Works.

Where Can I Get Hs Code API?

You can get some websites online which have APIs

These websites can make your products and services’ classification much easier and better.

APIs usually use inputs such as product names, brands, product descriptions, and manufacturer to assign unique codes to products.

Semantics3 is a tool that is used to assign HS codes to your product.

What Is Meant by Reasonable Care?

The term “Reasonable care” means compliance with customs rules and regulations.

This idea was as a result of the US 1993 Customs Modernization Act (famously referred to as the “Mod Act”).

The act amended some sections of the Tariff Act of 1930.

This changed the way trade communities and customs interact during international trade.

It makes us know that the business community and the customs office are both responsible for compliance with the Importer of Record (IOR).

This concept gives us a better understanding of the legal responsibilities of the trade community.

For instance, the trade community is expected to classify and determine the value of imported products and services.

It also makes information available to customs.

Customs use this information to assess and collect duties, gather accurate statistics and check for compliance with rules and regulations.

The Customs office is responsible for providing guidance and support to the trade community.

How Can an Importer Demonstrate Reasonable Care?

The first step is to get acquainted with the rules and regulations guiding imports.

Next, we can ask questions on controversial issue sat the customs office.

Abiding by established rules and regulations follows.

Lastly, importers should ensure they know about changes in customs regulations quickly.

How do I find HS Code?

Identifying the actual HS Code for your products can be challenging.

However, sendcloud.com has made your work easier.

On the website, key in the nearest description possible to identify your product.

When you don’t find the exact product you are looking for, use ‘other ‘or the navigator tool.

Otherwise, you can search the product using the materials it’s made of.

Once you get your code, you can check the import duty shown in the overview of the products selected.

The system is automatized; carefully check the HS Codes retrieved. Remember the codes help to determine the number of import duties or any other payable taxes; ensure they are correct.

Why do you need HS Code When Importing from China?

Importing products from China needs thorough planning which includes testing, labeling preparation of documents etcetera.

Therefore, you need to have the HS Code to run the process smoothly.

Here are some of the reasons why you need the Harmonized System while importing products from China.

I. For custom, duty to be applied- All goods imported to China are subjected to VAT Tax of 13% for agricultural and utility items while other goods are 17%.

II. It’s a regulatory authority requirement for pre-market approval.

III. CIQ ( China Inspection and Quarantine) supervision- checks labels and CC markings. They work hand in hand with laboratories and other offices to ensure the products imported are of good quality.

IV. For custom declaration process to take place.

What is HS Codes for Clothes?

HS Codes for clothes has four fixed digits 6210.

The additional digits make the whole difference to the code.

Garments are classified according to accessories, gender, whether handmade or not.

Example Apparel and clothing accessories not knitted or crocheted.

Who is Responsible for HS Codes?

HS Code responsibility is shared among HS traders, custom authorities, and exporters/importers.

HS traders provide HS Codes to custom authorities when they want to import and export goods. Information is declared on the import declaration.

HS traders have to provide the correct HS Code failure to which can result in penalties.

Custom brokers are familiar with the classification while importers and exporters are not.

As a result, traders expect brokers to determine the correct HS Code for their products even at a fee.

Interestingly the brokers are not as familiar with the products as the traders are.

Custom brokers may be tempted to quickly clear shipment by declaring HS Codes with the least import or export restrictions possible.

To reduce administration work, they may declare the HS Code with less amount of import duties.

It is the importers’ or exporters’ legal responsibility to ensure goods being shipped have been classified correctly.

At the end of the day, the trader is the loser.

So as a trader is important to learn the process of  HS classification, hire a consultant such as Tj chinafreight Experts or work together to determine the correct HS Code.

If you want to depend on a customs broker remember to at least conduct audits to manage the risks.

What is HS Code China?

In August 2018, China Custom Commodity HS Code changed from the original 10 digits to 13 digits.

The first 8 digits are based on the WCO and HS Code plus the Commodity HS Code of import and export of people of the Republic of China.

The 9 and 10 digits are customs supervisory additional numbers while 11 to 13 are related to inspection and quarantine.

Transcustoms provides the latest China HS Codes.

What is HS Code for Laptop?

The Harmonized system for laptops is 8471.30.

It ensures uniform classification of laptops among various countries.

However, countries add more digits to the HS System to be unique.

Laptops are classified according to the manufacturer of new or used laptops.

Is HS Code for Import the same as HS Code for Exports?

While dealing with imports or exports, Hs codes eliminate guesswork and instill confidence in the business.

Hence import, export HS codes are similar.

A certain commodity may mean one thing in a certain country and something different in another due to the language barrier.

For example, in India incense sticks are referred to as agarabatti while in other countries it’s referred to as incense sticks.

Non-Indians may not understand what agarabatti means.

To avoid such miscommunications, HS Codes are used in international trade.

They are a universal language.

What are the Number of Digits in HS Code?

Initially, HS Code numbers were six. This was adhered to by most of the countries worldwide.

The six digits can be broken into three parts;

Here is an example of HS Code 660390 for umbrellas. It falls under the footwear/headgear category.

The first 2 digits (66) identifies the chapter of the product i.e. the Umbrella.

It gives a rough indication of the product.

The next digits (03) identifies the headings of the product i.e. trimmings and accessories of the umbrella.

It gives

/ By che / China Freight News

Commercial Invoice – The Complete FAQ Guide

Whether you need to learn the basic meaning for what is the commercial invoice, or you have any advanced problem for the commercial invoice, this FAQ guide will definitely help your export or import business.

You can find questions you want to know, then click to check the answer, if you still cannot solve your problem, then do make comment on the bottom or contact us directly, we will give you best solution for any questions of the commercial invoice.

What is the commercial invoice?

A certain set of documents is always required for customs clearance of all kind of goods.

One of the most important of these documents is the commercial invoice.

A commercial invoice is a paper that the exporter (seller/supplier) must send to the buyer along with the goods being shipped.

When is the commercial invoice required?

Commercial invoice plays an important role not only in buying and selling goods.

It is also one of the indispensable documents for passing customs control at the borders of many countries as well as for individual territorial units with special trade legislation, like some US states.

The invoice is used as a declaration and is provided by the person or corporation that is exporting the item.

The key to smooth and fast customs clearance is a complete and correct commercial invoice.

Does the commercial invoice somehow relate to commercial documents?

Commercial document definition includes the next significant trading documents:

  1. Commercial invoice.
  2. Shipping or transport document.
  3. Certificate of origin.
  4. Order.

How a proforma invoice and commercial invoice differ between each other?

A proforma invoice is a document that contains preliminary data on the goods which would be delivered in the future (for example, its quantity or price).

A proforma invoice is a basis for issuing a final invoice or a commercial invoice.

Also, a proforma invoice is usually written out if the goods are delivered on a partial prepayment or free of charge (humanitarian aid, promotion goods, etc.).

The difference between the proforma invoice and the commercial invoice is that some of the data in the first document is not final and can still be changed before the final agreement on the delivery.

For example, this may relate to the number of goods or types of models.

Can the commercial invoice be handwritten?

According to the general international rules, commercial invoices have to be typed and not handwritten so the inside information is not confused by anyone because of illiteracy or bad handwriting skills.

How do I create a commercial invoice?

The use of various formats of commercial invoice is allowed.

The most common is the corporate invoice of the seller on its letterhead.

If the sender does not have a corporate invoice on letterhead, he can print the information on a regular sheet of paper.

When creating the corporate invoice, first of all, you have to build up the right form, which will contain all the needed information fields.

We will discuss all the obligatory parts of the commercial invoice later in this FAQ.

Which obligatory details should the commercial invoice contain?

The seller (supplier) has to prepare the commercial invoice which must contain the following information:

  • date of issue and invoice number;
  • personal info (name, address) about the supplier;
  • details of the consignee (buyer, recipient);
  • information about the contract (number and date of conclusion);
  • the product name, description of each type (model, article);
  • the number of units;
  • price per unit of cargo;
  • the total cost of goods;
  • HS code of cargo;
  • weight of products;
  • the currency which was used while buying goods;
  • the total value of the entire batch of goods sent;
  • information about the country of origin, the country of export (if it is not a manufacturer);
  • recipient country;
  • the purpose of exporting the goods;
  • VAT (may not be mentioned if the tax is zero);
  • terms of delivery according to Incoterms 2010.

Who can issue the commercial invoice?

A commercial invoice should be created by the seller, supplier or exporter.

In general, commercial invoices are printed on a company letterhead paper of the supplier.

It is also should be stamped and signed by the same company.

Any alteration or correction on any of the shipping document must be authenticated by the issuer of the document (in the vast majority of cases it is a supplier or an exporter company).

Commercial invoice and tax invoice: what is the difference?

As it was said earlier in this FAQ, a commercial invoice is the supplier’s bill of sale for the goods, specifying their type, price, and quantity, as well as other terms of sale.

Tax invoice is a document issued by a supplier which stipulates the amount charged for goods or services as well as the number of Goods and Services on which tax payable.

