In this guide, you will find all information you need about declared value coverage.

So, if you want to learn more about declared value coverage, read this guide.

What does Declared Value mean?

There are two meanings of declared value which are clearly explained below:

1. It refers to the value that is placed on imported goods by a given importer. This value of goods is declared for customs clearance at the entry port and is used to establish the duty amount to be paid on imported goods.
2. It can also mean the amount a shipper stated to a given carrier as the worth of their shipment. The carrier will be liable to compensate the shipper based on the shipment’s declared value if lost or damaged in transit.

What is Declared Value Coverage in Shipping?

In shipping, declared value coverage is a type of loss or damage coverage that raises the financial ability of the carrier.

Declared value coverage aims to increase the financial capacity of the page to ensure it matches the value of declared cargo.

It is important to note that declared value coverage is not cargo insurance. It is limited to the period whereby the cargo has a single carrier.

What is the Purpose of Declared Value Coverage?

Purposes of declared value coverage include:

• Ensuring speedy clearance at customs.
• Getting better shipping value from carriers.

How does Declared Value Coverage work?

Declared value coverage applies when the damage or loss is due to the negligence of the carrier.

The shipper will have the responsibility to prove that the carrier was negligent.

Is Declared Value Coverage the same as Marine Insurance?

No, declared value coverage is not the same as marine insurance.

Declared value coverage is subjected chiefly to exclusions, policy limits, deductibles, and warranties which are not well elaborated to the shipper.

On the other hand, Marine insurance takes care of a shipment throughout its entire journey from the pickup to the delivery point.

It will ensure that the shipment passes across multiple carriers and transport modes regardless of having a loss or damage negligence of the carrier.

Marine insurance provides door-to-door protection regardless of the carrier, but this is not the case with declared value coverage.

Marine insurance tends to pay less regardless of whether the carrier’s negligence has been proven.

On the other hand, declared value coverage would pay in full if it has been affirmed that the carrier was negligent.

Declared value coverage does not pay for damage or loss which occurred outside the control of the carrier.

Marine insurance may cater to damage on loss that happened outside the carrier’s power depending on the parties’ agreement.

Marine insurance pays the shipper for the total value of the cargo, inclusive of freight and related costs.

On the other hand, declared value coverage pays the shipper up to the declared value of their shipment.

The declared value does not pay to expedite the replacement of goods.

On the other hand, Marine insurance can pay to accelerate the replacement of goods depending on the agreement between the parties.

What is the Difference Between a Shipment’s Declared Value and Sum Insured?

Declared value boosts the limits of liability standards for an increased rate of freight.

It does not alter the terms of the bill of lading because similar limitations and exclusions apply.

Sum insurance refers to the level of coverage in general policies of insurance.

It is the maximum liability that the insurance company will undertake for compensation in case of loss or damage.

The shipments declared value and the sum insured value are often confused, and if these values are incorrect, there might be problems of underinsurance.

How do you calculate Declared Value?

The declared value of a shipment can be calculated, which are:

• By use of the cost price: this should be the cost at which you purchased the products for customs declaration.
• Use of retail price: for these shipments, the value should be that which you intend to sell the products.

Customs use the declared value to determine duties and taxes and to clear your shipments.

What are the Limitations of Declared Value Coverage?

Some of the declared value coverage include:

• It is not cargo insurance.
• Declared value coverage is limited only to the period that cargo has a single carrier.
• It only kicks in if loss or damage occurred as a result of negligence by the carrier.
• The shipper must prove that the carrier was negligent for declared value coverage to apply.

How long is Declared Value Coverage suitable for?

It is limited to the period that the cargo has a single carrier.

Declared value coverage only applies to incase damage or loss occurs due to the carrier’s negligence.

What happens to Shipments without Declared Value Coverage?

For shipments without declared value coverage, the carrier’s maximum liability will be $100 for losses or damages at no cost.

Loads that are valued over $100, you may declare a higher value of the item at the transaction time.

You will have to pay an additional charge for the declared value of the given amount.

In case you do not report a higher value, the maximum reimbursement you will receive will be $100.

What is the Impact of Adding Declared Value Coverage to my Shipment?

It is important to note that declared value is not insurance, but it is the maximum liability for damage or loss due to mishandling.

Some of the impacts of adding declared value coverage to your shipment include:

• Adding declare a value to your shipment will make the cost of shipping rise.
• In case you specify a declared value of $500 or more, then the importer will automatically include the direct signature confirmation. In this case, you will not need to select the immediate signature confirmation.
• For shipments that are multi-box, the declared value by the importer will be applied to each box in the entire load.

How do Different Carriers Handle Declared Value Coverage?

They handle declared value coverage as the value of each shipment unit for couriers, and it must be indicated in the paperwork.

It can impact the rates of shipping as more costly shipments will attract higher shipping rates.

Carriers also use the particular value to determine the maximum amount you can recover for your shipping insurance.

It is done in the case that your shipment is damaged or lost during transit.

Many carriers tend to set this value at $100 unless stated differently.

However, do takes this value to be the insurance liability for your shipment as it just indicates your cargo’s financial legibility.

Declared value coverage brings about different impacts depending on the carrier that you use.

Some carriers may use it as the insurance value, while others develop maximum financial liability for theft and loss.

How does Declared Value Coverage Affect Customs?

In customs clearance, declared value coverage is assigned to imported goods by the importer of records.

It is used to determine how much imported tax is imposed on the shipment.

Therefore, you should calculate it well to avoid overpayment or getting into trouble by making a false declaration

.

It is essential to be accurate when declaring the value mostly in i9nternational shipping.

In case customs suspects wrong value declaration, your cargo is held, and they will need proof of purchase to release it.

What is the procedure for claiming Declared Value Coverage?

The procedure for claiming declared value coverage entails:

• The carrier’s liability for loss or damage for each international shipment or domestic package is limited to $100 without a declaration of value.
• The maximum declared value per package is $50,000 per package. The carrier’s liability for loss or damage is increased up to $50,000 by making a value declaration for an additional charge.
• Specific domestic packages are eligible for the enhanced maximum of $70,000, subject to restrictions put in place.
• Declarations whose value ranges between $100.01 and $300 are subject to a charge of about $3.45.
• Declarations of a value above $300 incur a charge of about $100 for each of the total declared value.
• For international shipments with a declared value of more than $, 50,000there is a process of calculating them. You should multiply the total declared value by the rate and determine the displayed value charge for your shipment.
• For cargo tendered to a carrier with a declared value amount of more than $1,000, you must retain a high/value shipment summary. This summary should be signed by the driver and should be provided when requested.
• The charges for declared value are included in amounts that are billed to third parties or receivers.

Does Declared Value of a Shipment include Shipping Cost?

Usually, declared value reflects the shipment cost to the business and is mostly lower than the customs declared value.

During shipping of your package, you will obtain declared value coverage.

Declared value is also an option when determining freight charges. It will also assist in limiting the liability of the carrier for damages, delay, or loss.

Can Declared Value of a Shipment be Zero?

Yes, the declared value of a shipment can be limited to zero for those that do not have a declared value.

Thus, if your load is lost or damaged, the carrier will not be liable because you did not say the deal.

How do you Prove the Declared Value of Shipments?

You should provide relevant documents to prove the declared value for your shipments.

The declared value must be the same as the actual value of your cargo, and the documents should support this.

The declared value coverage of your cargo is the carrier’s responsibility in case of thefts, damage, or loss of your goods.

It will be compensated up to the declared value of your cargo, but the additional declared value may be allowed in consultation with your carrier.

Are all Shipments Eligible for Declared Value Coverage?

Most of the shipments are eligible for declared value coverage as long as they do not violate the carrier’s terms of service.

Packages shipped by carriers are eligible for $100 basic coverage, while some commodities qualify for up to the $50,000 range.

What are the Standard Terms and Conditions for Declared Value Coverage in shipping?

Different carriers possess unique terms and conditions outlining their policies for declared value coverage policies.

It is essential to familiarize yourself with these policies before shipping your cargo, as failure to observe the rules might result in claims denial.

You should specify accurate values before shipment pick up or drop off because proof of value is established at both points.

In case you have questions about declared value coverage, it is always good to direct them to your coverage provider.

Does Declared Value Coverage cover Duty and Taxes?

No, declared value coverage does not cover duties and taxes.

However, customs use the value of declared value coverage to establish taxes and responsibility to be imposed on your cargo.

Is there a maximum value of an item Declared Value Coverage would cover?

Different carriers tend to have different values for declared value coverage.

This value is used to determine the maximum amount you can recover for your cargo if it is lost or damaged during shipping.

Most carriers tend to set the value for declared value coverage at $100, but for others, it can be up to even $50,000.

If your package is not so expensive, then $100 will be sufficient.

You should discuss with the carrier for higher value packages and set a reasonable amount to incur it is lost or damaged.

However, you should not consider this as the insurance liability for your shipment but as just your cargo’s financial and legal ability.

What are some of the things not covered when you Declare Value during International Shipping?

Some of the things not covered when you declare value during international shipping include:

• The shipment is not catered for ”door-to-door”. The declared value is only valid for the period that the cargo is the custody, care, and control of the shipper.
• Does not provide coverage for other losses like ”Acts of God” and any other losses outside the carrier’s control.
• When buying declared value, costs such as packing expenses, freight charges, and forwarding fees are not covered.
• Any shipment without a scan.
• Data stored on any media.
• Bulbs or fluorescent tubes.
• Prepaid letters.
• Articles of unusual value.

What are some common Exclusions and Warranties in Declared Value Coverage?

