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  

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:

• A Guide to Shenzhen (Global Gadget Capital)
• Wholesale Electronics Market in China
• Maps of HuaqiangBei Electronics Market
• Huaqiangbei Electronics Market
• Huaqiangbei (Biggest Electronics Market in the World)

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:

• Shenzhen Electronic Map
• VPNs for China
• How to Use VPN without Breaking Law in China

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:

• Sea Freight from China to Global Destinations Guide
• Air Freight from China to Global Destinations Guide
• Rail Freight from China to Global Destinations Guide
• Door to Door Shipping from China
• FCL Shipping from China
• LCL 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. 

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:

• The US Census Bureau Schedule B Search Engine
• The US Customs Rulings Online Search Engine
• Export Training Videos from the US Census Bureau

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

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

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.

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

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?

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.

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.

There are a lot of figures connected with the transit process.

In this case, one of the most important indicators is transit time.

Let’s find out what this figure is needed for and how we can use it for profitable international trade.

What is the total transit time?

If the delivery is processed by several carriers, the total transit time will be the time needed for the transportation of goods between carriers and to the final destination.

How do time zones affect transit time?

Unfortunately, there is no generally accepted practice for correlating the transit time with time zones.

The transit time is measured as a separate value, which can make the understanding of delivery deadlines quite confusing.

Please, discuss with your supplier/forwarder about the time zone being used in your relations.

What is the difference between lead time and transit time?

The lead time in a supply chain management context is the time from the moment the customer places an order (the moment the supplier learns of the requirement) to the actual delivery.

There is also a connected concept of cycle time: it begins when the actual work on the unit starts and ends when it is ready for shipment.

What is the common transit convention?

Community transit is a European Union (EU) customs procedure.

It allows foreign products to move from one point of the EU to another.

Also, this procedure is used for domestic transit inside the EU countries.

The Common Transit Convention is the document which implies such procedures.

If you are a resident of the European Union, please, keep in mind that this process can affect the delivery time.

What is a transit time in shipping?

There are two main definitions of transit time (TT).

First of them states that it is the time needed for the cargo to get from the supplier to the buyer.

However, we prefer to stick with another concept: the transit time is the approximate time needed for goods to travel from one point to another.

If we are talking about sea freight, then the transit time will count when the goods are on the way from the port

A to port B.

In the case of air freight, we are talking about the airports instead of seaports.

The transit time may change due to the unforeseen circumstances which will be discussed later in this FAQ.

Transit time and delivery time: how are these two differ?

The delivery time is a wider concept than transit time.

The delivery time covers the whole process of shipping from the supplier to the buyer, including customs clearance, package handling, etc.

The transit time, on the other hand, refers to the transportation process by sea/air/rail freight.

Which factors can affect transit time?

There are several key factors which can affect the transit time.

Transportation mode.

The most obvious on this list, the transportation mode is the main difference between each shipment.

Airfreight, basically, is the fastest way of goods delivery, but it is not the mode which you can freely use for bulk cargo.

Sea vessel, on the other hand, is the slowest one, but the cheapest, and also can cope with massive orders.

Partner carriers.

In international trade, one shipment is usually processed by several carriers.

The communication between them can easily affect the transit time.

Weather.

Weather is a huge factor for all kinds of transportation modes.

According to statistics, it is an issue in the 90% of delivery delay cases.

The most affected mode is road transport, especially in the snow season.

Road construction and traffic (for road freight only).

Like the weather, road and traffic issues can’t be precisely predicted or calculated.

Forwarding agents and drivers do their best to stay tuned with the situation on routes, but it is never enough to fully guarantee the lack of delays.

Among other factors affecting the transit time, sea and airport congestions can be named.

What is a mileage guideline in the case of transit time?

Some shipping companies create a mileage guideline, which shows the approximate transit time for a different distance.

The mileage guideline is mostly used in the case of road or rail freight.

You can see the example of it in the next question of our FAQ, “What is the approximate transit time for road/rail freight?”.

Who is responsible for a transit time delay?

As we’ve already figured out, there are a huge amount of factors affecting the transit time.

You may assume, that such things as delays can happen a lot.

So there is a huge need in assigning the liability for it.

In general, the shipping line is the party responsible for the transit time delay.

However, the freight forwarding agent also can be obliged to meet the transit time deadline if it is stated in the trading agreement with the buyer.

How the transit time and freight costs are connected?

It is obvious that the fastest transportation option will be the most expensive.

If you are choosing the air freight, you’ll get the goods in one week on average.

However, in this case, the costs double compare with the sea, road or rail freight.

What is the meaning of “in transit” status?

The vast majority of shipping companies uses tracking programs to show their clients the movement of their packages.

Your order can have a lot of statuses, including “in transit” status.

It means that your freight is on its way to be delivered and the transit time is already counting.

After the transit is over, you may see the status “delivered”, “processing customs clearance”, or something similar.

Can the customs clearance affect transit time?

If you head back to the first question of our FAQ, you can see that there are two widespread definitions of transit time.

So if you consider the transit time as a process of goods transfer from the supplier to the buyer, then the customs clearance will be among the factors affecting such time.

However, the transportation process from one port to another obviously can’t be interrupted by customs.

What is the approximate transit time for road/rail freight?

The minimal speed of freight train is form 10 to 30 miles per hour.

Under usual circumstances, the maximum authorized speed on the vast majority of rail routes is about 60 miles per hour.

Speaking of the road freight, the difference lies in the loading options.

Full truckload transit times are the next on average:

• 0 to 399 miles: same or next day delivery;
• 400 to 600 miles: next day delivery;
• 601 to 1200 miles: delivery within 2 days;
• 1201 to 1800 miles: 3-day service;
• 1801 to 2400 miles: delivery in 4 days;
• 2401 to 3000 miles: 5-day delivery;
• 3001 to 3300 miles: 5-6 day service.