In the better part of countries, a commercial invoice can be raised by any supplier meanwhile a tax invoice could be given by a registered dealer may be service tax provider.

How many commercial invoice copies are allowed?

In practice, the supplier has to create two copies of the commercial invoice and store one of them inside the package.

The other copy has to be placed outside the package, in some kind of transparent envelope to protect the paper from tearing and ripping.

On the supplier’s desire or buyer’s demand, the commercial invoice can be translated into the national language of the destination country but the copy in the supplier’s national language should be also added to the package.

Also, some shipping companies can require more copies of the commercial invoice, especially in the case of multiple packages.

What is consignee in the case of the commercial invoice?

Consignee is a private person or a company (named in the commercial invoice) to whom goods are shipped.

What is the HS number on a commercial invoice?

HS stands for Harmonised Commodity Description and Coding System.

It’s a list of digits used by customs in various countries to classify goods.

It is mainly used to determine the taxes and duties which has to be paid.

An HS code can be also named as a harmonized, tariff or commodity code. You can check this FAQ Guide on HS Code.

How to figure out the commercial invoice number? Why do I need it?

In general, you can see the field with the commercial invoice number at the top of the paper.

This number can be used by suppliers to sort orders from their clients and add this info in their accounting documents.

Are there some general rules on how to fill the commercial invoice?

Even though the form of the commercial invoice can’t be found in any legal documents, there are still certain requirements that must be followed.

If there are doubts about the correctness of filling out the invoice, it is better not to rely on your strength and turn to the services of a specialist in this matter.

  1. The commercial invoice is issued on a standard A4 sheet, but preferably on a special letterhead of the supplier: this is more convenient since such sheets already contain all the necessary details of the seller.
  2. The document has to be filled in printed form.
  3. The invoice is certified only by the personal signature of the person responsible for sending the goods.
  4. The invoice costs are usually expressed in the currency specified in the contract. Otherwise, it is obligatory to indicate at what rate (indicate the date of transfer) the conversion will be carried out.
  5. The document is filled in a language understandable for both parties to the transaction, most often in English. The practice of bilingual filling of the document is now successfully used (in the languages ​​of the supplier and the recipient, divided into two columns).
  6. If the goods are not sent for commercial purposes, the reason for their movement must be indicated. For example, “This product is not for commerce. Payment is not required” or “Replacement of defects. Cost is indicated only for customs clearance”, etc.
  7. If insurance and transportation are paid by the sender, their cost is indicated in the invoice in a separate field.

You can also check this definitive guide if you want to find out more about how to correctly fill the commercial invoice. Or, check this Youtube video with the same topic.

Where do you put a commercial invoice?

Copies of the commercial invoice have to be placed both inside and outside the package.

Where can I get commercial invoice templates?

There are tons of commercial invoice templates on the Internet.

You can find good examples of visiting this and this page.

Where can I find legal requirements for the commercial invoice?

There are no general international requirements in the case of commercial invoice form.

However, you can contact your state customs authorities and ask them about this kind of document (in some countries the form of the commercial invoice could be found in customs legal acts).

Commercial invoice vs packing list: how are these two differ?

A commercial invoice and a packing list are both documents which describe transactions in which some goods and products change the owner.

However, there is still a slight difference: the packing list is needed to describe the goods themselves, while the commercial invoice shows details about the financial transaction which stands behind the transfer of such goods.

So, the main reason why the seller can use a packing list is to describe the goods, so that the supplier can show what exactly he has been sending and the buyer can check that all those goods have been received later in full.

The commercial invoice is simply needed to show the buyer how much and when he has to pay for desired products.

A commercial invoice contains information about the payment process, e.g. prices and terms, such as whether payment has to be issued immediately or in 30 days.

Do I need a commercial invoice to ship documents?

A document can be defined as a typed, handwritten, or printed communication which has no commercial value.

When you ship international documents you only need to complete a shipping label.

In general, the commercial invoice is not required for documents shipping.

Are there some special commercial invoice requirements for China/USA/UK/Canada/other countries?

Yes, the special requirements for the commercial invoice form can slightly vary from one country to another.

The main difference lies in the HS Code, which is not the same in the US, Europe, and Canada.

Also, some states may have a special requirement in the case of the commercial invoice form, which has to be completed following special rules of customs authorities.

Such invoices are known as Customs’ invoices and may be provided instead of or in addition to the standard commercial invoices.

What kind of product description should the commercial invoice contain?

The description of each product must include a specific list of information, the completeness of which determines the time for the cargo to pass through customs control and, as a result, the possibility to meet delivery deadlines.

In this part of the invoice you need to specify:

  • product name;
  • the scope of the product;
  • serial numbers, tariff number (if available);
  • production material;
  • the number of units of production;
  • type of product packaging;
  • weight and volume;
  • units of measure (kg, pieces, etc.);
  • price for one unit;
  • the total value of cargo.

A complete description of the cargo is the main requirement for its successful delivery to the destination.

Do I need a commercial invoice for personal items?

If you are sending personal items or a gift, a pro forma invoice, rather than a commercial invoice will be needed, because there is no purchase happening in such cases.

Is a commercial invoice the same as a bill of lading?

A bill of lading is not an accounting document.

It is a document which shows how the title to goods is passing from the shipper to the consignee.

Can one commercial invoice be used for multiple exporting products?

Yes, you can use a single commercial invoice if all the products are needed to be sent to the same destination.

Don’t forget to place a copy of a commercial invoice on each package.

How the commercial invoice and bill differ between each other?

In practice, commercial invoices are sent to customers after the goods are shipped.

Nowadays, original paper-based invoices can be replaced by electronic ones.

Bills are received from vendors.

They record expenses (or costs or inventory), and they record that the business owes the vendor the amount of money that appears on the bill.

Speaking of the difference between the commercial invoice and the bill, it lies in the fact of the shipment: commercial invoices contain a lot of shipping info while bills describe only goods and their cost.

How to get the commercial invoice from Aliexpress sellers?

Not all Aliexpress sellers provide their buyers with commercial invoices.

However, you might need such documents while importing goods from China.

So what to do in such a situation?

First of all, you can always try to ask Aliexpress seller about the possibility of sending you an invoice.

If this method hasn’t helped you, you can use some side Web programs for this.

For example, you can try to use the Aliexpress invoice generator.

Does the commercial invoice have to contain payment terms?

Yes, the commercial invoice has to contain payment terms and it is the main difference between this type and other types of invoices.

Do I have to use the commercial invoice for returned goods?

Just like in the case of personal items or gifts, for the goods return process, you have to use a pro forma invoice because there is no need of paying for such products.

What is the difference between the commercial invoice and the shipping invoice?

A shipping invoice shows how the goods are moved to their final destination, while a commercial invoice allows the supplier to bill the buyer for such goods.

Is the commercial invoice also used when dropshipping?

Yes, you have to use commercial invoices for dropshipping as well.

Why do some Chinese suppliers under-declare the total value in the commercial invoice during export?

The main reason why Chinese suppliers can under-declare the total value of goods is to reduce buyers cost.

Between the US and China, the general tariff was 0 until in 2019 Donald Trump changed it.

So in the case of US buyers, it is totally unnecessary to under-declare value from the recent time.

As a rule, the better part of Chinese suppliers will follow the instructions from foreign buyers to make documents for passing through the customs clearance process only.

In some cases, foreign buyers can even prepare the customs documents with lower cost by themselves and send them to Chinese supplier to print, stamp and send to shipping entity.

What are the consequences of having a commercial invoice and normal invoice with different totals due to free of charge items shipped?

None that we can think of.

In accounting terms, the only document which matters is the commercial invoice because it shows the money that was paid as a result of the foreign purchase.

In the case of logistics, a commercial invoice is a customs declaration paper which is used to calculate customs and duty charges when transporting goods across international borders.

Outside this use, it serves no other purpose.

What is the Purpose of Commercial Invoice?

Commercial invoice plays a fundamental role in facilitating trade, especially across international borders.

You can use this document in a wide range of circumstances related to shipping process.

Some of the uses of commercial invoice include the following;

· Outlining Commodities

Both the buyer and the seller use a commercial invoice to list all the goods being bought and sold, respectively.

Ideally, this document outlines all the items involved in the specific transaction.

Of course, this is essential since it helps to enhance accountability and inventory management.

· Sending Funds for Shipment Payment

In most instances, traders involved in large scale importation often use a commercial invoice to facilitate goods payment.

Ordinarily, the buyer, upon receiving the document, sends it to a particular bank or respective financial institution.

Upon scrutiny and verification of all the vital details, the bank then remits the payment to the respective seller’s account.

· Acts as a Support Document for Claims

In international shipping, several risks are always in the offing.

For instance, the shipment may get lost or damaged due to varied reasons.

In such instances, if the consignment is insured, it means the buyer will make claims from the insurance provider against the goods.

Therefore, the commercial invoice serves as an ideal support document in the insurance claim to compensate accordingly.

· Customs Clearance

In many countries, a commercial invoice is one of the primary documents required for customs clearance.