Some common exclusions and warranties in declared value coverage include:

• Theft may occur when the vehicle is left unattended.
• Dishonesty on the part of some of the carrier’s employees.
• For example, theft of certain commodities, cigarettes, fashion, cell phones, computer memory, apparel, and many more.

What is the difference between Declared Value and Customs Value?

Declared value refers to a declaration to the carrier for increasing the carrier’s limit of liability.

Customs value, on the other hand, refers to affair market value or sales price of your shipment even if it is not for resale.

Customs value serves as an affirmation to customs for establishing the applicable taxes and duties.

What are the Consequences for incorrect shipment Value Declaration?

Incorrect shipment value declaration will result in your shipment being held at the customs. You will then be required to provide your proof of purchase to the regional customs officer for your shipment to be released.

Therefore, it is essential to ensure that you are accurate when declaring the value for your shipment, more so in international shipping.

When should I purchase Declared Value Coverage?

You should purchase declared value coverage after a shipping label is generated and you possess the customs or tracking details available.

How do I pay for Declared Value Coverage?

Charges for declared value coverage can be:

• Billed to the shipper (prepaid).
• Freight collects (billed to the receiver).
• Billed to a third party.

You can pay for declared value coverage using the following methods:

• Wiring money straight to the carrier through an international transfer.
• Use of a broker.
• Transfer of the funds through western union.
• You can use PayPal.

What is a ‘Flat Rate Coverage’ in relation to Declared Value Coverage?

Carriers offer ‘flat rate coverage’ as an alternative to typical report-based policies.

All outbound and inbound shipments are insured on a given rate monthly with no need for reporting your freight to the carrier.

Some of the benefits of the ‘flat rate coverage’ include:

• There is a monthly fixed cost.
• No need for reporting.
• It covers all your shipments, inbound and outbound, domestic and international.
• Has a flat rate that is discounted.
• Claims are processed faster as there is no need to submit shipping reports before a claim is processed.

Are there any special Packaging Requirements for Declared Value Coverage?

Yes, there are packaging requirements about declared value coverage.

Declared value coverage is not available for the following types of packages:

• Items that lack proof of value.
• Additional restrictions are detailed in the policy documentation.
• Live animals.
• Perishable items like flowers and food.
• Gift cards, cash, and any other items that have cash value.
• Plants and seeds.

What Documents do I Need to Provide when Submitting a Claim for Loss or Damage to a Shipment Protected Declared Value Coverage?

Some documents you need to provide when submitting for loss or damage of a shipment protected declared value coverage include:

• Photographs of the Shipment that is damaged if they are available.
• Packaging list.
• The waybill of the shipment that was damaged or lost.
• Commercial invoice of the items in the damaged or lost shipment. Note that if you provide a proforma invoice instead of a commercial invoice, the item is treated as second-hand.

It is essential to provide all the documents within five business days of the delivery date for damage, not on the delivery receipt.

In case the damage is noted on the delivery receipt, you can fill the claim within ninety days.

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In this guide, you will find all information you’re looking for about customs exam fee.

So if you want to learn more about customs exam fee, read this guide.

What is a Customs Exam?

A customs exam is the inspection of goods in a container when suspicions arise regarding their content. The customs exam can be conducted through a Tail Gate, X-ray or intensive exam.

What is the purpose of Customs Exams?

The purpose of Customs exams is to inspect what gets into the U.S.

The customs exam is unavoidable.

It is very important for Customs and Border Protection to protect the United States from the entry of contraband goods.

The customs will undertake this measure to ensure that only the authorized goods, quoted value and the indicated quantities are allowed into the U.S.

Every year, a lot of containers going into thousands are held by the customs.

This is after they are examined and found to have goods not allowed getting into the country.

Some of the containers are re-exported back to the countries they came from.

Customs exam can be inconveniencing to the importer but it works for the good of the United States.

What are the different types of Customs Exam?

The customs will normally use three exam types in determining what is entering into the U.S. They include:

X-Ray

The X-rat is also referred to as VACIS or Non-Intrusive Inspection (NII) exam.

The Customs and Border Protection orders containers to be taken through an X-Ray machine located at the terminal.

They then review the images to determine if everything is okay.

If they are satisfied that everything is okay, the container will be released to be delivered.

If they determine that something is not okay, the exam will be escalated to the next exam.

Depending on the port the shipment is held and the container size, the fees will normally range between $150 and $350 for each container.

If the fees are charged per shipment, the charges will range from a minimum of $25 and go up to $100.

Tail Gate

In this custom exam, the container is going to undergo examination at the pier.

The Tail Gate acts as the ‘drive-by’ of the exams.

The customs officer gets the container seal broken, opens the door, and takes a look inside.

If they are satisfied that everything is as it should be, they will release the container to the importer to proceed with the delivery.

If there are reasons to question the contents of the container, then the container will be subjected to the final examination level.

Normally the fees for this exam will range between $150 and $350.

This will depend on the container size and the port where the shipment is being held.

If the fees are charged per shipment, the charges will range from a minimum of $25 and go up to $100.

The Intensive

The intensive exam is commonly referred to as ‘Full Monty’.

This means that the whole container is taken by the truck to the Customs Exam Site (CES).

It is at this CES where the stripping of the container takes place.

A CES is any private corporation that is authorized by the CBP to remove the goods from the cargo and separate every parcel.

They are also allowed to open the designated boxes, prepare the cargo for a visual inspection by the Customs officer.

Where possible they can organize samples for the customs officer.

The fees charged for the intensive exam range from $1,000 to over $2,500.

How do Customs Select Shipments for Exams?

The customs do not reveal what they target when finding out the shipments to hold for customs exams.

However, there are various factors that may come into play.

For example, if you are importing for the first time, you are subjected to a high-frequency inspection than an established importer.

In the same way, some goods, flagged entities and countries of origin have high chances of being picked from the queue for inspection.

This happens mostly with the new importers who are not conversant with the requirements.

How do Customs get Information about Shipments?

While selecting shipments for Customs Exams, the inspectors utilize a targeting system that gives scores on every shipment.

If the shipment scores over a given number, it creates an alarm for further review and maybe a customs exam can be conducted.

The Customs and Border Protection normally collects information from a range of sources.

Before your cargo is shipped, your airline, forwarder and the shipping lines will all make a submission on the details about your shipment.

This is done through the Automated Manifest System (AMS).

In case of an ocean shipment, your broker will transmit the compulsory Importer Security Filing (ISF) 24 hours before departure.

Days before the arrival of your cargo, your broker will transmit the data to the customs.

What is Customs Examination Procedure?

Once your cargo is flagged by the algorithm of the CBP for inspection, your cargo will be subjected to one of the following custom exams:

• The X-Ray
• Tail Gate
• The intensive

The manner in which the customs examination is performed depends on the type of exam that the cargo is subjected to.

If the cargo is chosen for an intensive customs exam, several things happen.

First, the shipper and the broker are notified of the status of the shipment.

The cargo is held at the port awaiting transportation to the Centralized Examination Station (CES).

At the Centralized Examination Station (CES), it will be queued waiting for other shipments to be examined.

This can take several days before the customs officers are done.

During the examination, the customs officers might be forced to break the container seal to completely offload it.

This may take time but it might be the only way of performing a thorough inspection on the shipment.

If the shipment has passed the customs exam, the contents will be loaded back to the container.

The shipment is then cleared to get into the U.S. without any more demands.

However, if your shipment does not pass the customs exam, several things may fall into place.

The customs may request the shipment be taken back to the country of origin.

This is done at the expense of the shipper.

If the shipment is considered illegal or harmful, it can either be incinerated or crushed at the CES location.

The shipper can never be compensated in any case for the loss arising from the decision to crush the shipment.

How will I Know if my Shipment is Undergoing a Customs Exam?

If your shipment has been selected for customs exam, the importer and the broker are notified by the customs.

After reviewing, the CBP decides on whether to go on and inspect the cargo using the different types of customs exams.

If further inspection is not necessary, they request for the submission of backup documentation, additional information and other relevant certificates.

The shipment is then released or taken for more examination using one or different types of customs exams.

Where do Customs perform Exams on shipments?

Customs Exams are conducted at the Centralized Examination Centre (CES). This is a privately owned facility that is operated with the authorization of the CBP.

This is where the cargo is taken to be examined by the CBP.

The CES can offer the transportation of cargo from the port to their facility as requested by the importer, steamship line or importer’s agent.

The CES helps in facilitating the examination process by offering the CBP transportation means and a facility to conduct their business.

CES providers are existing trucking and warehouse companies that choose to offer this as an additional service since they have required resources.

Can I prevent my Shipment from undergoing a Customs Exam?

Not getting selected for a customs exam is simply a bit of sheer luck.

You cannot prevent your shipment from going through a customs exam.

You can however undertake several measures to reduce the chances of being chosen for the customs exam.

Following the tips below can help you reduce the frustrations that come with customs exam.

Put your Paperwork Clear and in Order

If you are new in the importing business, you need an experienced freight forwarder to help you with the process.

They understand everything necessary and what kind of behavior may alarm the customs officials.

Choose a freight forwarder who can link you up with a customs broker that is experienced.

A good customs broker is going to help you clear your shipment promptly without delays.

Give Accurate Valuations for your Cargo

The custom officials do check the values of your goods and compare them with similar goods.

If the valuation of your cargo is way off, it is going to trigger the interest of the customs officials.

Your freight forwarder is going to give you a piece of good advice on this part.

Works Together with Partners who are Established

Always maintain an importing record.

Work with freight forwarders that are established and have a secured supply chain.

This will minimize the possibilities of ever being selected for a customs exam.