Less than truckload mileage guideline is the next:

• 50 to 400 miles: 1 to 2 days;
• 401 to 600 miles: delivery within 2 days;
• 601 to 900 miles: 2 to 3 days;
• 901 to 1200 miles: 3-days delivery;
• 1201 to 1500 miles: 3 to 4 days
• 1501 to 1800 miles: 4 days for transit;
• 1801 to 2100 miles: 4 to 5 days needed;
• 2101 to 2400 miles: 5-days transit;
• 2401 to 2700 miles: 5 to 6 days;
• 2701 to 3000 miles: delivery within 6 days;
• 3001 to 3300 miles: 6 to 7 days needed.

Please, keep in mind that the above-mentioned figures are approximate and the real mileage guideline differs for each shipping company.

If you wish to know more about the road freight, please check this useful Tj chinafreight guide.

How can I calculate a transit time of the freight?

Freight forwarding companies and shipping agents use different software to calculate the transit time of each freight.

The vast majority of logistic apps are distributed for money, however, you can find a lot of free web calculators on the Internet.

Also, you can try to count the transit time manually, figuring out the average speed of transport and the distance of delivery.

Can transit time be guaranteed in shipping?

The transit time is the approximate value which can’t be 100% guaranteed in shipping.

What is the average transit time for air freight?

The air freight is considered as the fastest mode of transportation.

The average delivery time for air cargo shipments is between six to seven days: the transit process covers only 1-2 days from it, while the other time is needed for export/import haulage and customs clearance.

What is the average transit time for sea freight?

On average, sea freight is the slowest type of transport.

Depending on ports and shipping line capacities, it may take from 13 to 40 days.

As an example, let’s see the approximate transit time of shipping from Guangzhou, China to the USA:

• New York: 27-33 days;
• Miami: 34-40 days;
• Los Angeles: 13-18 days;
• Seattle: 16-21 days.

The sea freight from China to the UK takes nearly the same time:

• from Guangzhou/Shenzhen: 23-25 days;
• from Central China (Shanghai/Ningbo): 28-30 days;
• Northern China (Qingdao/Tianjin/Xingang): 32-35 days.

Note: the whole delivery time will be larger because of customs clearance and haulage procedures.

How can the transit time be improved?

In recent years, the transit time has been slightly improved due to the ongoing development of transportation technologies.

Modern shipping companies can improve the transit time just by using the fastest machines trucks, trains, and aircraft.

Also, the transit time can be improved by choosing the fastest and safest routes possible.

What is the Importance of Documentation on Transit Time?

Shipping documents are essential in any shipping venture.

They help to hasten the shipping process, ease tracking and enable easy identification of goods.

That said, several documents are needed both at the loading and offloading port.

Even though transit time has nothing to do with documentation, you should provide the needed documents at the right time.

Documents such as those showing the delivery address and the consignee make it easy to schedule delivery and reduce transit time.

Suppose in a case where your supplier delivers the goods to the port and provides inaccurate details on the delivery point.

In such a case, your goods cannot leave the port because there is no exact transportation point.

Also, when you fail to present the right documentation at the receiving port, customs may not be able to release your goods.

In worst cases, they may even deny the entry of your goods into the country.

You need your goods at the earliest possible time.

Therefore, you should do your part by providing detailed documents at the earliest possible time and let the shipping company do their part.

What is Door to Door Transit Time?

Depending on the context of shipping, you can use transit time to refer to:

• The time it takes to deliver the goods to the port
• The time it takes to ship goods from one port to the other
• The time it takes to deliver goods from the port to your doorstep.

If you are shipping under EXW incoterm, you are responsible for your transportation.

In this case, the transit time will depend on your method of transport.

Usually, express shipping offers the quickest delivery at a shorter transit time.

What is the Difference Between Transit Time and Free Time?

As previously mentioned, transit time refers to the total number of days your shipment takes after booking for shipment until it is delivered to the agreed place.

Transit times are specific to the shipping time and do not include the port’s inland delivery time.

On the other hand, free time is the grace period provided by the liner.

It is when you have to complete local importation, offload the cargo, and return the empty shipping container.

Does transit Time Affect the Cost of Shipping?

Generally, the shipping cost is relative to the destination port and is charged on the distance and not the times.

When shipping from china, the shipping cost will depend on the container weight, volume, and shipping distance.

Therefore, your distance dictates your shipping time and is thus used to calculate the cost of shipping and not the transit time.

How does the Type of Shipment Affect Transit Time?

The type of goods you are importing will dictate the method of shipment you use.

In most cases, when you import large quantities of products, you will settle to either use sea or air transport.

Sea transport is cheap when you are importing large quantities. However, it takes a slightly longer transit time.

Air transport offers a shorter transit time and is limited to the type of goods you can transport.

Some heavy and irregular products cannot fit large commercial airlines, meaning you can only use sea transport.

Also, perishable products need a shorter transit time meaning that they require air transport.

When it comes to shipping certain kinds of goods, you should check with your country on rules and regulations to be followed.

The government can hold hazardous goods, and preparing and clearing for export may increase the transit time.

What is Transshipment, and How does it Affect Transit Time?

You might sometimes find that your consignment leaves a specific port in international shipping but does not reach your destination port directly.

Along the way, your shipments are loaded onto another vessel that delivers them to your port.

Transshipment occurs when there is no direct vessel to your destination port. It saves on costs but at the same time leads to an increase in transit time.

When your products are being shipped under transshipment, you risk waiting to receive the goods for long. The process of offloading a vessel takes a lot of time.

If your products have to be offloaded from one ship, sorted, and loaded onto another vessel, it will take longer to receive them.