Technically, the customs officials look into the document to verify the goods match with the cargo.

It also helps in determining whether the goods are prohibited or restricted before subjected to physical inspection if need be.

· Helps to Evaluate Actual Payable Tax and Duties

Most governments, through appointed departments, use commercial invoices to calculate the actual payable taxes and duties.

Different goods are subjected to varied duty or tax brackets, depending on a wide range of factors.

While at it, some commodities are also exempted from tax.

Thus, the commercial invoice makes it easy to determine the true value of goods for customs and duty.

What are the different types of commercial invoices available?

Typically, a commercial invoice can be divided into two main categories, which include the following;

· Purchase Invoice

This refers to a type of commercial document that the seller issues to the buyer.

A purchase invoice outlines the commodities purchased or services offered.

This document also includes the number of items sold and the sale price.

The purchase invoice is used to demonstrate proof that the product or service was purchased and the amount paid for the same.

· Sales Invoice

It refers to the type of commercial invoice that the seller, manufacturer, or exporter sends to the customer to request payment for items.

A typical sales invoice includes a product description or the product being sold or the service being offered.

Furthermore, the sales invoice also serves as an official record for a sale for both the buyer and seller.

What is the Step by Step Process of making a Commercial Invoice?

Most suppliers often have customized templates of commercial invoices, which reflect their respective businesses.

It is important since it makes it easy for the business to fast-track and generate the invoice.

However, for a new business, there is also a way you can use to make this document when in need.

Here’s a step-by-step process on how to generate a commercial invoice;

1) Download the Template

The easiest and fastest means of building a commercial invoice is by downloading a template you can customize.

While at it, ensure you obtain it from a reputable website.

2) Fil in Seller Details

Fill in all the relevant details regarding your business. These include business name, address, email address, and phone number.

3) Fill in Buyer Details

Ensure you include the name, address, and contacts of the individual or entity purchasing the commodities.

You’ll also want to include the shipping address in case it is different from the billing address.

4) Assign Invoice Number

The invoice number must be unique, which makes the commercial invoice autonomous from any other similar document.

A suitable way of assigning invoice number is by using a sequential method.

Where possible, you may consider making the invoice number alphanumerical.

5) Include Buyer’s Reference Number

In addition to the invoice number, you may also want to incorporate a customer’s reference number.

The buyers may use this reference number in case they have inquiries to make to your business regarding a particular concern with the order.

6) Incorporate Terms of Sale

Detail the terms and conditions surrounding the sale of specific commodities.

Technically, this refers to any information related to the obligations, costs, and risks that both parties take on as part of sales of items.

Ensure the terms are brief and straight to the point.

7) Include Terms of Payment

Provide clear terms of payment.

This will include vital information concerning the agreed payment terms and conditions for both parties.

Ideally, you’ll always have such details worked out as part of a purchase order for the sale.

8) Determine the Currency

This is a critical step, particularly when dealing with an overseas buyer.

Ensure you include the specific currency on the commercial invoice. Moreover, the buyer must agree to use the identified currency for the sale.

9) Determine Shipment Method

Indicate the specific ways your products will be shipped to the buyer.

It could be via airfreight, ocean freight, or express shipping among others.

10) Include the Item Description and Quantity

Provide a complete description of all the commodities to be shipped.

Essentially, this includes a type of container, gross weight, and unit price of the merchandise.

Furthermore, detail the total quantity of every product to be purchased and shipped.

11) Provide a Unit of Measure

Give the total gross and net weight of every commodity to be shipped.

This should be expressed in kilograms, tonnes, or pounds, depending on the country of origin or destination.

Make sure you include the unit price of the commodity per unit measure.

12) List Price and Value

Provide the total price for the shipment and list the net commercial value.

Of course, this is the total value of all the commodities covered on the invoice.

13) Detail Miscellaneous Charges

Note down any extra charges you expect the customer to pay as part of the consignment of the shipping process.

This may include insurance, storage fee, etc.

In a nutshell, this is how you can generate a commercial invoice when in need of one.

Is a Commercial Invoice the same as Customs Invoice?

Technically yes.

The key difference between a commercial invoice and a customs invoice is the specific setting where one is used.

For instance, a commercial invoice is used in domestic and international purchases and sales of different commodities.

However, in foreign trade, a commercial invoice is used as a customs invoice.

Primarily, a customs invoice is a legal document transported together with a shipment needed for customs clearance.

Another difference between these two types of invoices is that customs invoice may be a bit detailed.

Nonetheless, they both serve the same purpose irrespective of the setting or circumstances used.

Does Commercial Invoice need a Value?

Yes.

Before shipping your consignment, you need to determine the value for each commodity.

Essentially, one of the main reasons for this is to specify a value for the carrier you are using to ship the consignment in case of loss or damage.

Another reason is to help in calculating the customs duty and taxes to pay when shipping internationally.

Nevertheless, the commercial invoice includes consignment value for customs of the designated country to sign duties and taxes accordingly.

Technically, the value on this document should be the price the buyer paid for the goods.

However, the seller can assign a lower value on commercial invoice if they are providing a sample at no cost.

How does Commercial Invoice compare with other Types of Invoices?

Typically, a commercial invoice intends to provide records of a business.

In general, the country of destination reviews this document before allowing a consignment into the country.

A commercial invoice is quite unique compared to other types of popular invoices such as the following;

·  Standard Invoice

It is relatively basic and contains an invoice number and other vital information about the buyer and seller.

This type of invoice also contains an itemized description of commodities of services, cost, payment terms, and due dates.

· Progress Invoice

Commonly used in construction industry, a progress invoice is merely incremental detailing the progress of long-term projects.

In essence, it makes it easy to know the amount they presently owe the supplier or service provider.

· Utility Invoice

A type of invoice specifically utilized by companies such as electricity, water telephone, internet, and sewerage.

Utility invoices note the different details relevant to the service, billing period, previous balances, and past due balances.

· Recurring Invoice

It refers to the type of

/ By che / China Freight News

Incoterms 2010: The Definitive Guide 202

If you just want to have a quick check about each Incoterm 2010, you can download this comprehensive Incoterms chart.

If you are new to importing from China and have any problem with Incoterms in 2020, please find answers from below questions, let me know if you cannot find your interested topic answer.

What is Incoterms 2010?

Incoterms stands for international commercial terms.

Incoterms 2010 is, in fact, a set of rules recognized by state entities, suppliers and lawyers worldwide as a comprehensive description of different terms in the international trade.

Incoterms 2010 definitions cover the duties and rights of the trading parties in the case of goods supply.

Incoterms represent a variety of trade rules, which are gathered in categories (named in the first three letters).

Each of these categories displays business practices in international sale contracts.

In general, Incoterms 2010 describe the costs, risks and main responsibilities which are connected with the delivery of goods from the supplier to buyer.

How many Incoterms 2010 are there?

There are 11 sets of rules in Incoterms 2010 in total.

Seven of these sets can be used for any type of transport of the main carriage.

All terms that are part of Incoterms are indicated in the form of a three-letter abbreviation, the first letter in which indicates the time and place of the transfer of obligations from the supplier to the buyer:

  • Group E: obligations pass to the buyer directly at the time of dispatch and, accordingly, at the place of dispatch of the goods;
  • Group F: the point of transfer of obligations is the terminal of departure, provided that the bulk of the transportation remains unpaid;
  • Group C: the payment for the main transportation is made in full, obligations are transferred at the time of receipt of the goods at the terminal of arrival;
  • Group D: full delivery, when the transfer of obligations is carried out at the time of acceptance of the goods by the buyer.

What are the most common Incoterms 2010?

The system of Incoterms was set to clarify international trading rules for both buyer and seller.

In daily practice, it is extremely easy to choose the wrong Incoterms set, which will eventually confuse the trading deal and relations between trading parties.

So if you don’t want to dig deeper inside the complicated rules of Incoterms 2010, you can use the most common sets listed below:

  1. DDP (Delivery Duty Paid).
  2. EXW (Ex-Works).
  3. DAP (Delivered At Place).
  4. DDP (Delivery Duty Paid).
  5. FOB (Free on Board).

These Incoterms are the most popular among the trading representatives because of the simplicity of inner terms both for buyer and seller.

However, we strictly recommend you to become familiar with all Incoterms so you can make your choice with a full understanding of all processes.

Please, follow our FAQ to become pro in this topic.

Are Incoterms 2010 mandatory?

The code of rules does not have the status of an international source of law.

However, its provisions are mandatorily taken into account by government agencies, including customs authorities and courts, if the contract contains references to the delivery basis or disputes of a foreign economic orientation.

In other words, it is a reflection of generally accepted universal concepts, rights, and obligations in the sphere of trade.

In some countries, the document is binding and received the status of law.

This item is important to consider when concluding supply agreements with residents.

In this case, the parties are obliged to indicate in the contract a clause on the reluctance to be guided by the provisions of the regulatory action, if there is no such need.

Why are Incoterms 2010 important?

If you want to become a professional in international trading, obviously, you have to learn a lot of things about this topic, which includes the Incoterms 2010.