 

Avoid Consolidating Shipments from Strangers

LCL shipments can greatly save you money, they have high chances of being flagged for customs exam.

It is worth sending your cargo using a dedicated container.

This helps you avoid the chances of being subjected to a customs exam.

Familiarize yourself with the CBP by Applying for Continuous Customs Bond-

Building a good relationship with the CBP can help them see you as a reliable shipper.

They are able to expedite your cargo and reduce the possibilities of being selected for customs exams.

If you are shipping large volumes of goods, you can consider getting the CTPAT membership with CBP.

If you are able to adhere to all the requirements, you will be subjected to very few customs exams.

And in case you are selected, you can get a fast inspection.

How do you prepare for Customs Examination?

There is nothing much you can do once your shipment has been selected for Customs Exams.

Once your cargo gets to the port, you will have no time to prepare.

However, you can do a few things to get ready in case your shipment has been flagged for Customs Examination.

You can be able to prepare for the customs Exam even before the shipment is dispatched from the country of origin.

The custom examination is not a must but you must prepare in advance just in case your cargo is selected.

There are two ways that you can protect yourself from the customs examination. These are:

• Insurance
• Customs broker

To start with, an intensive customs exam can damage your freight.

It is a good idea that you invest in cargo insurance that is going to cover transit and damages relating to the inspection.

This way, in case your cargo gets damaged after undergoing intensive customs exams, it does not become devastating.

Secondly, having a customs broker can greatly help you in many ways.

Customs broker can help you reduce the chances of your shipment being selected for customs exams.

They will also help you in communicating with the customs as well as updating you on every process of examination.

Customs brokers are also going to help you correct the errors occurring on the documentation on your behalf.

This helps in moving the entire process smoothly.

What is Customs Exam Fee?

A customs exam fee is the charges incurred by an importer in case a shipment is selected for customs exams.

The Custom exam fee is dependent on the kind of inspection that is being performed.

The custom exam fee can range from $80 to $1000 and beyond.

Who pays for Customs Exam Fee?

It’s the importer’s responsibility to cater for the customs fees that are incurred on the shipments entering the United States.

These costs may include exam fees, service fees, transportation costs, and storage costs.

How are different Shipments charged for Customs Exams?

For Every type of customs exams that your shipment gets subjected to, it will attract a different fee.

The fees charged for the intensive exam for example will range from $1,000 to over $2,500.

The charges will depend on the amount of labour involved, the container size as well as the port from where the container is held.

If the fees are charged per shipment, the charges will range from a minimum of $250 going up.

For the case of an LCL shipment, the cost of every container is divided proportionally among the importers involved in the shipment.

The fees are calculated and the freight forwarder facilitating the movement of the goods from the country of origin collects them.

For FCL, the fees will be a one-off and the importer will be required to pay the charges associated with the customs exams.

Who charges Customs Exam Fees?

Custom exam fees are not charged by Customs and Border Protection (CBP).

Whenever you are required to pay the fees, they will be collected by:

The Centralized Examination Station (CES)

This is a private facility that is used by the CBP when they need to conduct an inspection.

They will handle the logistics, inspection, unloading and loading of the cargo to the container.

All charges accruing from these services will be charged to you.

You may also pay for storage in their warehouses.

Transport Company

This is the Company handling the movement of your shipment to the CS and back.

The fees will reflect as drayage charges on your invoice.

The Shipping Company

The Company handling your shipping may charge you for demurrage and detention since you are exceeding the time agreed on the container usage.

Depending on how the situation is, they may also request you to pay for storage charges.

Must I pay the Customs Exam Fee before my shipment is released?

Once the shipment has been subjected to a customs exam, all fees must be paid before the shipment is released.

To avoid that these payments do not cause delays and extra fees, you should have arrangements for prompt payments in advance.

How long does a Customs Exam take?

Normally shipments are held for around 45 days when undergoing customs exam.

Unfortunately, there is never a legal limit on the time the customs can keep your shipment when undergoing a customs exam.

Although the shipment is helping indefinitely, you can have your cargo released between 30-45 days.

This can even be earlier depending on the list of shipments ahead of you waiting to be examined.

The more time your shipment spends with the customs, the more charges you are going to rake to take care of storage fees.

Whatever you can do to speed up the customs exam process, you should do it.

This may involve payment of duties, provision of additional information and correction of documents.

This will highly impact the number of fees you will pay.

What happens after Customs completes Examining my Shipment?

Once the customs complete the examination process, they will release your shipment. At this point, you will be invoiced on the total amount so that you can pay.

Once you pay you can take your shipment.

If the customs find that the shipment violates the regulations and standards set, the shipment is returned to the country of origin at your own cost.

In the worst-case scenario, the shipment can be destroyed if the goods are found to be illegal or contraband.

What is a Customs Exam Hold?

Customs exam hold is where the shipment is held because there is something wrong with it.

Some of the wrongs include incomplete paperwork, unpaid taxes and fees. In short, a shipment is going to be held if you have made some errors during the process.

It can also be held whenever there is a pending thorough examination.

If your shipment gets held at the customs, it will remain there until the issues leading to the holding are resolved in their entirety.

This could mean you pay all the related charges, giving additional information, changing incorrect dates or any other necessary actions required by the customs.

What are the Different Types of Customs Hold?

Even when the shipment is not subjected to inspection, sometimes the customs will need to hold your shipment at the port of entry.

There are several types of customs hold each depending on the problem and situation.

However, all of them will subject you to long waiting before getting your shipment released.

The common types of customs hold are:

Manifest Hold

Manifest holds are placed when your shipment has incorrect shipping information.

The carrier’s manifest or the ISF data are the reasons why the manifest hold can occur.

To prevent this, make sure you have verified that is correctly entered and completed before the shipment is released.

Take time and double-check the information entered to save your time later when the shipment is being cleared.

Commercial Enforcement Hold

This type of hold is placed when the shipment does not comply with the customs regulations that apply to your shipment.

This can also happen if your shipment fails to comply with the regulations set by the government agencies that regulate your commodities.

How do I know if my Shipment is on Hold?

Once the shipment gets held or is chosen for customs exams, the “notify party” will be contacted via mail.

The notify party can be yourself or your broker.

Once that is done, you should contact customs or have your broker contact them.

This is done to find out if there is something you can work on to speed up the process.

In some cases your shipment will be held as a result of the “notify party” section being blank.

In such a scenario, the customs will contact any other contact person appearing on the documentation.

This can be the manufacturer, the packager, the shipper or your broker.

If nobody else is indicated and nobody is available to claim the cargo, it will have to be destroyed.

After all, it is upon you to make sure that you are doing everything correctly.

Why is Customs still holding my Shipment even after Examining it?

The customs will still hold your shipment if there is insufficient information on documentation.

They are not going to release your shipment until the information required has been submitted.

The customs are always going to think that something is being hidden.

It is important that you provide all the information they ask for.

Do Customs Accept Liability for Shipments under their Hold?

The customs are never going to accept liability for the cargo they are holding.

All fees and charges that accrue will be invoiced to the importer and the shipment can never be released until they are all settled.

It is your responsibility to ensure that everything is done right.

If your mistakes lead to losses, it is not up to them.

Which Shipments do Customs flag for Examination?

The CBP uses an algorithm which rates incoming shipment based on the risk levels.

They then select the riskiest and suspicious cargo for examination.

The factors included in the algorithm are not known since even the least expected shipments still find themselves in the examination list.

There is factors that easily attracts the attention of the customs to act and consider holding the shipment for examination.

They include:

• When the shipment involves a new shipper, one who hasn’t imported into the U.S. before, the customs will high suspect the shipment.

• If you are known for shipment mislabeling, doing things the wrong way, your shipments will always be suspected and selected for custom examination.

• The CBP takes into account everyone involved in your shipment while determining your risk factor.

So it does not mean that you are the only one to capture the attention of the CBP.

Handlers or the manufacturers, any of them with a bad reputation will make your shipment selected for inspection.

• Some Shipments will have more suspicious goods than others or easily mislabeled.

If your goods fall in that category, it is highly likely that they will be held for examination more often.

• The country of origin will also play a very significant role in determining the shipments to be flagged.

Shipments from some countries are regarding highly suspicious than those from other countries.

• It is not a very good idea for you to consolidate your cargo with other products even if it means saving money.

Your shipment can be held because of other goods contained in the container hence, you will suffer for their mistakes or actions.

• If your paperwork is not properly done or done incorrectly, the CBP is going to hold the shipment.

They have to determine if there is anything you are trying to hide and as such, they must inspect the shipment.

How can I avoid Customs Exams and Fees?

Customs exams and the fees that come along with is something that cannot be avoided once it occurs. They can only be prevented.

You must do all you can to avoid any suspicions.

Make sure you understand the shipping process and the requirements.

Adhere to every requirement and provide the necessary data to avoid being flagged.

In case you get flagged for inspection, prepare all the requirements the fastest possible to get cleared.

This will prevent you from excess fees that may accrue as storage fees.

Can a Customs Broker help navigate Customs Exam and Hold?

It is the easiest way you would consider in handling your customs examination.

You must choose a licensed customs broker.

They will come in handy especially if you are importing for the first time.

They are going to make sure that you do everything smoothly since they are specialists allowing you to focus on other things.

A customs broker is also going to help you reduce the chances of your shipment being flagged by filling all the documents properly.

In case your shipment is selected for customs exam, a customs broker can make you get informed about your shipment.

They will work to have your shipment cleared in a much faster way than you possibly could on your own.

Still, if you have any questions about customs exam, contact Tj chinafreight now.