Transshipping is not a perfect shipping method since it inconveniences your plans because of the longer transit time.

Nonetheless, you can use it only if you lack a direct shipping route and plan on saving shipping costs.

Does Shipping Seasons Affect Transit time?

Yes.

Seasons tend to have a very significant influence on the demand and supply of products.

There are opportune times when shipping is cheap and the transit timeless.

The shipping seasons are grouped into four seasons, each with varying impacts on costs and transit time.

January-March Season

This season is also referred to as the quiet season.

During this season, many customers are recovering from the busy holiday season.

The climatic temperatures are also low due to the snow, and highways are not suitable for transportations.

The demand for products is low, and few customers place their orders for shipment.

During this time, many vessels are lying idle the shipping costs are low.

Placing an order during this season is opportune, and you are guaranteed less transit time for overseas shipping.

April-July Season

As the year progresses, the production volume increases, and the stock in most warehouses significantly reduces.

The shipping industry is starting to pick up, with most shipping companies settling in the production industries.

At such a time, the demand for carriers increases, leading to a surge in shipping costs. Many customers become despair to have their goods delivered to them.

Finding a carrier is difficult during this season, and in most cases, you will pay hugely for shipping.

The transit time also lengthens as finding a shipping space and processing export/import clearance becomes a problem.

August-October Season

This is a busy period for every party in the shipping business.

It is school season, and parents place enormous orders for their children, and most carriers are occupied.

Also, prospective customers are placing huge orders for the holidays.

Companies are also moving their products from one warehouse to the other due to the high sales. ‘

Finding a carrier at this time is practically difficult.

The costs are high, and it takes more time to prepare and load goods for shipping.

However, during such a time, many carriers endeavor to make maximum returns, and thus the transit time will be less.

November- December Season

This is the last season, and ironically, it is busy as well.

Toward the beginning of November, many customers make rush shopping, and finding a carrier becomes difficult.

However, things begin to slow as people near Thanksgiving, Christmas, and New year.

Also, many carriers are in a rush to finish delivery before the end of the year.

If you successfully secure a carrier, everything moves swiftly, and the transit time shortens even though the costs are high.

What areFCL and LCL and their Effect on Transit Times?

When it comes to international shipping, you can choose to have your goods in a Full Container Load (FCL) or Less than Container Load (LCL).

Both serve the same purpose of having your goods shipped to your destination.

However, depending on your goods’ quantity and type, you need to understand what each term means and how it impacts the transit time.

Full Container Load (FCL)

One rule set by the carriers is that all goods must be inside a container during shipping.

FCL shipment refers toa large product or many products that can fit in a single container.

Basically, under FCL, you will hire a container and have your goods shipped in them.

When the goods reach the destination port, arrange for the goods to reach you in the same container, remove the contents and return the container.

FCL is expensive because you hire the container and have the guarantee of safe handling of your products.

However, it is convenient because of the shorter transit times.

Less than Container Load (LCL)

LCL is the most common shipping method used by the majority of small importers.

It is convenient for customers with small orders and small budgets.

It involves a single container carrying products of several customers to the same destination.

Under LCL, the customers each have to pay the container fee.

The different pieces of cargo have to be picked from various places before being shipped.

The LCL shipment takes a longer transit time and is inconvenient when the delivery time is essential.

What is Cut Off Time, and How does it Affect Transit Time?

Cut off time is the deadline allocated by the carrier in which all products scheduled for shipment have to be availed at the harbor.

It considerably impacts the scheduling of shipment.

Also, it dictates the loading of the vessel and consequently the departure time.

It would help if you organized inbound logistics to have your products delivered at the loading port.

Failure to do so in time will delay your transit time, and in most cases, you will have to wait even up to a week.

What is the Relationship Between Transit Time and Schedule Reliability?

Schedule reliability refers to how frequently carriers achieve their goal of having shipments delivered to their customers.

On the other hand, Transit time is how much time it takes to deliver goods from one port to another.

Therefore, transit time is one single measure used to ascertain the schedule reliability of a particular carrier.

Does the Choice of Incoterm Affect the Transit Time?

Yes, partly.

Incoterms are rules that outline the agreement between a seller and a buyer.

They describe the responsibility between each party.

Transit time entirely depends on the carrier’s efficiency and schedule.

However, under certain incoterms where the seller pays for shipping (CIF, DDP, DAP, CIP, and CPT), the seller can choose a shipper whose shipping cost is low but takes a longer Transit time.

In essence, your choice of incoterm may how and when you finally receive your goods at the destination.

Has Covid 19 Affected Transit Times in International Shipping?

Covid 19 has had a significant impact on most suppliers, shippers, carriers, and freight forwarders’ delivery schedules.

Ports have had to close in adherence to quarantine measures.

Goods that were previously carried comfortably on ships and cargo crafts now have to follow a set of strict rules and procedures.

This has led to a significant delay in shipments as it takes a long time now to get the necessary permits and approvals or international shipping.

Does ICC Cover a Claim that Leads to an Increase in Transit time due to Covid-19?

The shipping industry has been dramatically impacted by covid-19, leading to delays in loading containers and yard congestions.

The delivery times have also been significantly affected given the high dependency on paper-based documentation and many banks not operating at full potential.

Institute Cargo Clauses (ICC) provides three clauses (A, B & C) that governs marine operations.

• ICC A provides the most comprehensive marine insurance at a higher premium
• ICC B less restrictive with a moderate premium
• ICC C very restrictive but with a lower premium

According to clause A that covers significant risks associated with shipping, the claims should be on actual risks that are assured.

Covid-19 caught everyone by surprise, and no shipper knew how long it would take.

This means that few importers, if not any, insured their shipment against delays resulting from covid-19.