These rules cover practically all known scenarios related to transportation, customs clearance, import and export procedures, etc.

Who created Incoterms 2010?

The development of Incoterms was first conceived by the International Chamber of Commerce (ICC) in 1921, and this idea was realized in 1936 when the first edition of Incoterms rules appeared.

In 1923, the ICC Trade Terms Committee, with the support of national committees, developed the first six rules: FOB, FAS, FOT, FOR, CIF, and C&F, which were the forerunners of future Incoterms rules.

This was the beginning of a long and eventful history of Incoterms rules, which continues in our time.

On January 1, 2011, a current version of the rules, Incoterms 2010, was introduced.

What is Incoterms 2010 DAP?

DAP stands for Delivery At Point.

DAP set of rules tell us that the seller is obliged to provide the buyer with the products which are released in the export customs and are ready for unloading from the transport at the specified destination.

The rules of DAP impute the supplier the need to pay all the fees and costs connected with the transportation of products to the final destination.

What is Incoterms 2010 DDP?

DDP is an abbreviation for Delivered Duty Paid.

Speaking of DDP, the supplier has to process all the export and import customs which will make the products ready for unloading from the selected type of transport at a certain place.

Also, the supplier has to think of all costs and fees related to products transportation, which includes all exporting and importing processes.

Note that these rules can’t be used if the supplier cannot ensure the import customs fulfillment.

So, if the parties still want to exclude such obligations from the supplier and use the rules of DDP, this should be clearly defined in the contract of goods’ sale.

The DDP rules are applicable in the case of goods transportation by any mode, even including the multimodal transport type.

You can see the word “carrier” in the DDP description of Incoterms.

In this matter, it means any entity who takes the obligation to arrange or provide transportation of products by some type of delivery route under the agreement of carriage.

What are Incoterms 2010 FAS?

FAS is short for Free Alongside Ship.

Under the FAS agreement, the supplier has to deliver certain products along the side of the ship at the berth in the specified port.

The term FAS can only be used when transporting goods by sea or inland waterway.

The risk of loss or damage to the goods passes to the buyer when the goods are located along the side of the vessel.

The seller’s main responsibility is to transport the goods not just to the port, but to the indicated berth where the ship chartered by the buyer moored, or to the barge (without loading onto the ship).

The buyer is obliged to load the goods onto the chartered vessel, pay for the vessel’s freight, unload it at the port of arrival, perform import customs clearance with payment of import customs duties and fees, and deliver the goods to the final destination.

What is Incoterms 2010 CIP?

CIP is short for Carriage and Insurance Paid to.

This set of Incoterms 2010 rules shows us the situation where the supplier has to transfer the insured goods, released in the customs export mode, to the carrier he chose before to transport the goods to the destination.

Considering the CIP rules, the buyer takes all risks of damage or loss of the products, as well as other costs after the goods are transferred to the carrier, and not when the goods reach the final destination.

All risks which arise after loading the goods into the vehicle and all the costs at the destination point are distributed to the buyer.

However, the supplier must pay all costs connected with the freight of products to the certain area, perform export customs clearance for the export of goods with payment of export duties and other fees in the country of departure.

Keep in mind that the supplier is not obliged to complete customs procedures for importing goods, pay import customs duties, and perform all the connected with import processes.

Finally, the CIP rules impute the supplier of some insurance fees.

This party has to pay for risks of loss and damage to the goods during transportation to the buyer.

But, please note that under the rules of the CIP, the supplier is obliged to provide insurance with minimal coverage.

So, if you want as a buyer to have insurance with a larger coverage, you have to either specifically agree on this with the supplier, or conclude additional insurance by yourself.

You can freely use the CIP rules for the transfer by any type of transport, including multimodal transport.

In the situation with shipment by several carriers, the supplier transfers its risks at the time of transference of products to the first carrier.

What is Incoterms 2010 FOB?

Let’s try to figure out what the term FOB means.

So, FOB is short for Free on Board and it tells that the supplier completes the delivery when the cargo passes the ship’s rail at the specified port of shipment.

That is why all the connected risks of damage or loss to products and all the relevant costs are borne by the buyer from this moment.

The FOB rules state that the supplier must make all the clearance in the case of export.

Please remember that you can use this set of rules only if the carrier transports the goods by inland waterway or maritime transport.

In the case when the parties don’t want to deliver the products onboard, the term FCA should be used.

What does FCA Incoterms 2010 mean?

FCA (Free Carrier) Incoterms 2010 describe the deal in which the supplier has to transfer the products passed all customs procedures to the carrier, specified by the buyer, in the named place.

It should be noted that the choice of place of delivery will affect the obligations of loading and unloading goods.

If delivery takes place at the supplier’s premises or another agreed location, the supplier is responsible for loading the products.

It is recommended to identify the point of delivery because the risk passes to the buyer at this moment.

What is CIF Incoterms 2010?

CIF (Cost, Insurance and Freight) Incoterms 2010 show the situation when the supplier has to transfer the insured goods on board of the ship and deliver them to a destination port.

This is the moment when the supplier’s goods obligations pass to the buyer.

According to the CIF rules, the buyer takes all risks of losses, as well as other expenses after the goods are placed on board of the ship at the certain port (not when the goods reach the destination).

In the case of CIF contract, the supplier is obliged to pay the costs and freight required to deliver the goods to the specified port of destination, perform export customs clearance for goods with payment of all connected duties and other fees in the country of departure.

However, you have to know that such a supplier is not obliged to process customs formalities for importing goods or take part in other import customs procedures.

Finally, the CIF contract rules also place on the supplier the obligation to purchase marine insurance against the risk of loss and damage to the goods during the transportation process.

Like in the case of the CIP set of rules, the supplier is required to provide minimal coverage insurance, so if the buyer wants to have insurance with large coverage, he must either specifically agree on this with the seller, or apply for additional insurance agreement.

Note: the CIF set of rules can be used only when transporting goods by sea or inland waterway transport. If the parties do not want to deliver the products in such a way, they should use the CIP contract, which was already mentioned previously in this article.

What is CFR Incoterms 2010?

CFR stands for Cost and Freight.

What does it mean?

These terms state that the supplier finishes the delivery when the products pass on board of the vessel at the port of shipment and are delivered to the port of destination.

According to the CFR delivery basis, the buyer assumes all risks of loss or damage to the goods, as well as other expenses after placing the goods on board of the ship at the certain port.

The CFR delivery terms impute on the supplier the obligation to pay the costs and freight required to bring the products to the certain port of destination and to perform export customs clearance.

The buyer, on the other hand, has to perform customs formalities for import goods, pay import customs duties and perform all other import customs procedures.

The term CFR Incoterms 2010 can be used only when transporting goods by inland or sea waterway transport.

If the parties are not going to deliver the goods across the ship’s rail, the CPT rules are better to be used.

What is CPT Incoterms 2010?

CPT is short for Carriage Paid To.

According to the CPT rules, the buyer assumes all risks of loss or damage to the goods, as well as other expenses after the goods are transferred by the seller to the carrier (not when the goods reach the destination).

The seller must pay the costs and freight required to deliver the goods to the specified destination, perform export customs clearance for the goods with payment of all duties and other fees in the country of departure.

But, please note that the supplier is not obliged to perform customs formalities for importing goods, pay corresponding customs duties or deal with other import procedures.

These terms can be applied for delivery by any mode of transport, including multimodal transport.

In the case of transportation to an agreed destination by several carriers, the transfer of risk from the supplier will occur at the time of transfer of the goods to the first of carriers.

What is EXW Incoterms 2010?

EXW (Ex Work) terms describe the situation when the seller is considered to have fulfilled the delivery obligations when he transfers products to the buyer’s business or in another specified place (e.g. warehouse, factory, shop, etc.).

Under the EXW rules, the supplier is not responsible for loading the goods onto the vehicle provided by the buyer, neither for making customs payments nor for customs clearance of the exported goods, unless otherwise specified.

According to the EXW rules, the buyer bears all the risks and costs of moving goods from the seller’s territory to the specified destination.

If the parties wish the seller to take over the responsibility of loading the goods at the place of dispatch and bear all the risks and expenses for such a shipment, this should be clearly stated in the relevant addendum to the contract of sale.

The term EXW cannot be used when the buyer is not able to perform export formalities.

What is DAT Incoterms 2010?

DAT is an abbreviation for Delivered At Terminal.

This set of terms states that the seller is considered to have fulfilled his obligations when the goods released in the customs regime of export are unloaded from the transport and placed at the disposal of the buyer at the agreed terminal.

The term “terminal” in the basis of delivery DAT means any place, including air/ auto/railway cargo terminal, berth, warehouse, and so on.

The DAT terms of delivery impose upon the seller all the risks associated with transporting the goods and unloading them at the specified terminal.

Also, the seller is obliged to pay the costs and freight necessary for the delivery and unloading of goods to the specified terminal, perform export customs clearance in full.

On the other hand, the buyer is obliged to perform customs formalities for import and pay all the connected fees or duties.