At Tj chinafreight, we will help you in all your freight forwarding from China.

This guide covers all the critical aspects you need to know about deconsolidation.

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

What is Deconsolidation?

Deconsolidation is the breakdown of a big shipment into smaller shipments usually at the port of entry for the final destination delivery.

The final destinations for the smaller cargoes can be a warehouse, distribution centers, stores, or to the end user client.

Why is Deconsolidation important in shipping?

Deconsolidation helps in making freight manageable by dividing them into smaller pieces and processing for delivery.

This saves the cost of last mile shipping as well as boost delivery speed to shippers and customers respectively.

Despite deconsolidation being a cost saver in the shipping process, it may increase cost of shipping if mismanaged.

This is because there are many touch points that may pose a risk to both the carrier and shipper.

Having a proper and up-to-date inventory system is crucial for a successful deconsolidation process in shipping.

What is the difference between Consolidation and Deconsolidation?

Consolidation is the merging of several less than container load (LCL) into a big container or truck shipment before transporting.

Deconsolidation is the act of separating a big cargo into smaller shipments for inland delivery to either stores, distribution center, etc.

The mode of shipping of consolidation is sea freight while deconsolidation is mainly inland transportation by trucks or rail.

While consolidation happens at the port of origin while deconsolidation is done at the destination port.

Consolidation and deconsolidation are mutually exclusive. They are like two sides of the same coin, one cannot be without the other.

Both consolidation and deconsolidation is carried out at the container freight station (CFS).

What are the benefits of Deconsolidation to Shippers?

Deconsolidation of freight is an integral part of enterprises in this age of e-commerce.

Small and medium businesses (SMBs) are able to operate profitably by consolidating and deconsolidation the shipment.

Deconsolidation shares the same benefits as that of consolidation process. They include:

Reduced Freight Cost

Deconsolidated freight are processed before they can be loaded for their respective destination delivery.

In this case, various means of transportation is used depending on the size and weight of the packages.

Trucks, train, motorcycle are among the vessels of transports used to carry out last mile delivery of the deconsolidated shipments.

This reduces the cost of transportation of these goods as compared to using the alternative.

Proper processing and handling of the goods is crucial to ensure correct, timely and cheaper delivery costs.

Proper Inventory Management

Deconsolidation process is not a walk in the park as it involves several different goods from different shippers in different locations.

Any carrier or freight forwarding company offering deconsolidation services has to have an excellent inventory management system to attract clients.

Secondly, proper inventory management will ensure efficient, accurate and timely delivery of the various goods to their respective localities and destinations.

Destinations of deconsolidated shipment include, warehouses, end user client, distribution centers, fulfillment centers, online orders collection centers.

Increase Market Delivery

Shippers can consolidate their goods and ship into the country using the third party companies and store in their warehouses.

Freight is then separated and transported to their respective markets and avoid out of stock situations.

Discounted Shipping Rate

Using third party logistics companies to ship consolidated goods makes them stay afloat during low season and also reduces cost of shipping.

This makes such shippers their preferred clients hence they are offered better discounts during shipment.

What is Deconsolidation Point?

Once the consolidated container arrives at the destination port, the container is transferred to a separation station within the port facility.

It is at this point that the shipment is separated into smaller packages and prepared for inland delivery.

Hence the name, deconsolidation center.

Deconsolidation points have workers who help with the offloading and processing of the goods using an inventory management system.

The goods are then loaded to appropriate mode of transportation and shipped to their final delivery points.

Where are Deconsolidation Facilities located?

Deconsolidation facilities are conveniently located within the ports to enable easy and faster separation of consolidated goods.

The reason for having them at the port due to availability of warehousing services, advanced equipment, inventory systems, manual and skilled labor.

This location is ideal for unloading, separating, classifying, tracking and transporting unmerged goods to several locations.

What is the difference between Deconsolidation and ‘Merge in Transit’?

Deconsolidation is the separation of consolidated loose, bulk or containerized goods into smaller Shipments.

Merge in transit is bringing together different goods from different suppliers and combining for transportation to a single customer.

Deconsolidation happens at a deconsolidation center while merge in transit is done at a merge center.

Whereas deconsolidation requires warehouse facility for storage, merge in transit eliminates the need for warehousing as it delivers to the final client.

Deconsolidation happens at the final destination port, merge in transit is carried out in the country of origin before shipping.

Both deconsolidation and merge in transit aim to lower the cost of transportation.

How can Deconsolidation simultaneously Increase and Decrease Risk in International Shipping?

Deconsolidation as we know involves dividing a big consignment into smaller packages for the last leg of shipment delivery.

This involves offloading all the goods from the FCL or FTL, segregation, processing, inventory update and dispatch to various destinations.

This increase the goods’ touch points and thus exposing them to risk of damage, loss or quality degradation if mishandled.

Furthermore, goods may be delivered to the wrong destination if the address is unclear or misplaced.

Conversely, deconsolidation decreases the risk of international shipping because it has made the carriers develop and use better inventory systems.

Carriers that offer consolidation and deconsolidation have warehouses management systems (WMS) integrated to the cloud.

This technology only requires the shipper to login from wherever they are in the world and monitor their shipment.

It easily integrates with the monitoring technologies such as RFID and AIDC that are tagged on the goods.

In some instances, the WMS come with camera that enable visual monitoring of deconsolidation process.

This has greatly reduced the risk of international shipping.

What are the Common Problems Experienced by Shippers in Freight Deconsolidation?

While deconsolidation comes with some benefits, it also has some challenges that shipper may encounter. They include:

Increased Risks

Consolidation and deconsolidation of goods has several touch points which also increases the likelihood of loose or damage of goods.

It is therefore, critical to reduce the touch point as possible to mitigate the risks.

Delays in Offloading and Deconsolidation

Upon arrival at the port, the container is expected to be offloaded and unloaded and goods separated. However, lack of space, injuries, etc. may cause delays in deconsolidation process thus affecting timely delivery and increase other costs.

Finding the Appropriate Carrier

Getting the right carrier can be a challenge as consolidation and deconsolidation process is quite involving.

Using freight forwarders or third party logistics companies is ideal as they are knowledgeable and can execute seamless deconsolidation of freight.

Tracking Challenges

While it is easier to track consolidated cargo, challenge arises once the goods are separated at the deconsolidation center.

This can cause chaos when you cannot locate your small shipment real-time while on transit.

To negate the chances of losing visibility of your shipment it is imperative to have the goods tagged using automatable technologies.

Some of the methods you can apply include; radio frequency identification code (RFID), automatic identification data capture (AIDC).

These will enable you have real-time end-to-end visibility of your goods from point of origin to final destination point.

Intermodal Shipping Challenges

Disintegrated goods move from full truck load (FTL) to less truck load (LTL) or small shipment vessels for transportation to various destinations.

In some cases, they maybe need to reconsolidate and deconsolidate at various points thus presenting increase in touch point risk.

Having a real-time tracking method in place may come in handy in monitoring goods movement.

Routing Issue

During the major shipping leg, situation may arise that require goods to be deconsolidated and reconsolidated during shipment.

This situations may be out of natural causes hence causing delays.

Carriers should plan ahead and make sure they stick to shippers’ route despite arising situations.

Who does Freight Deconsolidating?

Freight deconsolidation is carried out by third party logistics carriers or freight forwarders for shippers who do not have such shipping capacity.

Such shippers include small and medium businesses or e-commerce enterprises that struggle with their freight shipping.

Large shipping companies have the muscles to move freight without consolidation or deconsolidating hence seldom offer deconsolidation services.

How much does Deconsolidation cost?

The cost of disassembling freight at their destination port is averagely USD 25 depending on the dimension on the goods.

What are the key considerations for reducing the costs of Freight Deconsolidation?

The aim of freight deconsolidation is reducing their overall shipping costs, fasten delivery process among others.

In order to reach this goal, the following key aspects must be looked into.

Better Process knowledge

This help the carrier company to plan well for the cargo movement as well as deconsolidation and final deliver transportation.

Proper Shipping Documentation

Carriers and freight forwarders understand the importance of timely delivery of goods to their clients. To ensure they make timely delivery, carrier’s present proper documentations for the goods in transit across the borders for inspections.

This avoid hold up of goods by customs that may lead to unnecessary delays and extra shipping expenses to the shippers.

Freight forwarders may use pre-approvals lines where applicable to avoid delays.

Accurate Package Dimensions Entry

Lately, there has been an increase in the use of dimensions-price models by freight forwarders.

It is therefore important to correctly capture the weight, size and volume of each shipment to be shipped.

This assist freight forwarders to give accurate quotations and also to plan for consolidation and deconsolidation appropriately.

Experienced Freight Forwarder

Experience in working with different and warehouse and yard management systems makes the process seamless for the carrier company.

Real Time Traceability

End-to-end visibility of goods during transportation is important for tracking purposes and avoid lose.

Goods Prioritization

During consolidation, goods should be loaded in various categories which will subsequently make deconsolidation process easier and faster.

It makes entry of inventory process easier and further fasten the last-mile distribution process.

Does Freight Deconsolidation work for everyone?

While deconsolidation may work well for some business, it may lead to terrible losses and higher costs for some.

It is therefore important for business owners to analyze their market before venturing into deconsolidation services.

For instant, clothing business might do well with deconsolidation services. First, the clothes will reach the market faster by bypassing distribution centers.

Secondly, the business owner might decide to hold stock and study trend before dispatching thus gaining more profits.

Finally, if the business has several retail centers across the country, deconsolidation allows them to redistribute the clothes faster and cheaply.