Clause A also offers 60 days protection policy to the customer.

You should receive your goods within 60 days of delivering your goods at the loading Wharf.

The clause refers to when the goods are still under the care of the shipper.

However, the delay caused by Covid-19 finds when the goods are already at the port of destination.

Thus, there would be no claim regarding the policy on the Transit time increase caused by Covid-19.

What is Slow Steaming, and how Does it Affect Transit Time

Slow steaming is a typical marine term that refers to operating cargo ships at speeds below the maximum speed.

Slow steaming arises when the cargo ship needs to lower fuel consumption, reduce emissions, and maintain the vessel, which eventually leads to a lot of money-saving.

However, slow steaming leads to an increase in transit time and delays in delivering the consignments.

Can your Carrier Choice Help to Speed up Transit Times?

Yes.

We have mentioned the importance and convenience that results from a shorter transit time.

The hope of reducing the transit time rests on choosing a trusted shipper.

Your shipper should be well versed in the shipping industry and able to communicate at the appropriate time.

Also, a good shipper should have access to both air, train, land, and sea transport to enable you to make the right choice depending on your interests and priorities.

Besides, the routes used by your shipping company should be convenient, safe, and short to reduce your transit time.

Your shipping company will provide you with approximate transit time if you choose different modes of transport.

What Influence do Freight Forwarders have on Transit Time?

The whole shipping process is complex and requires the work of an expert.

Freight forwarders offer their vast experience in scheduling shipping and handling any clearances.

With their experience, freight forwarders can have an immense impact in linking with carriers who have a reputation and help shorten transit time.

The freight forwarders also help handle clearances that might slow the shipping process.

In doing so, they help in having your goods loaded and offloaded on time for delivery.

What is Rolled Shipment, and How does it Affect Transit Time?

Depending on the demand for shipping, carriers might increase their costs and push forward other cargo shipments.

When some valid documents are needed, carriers might push forward your consignments until you provide the required documents.

This is not accepted, especially after paying for the consignment to be shipped.

If you understand Transit time as the whole process from delivering goods to the port until they reach you, then rolled shipment dramatically impacts your Transit time.

It takes days for a particular carrier to load and arrange shipment to a single destination.

Therefore, once the original vessel has left, you will have to wait even for a week before the next vessel is scheduled.

How does the Number of Ports Between Origin and Destination Affect the Transit Time?

The higher the number of ports between the origin and the terminus, the higher the transit time.

If your carrier has many stops along the way, the chances of delays are higher.

These delays are caused by missing paperwork, congestion of the ports, time is taken to load and offload, and other unavoidable factors.

You should carefully research which route your shipment will take and the ports’ nature in those routes to avoid increased transit time.

You need your goods at the right time; therefore, choosing another carrier with a different route can allow you to plan with a shorter guaranteed transit time.

CNF shipping Incoterms are a set of rules which describes the delivery of goods from the supplier to buyer.

CNF rules are used to describe the responsibilities of parties connected with customs clearance, freight shipping, and final delivery.

Read this FAQ if you want to learn more about all the nuances about the CNF Incoterms.

What are the Buyers’ responsibilities in CNF shipping terms?

Under the CNF agreement, buyer’s responsibilities arise from the time when goods arrive at the port of destination.

So, the buyer is responsible to pay any costs at the moment of arrival.

This might include the next charges:

• customs clearance fee;
• import duty;
• port charges;
• VAT (value-added tax);
• fuel surcharge;
• docking charge;
• warehouse storage fee.

Please remember, that the risk of loss or damage to the products passes to the buyer after placing them on board at the port of shipment.

What is the difference between FOB and CNF Incoterms?

FOB (Free on Board) rules state that the seller completes the delivery when the goods get to the ship at the nearest port.

After this, the buyer has to organize the transit to the destination country and pay all fees and costs connected with this process.

In the case of CNF Incoterms, the seller has to organize and pay for the delivery to the port of final destination.

What is the difference between EXW and CNF Incoterms?

What is the difference between CIF and CNF Incoterms?

CIF Incoterms are similar to CNF, with the main difference lies in the insurance obligations.

Under the rules of CNF, the buyer has to buy additional insurance if he wants such an option to be in charge.

The CIF Incoterms oblige the seller to buy insurance for the transported goods.

Note: all Incoterms with insurance responsibility state that the seller has to provide the minimum coverage.

If the buyer wants stronger insurance, he has to buy it himself or discuss this option with the seller.

What does it mean for CNF Shanghai, CNF Guangzhou, CNF Ningbo, etc?

You can often see such collocations, where the first word is a type of Incoterms, while the second is the name of some city.

For example, you see CNF Shanghai in your agreement with the supplier.

It means that the seller completes the delivery when the goods are placed in some ship at the port of Shanghai and then transferred to your country.

As a buyer, which costs and fees do I have to pay for the CNF Incoterms contract?

As it was said earlier in this FAQ, the buyer has to pay charges which arise at the port of destination.

When the products arrive, you as a buyer have to organize customs clearance and delivery to your office or warehouse.

You can see the full list of possible fees in the question “What are the Buyers’ responsibilities in CNF shipping terms?”.

How do I calculate the CNF price in exports?

Unfortunately, there is no stable formula to calculate prices in export.

The prices might vary because of different sellers, shipping agencies, forwarders, and their quotes.

As a buyer, you have to keep in mind that initial CNF price would be smaller than the final price because of additional customs and delivery charges in your home country.

Can I add qualifications or variations to the CNF Incoterms rules?

Yes, it is possible to add extra words to any kind of Incoterms rule.

For example, you can add the “stowed” rule to the agreement, which will make the seller responsible not only for loading the cargo on board but also for stowing it correctly.