The DAT terms may be used in the carriage of goods by any mode of transport, including multimodal transport.

What is a multimodal transport in the case of some Incoterms rules?

Multimodal transportation definition is used for the transportation of products under an agreement with one carrier using various modes of transport.

The carrier has the right to use the transport of other contractors, but all responsibility lies with the general contractor, from whom the transportation was ordered.

The organization of multimodal transportation of products should begin with comprehensive route planning.

Carefully consider a timetable with overload points and stops along the way.

Multimodal transportation can be used in the next cases:

  • when there is no direct communication by a single mode of transport between the supplier and the consignee;
  • direct communication by a single mode of transport is not suitable for the consignee due to the high price or long delivery time.

The consignee can also order transportation by different modes from multiple carriers; this type of transportation is called intermodal.

There is a certain difference between multimodal and intermodal transport.

Compared with multimodal, the latter has several disadvantages:

  1. The number of organizational and paperwork is increasing.
  2. It is very difficult to find the guilty party if the goods were received not on time, or in an imperfect condition.
  3. If carriers do not use their transport, the price is higher, as the number of agents and their agent fees increases.

What are the Incoterms 2010 for air/road/rail transport?

This group includes the terms EXW (Ex Works), FCA (Free Carrier), CPT (Carriage Paid To), CIP (Carriage and Insurance Paid To), DAT (Delivery at the Terminal), DAP (Delivery At Place) and DDP (Delivered Duty Paid).

They can be used even if there is no shipping at all.

However, it is important to remember that these terms can also be applied when a vessel is partially used during transportation.

What are the Incoterms 2010 for maritime transport?

The next rules are used for maritime and inland water transport only:

  1. FAS (Free Alongside Ship).
  2. FOB (Free on Board).
  3. CFR (Cost and Freight).
  4. CIF (Cost Insurance and Freight).

What is the difference between Incoterms 2000 and Incoterms 2010?

First of all, in the 2010’ Incoterms edition the number of terms was reduced from 13 to 11.

But at the same time, two new positions were introduced (DAP and DAT).

And the four least popular terms were abolished (DAF, DES, DEQ, and DDU).

In fact, the term DAT (Delivery at Terminal) replaces the term DEQ.

However, the DAT set of rules, unlike DEQ, is applicable for multimodal transport.

According to logistics experts, the delivery to the DAT terminal corresponds most of all to the logistics practice in the port.

The term DAP (Delivery to Point) makes important to specify the exact destination.

It replaces three terms (DAF, DES, DDU).

Speaking of the FOB, CFR, and CIF, the risks and costs are set in a new way.

In Incoterms 2000 the risk passes on after the delivery has been made to the ship’s side.

In Incoterms 2010, on the other hand, the transfer of risks takes place after full loading of the cargo on board of the ship.

You can check Incoterms 2000 via this link.

Can Incoterms 2010 be used for domestic shipments?

Yes, Incoterms 2010 may apply both for domestic and international transportation.

Do Incoterms 2010 cover title transfer?

Incoterms 2010 is mostly a set of rules connected with transportation and customs fees and procedures.

That is why these terms do not determine ownership or transfer title to the goods, nor contain payment rules.

Which Incoterms 2010 are the most favorable for the seller/buyer?

As you can already assume, various Incoterms 2010 rules can be profitable for buyers and seller with a slight difference.

Here we’ll try to figure out the most favorable Incoterms for such parties.

Let’s start with buyers.

FOB should be your #1 choice because under these rules the supplier has to leave the products at the port, prepared and ready for international departure.

As a buyer, you have to hire the shipping company.

This gives you total control of all expenses and coordination of the cargo delivery.

FOB terms are very flexible and useful.

Also, buyers can use EXW and DAP with great success, however, these sets require a good understanding of trading laws and regulations.

As for suppliers, CPT or similar rules where the goods are passed to the carrier without exporting procedures should do just fine.

Incoterms 2010 and revenue recognition: how do these concepts connected with each other?

Please keep in mind that Incoterms 2010 are not written for revenue recognition and the ICC (International Chamber of Commerce) guide specifically says that’s not what they do.

They cover only the supply delivery processes, transfers of risk, import/export procedures and very little else.

When the next Incoterms set of rules will be created?

The work under a new set of Incoterms rules has already been started.

Presumably, they’ll come out in 2020.

What kind of insurance obligations could be found in Incoterms 2010?

You have to remember that two Incoterms 2010 only (CIF, CIP) have a provision about the freight insurance, which has to be arranged and paid for by the supplier.

In practice, it can be quite hard to identify the moment in a journey where the damage takes place.

So it is most recommended to ensure the delivery on a warehouse-to-warehouse term.

Also, the freight insurance in this case usually doesn’t cover consequential losses, like the knock-on effects of buyer missing a contract deadline or a sales season.

If desired, this risk can be included in the insurance agreement.

Incoterms 2010 chart of responsibility: what is it?

Incoterms 2010 chart of responsibility is a useful scheme which shows all the terms in one place, with a clear comparison of rules for each set of terms.

You can see the comparison chart in the picture below.

What are the payment terms in the case of Incoterms 2010?

You should know that Incoterms 2010 do not contain any kind of payment terms connected with the purchase of goods.

So, the payment terms in the case of Incoterms refer to all costs and fees for customs and transportation process.

Where can I find an easy tutorial for Incoterms 2010?

It is hard to mention the one and only best way to learn Incoterms with ease.

There are a lot of useful articles and videos on the Web which can help you to become more familiar with Incoterms 2010.

For example, you can check this Youtube video if you want a simple descriptive guide to this topic.

What is the difference between CISG contracts and the Incoterms 2010?

There is no clear connection between Contracts for the International Sale of Goods (CISG) and Incoterms 2010.

CISG is a set of applicable laws for sales of goods between businesses situated in different countries.

Incoterms are a set of rules (not obligatory laws) that simply specify parties’ respective rights and obligations about transportation and delivery of goods (not just internationally but for domestic purposes as well).

You can use both CISG and Incoterms in your trading practices.

Do Incoterms 2010 matter when calculating custom duty?

Yes, it has a huge matter because the import duty and payable taxes are calculated following the complete shipping value, which includes the cost of the imported goods, the cost of freight and the cost of insurance.

That is why it is possible to save on the small amount of taxes if you conduct a good freight cost.

Are Incoterms 2010 required in an invoice for cross-border shipping transaction? Or can I issue an invoice without these terms?

As it was said previously in this FAQ, using the Incoterms 2010 is not compulsory.

You can issue an invoice without the terms as long as the other party is agreed with it.

Can I use Incoterms 2010 on Alibaba/Aliexpress?

Incoterms 2010 can be used by Alibaba suppliers, the vast majority of which are actual manufacturers.

However, you won’t see Incoterms in the case of Aliexpress because all the transportation and customs procedures are already figured out by Aliexpress sellers and carriers (you can only choose the type of carrier when ordering on Aliexpress).

Ask an expert about incoterms now

If you want to dig into the all incoterms, I think you can keep reading this guide. You will be an expert about incoterms.

Here is a quick overview of what you’ll learn here:

The best part:

Whether you are fresh to international shipping or want a refresher on the details of Incoterms, I have you sorted.

As an experienced freight forwarder, the three-lettered acronyms are my daily cup of tea.

Since shipping from China is a complicated business, it is essential you understand the trade’s vocabularies, related costs and risks and how it all impacts you.

When brokering an international sales agreement, you should be keen on the terms of sales regarding the sale price.

Therefore, to reduce unnecessary confusion, use International Commercial Terms, the commonly accepted serial of international trade terminologies.

Incoterms are standardized rules developed by the International Chamber of Commerce (ICC), which clarify the predominantly applied international trade terms.

The trade terms closely correlate with the U.N. Convention on Contracts for the International Sales of Goods.

They are recognized and enforced by all key trading nations.

Incoterms are a voluntary, assertive, universally accepted and complied with text for defining your responsibilities.

And, that of your seller during the carriage of goods in contracts of sale for international trade.

They aim to plainly explain the risks, costs, and responsibilities associated with the shipment of goods.

But, it is good I made you aware that Incoterms are just a section of the entire international trade transaction agreement.

They do not mention anything to do with the price to be paid f

/ By che / China Freight News

Truck Freight and Shipping: The Complete FAQ Guide

If you have any problem on the truck freight to ship your goods from point A to point B in your country, then you need to check this FAQ guide.

Find the questions you are struggling and check the answer. If you cannot find the answer you want, do contact us, our expert will help you out.

Where can the truck freight shipping be used?

Truck freight shipping can be used if you need to organize the transportation of large volumes of goods by land.

Note: it is necessary to take into account the geographical location of the delivery point.

In some cases, the logistics conditions do not allow the use of this transportation type.

What are the average truck shipping rates per mile?

Freight rates are typically paid by the mile.

Depending on many conditions, they can range from $1.50 to $4.00 or more per mile.

Experienced freight carriers say the best price on the market is $2-3 per mile.

What is the average truck freight shipping time?