While this might lead to higher sales, reduced costs to the clothing business it might lead to overstocking for furniture business.

Higher inventory capacity may be costly and lead to bigger financial burden.

How can you Ensure Safety of Goods during Freight Deconsolidation?

Safety of goods that are to be deconsolidated is paramount to avoid product loss due to theft or misplacement.

Shippers can ensure their product safety by using modern technologies such as RFID and AIDC to trace their goods end-to-end.

Having real time visibility of the product will enable the shipper to know every location of the freight during transit.

Such technologies also enable inventory monitoring from the cloud for shippers who use carrier’s warehouses for storage.

Additionally, carriers provide a round the clock security to the goods once they take over from the supplier.

They oversee deconsolidation process at the deconsolidation station and countercheck goods as they are loaded for dispatch.

Does Cargo Insurance Cover loss and Damage of Goods During Freight Deconsolidation?

Cargo insurance is the protection of goods provided by the carrier vessels corporation.

This covers loss of goods in case of any incident while on board.

To protect freight during deconsolidation, the terms need to be added to the policy for it to apply.

It is important for shippers to ensure the insurance cover taken is comprehensive to cover deconsolidation process.

This comes at an extra fee since the risk involved in freight deconsolidation is high.

How do you Make a Deconsolidation strategy Successful?

Like any other strategies, deconsolidation planning should factor in all the pros and cons towards a specific items.

While the aim is to reduce shipping cost and fasten goods availability in the market, risks must be mitigated.

Carriers have to ensure that the multiple touch points get extra attention and if possible reduced.

This can be achieved by putting in place a working measures during offloading and sorting.

Equipment such as conveyor belts to be used for loading onto waiting truck, and fragile items separated and handled carefully.

With this and good inventory system in place, deconsolidation strategy will be successful.

Is Deconsolidation viable for all kinds of Shipments?

Deconsolidation services cannot be offered to any type of goods.

There is a limit for goods that can be disintegrated from the original consolidated freight for final destination shipment.

Such items include; fragile goods like carvings, food items that are perishable, drugs, minerals etc. Hazardous materials (HAZMAT) cannot be deconsolidated, they include; toxic chemicals, biological and radioactive agents, nuclear waste products, fuels, etc.

 

How can Tj chinafreight help Shippers boost Proficiency and Efficiency in Freight Deconsolidation?

Shippers use deconsolidation services in order to reduce cost and ensure goods availability on time.

Tj chinafreight shipping can help shippers to realize efficiency and proficiency of freight deconsolidation by the following:

• They can also offer discounted rates to their frequent shippers to help them reduce their shipping costs.
• Timely arrival and deconsolidation at the entry port ensure the goods reach the market on time avoiding out of stock situations.
• Keeping clean inventory records for shippers to monitor their items throughout the process.
• Assist with end client delivery of items.

Do you Recommend Consolidation and Deconsolidation of Amazon FBA Shipments?

Yes.

Amazon FBA serves global customers therefore, in order to deliver to the on time, they can use consolidation and deconsolidation services.

This online store serves customers in different geographical regions.

It operates by customers ordering through their Amazon account and the goods are delivered to their fulfilment center buy manufacturer.

Once they receive the goods, they sort and consolidate all freight going to similar region and dispatch them.

Upon arrival to their respective country ports, the freight is deconsolidated and good distributed to all their customers respectively.

What Does a Deconsolidation Service Entail?

Deconsolidation services include:

• Receipt of cargo at the deconsolidation center
• Storage
• Clearance with customs
• Offloading, sorting and inventory management
• Documentation
• Packing and truck loading
• Cross docking
• Inland Shipping

What is Deconsolidation Notice and why is Important?

A deconsolidation an electronic notice issued by border authority allowing the client (carrier or freight forwarder) to take over consolidated shipment.

This electronic authorization is presented to the warehouse manager to authorize the freight forwarder to take charge of consolidated cargo upon arrival.

Besides, it acts as an electronic notice to customs official that taxes and duties of that particular consolidate freight have been acquitted.

If the warehouse operator does not get the electronic notification the client can present them with printed copy of the same.

A verified and stamped copy of the consolidated cargo control document by CBSA may also be presented to the warehouse operator.

At Tj chinafreight, we will help you in all freight forwarding services from China – contact us now.

This guide covers everything you need to know about delivery labor fee.

So, if you want to learn more about delivery labor fee, read this guide.

What is Delivery Labor Fee in Logistics?

A delivery labor fee is a destination charge. It appears when the trucker helps to unload cargo at your warehouse or distribution center.

Note that this charge is applicable when the trucker spends 20 minutes or more unloading your goods from the truck.

How is Delivery Labor beneficial during shipping?

Delivery labor, while not so popular, provides several benefits:

• You save a lot on labor when you use truckers to help unload cargo at destination
• Accurate and faster unloading because of the additional help
• You avoid detention, trucking wait fees, and other surcharges that may accrue because of delayed unloading
• It helps you distribute products faster thanks to on-time delivery, unloading, and packing
• Delivery labor allows you to return the empty shipping container to the port on time, avoiding the extra drop fees. This also reduces the chassis use days that may cause more charges on your invoice.
• Most truckers have experience in cargo unloading. Hence, they will ensure the safety of goods while moving them from the truck to the warehouse or distribution facility.
• It minimizes theft and loss of cargo. The chances of the truck driver stealing your goods are minimal than when you hire third-party laborers for the live unload.

Is Delivery Labor the same as Unloading?

In a way, yes!

Delivery labor is the help provided by trucking drivers in moving cargo from the truck to your facility at your destination.

Unloading is the same thing only that with this, it can happen anywhere. Unloading can occur at the port, at the customer’s premise, or the freight forwarder’s warehousing facility. Unloading is a generic term that describes the action of removing cargo from a ship, a truck, or a container.

Why do Trucking Companies charge Delivery Labor Fee?

In logistics, any cost that isn’t a simple per-mile transportation charge is quoted as an accessorial charge.

Truckers are often called upon to perform services other than just transporting cargo. Truckers may have to unload the cargo. This service, note, isn’t included in the per-mile shipping rate charge.

It would be unfair for a trucking company to charge the fees for unloading as part of the per-mile rate. This is because not all customers may need this additional service.

Cargo unloading and other extra services come at unique costs. Hence, it would be quite difficult to average out the cost without overcharging customers who only need simple shipment services.

To put it simply, logistics companies charge delivery labor fees because it is the only fair way to charge a customer for the unloading services. The same applies to other accessorial charges in shipping.

Who pays the Delivery Labor Fee in Shipping?

The shipper pays the delivery labor fee in shipping.

Here, the shipper can be the buyer/importer, freight forwarder, or customs broker.

How much is the typical Delivery Labor Charge?

The standard delivery labor charges vary depending on the trucking company you’re using as well as the type and volume of goods you’re transporting.

Note however that truckers charge a standard fee for the first few minutes. Extra hours are charged on a per hour basis.

Is Delivery Labor Fees applicable to all shipments?

Yes, delivery labor fees apply to all shipments as long as one trucker can handle them. It applies to freight that requires a lift gate, or for any freight that is palletized, skidded, or unitized.

A shipper may hire third-party off-loaders to offload the truck.

In this case, you won’t require the help of the trucker/driver to offload, and then delivery labor fees are not applicable.

What is the difference between Delivery Labor Fees and Demurrage Fees?

Delivery labor fees comprise payments to the driver for unloading cargo at delivery location. Demurrage fees are charges assessed by the carrier to recoup its costs for holding goods at the terminal beyond the agreed free hours.

Demurrage fees will continue to add up even if the delay to pick up your cargo is because of congestion at the terminal. It is charged daily so collect your cargo as soon as possible to avoid hefty demurrage fees.

How do you cut Delivery Labor Fees in logistics?

The shipper may reduce their delivery labor fees by utilizing the maximum allowed weight of the shipment and having a flat rate labor fee charged at delivery.

Do not, however, exceed the weight limit.

When you take the services of a reputable company, you may get discounts which result in reduced shipping trickling down to the overall cost of goods.

You may pass on the savings realized from such discounts to your customers or use it to increase your profits.

Get quotations from several sources (companies) and choose the best in terms of efficiency and best rates.

Use packaging boxes of correct size and dimensions to avoid extra charges associated with extra-large boxes.

Does Delivery Labor Fees factor into the Final Cost of shipping?

Yes.

Cost of shipping is the total expense incurred in moving goods from origin to final destination.

Delivery labor fee in this is an expense that you incur to ensure goods are safely unloaded and delivered to your destination location.

So yes, delivery labor fees factor into the final cost of shipping.

How is Delivery Labor Fee calculated?

When the tracker takes at least 20 minutes to unload the truck, they are entitled to a fixed amount as a delivery labor fee. Any extra time that the trucker takes during offloading is charged per hour.

If the tracker helps the buyer with lift gate services, a standard fee is charged which is usually higher.

The truck will have electric or hydraulic equipment fixed at the back of the truck to help lift the weights of the cargo.

Not all trucks are fitted with hydraulic equipment, so you need to let the trucking company know you need the lift gate.

You may incur extra charges in case you need a lift gate to offload your cargo, and it is not available. That means that your cargo will be redelivered, which will cost you more.

Is Delivery Labor Fee Negotiable?

Yes, delivery labor is negotiable under different circumstances.

As this is an accessorial charge, you can always ask for a discount especially if you’re a regular customer of the trucking company.

Does the Delivery Labor Fee cover risks in unloading?

No.

The delivery labor fee is the price of the unloading services paid to the driver/trucker. The labor fee does not cover any damages or loss that may occur during cargo unloading.