Also, you can add the rule of VAT payment and decide that the seller is responsible for paying not only the export costs and duties but VAT as well.

Note: as a buyer, you have to be 100% exact and correct with terms used in your agreement with the supplier.

Use only clear widespread definitions which are common in international trade.

Should I use CNF as a buyer? What benefits can I get?

Each type of Incoterms has clear advantages and disadvantages for the buyer.

CNF is often the cheapest and helpful Incoterms contract since the buyer is obliged to perform only import procedures.

How the CNF Incoterms impact the shipping costs?

Under the CNF rules, all the shipping costs to the destination country are on the seller.

What are the rules for CNF Incoterms insurance?

CNF Incoterms do not have any kind of rules for insurance.

You can add such clauses directly or use another set of rules, like CIF (cost, insurance, and freight).

Are the CNF Incoterms rules applicable to the eCommerce business?

Yes, a lot of eCommerce platforms use CNF Incoterms, as well as other international trading rules.

The most popular Incoterms for B2B trade are EXW, CPT, or CIF.

The B2C model widely uses CPT or CIF Incoterms.

Reminder: eCommerce platforms are websites which buy or sell products via the Internet or other electronic services.

The most popular eCommerce platforms are:

1. Amazon (both B2B and B2C).
2. Alibaba (B2B).
3. AliExpress (B2C).
4. Shopify (depends on the store, both B2B and B2C).
5. Magento (B2B and B2C).

Does CNF relate to all transportation modes?

No, CNF Incoterms can be used only in the case of maritime transportation.

What is the special paperwork for the CNF Incoterms? Who is obliged to perform it?

Seller is obliged to perform paperwork connected with:

• export customs clearance;
• pre-freight delivery;
• shipping line services.

Buyer, on the other hand, has to be able to:

• complete documents for import customs;
• provide papers for the VAT and other taxes;
• handle any other permits, quotas, special documentation relating to the shipment.

Are there some lacks when using the CNF Incoterms in international trade?

The most obvious flaw of CNF Incoterms lies in the absence of insurance.

Secondly, the transfer of risks connected with loss or damage to goods is also quite confusing: the seller selects the shipping line and organizes the delivery, but he passes his responsibilities when the products are placed on board.

The final lack of these Incoterms arises when the products arrive in your country: from this moment you have to deal with customs and final delivery.

You can prefer to put this work on the forwarding company, but it is connected with extra charges.

Who is responsible for customs clearance in the CNF Incoterms contract?

Export customs clearance is the seller’s obligation, while the buyer has to perform customs duties at the port of destination.

What does the shipping point mean in the CNF Incoterms?

Shipping point is a place where the seller transfer goods to the shipping company.

For example, it can be a delivery truck, post office, loading dock, etc.

In the case of CNF Incoterms, the shipping point is the port in the country of origin.

This is the place where the seller transfers goods to the shipping company, as well as his responsibilities for loss or damage to such goods.

Can I use CNF Incoterms for domestic transactions?

Even though Incoterms were introduced as rules for international trade, they can be used for domestic agreements as well.

However, please keep in mind that CNF Incoterms regulate only maritime freight.

What is the legal status of CNF Incoterms?

Incoterms is a document which is recommendatory in nature.

This is the reason why all international commercial terms have to be backed up with laws.

The parties can choose between three options:

To keep the law of the exporting country

By default, the seller will use laws of his own country when some issues with shipping arise.

Speaking of Chinese laws and regulations, they similarly protect both buyer and seller.

To keep the law of the importing country

If you don’t want to get confused by unclear regulations of a foreign country, you can decide to use domestic laws.

To keep the law of a third country

This option is also popular because it allows finding the consensus between parties.

If the seller doesn’t want to use your domestic laws, you can decide to pick laws of any country in this world.

Note: as a buyer, you have to find agreement about the laws before the shipping process begins.

Otherwise, it will be considered that you are using the seller’s domestic laws.

What is a step-by-step procedure of goods delivery in the case of CNF Incoterms?

Now, when we’ve figured out all the details about the CNF Incoterms, let’s imagine the real situation to have the full picture.

For example, you order some kind of goods from China and decide to use CNF rules with your supplier.

Step 1. The seller packs products, prepare export documentation and other legal papers needed at the port of origin.

Step 2. The supplier delivers your products to the port, using his vehicle capacity or some courier services.

Step 3. The seller has to clear the goods at customs. For this step, the vast majority of companies use the help of customs broker agents.

Step 4. The supplier puts the goods on board the ship. He also pays for the shipping to the destination country and all the above-mentioned services.

Step 5. When the freight gets to the port in your country, you have to start acting.

You must process the customs clearance, pay connected charges and port fees.

Step 6. Finally, you have to deliver goods from the port to the needed destination point.

What is CNF Incoterms connection with the transfer of title to the goods?

Please remember, that none of Incoterms determine transfer title to the products or ownership fact.

Also, they do not contain info about the payment for goods.

Who pays CNF Freight?

Under CNF, the seller nominates the carrier.

Hence, they are responsible for paying for all the costs associated with transporting the goods from their location to the destination port.

This includes inland trucking costs at the country of origin and ocean freight costs from origin to the destination port.

Once at the destination port, the buyer arranges transportation of the goods to their final destination.

Does the CNF Price include Duty?

No, CNF does not include duty. It only covers the cost of goods and freight charges from origin to the point of delivery.

The buyer’s responsibility is to pay for import duty and taxes andany other costs related to customs clearance.

Does CNF include Unloading?

No, it doesn’t.

With CNF shipping terms, the seller is responsible for transporting the goods from origin to the destination port.

The seller’s responsibility includes trucking goods from the factory or warehouse to the shipping port.

They also load the goods onto the shipping vessel and facilitate shipping to the destination port.