The transit time within the country is usually 4-6 days.
In the case of small countries or US states, it can be 1-2 days.

The international transit time is calculated individually, there are no average figures here.

A carrier engaged in FTL most often can guarantee the arrival of cargo on time.

In the case of LTL, these figures are approximate because of unforeseen circumstances.

How can I find the right truckload partner?

The best truckload company has to provide its clients with three key features:

Easy enough, but the vast majority of truck freight companies can’t fulfill such points.

However, Tj chinafreight keeps a lot of trustful trucking partners under the belt in full accordance with all above-mentioned rules.

What is a truck freight/shipping?

In general, freight shipping is the transportation of different cargo from point A to point B.

Usually, it is made for a commercial gain.

Freight shipping is not limited to one type of transport.

Cargo can be delivered by sea, air, or land means.

Hence, truck freight shipping is determined by a type of transport.

In this case, it is trucking transport.

This method of land transportation is considered as very efficient.

What is the difference between shipping and freight?

In some cases, “Freight” may be a synonym of “cargo”.

Also, the term “Freight” means the process of large cargo transit from point A to point B.

For this, various types of transport can be used: air, sea transport, and trucks.

Shipping is a common, general term, that is used when we speak of bulk goods transportation.

Shipping is carried out both for commercial and non-commercial purposes.

In some context, this term means the transport of cargo in a small amount.

Depending on the conditions faced by the carrier, air, sea and ground transport (including trucks) can be used for shipping.

The difference between shipping and freight can be stated in four key points:

How does LTL freight work? Is it somehow connected with truck freight or shipping?

The LTL abbreviation stands for “less than load” or “less than truckload”.

It is used in cases when the amount of freight is not enough to fill the truck.

It works like this: a client contacts a logistics company with a request to transport a certain amount of cargo.

The company estimates the size and weight of the cargo to form a package.

This package is loaded into the truck with several more packages from other customers.

Then the company makes an optimal route to deliver the goods on time.

This method of transportation is convenient primarily for small and medium-sized businesses.

The price of LTL truck freight shipping is formed depending on:

There is a connected term “LCL” (Less than Container Load) which is also widely used in the trading world.

You can read more about this via this link.

What is the difference between LTL and FTL freight? What is considered a truckload?

FTL stands for “full truckload”.

FTL differs from LTL with the fact that your cargo occupies the entire truck space, not just some part of it.

Also, LTL and FTL have other significant distinction points:

Cost. If you have a small amount of cargo, it is beneficial to use LTL freight shipping. The freight carrier shares the cost of transit between all customers that book a truck for transportation.

Weight. LTL shipping method is suitable if the total weight of the cargo is less than 15,000 pounds. If the weight is bigger, FTL method fits better.

Speed. The FTL method does not require stops, while for LTL shipping additional unloading and loading routes may be needed.

Bulk goods are typically shipped by FTL.

It is quite hard to unequivocally figure out what to consider a full truckload.

The norms of one carrier may differ from the norms of another.

However, three generally accepted indicators are the next:

    • <li44,000 lbs of products;

<li2,500 cubic ft of products;

What are the freight shipping classes and an NMFC number?

The National Motor Freight Traffic Association (NMFTA) created a classification system for every type of freight.

This system divides freight into 18 classes with their tariffs.

Such classes are defined with a number between 50 and 500 (as you can see in the picture below).

Freight class is figured out with the help of four key factors:

Besides freight classes, there is a unique number to each product (NMFC code).

As an example, fasteners, clips, and holders have an NMFC number of 179180.

You can use this number to match a product with a freight class and calculate shipment charges correctly.

Please, become familiar with a helpful NMFTA guide for NMFC codes visiting this page.

What kind of terms are used in the case of truck freight shipping?

There are a lot of terms in logistics, but you don’t have to know all of them.

It is enough to study those that relate to the truck freight shipping.

Inbound freight is a cargo moving from a supplier to a warehouse.

Outbound freight defines shipments that leave the warehouse.

Flatbed hauling refers to extremely heavy or unusual shaped loads. 

BOL stands for the bill of lading.

This is a document that reflects all aspects of transit.

It is also the agreement between the shipper and the carrier.

PRO number is used by the carrier to mark a shipment.

It allows a shipper to track a movement of cargo.

Bulk freight typically refers to a cargo that is transported without packaging.

Most often these are various kinds of raw materials.

Blind shipment refers to a situation when a shipper and receiver remain anonymous to each other.

It may also mean that the origin of the goods or the destination point remains masked.

Cartage describes a cargo that ships within the same area.

Intermodal transportation is when more than one mode of transportation will carry cargo to the delivery point.

Who are the largest trucking companies in China/worldwide?

Worldwide:

China:

<liWANGFOONG.

How much weight can a freight truck carry?

These figures differ for various truck types.

However, you can see the average numbers in the US Federal Regulation Laws.

They refer to a maximum truckload:

The same rules for China will be discussed later in this FAQ.

What is the maximum single axle weight for trucks?

The maximum single axle weight for trucks is calculated according to the Bridge Formula Weights.

It began to be used in the late 60s when the freight market began its constant growth.

More cargo means more load on the bridges which was a big problem back then.

To avoid accidents, the US government has developed a formula to calculate the maximum single axle load.

You can use the online calculator or try to figure out this number on your own.

The Bridge Formula Weights has the next constituents:

You can see the whole formula in the picture below.

How has shipping freight via container changed the trucking industry?

Widespread use of containers in the freight industry has led to several important changes:

Which freight is more fuel-efficient, barge giant ships or several trucks over roads?

It is a quite complicated question.

In the vast majority of cases, water transport is more fuel-efficient than road transport.

But, they are not always competing with each other.

You see, sometimes it is simply impossible to deliver goods by ship or truck.

And some cases require using both these modes.

As a general rule, ships are more fuel-efficient, but if there is a possibility of truck freight, it would be faster.

How to calculate truck freight rate?

Truck freight rates depend on a variety of factors, including:

<liweight;

As an example, take a look at how these rates are determined in the most common truck freight cases:

What is the difference between a simple freight truck and semi-truck?

The truck is a common term that describes the land motor vehicle.

The truck has at least two axles, engine system and a frame that is specially designed to move heavy loads.

Semi-truck describes a combination of a truck with a trailer.

Semi means a trailer that has an only back axle.

In front, it is supported by a truck.

This type of trucks is also called flatbed and they are widely used in many industries.

You can watch this Youtube video to see how flatbeds are profitable for the automobile industry.

What Incoterms 2010 can be used in the case of truck freight shipping?

Seven of 11 Incoterms 2010 can be used for any transportation mode:

Delivered Duty Paid).

Ex Works).

Can I use broker agent services for the truck freight?

Freight broker agent can help you to organize all kind of shipments, including truck freight.

Please, visit this page to find out more about Tj chinafreight trusted broker agents.

What business plan can I use to build the freight truck company?

A business plan can be an extremely efficient tool for the new-bee entrepreneur.

Such paper explains the stability and goals of your company.

Investors, financial companies and other potential partners may ask about this document before starting to work with you.

We’ve found a very useful guide which can help you to build a perfect truck freight business plan.

What are the truck freight futures and how to use them?

Futures contracts were introduced to help participants de-risk their exposure to volatility.

Such contracts use hedging instruments to stabilize and predict cash-flow streams.

Truck freight futures can help you:

What is the future of truck freight market?

Can it still be competitive in the modern environment?

There are lots of articles which predict the near end of the trucking industry.

Some of them speculate about new technologies in transport, others are dedicated to automatization of driving processes in general.

Right now, the truck freight market grows with huge pace worldwide.

With live or AI drivers, we don’t see how the automatization processes can disturb this growth.

New transportation technologies also do not have an adequate replacement for truck freight.

As far as humanity uses roads and ground transport means, this type of shipping will be quite popular.

Does the weight of the goods have to be accurate or can it be estimated?

When buying products, in the first stages you can use estimate numbers to calculate your future costs.

However, it is very necessary to know the exact weight when it comes to transportation and customs clearance.

The more certain you are, the lesser costs you’ll pay eventually.

Truck broker vs freight forwarder: what is the difference?

First of all, a freight broker never takes possession of items being shipped.

The forwarder, on the other hand, has more rights and obligations.

He takes possession of the items, arranges smaller shipments, and negotiates for the transportation of the consolidated shipment.

You can read more about these two specialties by checking this page.

What are the best practices for shipping truck freight?

There are three main practices which help Tj chinafreight to hold leading positions:

What is the temperature-controlled truck freight shipping? In which case do I need such services?

The above-mentioned type of freight shipping is needed for temperature-sensitive products.

Such goods vary from flowers, chocolate, fresh produce, too many other goods that need a specific temperature for perfect conditions.

Some freight service entities can provide you with temperature-controlled truck freight shipping and guide you through this complicated process.

What are the main truck freight shipping restrictions?

Truck freight restrictions may vary due to the type of goods, delivery contracts, different country laws and so on.

They are limiting height, weight, volume, and quantity of cargo, as well as arise additional rules for hazardous or fragile products.