Who takes Liability in case of Damage or theft during Cargo Unloading?

It is pretty common for cargo to get lost or damaged during unloading.

Unfortunately, most trucking companies don’t take responsibility for this. Remember, delivery labor is an outside arrangement.

It is not part of the last mile delivery contract. As such, any liabilities are only borne by you (buyer/importer).

It’s worth noting though that most truck drivers are disciplined and won’t steal goods when offering delivery labor services.

They have employment contracts that bind them to ensure professional and reliable service delivery.

However, if you suspect misconduct in terms of cargo theft during delivery labor, you may launch a complaint with the trucking company.

They should be able to give you the right way forward.

Regarding cargo damage, this liability is also not borne by the trucking company.

You, the buyer, will solely bear this loss.

That is why it is important to consider your options when requesting for delivery labor.

If shipping goods that require special handling, it is better to hire skilled lumpers to do the task.

Moreover, it is important to get last-mile cargo insurance to give you additional protection against the risk of damage, theft, or loss.

Choose one that covers your liability in case of damage or theft during cargo unloading.

How do you Ensure Safe Unloading during Shipment Delivery?

If you are in the business of importation, it is important to know how to pack and secure your cargo during shipping.

The unloading process can be considered as one of the most vulnerable phases of shipping. It is the time when your cargo can easily be damaged or lost.

Proper packaging using the right materials is essential in ensuring your cargo reaches its destination in good condition.

It may also prevent damage during unloading. Securing the cargo well during loading is also vital. It will keep goods from toppling and falling over during unpacking.

The quality of unloading also affects the safety of goods in the delivery process. Off-loaders should be trained and skilled in handling many loads for unloading products safely.

If not, find skilled labor to do the unloading. This will help avoid losses due to poor handling during the unloading process.

If you’re transporting large volumes or special goods, make sure that you use the right personnel and equipment for the unloading.

How do you pay Delivery Labor Fee when shipping?

Usually, you will pay the delivery to the cargo transportation company after the trucker has helped in offloading the cargo.

The company sends you an invoice and you my then do a bank transfer from your account to the company’s bank account.

You may also consider other payment options acceptable by the trucking company such as credit card payment, or PayPal.

How does increased Delivery Labor Fees affect your Import Business?

Increase delivery labor fees delivery increases the cost of shipping.

Ultimately, you will have to factor in this increase into the final cost of your product setting prices a little higher.

Note that a high cost of goods tends to driver away customers, especially if your goods are higher priced that the competitors.

You may choose to pass on this extra charge to customers or not. The latter, beware, will eat into your profits.

Are Delivery Labor Services applicable to Goods that require special handling?

No.

Delivery labor service does not apply to goods that require special handling, as these special skills and equipment to unload.

Goods that require special handling may be dangerous goods i.e. HAZMAT, fragile items like glass, or OOG which require the use of special equipment.

Special handling involves additional time, costs, and procedures that a truck driver may not be able to offer.

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How does Delivery Labor Fees Factor into your product landed costs?

Charge of delivery labor fees is a value that will eventually land in your product landed cost.

Note that landed cost is the sum of all expenses required to bring a product from its origin or manufacturer to its final destination.

These expenses typically include costs for purchasing goods, packaging materials, shipping or freight charges, insurance, and taxes as well as accessorial fees.

The delivery labor fee is an accessorial charge.

It occurs during last mile delivery and yes, it factors into the final landed cost of the product.

You have to consider all costs and fees, including delivery labor, when calculated the final cost of shipping the product and setting its market price (if importing for resell purposes)

Product landed cost is a key element in determining the profitability of any business.

Therefore, it is important to make sure that you have accurate landed costs for your deliveries.

Can seeking a Freight Forwarding Partner help you avoid or Lower Delivery Labor Costs?

Yes.

A freight forwarding company is not only a forwarding agent but also offers other services like consolidation and inventory management.

They also offer planning and documentation help, arranging pickup and delivery as well. This makes them an essential partner in your supply chain.

Freight forwarding companies provide this service for a fee besides the shipping costs.

If you use them as ‘your one-stop shop’, a freight forwarder will help you get your products shipped with minimal or even no delivery labor costs.

It is important to find freight forwarder who can save you money in shipping.

The best freight forwarder is the one who can provide shipping services across different modes of transportation.

They should have the capability to all kind of shipments including full container loads and partial loads, line-haul loads, or full truckload shipments.

Are there exceptions to the Delivery Labor Fee?

Yes.

If you are a regular client to the logistic company, they may discount you on the delivery labor fees.

A freight forwarder offering you import haulage may also give you a delivery labor discount. This is only if their service package includes last mile delivery. Most forwarders also offer this service for free to repeat customers. So you may want to establish some loyalty with your import/shipping partners.

Who pays for Delivery Labor when shipping under DDU or DDP terms?

The buyer/importer pays for delivery labor both under DDU and DDP terms.

On the DDP incoterm, the seller delivers goods to the buyer’s premises. He pays for all costs including clearance fees at the customs, VAT, all taxes, and import duties.

The seller takes care of the entire risk of loss until the cargo gets to the buyer’s door. He does not, however, pay for the unloading of cargo.

With DDU shipping, the seller takes care of all costs until the cargo gets into the buyer’s country.

The buyer then takes over the shipment and pays for VAT and/ or customs charges as applied in their (buyer’s/importer) country.

In both terms, the buyer/importer is responsible for all shipping costs including last mile delivery of cargo.

So in both terms, unless otherwise agreed upon by the buyer and seller, the buyer pays for delivery labor whenever necessary,

Is Delivery Labor Fee legal?

The primary job of the truck driver is to safely deliver the cargo to the buyer’s premises.

If the driver helps to unload the cargo at your premises then it is reasonable that you pay for the offloading labor.

This is keeping in mind that cargo loading and unloading is outside their service jurisdiction and the trucking company’s per mile rate.

So yes, delivery labor fee is legal as it is payment for a service rendered.

What is the difference between Delivery Labor Fee and Lumper Fee in Logistics?

As stated severally, a delivery labor fee is the amount paid to the truck driver for physically unloading your cargo at destination.

The fee applies when the trucker spends over twenty minutes offloading.

Lumper fees are the amount paid to third-party workers (lumpers) hired to help with the loading or unloading of cargo at a destination.

The truck driver either pays the lumper fee in cash or issues them with a cheque.

The amount the trucker pays to the lumpers (lumper fees) is then reimbursed to him by the buyer/shipper or the carrier.

At Tj chinafreight, we will help you in all freight forwarding services to any global destination – talk to us now.

This guide covers all information you need to know about demurrage.

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

What is Demurrage?

Demurrage is the penalty charged on the shipping container for staying at the port terminal beyond the last free days.

Carriers or shipping lines grant between 3 to 7 free days to the buyers to collect, load or discharge their cargo.

Failure to collect the container within the free days attract charges per day per container till the day of pick up.

What are the causes of Demurrage?

Demurrages can arise due to causes within shipper’s control or from unforeseen circumstances. Some of the causes are:

• Lack of proper shipping time and date communication between the cargo recipient (consignee) and the shipping company. Thereby leading to consignee delaying to pick up the cargo.
• Consignee receiving incorrect customs clearance papers thus leading to clearance delays by customs authority.
• Cargo and sales order mismatch after arrival at the port hence the consignee cannot accept them.
• Failure on the shipping company to send the consignee customs clearance documents on time for cargo clearance and pick up.
• Disagreement between the consignee and the shipper.
• Container held for customs exams by customs officials.

When does Import Demurrage finish?

Import demurrage ends when the container has been removed from the destination port terminal or delivered to the client.

Carrier haulage is under the control of shipper line or their contractor hence the demurrage ends with delivery.

Merchant haulage is the customer’s transport arrangement form the terminal therefore demurrage end when the container is removed from the terminal.

Demurrage must be paid before container can be released in both cases.

What is the difference between Laytime and Demurrage?

Laytime is the period of time allowed for loading and unloading of cargo under the voyage charter. Demurrage on the other hand is the penalty levied on containers once the free days run out.

Laytime ensures the voyagers adhere to the shipping times while demurrages ensure quick turn-around and efficient use of containers.

Both laytime and demurrages offer free time or days before charges apply.

Exceeding laytime attracts demurrages which is paid to the port official where the delay occurs.

How can Port Congestion affect your Supply Chain?

Port congestion is a situation whereby ships are unable to load and unload due to full capacity at the port.

With the high adaptation of globalization, there has been an increase in demand for supply and transportation of goods globally.

This in turn has led to port congestion since cargo fleets are doubling but port expansion is still slow.

Other causes of port congestion is unstable workforce brought about by poor remunerations as well as strict customs clearance processes.

This has led to increased operational cost to the shipping lines and cargo owners in terms of demurrage, storage and detention. It has made it difficult for carriers to deliver goods on time and cargos to miss their connection ships or trucks.

Shipping companies and governments are trying to reduce port congestion in order to improve marine logistics, reduce losses and port accidents. Some of the steps taken include:

• Adopting use of technology in port operations to make clearance processes faster and smooth.
• Introduction of night shift for workers to clear as much as possible cargo within 24 hours. Improve remunerations for workers to retain them.
• Using the ‘free flow’ container delivery system for readily available truck drivers. This reduces time spent in accessing the specific container.
• Improve port infrastructure and equipment for faster movement of cargo.
• Encourage importers to adopt Shipper-Owned Containers (SOC) as opposed to Carrier-Owned Containers (COC). This saves shippers from demurrage, storage and detention charges and also eliminates the need to return containers to the port.