Once the shipment leaves the shipping dock, the seller ceases to be responsible for it.

Final delivery rests with the buyer.

As the buyer, you will have to organize unloading from the shipping vessel, import clearance, and trucking to the final destination.

Can you use CNF for Air Freight?

No, you cannot use CNF for Airfreight.

This incoterm only relates to shipments you’re transporting by sea or inland waterways.

If you’d like to ship goods via airfreight, you may need to consider other incoterms.

Does CNF work with Letters of Credit?

Yes, it does; although, it comes with a fair amount of risk to the seller.

If a seller agrees to payment by letter of credit, they will have to wait until the buyer acknowledges receipt of goods to get paid.

Or provide evidence showing that goods have been dispatched and all carriage fees are paid for.

Technically, letters of credit are separate transactions from the sales contract.

In other words, banks are very less concerned with such agreements even if they’re referenced in the LC.

Likewise, banks are not bound by the trade contract when it comes to LCs.

This can create a big problem for sellers that invest a lot of their resources in negotiating contracts.

Especially those who specify payments be made via LC.

Letters of credit don’t protect nor benefit the seller as they are drawn after the trade contract.

Also, sellers don’t negotiate the critical terms of the LCs.

Since most LCs presented to banks tend to be discrepant, this can delay payment or potentially eliminate the LC payment.

You (the seller) should focus on preparing and submitting the relevant documents to the advising bank.

The paperwork should comply with the terms of the contract.

For the buyer, agreeing to pay via LC protects you against fraud and possible scams.

This is because the seller can only be paid once they fulfill all their delivery obligations under the CNF terms.

Which other Incoterms can you use as an Alternative to CNF?

CIF, FOB, and FAS are the most common alternatives of CNF in foreign trade contracts.

FAS (free alongside ship) means that the seller is only responsible for delivering the goods to the port next to the shipping vessel.

It also requires the seller to load the goods onto the ship. After this, risk and responsibly shifts to the buyer.

Like FAS, FOB (free on board) also requires the seller to deliver the goods to the origin port and load them for shipping.

For buyers, this incoterm is cheaper and offers full control over the delivery process.

CIF, on the other hand, is no different from CNF.

Both terms are used during sea shipping and require the seller to facilitate the transportation of goods up to the destination port.

However, CIF obligates the sellers to take up liability of goods up to the point of delivery while CNF doesn’t.

If you’d like the seller to assume the risk of transporting the goods to the destination, CIF is an excellent option over CNF.

How can you get Goods Insurance when Shipping CNF?

As you know, CNF shipping does not include freight insurance.

Therefore, as the buyer, you’re responsible for insuring the goods from the point of shipping to the destination.

This ensures that your goods reach the destination in good form and that you claim compensation in case of loss or damage.

If you buy goods on CNF terms, you can talk to your forwarding or sourcing agent to organize insurance for you.

These agents are professionals with immense experience and connections in the industry.

They can help you get a policy with reasonable coverage and affordable premiums.

Alternatively, you can consult an experienced insurance broker to help you acquire insurance coverage for your goods.

Just ensure that the broker you’re contracting is reliable and trustworthy.

If you trust yourself, you can personally approach a reputable insurance company and handle the formalities yourself.

No matter the approach you choose to take, ensure that it gets you reasonable cargo insurance cover at good rates.

Are there Hidden Costs with CNF Price?

Well yes.

CNF price only includes the product price and cost of shipping the goods from the supplier’s facility to your destination port.

It excludes any other costs that occur at the point of delivery and beyond.

Meaning, you will have to bear sole financial responsibility for other costs involved at your destination port.

Additional fees associated with CNF shipping include port fees, import duty and taxes, docking fees, warehousing charges, fuel surcharges, etc.

So when considering buying on CNF terms, remember that the price is only just the tip of the iceberg.

It does not mark up the final landed cost of your product from origin to destination.

Can you use CNF for Alibaba Purchases?

Yes, although FOB and CIF are the more default prices on the Alibaba platform.

Sellers and buyers alike can agree to transact on CNF terms where the buyer arranges their insurance.

Both parties need to negotiate the terms and understand them clearly before agreeing to the contract.

Is there any Point where FOB equals CNF in Shipping?

No.

CNF and FOB have very distinct outlines on who is responsible for costs and risks during international shipping.

In FOB, the seller only delivers the goods at the shipping port and loads the goods onto the ship.

CNF requires that the seller oversees the transportation of the goods up to a destined port.

The buyer assumes a large part of the risk and financial obligations in FOB.

In CNF, it is the seller that bears most of the responsibilities.

The only thing that can compare FOB to CNF is that both incoterms are designated for ocean shipments.

Moreover, both terms exclude insurance coverage for the goods.

Who chooses the Freight Forwarder in CNF Shipping?

Since the seller is responsible for 90% of the freight process, they naturally choose the freight forwarding agent to use.

As the buyer, you can also hire a freight forwarder to help you receive and clear goods at the destination port.

The agent can also organize the goods’ transportation from the origin port to your door or warehouse at the destination country.

A good freight forwarding agent will also help you with the customs clearance process.

 When choosing these agents, choose those with a good reputation and experience in the industry.

Can you Pick up a CNF Shipment at the Destination Port Yourself?

Yes, you can pick a CNF shipment yourself once it reaches the delivery point.

It is even better if you can confidently navigate through the customs clearance process by yourself.

Otherwise, delegate the consignee’s role to your shipping agent or customs broker so they can also work on clearing the goods for import.

When should you Use CNF?

For buyers, you should use CNF when you’re relatively new to foreign trade.

It saves you the hassle of dealing with all the processes and formalities of international shipping.

CNF terms are also ideal when importing small volumes.