In China, truck cargo is considered as overweight and oversized in the below-mentioned cases.

Dimensions of truck plus container:

Weight of truck plus container:

Weight of vehicle with the container:

The weight limit per tire is 3,000 kilograms in the vast majority of cases.

Is it possible for the shipping trucks to maximize the limited space they have to pack goods?

The better part of transportation cases has a problem not with volume, but with weight.

The truck can be half full but already too heavy so you can’t place anything else there to comply with laws.

The main technique to avoid such situation are smart stacking of pallets or floor loading the freight without pallets.

But remember that the letter case is generally to be avoided if possible: it takes forever to load and unload the trailer if you are not using pallets.

Can the truck shipping industry be overtaken by rideshare companies?

Although rideshare companies are gaining huge popularity nowadays, it is hard to imagine how they can overtake such a complicated business, as a truck freight shipping.

Just have a look at trucking services: the vast majority of goods move in special equipment driven by people with certain licenses.

We can see reasons why the ridesharing companies might take control of small parcel distribution.

But, the commercial shipments would never be entrusted to unprofessional unequipped rideshare drivers.

/ By che / China Freight News

The Definitive FAQ Guide for Freight forwarding Process

International trade is a complicated mechanism with a lot of gears and tools involved.

To help the trading parties, the freight forwarding services were introduced.

In this FAQ, we’ll try to figure out, what the freight forwarding process is and how it can help in worldwide trade.

What freight forwarder means? Is it the same with freight forwarding officer?

A “freight forwarder” term has a lot of synonyms, such as “forwarding agent”, “forwarder”, etc.

All of them describe a person or company that organizes product shipments from the supplier.

Freight forwarding officer is yet the same as the freight forwarder.

The only difference is that a freight forwarding officer is a person in all cases, while the “freight forwarder” concept can mean both human beings and businesses.

How does freight forwarding work?

Freight forwarding is a wide-spread method of international transportation both for corporate and personal use.

Freight forwarders coordinate the shipment of goods from one destination to another using various carriers (such as air, sea, road, and railway freight).

To do so, the complex of methods is used.

Below you can see the main services freight forwarder can offer:

  1. Customs clearance.
  2. Packing.
  3. Insurance.
  4. Import and export paperwork.
  5. Storage.
  6. Inventory management.

This list is not exhaustive; there can be other actions performed by the freight forwarding entity.

Due to such services, the whole process of importing and exporting of products becomes less stressful.

What are the main duties and responsibilities of a freight forwarder?

The freight forwarder uses the best routes and methods for moving big freights to the destination point.

The forwarding agent has to be sure that goods can reach the buyer in the shortest time.

So, the forwarder has to utilize several modes of transport most efficiently.

The freight forwarder has to conduct researches while planning routes.

He takes into account:

  • the kind of transported products;
  • the distance to the final destination;
  • any specific customer requirements with regards to the final delivery time.

The forwarding agent also has responsibilities connected with:

  • packing process;
  • insurance procedures;
  • customs documentation and other regulatory requirements.

A good forwarder has to have high organizational skills.

S/he has always keep an eye on under control freight, using satellite technologies and software apps.

Finally, such a person (company) has to communicate with its clients and make payments on their behalf.

Please, also check this helpful Youtube guide for a freight forwarder.

Why is it profitable to use freight forwarder services?

We can see 5 key factors which make freight forwarder services helpful:

Flexibility. Using forwarder services, you can easily change your choices about shipping companies or transportation modes without any troubles.

Versatility. Good forwarder knows how to quickly react and solve problems the moment they arise (like rerouted sea freight shipments or air freight delays).

Cost-effective. Freight forwarding services can help you to save a lot of money. Shipping companies work with bulk freights, which makes lower rates possible.

No customs hassle. The customs rules and regulations can make your delivery confusing and complicated. The freight forwarder will make sure that you can avoid all these troubles.

Additional services. Such options include purchase tracking, packaging, and on-demand reporting. When choosing a freight forwarder, it is a good choice to pick the company with helpful extra services.

If you are interested in international shipping from China, you don’t have to continue your search of trustful freight forwarder: Tj chinafreight specialists are always here to perform all the needed logistic tasks.

How much does freight forwarding cost? What is a freight forwarding additional charges?

The freight forwarding process requires various costs and fees.

They can be separated into two groups: common and non-standard charges.

There are 3 general charges which have to paid practically in any case:

Air/road/sea shipping fee. This is the most obvious one. It depends on the dimensions of your cargo, country of origin, and the delivery distance.

Some forwarders might include additional fees here:

  1. Cargo screening charge.
  2. Airline security fee.
  3. Fuel surcharge.

Pickup charge. These are the fees connected with pick up of goods from a warehouse.

Forwarder handling charge. This type of fee is connected with different paperwork, including copying documents and preparing the bill of lading. This charge might range from $35 to $75.

The non-standard (additional) fees might refer to:

  1. Certificate of origin. In some countries, you may need this document to verify the manufacturer of the products.
  2. Hazardous materials. Dealing with hazardous materials always require additional costs and fees.
  3. Legalization procedures. In the vast majority of countries, the legalization procedure is connected with verifying documents by a consulate or embassy.

Remember that there are additional charges in the case of each country.

For example, the US government presumes extra export fees, such as TSA Security and AES charges.

How do freight forwarder and carrier differ?

Freight agents provide forwarder services and organize delivery through a carrier.

In some cases, a forwarder can be a carrier as well.

The main difference is that the carrier uses its transport, while the forwarder relies on a third party in this matter.

Is it possible to ship a container directly without using freight forwarders?

Yes, it is possible, choosing between the next two options:

  • by applying for a long term contract with some shipping line;
  • by using extra agents (such as transporter, customs house agent) as well as shipping lines.

Note: shipping lines work works only with full load orders. It is impossible to order a small number of goods in this situation.

Also, it is recommended to use forwarder services if any challenges occur.

Such persons (companies) have huge expertise and worldwide partners, so they can deal with all kind of issues.

Which documentation is needed for the fast-forwarding process?

A lot of documentation is needed for freight forwarding process, especially in the case of international shipping.

Such papers include the next ones:

  1. Export license, packing list, and declaration.
  2. Commercial invoice.
  3. Inspection certificate.
  4. Certificate of origin.
  5. Bill of lading.

How is freight forwarding different from transportation?

Transportation of goods is connected with the delivery process only, while the forwarding services cover products movement, handling, storage, packing, and so on.

What is the step by step process of freight forwarding?

There are 6 basic steps of freight forwarding process.

Step 1: Pick up Delivery

This stage is also called export haulage.

It presumes the movement of items from a supplier’s location to the freight forwarders warehouse.

It requires the use of a truck or train to move goods.

The timeline of this step depends on the huge amount of factors, including distance, geographical location and the type of goods.

Step 2: Goods inspection

Right after the export hauling ends, the forwarder begins to inspect the goods and prepare them for departure.

This step starts by checking of goods quantity and quality.

It is also important to figure out the legal status of goods.

If there are some kind of issues, the forwarder can contact the buyer to fix them before the goods can be banned at customs.

Also, at this step, the forwarding agent can perform packaging if the supplier hasn’t made enough to secure the products.

Step 3: Export customs clearance

Before items can be shipped to the country of destination, it is required to clear them at customs.

On this stage, the freight forwarder can work with a customs broker or perform customs procedures himself.

Customs require to submit details about the cargo and provide them any supporting documents.

Usually, the supplier and buyer agree on who is responsible for this process.

If a freight forwarding agent can’t provide such services, it is required to find a third party with a customs brokers.

Step 4: Import customs clearance

In general, this step is similar to the export clearance.

When the cargo arrives at the final destination country, its authorities have to check such goods and all the connected import customs documents.

This step, like the previous one, can be conducted with the help of freight forwarder or a third party with a customs brokers.

Note: a good forwarder starts to process this stage even before the cargo arrives at the destination country. This helps to save a lot of precious time.

Step 5: Destination arrival and handling

After clearing goods, the forwarder gathers all the documents and pick up the freight.

At this step, the freight forwarding agent receives all documents for the cargo, including outstanding documentation, carrier bills and so on.

This stage is always processed by the freight forwarding company itself.

Step 6: Delivery to the recipient

This step is also called the import haulage and it is quite similar to the export haulage.

The forwarding agent transport goods to the buyer and transfer them with all papers.

Also, the buyers (receivers) can decide to collect the cargo themselves from the freight forwarder warehouse.

The freight forwarding process includes selecting the most appropriate routes and travel options for you as a buyer.

Do I need a freight forwarder for my e-commerce store?

This is kind of a picky question which mainly depends on the type of e-commerce store, targeting audience, and quantity of the shipping goods.

When you transport a lot of products inside the country, using carrier services can be a good idea.

However, the amount of shipments needs to be huge in this case (like dozens of shipments a day).

But this will guarantee you the best rates.

It is also recommended to hire 3-5 carriers if you want to speed up the process.

If you transfer goods internationally and need storage services, the freight forwarder should be the best option.