What is the difference between Demurrage and Detention?

Demurrage is the fine on the buyers for failing to collect their containers from the port after the last free days.

Detention is the penalty for delaying to return empty or filled containers to the port after unloading and loading cargo respectively.

Demurrages applies when the container is still within the port whereas detention applies when the container is used outside the port.

Demurrage and detention offer buyers “free times” usually between 3 to 20 days to collect containers or return to the yard.

During imports, demurrage would apply for not picking up the container within the allowed free time.

Detention fee would be charged for failing to return the empty container after discharging your goods within the free time.

When exporting cargo, demurrage fee will be applicable when you deliver the loaded container prior to the agreed dispatch date.

Besides, when you do not present proper customs documentation for your shipment, it may delayed at the port, hence demurrage.

Detention fee would be applied if you delay to return the filled container to the port for dispatch as expected.

What is Combined Demurrage and Detention (Merged D&D)?

Combined demurrage and detention also known as merged D&D is when the individual charges are billed as one.

In such scenarios, clients are offered flat free days for collecting and returning containers when importing.

If the free days is 14 days, clients are expected to clear, collect and return the empty container within 14 days.

Beyond the 14 days, merged D & D is charged per day for the number of days exceeded by the client.

Who is responsible for Demurrage Charges?

Once the shipment arrives at the terminal, the vessel owner is absolved of any costs incurred from thereon.

Cargo owners take responsibilities of demurrages, storage, detention, and any other charges that are levied.

How much does Demurrage cost?

Demurrage fee differs from carrier, ports, and the contract agreement in place. The average cost is between USD 80-200 per container per day.

This rate can significantly change upwards after certain number of days depending on the port.

For example, port A charges USD 80 per container per day for demurrages. If you delay to pick up 7 containers by 6 days, you will incur USD 3,360 as demurrage.

Demurrage must be paid before the cargo is released from the terminal, this amount will impact negatively on your shipping cost.

How is Demurrage Calculation done?

As mentioned above, demurrage rates vary with ports, shipping lines or contract agreement between the consignee and carrier.

To calculate demurrage payable to ship owner, demurrage rate is multiplied by the number of days or hours exceeding the laytime.

An example of the calculation is as below:

• Demurrage rate per day pro rata (PDPR) USD 2,000
• Total number of laytime exceeded by ship is 5 days 6 hour and 45 minutes
• Total demurrage payable=USD 2,000 X 5d 6h 45mèUSD 2,000 X 5.2396 days=USD 10,479.12

It is necessary to understand the exact time a laytime expires in a charter and when the demurrage start to run. This will assist to arrive at the number of days and hours in excess of the allowed free time.

Demurrage, like stop watch will continue running until there’s an exception that necessitate its stoppage.

General exceptions is made when the ship moves from loading or unloading bay to berth and vice versa during free laytime.

In this scenario, the time consumed in moving is not factored in the laytime.

However, if the ship moves when laytime is expired, demurrage will continue running and the ship owner will be compensated.

When does time on Demurrage end?

Demurrage time ends the same time laytime would have ended as stated in the specific charter.

For dry bulk market, that would be completion of cargo operations and when cargo hoses are disconnected in tanker market.

What is Free Time Demurrage?

Free time refers to the period which the container can stay at the terminal port without incurring charges.

Free time is granted by ship owners to allow the cargo owners to collect and return containers. The number of days is usually between 7 to 14 days for shipping lines and can be extended upon request.

Which factors influence Demurrage Free Time you can enjoy?

Before demurrage clock start rolling, customers are allocated a number of free days within which they can clear and collect their containers.

The elapse of the free days mean costs start going up for the clients till they pick up their cargo.

Free days are allocated depending on port location, shipping line and the contract agreement, equipment and infrastructure.

Free time is not granted in some warehouses or yards.

As a result, they determine the number of free days customers will get and when the demurrage will start to apply.

Import demurrage may start when the ship docks at the terminal port, during vessel unloading or when cargo dispatch is completed.

Free days may run out due to unforeseen circumstances such as port congestion thus leading to demurrages.

Proper advanced planning is therefore encouraged to mitigate such scenarios.

How can you optimize your Free Time to manage Demurrage Costs?

Shipping lines grant certain number of days to cargo owners to enable them to clear and collect containers for free.

If the cargo owner fails to collect the cargo within those days they are then penalized each day.

This cost can eventually impact your business negatively, therefore, as an importer you need to plan in advance to avoid demurrage.

You can optimize on the free time by pre-clearing your goods and having the haulage schedule ready.

This will give you enough time to pick up your cargo before the free days end.

Is Demurrage the same as Storage?

No, it is not the same.

Demurrage is penalty for failing to collect container whereas storage is fee for the space occupied for days beyond free days.

While demurrage is to encourage efficient use and quick turn-around for containers, storage is to deter congestions at the port container yards.

Both demurrage and storage fee are calculated per day for each container.

Does Demurrage apply to Less than Container Load (LCL) Shipments?

No.

In LCL shipment, the shipping line is responsible for clearing the container on time and not the client. Therefore, demurrage do not apply to LCL clients.

However, they may be billed for storage space if they fail to collect their cargo within free days.

What is the difference between Demurrage and Wharfage?

Demurrage is the fee charged on containers that stay in the terminal port after the free days have run out.

Wharfage is the amount charged by port authority for using the wharf terminal.

This fee is normally included in the terminal handling fees quotation as part of port duty.

While demurrage allows for free days before it starts running, wharfage is standard charge for using the wharf which always applies.

What is ‘time study and turnaround time’ and how does it help to control Demurrage Charges?

Time study is close monitoring of different elements of a process, recording and analyzing each one of them.

Turnaround time is the amount of time taken to complete a task such as the length of time between arrival and departure.

Knowing the turnaround time is important in supply chain as it can predict the possibility of demurrage and detention.

Shorter the turnaround time are better for business while longer turnaround time increase chances of demurrage and other related costs.

Is Demurrage avoidable?

Demurrage are caused by both known and unforeseen circumstances which can be beyond human control.

Instances such as poor planning and communication and incorrect documentation can be mitigated to avoid demurrage.

Causes which are beyond the cargo owner such as bad weather, port congestion, are hard to avoid and lead to demurrage.

How can you reduce or avoid Demurrage Charges?

While it is difficult to avoid demurrage charges during shipment, it is possible to reduce or avoid them by:

1)     Clear and Effective Communication

Proactive communication between all parties involved is paramount when you are avoiding demurrages. The carrier, consignee, truckers, brokers and shippers should all be aware of where the shipment is at all times.

Communication starts the moment a shipping schedule is developed, this itinerary is shared across with everyone to plan accordingly.

Poor or lack of proper communication can lead to delay of container pick up which results into demurrages.

2)     Use the Services of Knowledgeable Carriers or Freight Forwarders

The process of shipping freight across borders is no mean fit and requires experts to handle it. This is because it is complex, time consuming and simple mistakes can lead to costs such as demurrage, detention charges, etc.

Working with a freight forwarding expert gives you a peace of mind as they will handle everything on your behalf.

Established freight forwarding companies have infrastructures such as storage facilities in different ports where they can store your goods for free.

Additionally, they are able to negotiate with ship owners for sufficient free days and favorable demurrage and detention fees.

3)     Understand Customs Clearance Processes for your Shipment

Having a clear understanding of customs processes for goods clearance will enable you to prepare the right documents on time.

You can also hire the services of a customs broker for a smooth process.

You can pre-clear your goods if the option is available, this will hasten the process of container discharge upon arrival.

Standard documentation required by the customs include:

• Bill of lading
• Commercial invoice
• Packing list
• Arrival schedule
• Others such as import license and dangerous goods certificate may be needed as and when required.

Ensure your supplier and carrier provide all the needed documentation on time to facilitate the process.

4)     Prepare for Cargo Pick up in Advance

Have a clear schedule for container clearance and pick up from the port even before the ship arrives.

If using merchant haulage, have the trucks arrive at the port early and collect container within the allocated free days.

For carrier haulage, ensure they share a clear schedule for container pick up that falls within the free time.

5)     Request for Quotation Breakdown for Demurrage Charges

Carriers should clearly indicate the demurrage rates per day, free days and the start and stop for demurrage and exceptions.

The transparency in quotation helps the buyers to plan well for the shipping costs.

Which Tools can be used to Monitor and Control Demurrage and other Accessorial Charges in Shipping?

Most organizations want to reduce shipping costs as much as possible, therefore tools for monitoring and controlling demurrage are welcome.

Key performance indicators  (KPI) and root cause analysis (RCA) are tools that organizations leverage for demurrage monitoring and control.

While KPIs measure organization’s deliverables both in the past and current, RCA, help reveal problem cause and how to avoid them.

KPI and RCA tools can be used to compare organization’s trends, problem causing activities and how to solve them respectively.

To avoid demurrage and other related costs, an organization or supply and logistics’ department can study the trends cause them. Therefater, they will be able to control the issue by analyzing the cause and have future preventive measures in place.

What is the difference between Demurrage and Per Diem?

Demurrage is the fee payable by the buyer for failing to collect the container from the port terminal past free days.

This fee is paid to the ship owners as a compensation for delaying their vessels at the port.

The charges are incurred per day per container and vary with port location and shipping line.

Per Diem is the fine billed to the buyer for using port equipment beyond the allocated free time.

The equipment include; containers, chassis or air unit load devices for airlines.

The per diem amount is fixed and is charged per equipment.

Is Demurrage the same as Despatch?

No, it is not the same. Despatch is complete opposite of demurrage.