However, it ismore costly in reality as you may end up paying more in terms of terminal handling charges at the delivery port.

When you have a trusted shipping agent or customs broker at the delivery point, you may consider CNF.

The agent/broker can help you handle the customs clearance formalities and ensure safe delivery from the port to your final destination.

As a seller, a CNF price can significantly increase your profit.

It would help if you considered it for overseas transactions where the buyer is not familiar with the import process.

When you have trusted connections, i.e., freight forwarders and carriers, quoting a CNF price can also be convenient.

Are CNF Terms Legally Binding?

Not really.

CNF shipping incoterm serves as a commercial agreement between buyer and seller in international shipping.

In case of a dispute during the engagement process, the contract can be referenced to establish who is responsible and gain a resolution.

Therefore, both the seller and buyer should review the contract carefully before agreeing to the terms.

However, CNF does not replace any legal systems that exist in various countries and trading blocs.

It only codifies the concept of risk, allocation of costs and liability, and the delivery point.

Is CNF suitable for FCL shipping?

Yes.

Typically, CNF is designated for ocean shipments.

The shipment size does not matter, nor does the type of container you’re shipping the goods in.

CNF can be used for FCL (full container load) shipments and LCL (less than container load) shipments.

With LCL shipments, the seller will handle the consolidation process to ensure the goods reach you at the agreed time and in good form.

What is the equivalent of CNF shipping for Airfreight?

As earlier mentioned, you cannot use CNF for

The parties in international trade can be guided by the rules of Incoterms 2010.

This edition contains 11 sets of international commercial terms for the delivery of goods.

DAP is a new concept introduced in Incoterms 2010.

Let’s find out what the DAP Incoterms are and how they differ from other sets of rules.

What are the DAP shipping terms?

The term DAP is an abbreviation for Delivered at Place.

It literally means the delivery of goods to some place, previously agreed between the buyer and seller.

The only thing important here is that such a place has to be situated outside the supplier’s country.

Who pays for DAP shipping?

Shipping under the DAP Incoterms is an obligation of the seller (consignor).

What are the buyers’ responsibilities in DAP shipping terms?

For the buyer, sending the necessary documents on time is very important.

If you have unforeseen difficulties in obtaining licenses for the import of goods, then all expenses for untimely unloading would fall on you.

Under the DAP delivery, the basic requirements for a buyer are the next:

• pay for customs procedures regarding the import of the product;
• notify the seller about the time of the alleged acceptance of the goods;
• unload the goods on a specific date.

The latter obligation is important to keep in mind.

The supplier is only responsible for the transportation of goods to a certain location, not for unloading.

You, as a buyer, have to unload the products from some kind of transport yourself or with the means of third parties.

What are the seller’s responsibilities in DAP shipping terms?

The seller must transfer to the buyer all accompanying documents for the goods.

These include invoices, and quality certificates, certificates of conformity and other documentation that is indicated in the agreement.

1. Choose a carrier that will deliver the goods and conclude the shipping deal.
2. Pay all customs costs for export.
3. Notify the buyer of the location of the goods at the delivery point.
4. The seller receives export licenses and certificates himself, at his own expense.

Upon the arrival of the goods at the destination, the seller notifies the buyer about this and provides him with the next transport documents:

• bill of lading;
• sea waybill;
• air waybill;
• waybill confirming transportation by car or by rail, etc.

What are the Tj chinafreight advantages based on the DAP Incoterms?

A lot of Chinese manufacturers trust the delivery process to Tj chinafreight.

As a reliable freight forwarding company, Tj chinafreight has clear advantages against competitors:

• High efficiency. We always try to choose the fastest routes to fulfill your order in the shortest time;
• 7/24 online support. You don’t have to worry about the time zones and delays connected with them;
• Better freight rates. Tj chinafreight has private contracts with various carriers which give us the best prices for their services;
• Professional brokerage services. Completing Chinese customs might be a tricky process without the help of experienced Tj chinafreight brokers.

Please, leave us a quote if you want to require more information about Tj chinafreight services.

What are the top things to take care of for the buyer and seller?

If you want the process of delivery to go smoothly, please keep in mind the next simple tips:

1. Accurate paperwork only, from both parties. If your documents will have some flaws, the whole process might be postponed and additional charges might appear.
2. Choosing the right HS code for your products. The HS code is used mainly to decide which tariffs to imply for one or another product. If you pick the wrong code, it might affect the customs clearance procedure.
3. Pay attention to extra import duty, such as anti-dumping duty and other special trade duties (please read the linked guide if you want to learn more about these charges).
4. Take care of the delivery time. Buyer and seller have to choose the fittable shipping schedule based on the delivery time.
5. The consignee’s broker must finish the customs clearance in time. If there will be some delays, the additional charges will arise as well.

Choosing Tj chinafreight as your partner you can be sure that there will be no issues with the delivery process.

What is the difference between the DAP and FOB Incoterms?

FOB (Free on board) terms state that the seller has to deliver goods through the ship’s rail at the port of shipment.

This means that from now on, the buyer must bear all arising costs and risks.

The DAP Incoterms, on the other hand, suggest more responsibilities for the seller, such as export duties, delivery costs, etc.

What is the difference between DAP and DDP in Incoterms for shipping?

DDP (Delivered, Duty Paid) is one of the closest terms to DAP.

The main difference is that under the DDP Incoterms, the seller is additionally obliged to perform customs procedures in the country where the goods are imported.

This means that the buyer is placed in an even more advantageous position.

What’s the difference between CPT and DAP terms?

CPT (Carriage Paid To) and DAP terms are practically the same.

CPT means that the seller pays the freight for transporting the goods to the specified destination.

In practice, such a specified destination is similar to the place, mentioned in DAP Incoterms.