Such a company can act as a carrier and deals with complicated customs clearance procedures.

Finally, forwarders are fully responsible for any loss or damage to the products, so they store and transport them with extreme accuracy.

If you ship worldwide but do not need to store your goods, you can look for a 3PL (third-party logistics company).

Such entities are similar to freight forwarders and we’ll talk about the difference between them in the next questions.

Freight forwarding and 3PL: how are these two correlate with each other?

As we said previously in this article, 3PL (third party logistic) providers and freight forwarders have quite similar roles.

The differences between them become more obvious after reading about each service.

Freight forwarders allow companies to get the best rates and combination of carriers figured out on their behalf.

They coordinate almost everything from booking cargo space to filing insurance claims.

Their services end at organizing how your products will get from point A to point B.

3PL providers can take care of your entire supply chain.

This includes warehouse storage, picking, and packing, as well as shipping.

Third-party logistics services offer some flexibility as well since companies can pick and choose which services they’d like.

What is freight forwarding insurance?

Freight forwarding process presumes billion dollars in cash flow, so the insurance is an obvious option.

Good insurance coverage from the forwarding agent liability includes:

  1. Bill of lading liability.
  2. Errors & Omissions (E&O).
  3. Bailee liability for warehouse and trucking operations.
  4. Packing and container filling liability.
  5. Container and transportation equipment coverage.
  6. Customs liability.
  7. Third-party liability (mostly in the case of 3PL companies).

How does a freight forwarder handle missing freight?

In this matter, everything depends on a contract which you sign with a freight forwarder.

The forwarding agent also signs similar liability contracts with shipping lines and carriers.

In general, such agreements specify the course of action when the loss or damage of goods happens.

Once the freight forwarder signs the contracts he’ll try to ensure that there would be no such troubles.

If they still arise, the forwarding agent will take care of such losses himself or with the help of the insurance company.

What are the general problems of freight forwarding process?

The freight forwarding process is facing a lot of challenges.

The following are the most common problems.

Unclear rules of the competition

The freight forwarding depends on the economics of various countries, as well as on international regulation rules.

It makes the process quite complicated and uneven, due to different rates, fees, and charges.

Customs clearance complications

Following the previous topic, here is another problem of freight forwarding process: uneven customs regulation worldwide.

This has limited the scope of operations of a freight forwarder. Which means that most of the freight forwarders will venture on the local market.

Digitalization

We’ll describe this problem more precise later in this FAQ.

Let’s just mention that in the modern environment it becomes easier for buyers to process their shipments directly.

So the freight forwarders have to find new ways on how to help their customers.

What is the difference between freight forwarding and export house?

Export house is a company which is mostly located in the supplier’s country.

It is involved in the export of the products through their agents and distributors in the destination country.

Freight forwarding process covers a lot of stages, including exporting goods.

Please, head back to the previous question about 6 steps of freight forwarding.

What is the difference between freight forwarding and customs brokerage services?

Freight forwarder provides a wide range of services, while a customs broker helps to get through customs clearance.

Customs brokers focus on the import side of transportation.

For exporters, the customs broker is a foreign country deal, which can be handled by a forwarding agent.

The freight forwarder deals with the logistics of moving your products from A to B.

The customs broker, on the other hand, deals with the bureaucratic side, document completion, of getting your goods into the country.

Freight forwarders are always working together with customs brokers to help with export procedures.

What is a freight forwarder bond?

The Federal Motor Carrier Safety Administration (FMCSA) obliges all forwarders and freight brokers to hold such a bond (BMC-84).

The main task of this bond is to guarantee that you will be performing your job duties in full accordance with federal and state rules.

A bond protects the entities you work with (such as other shippers, motor carriers, etc).

If the freight forwarder can’t fulfill the law rules or contact terms, someone can claim his bond.

Note: freight forwarder bond is a rule which arises for US forwarding agents only.

How to start a freight forwarding business?

Starting a freight forwarding business consists of several key steps.

First of all, you have to conduct comprehensive market research.

You will save a lot of time and resources if you answer two main questions at this stage:

  • What is your target audience?
  • What volumes of cargo do you plan to work with?

Based on this information, you can purchase/rent only the necessary equipment.

Your market research will narrow down to a specific type of consumer.

Having studied a niche, you need to decide: whether to create a business from scratch or buy a franchise?

Buying a franchise, you get a ready-made business model and support.

But keep in mind that you will work according to the rules of the franchise owner.

Creating your own freight forwarding business is more difficult, but in the long run, it will bring big profits.

Also, business processes remain under your complete control.

Finally, you should clearly understand what services to provide and decide what equipment you need for it.

Most startups in this niche begin with the purchase/rental of vehicles and a warehouse.

The warehouse should be in a convenient location for vehicles access.

Also, the amount of start-up capital should allow you to purchase logistics software.

Without it, effective work in the freight market is impossible.

Hint: choose a narrow specialty (transportation of a certain type of goods or by certain transport means).

This will help to avoid competition with strong market players.

What is the biggest freight forwarding company in China/worldwide?

The biggest freight forwarding company in China is CNXtrans.

Company is based in Shenzhen – the main logistics hub in China.

Worldwide leader of freight forwarding business is DHL.

Currently, it is a part of the Deutsche Post DHL Business Group.

The company headquarters are located in Bonn.

How digitalization affects freight forwarding business? Would it still be actual in the future?

Digitalization of the economy leads to rapid and large-scale globalization.

For carriers, this means a growing burden on transport networks and a greater demand for services.

Today, the effective work of a freight forwarding company is impossible without the use of IT products.

This creates new challenges for the business:

  1. Creating own data warehouses.
  2. Development of software for freight movement tracking.
  3. Creating a support service capable of instantly responding to a customer request at any time.
  4. Hiring IT specialists who are into the nuances of the freight market.

In general, the digitalization of the freight market has led to improved communication within transport systems and between the carrier and the client.

Also, thanks to the analytics of large databases, it has become easier to form a favorable price and interact with a specific target audience.

What is a container type? How many types are used in freight forwarding?

There are four main container types for cargo transportation:

  • dry storage container;
  • rigid Intermediate Bulk Containers;
  • intermodal Tank Containers (ISOs);
  • flexible Intermediate Bulk Containers (FIBCs).

In general, there are 16+ container types, that are used in freight forwarding.

Freight forwarding KPI: what is it?

KPI is short for key performance indicators. It is a bunch of analytical tools which can help you to calculate your activity.

The main KPIs for the freight forwarder is the next:

Order accuracy

This KPI shows the number of various incidents from the placement of the order to the delivery of a shipment.

Using it, any freight forwarder can identify patterns and correct errors to make the transportation process safer.

On-time in full

This logistics KPI is also known as OTIF.

It is used to measure the percentage of orders delivered within the stipulated time (without any problems or documentation issues).

It is an ideal KPI which show how punctual and safe the services of a freight forwarder are.

Lead time

Lead time is a KPI that tracks how long your company’s processes different stages of freight forwarding process.

It is good to know the exact amount of time spent in each stage of the supply chain and optimize this time.

Warehousing costs

This KPI is used by the freight forwarders that offer warehousing services.

It monitors the expenses involved in the management of your warehouse facilities.

Truck turning

This KPI shows the average time spent between the exit for collect/delivery and the return of the vehicle to your warehouse.

It is widely used by road transportation companies.

Container capacity utilization

This indicator shows how you use the load capacity of a vehicle during road transport or a container during sea freight.

If you are always making full-loaded deliveries, then this KPI will be higher.

Productivity

This KPI displays the forwarding company employees’ production rate (workforce/labor hours/productivity).

Transportation costs

It means all charges related to each logistics operation developed by your company.

A number of shipments

Evaluates the average of cargoes handled by your company at a stipulated time (weekly/monthly/yearly).

This list of freight forwarding KPIs can be continued with other values.

Tj chinafreight can guarantee the highest performance regarding all the above-mentioned KPIs.

Our comprehensive experience and worldwide net of trustful partners are making us the best deal when it comes to shipping from China.

How can I choose the right freight forwarder?

The best freight forwarding agent has to have the next key features.

Great expertise

Experience is the most important factor when it comes to shipping issues (like dockworker strikes, port shutdowns, cargo reroutes, customs problems, warehousing organization).

An experienced freight forwarder always has an answer for even the most complicated issues.

A widespread network

The best forwarding agent is the one that has the full-fledged net of agents worldwide.

When choosing a forwarder, make sure it has connections in the destination country.

Competitive services

When choosing a freight forwarding company, confirm that it has all the services you need.

This helps all your international shipments go smoothly.

Certification and licenses

Always ask the freight forwarder about their certificates and other credentials.

They show if a freight forwarder has the specialized training and security requirements to correctly handle shipments.

Customer support

A forwarding agent with excellent clients service can provide support for effective international trading.

Tj chinafreight is proud to be among the most reliable and fast-growing freight forwarding companies in China.

We provide extremely competitive shipping rates and can timely deliver any type of product worldwide.

Choosing us as your trustful partner you can be sure that it will be a win-win situation.