So what is the difference, you may ask?

First of all, it is about the transfer of risks: under CPT, they are transferred when the supplier passes goods to the first carrier, while under DAP, the seller bears with all risks until the delivery of the products to a certain place.

Another difference is connected with unloading: CPT gives this responsibility to the seller, while the DAP – to the buyer.

How to differ DAP and CIP terms?

Firstly, the difference lies in liability for the risk of loss of cargo.

Under DAP Incoterms, if the carrier loses cargo on the way to your country, this will be the sender’s problem.

Under CIP (Carriage and Insurance Paid to) conditions, this will be your (buyer’s) problem.

Another difference lies in the insurance responsibilities.

The DAP Incoterms do not have any clauses about insurance, while the CIP rules oblige the seller to pay for insurance.

What is the difference between DAP and EXW Incoterms?

EXW (Ex Works) provides for the seller’s minimum responsibilities: simply placing the goods at the disposal of the buyer at the seller’s premises.

Ex Works is often the cheapest and the most hassle type of Incoterms for you.

What’s the difference between DAP and DDU shipping terms?

DDU is short for Delivered Duty Unpaid.

It is an old term which is practically the same as DAP.

Just like the DAP, the DDP oblige the seller to deliver some kind of products at the named place in the country of importation.

As we’ve already mentioned, DAP rules were introduced in Incoterms 2010.

Basically, it is a general provision which has replaced three terms: DAF, DES, and DDU.

The vast majority of trade partners, who have used DDU rules before the Incoterms 2010, have switched to DAP eventually.

However, it is not restricted to use old Incoterms, so the DDU rules are also quite popular.

What is the difference between DAP and CIF shipping terms?

CIF is an abbreviation for Cost, Insurance and Freight.

The first difference between DAP and CIF Incoterms is insurance responsibility.

DAP has no insurance obligations for parties at all, and CIF makes the seller responsible to pay for minimum insurance coverage.

Secondly, the CIF terms can be used only for the maritime and inland transport, while the DAP Incoterms fit for any kind of transport.

Finally, the difference lies in the carriage obligations of the supplier: CIF terms state that he has to deliver goods to the port of destination, while the DAP rules speak of the delivery to some certain location.

How to differ DAP and DAT shipping terms?

DAP and DAT are the new set of rules introduced in Incoterms 2010.

These terms are included in group D, which means that the transfer of the obligations is carried out at the buyer’s location.

The DAP means the delivery of cargo to a specific point.

This condition is general in the transaction, so it is important to determine the destination in the most detail when making delivery.

The DAT rules, on the other hand, implies delivery to the terminal.

In addition to the final delivery point, the difference lies in the unloading responsibilities.

Under the DAT terms, the goods have to be unloaded by the seller at the terminal, while the DAP rules give this responsibility to the buyer.

Where is the named place for handling goods and responsibilities to the buyer?

It still might be quite confusing for some of you to understand, what is the named place in the DAP terms.

The only thing that Incoterms 2010 state about it is that it has to be situated outside the supplier’s country.

Logically, you would rather choose some certain place inside your home country, but there are still some nuances.

The seller is responsible for the security of goods until they arrive at your place, as well as for their transportation inside your country.

If the supplier doesn’t have the means to do that, then he may insist on the usage of the DAT set of rules.

Does DAP Incoterms include unloading services?

No, as it was already mentioned, unloading is a 100% obligation of the buyer under the DAP Incoterms.

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

Under the DAP Incoterms, all the above-mentioned charges have to be paid by the supplier.

Can I have a container of goods shipped from China directly to my property?

Yes, this is exactly why the DAP Incoterms were created for.

Under such rules, the supplier is obliged to deliver goods to your property or another needed place.

The only thing you left to bother as a buyer is an import customs clearance and in-time unloading of arrived goods.

Do DAP Incoterms include insurance?

Neither party should insure the goods under the DAP Incoterms.

Nevertheless, both the buyer and the seller should be interested in receiving compensation in the case of loss or damage to the goods.

Therefore, it is recommended to add an insurance company option to your contract formula.

What are the main issues of using DAP Incoterms for the buyer?

If you want to buy something and choose the delivery under the DAP Incoterms, please be aware of two main things:

1. You have to be able to perform import customs clearance (if you can’t do it, you can always rely on customs brokers).
2. You have to be able to unload goods at a certain time, discusses with the seller previously.

If for some reason you won’t be able to fulfill such requirements in time, all additional charges for the delay would be on your part.

Do DAP terms include customs clearance?

Yes, like any other type of Incoterms, DAP rules have clear instructions for the customs clearance process.

The seller has to pay all customs costs for export, while the buyer is obliged to pay for import customs clearance.

What shipping method can be used in the case of DAP Incoterms?

According to DAP conditions, any type of transport can be used: air, sea, rail, road, or a combination of various modes of transport.

What are the main steps in the delivery process under the DAP Incoterms?

The whole process of the delivery under DAP rules can be divided into the 6 key steps.

Step 1. The seller picks up goods and delivers them to the shipping company he chose before. He pays for this initial delivery, and future freight services.

Step 2. The export customs clearance is needed to be done, with the help of customs brokers or employing the supplier’s means.

Step 3. After the goods are stowed on the ship, aircraft or some other mode of transport, the transit process begins. The seller and carrier are both responsible for the goods during their international transfer.

Step 4. When the products arrive in your country, this is the moment you start acting. Remember, that under the DAP terms, the buyer has to provide the import customs clearance.

Step 5. After the customs clearance procedure is successfully done, the seller loads the goods to some kind of transport and drives them to your location. 

Step 6. At the final step, you have to unload the products from the buyer’s vehicle at a certain time. The seller passes the responsibility for goods to you, as well as all accompanying documents.