Demurrage is the penalty fees paid to the ship owner by charterer for delaying beyond allowed free time.

Conversely, despatch is the fee paid to the charterer by ship owner for loading and unloading in less time than allowed.

Can you negotiate Demurrage?

Absolutely.

Demurrage varies depending on the carrier, port or contract agreement.

You can negotiate with the carrier for more free days for your cargo or longer laytime for the ship. This will buy you more time to clear and pick up your cargo or load and unload the ship.

Alternatively, once you get a quotation for demurrage at the port, you can request for a discount from the port official. Shipper with high volume goods are likely to get discount on the demurrages.

Since demurrage are unavoidable expenses for consignees, it is important to understand the local customs clearance process. This will help you prepare well in advance of your shipment arrival.

Additionally, you can ship ahead of time to buffer you from unpredictable situation such as bad weather, port backlog, etc.

Now, in case you have any other question about demurrage or any other freight term, feel free to contact us.

At Tj chinafreight, we offer perfect solution for all your freight forwarding services from China.

In this guide, you will find all information you are looking for about Chassis.

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

What is Chassis in Shipping?

It refers to a structure conceived with wheels specifically for holding shipping containers.

Chassis facilitates the movement of shipping containers into and out of the shipping terminals or container freight stations.

Why do I want a Chassis?

There are a number of reasons why you need chassis.

Some of these include the following:

Facilitates smooth & secure shipping– secure attachment to the chassis-helps prevent unnecessary container movements, thus safer transportation.

Helps align with shipping requirements – With chassis, you can easily load or offload shipping containers. Besides, it helps in counting and storage of shipping containers, alongside other logistics operations.

Cost-effective and quick – Capable of loading several containers in one trip.

Which makes the process quick, so you can deliver goods on time.

As a result, this cuts down on extra costs making the entire process cost-effective.

Bugles on Customer Satisfaction– containers are shipped quickly and safely which improves reliability and scales up the general customer experience.

What is the use of Chassis in the Import and Export of Containerized Freight?

Ocean container chassis are known to poses a variety of functions.

You will use chassis to move shipping containers from one location to another.

Alternatively, you can also use chassis to store the shipping container. This will reduce the extra cost and time of loading or offloading the shipping container.

In addition to the chassis role in drayage options, it supports or bears a load on the body of a ship.

Chassis may as well be used in storage exclusively within any given supply chain. This is as follows;

At the terminal – you can conveniently store the shipping containers on your chassis. This normally happens when the chassis is awaiting collection.

On the other hand, at the facility of a shipper, you can also place shipping containers on the chassis.

Of course, this is after you detach the chassis alongside the container from the truck.

How do Chassis Work?

Over time, a chassis has been identified as the most integral component within any motorized automobile aside from the engine itself.

They are intended to securely attach to the containers.

The container fits firmly onto the Chassis, preventing excess movement.

Depending on the situation at hand you can:

1. Connect chassis to the truck then load a shipping container or,
2. Load shipping container to the chassis then attach it to a truck. Here you must esure the chassis has good support to withstand the load.

Once you have attached the chassis to a truck, you can move the container to any place.

How many types of Chassis are there?

There exist different types of Chassis, the 4 major types include;

Gooseneck Chassis – container trailers used in countries with the limit for the utmost height of containers especially for tall and heavy loads.

Marine Chassis – It is also known as domestic Chassis.

It refers to an ocean container chassis meant to hold containers in the marine.

This mainly to facilitate movement of trucks amidst shipping facilities and terminals.

Bomber Chassis – Bomb carts are employed to shuttle containers within a port.

They need side panels rather than twist locks which allows crane operators to quickly place containers on them to fasten the container ship unloading process.

Tank Chassis for Bulk Container- this refers to a characteristically longer type of Chassis with a third deck height.

It is used for portable bulk liquid containers or ISO tank containers.

What are the Basic Components of Container Chassis?

Coupling rod– Connects the stabilizer of a vehicle with the Chassis between axles thereby facilitating stability.

Hydraulic shock absorber– comprises of a cylinder crammed with hydraulic oil and a piston which helps it move with every vertical movement of the wheel.

Independent suspensions– they guarantee sure and safe driving characteristics.

As a result, achieving the highest possible comfort.

Rigid axle– mostly used in commercial vehicles and off-road vehicles since they are powerfully built.

Stabilizer– acts as a suspension component. This is to reduce chances of the vehicle rolling.

Suspension link– Absorbs the forces resulting from the driving dynamics.

Suspension spring– helps in compensation of uneven road surfaces and thus assures high comfort levels.

Torsion–beam rear axle– transfers all forces and torques between the wheels and vehicle bodywork.

Wheel bearings– They have many functions such as:

• Guides and supports shafts/axles
• Guide the wheels
• Absorb axial and radial forces

Wheel carrier– a part of the wheel suspension which supports the wheel bearing.

Wheel suspension– a part of the Chassis supporting the wheel system.

Spring strut support bearings– are a part of the spring damping system. They act as the interface between the spring strut and vehicle body.

What are the Notable differences between Ocean Container Chassis and 53′ Intermodal Container Chassis?

An ocean container chassis refers to a mechanical device with an easy design consisting of a frame made of steel, tires, a lighting system, and breaks.

It’s designed specifically for holding marine containers to aid movement between shipping facilities and terminals.

The domestic intermodal container is one that’s usually crammed with freight moving between North American terminals via railroads and doesn’t move by waterborne service.

Domestic intermodal Chassis are usually longer than ocean containers.

It is 53 feet and built to a lighter tare weight standard to accommodate more product.

Consequently, their mode of construction is equal except that there exist differences in terms of height and weight.

A domestic intermodal chassis is bigger in terms of height, a 53-foot weight can range from 500 to 700 lb.

On the other hand, an ocean container Chassis’ weight is approximately 6500 lb.

Most of the 53-feet domestic intermodal Chassis is designed with a certain mechanism.

This mechanism permits the axle of a chassis to be moved forth and back, change the distribution of loads and radius turning while traveling along locally made roads.

When it comes to the 40′ ocean container chassis, it is shorter to capacitate a 53′ domestic intermodal container.

The expected operating lifetime of the two types of Chassis also differs by great lengths.

An ocean container chassis features a lifespan of quite 20 years without being refurbished if properly maintained.

A 53′ intermodal container chassis anticipation is approximately 15 years as it is lightly built thus making it less durable.

How much does a Marine Chassis Cost?

According to equipment providers, there are a variety of international studies that have examined the value price relative to its features.

A chassis being replaced price range is approximately $10,000 to $20,000 depending on the specifications and features. A 53-foot container is about $10,000 to $15,000.

Do Chassis work with Custom-made Containers?

Previous studies indicate an opportunity for a chassis working hand in hand with custom-made containers.

Standard size straight frame chassis is essential for shipping containers without tunnels.

Some custom-built shipping containers are made with no tunnels.

This has made it difficult to fit containers in a gooseneck type of Chassis.

When carrying custom-made containers, one is expected to point out whether the container aligns with a tunnel or not.

The standard recommended size of straight frame chassis carries flat tunnel type of containers at specific dimension.

Are there specific Standards that Chassis must adhere to in Terms of Design and Built?

Basing on research over the past years, studies indicate that there’s an existing research gap on specific specifications that a chassis must adhere to.

We have various sorts of chassis containers, and that they differ greatly by region from one to another thereby bringing about distinctions.

What are the available Tire and Wheel options for Marine Chassis?

It’s recommended a marine chassis comes with 10 by 20 tires on 5 spoke wheels and spring suspension.

Options include air suspension and 11r22.5 tires on 10-hole disc wheels.

What are the 20ft and 40ft Straight Frame Chassis Specifications?

They both exhibit an equivalent specification except for the kingpin location and overall length where they differ greatly.

Overall Length varies for 40ft and 20ft respectively- 40ft- 40′-10″ and 20ft- 23′-6” Retracted; 27′-6” Extended

They both have an overall breadth of 96″.

King Pin Location varies – 40ft has 30″ from the rear face of the front bolster whereas a 20ft has 18” from the front of the Chassis

Joist Height is 48″.

Unladen weight is about 6,600 lb.

Main Rails should have two hot rolled steel, ASTM-A572 Grade 50 “I” beams. The wide flange of 12 inches through 19lb.

They should have a two-speed mechanism and square leg tubing landing gears with 10″ by 10″ low profile sandshoes

It entails a suspension hutch consisting of three leaf springs each 11,000 lb.

Also, they should have at least two axles of 5-inch round and 22,500 lb.

They beam specifications should have the following each; 16.5 by 7-inch Q brakes and slack adjusters preferably automated ones.

It should have anti-lock braking system; Meritor Wabco 2S/1M and a 30/30 Spring brake chambers

The recommended type of tires; 10 by 20 tires on 5 spoke wheels

It has a 12 volt electrical system with a 7-way plug type of connectors, lights, and sealed wire harnesses.

Twist Locks are mandatory for casting steel to interact with ISO corner castings

The preferred type of paint is commercial sandblast, primer, and a top-quality paint system

Others include; Bumper, Conspicuity Tape and 24 by 30 Mud Flaps

How has the Chassis Market evolved over the Last years?

The use of containers in Europe began as early as the 1960s.

The development of intermodal facilities at various locations succeeded in the establishment of the Chassis management model.

Similar developments are reported in Asia and other major global destinations.

The use of the Chassis model is postulated to experience a 7 seven-fold growth in CAGR.

The predicted growth is attributed to evolving adoption of manufacturing technologies and the underlying selection of material.

These developments have increased the competitiveness of automobile dealers and organizations.

Studies show Aluminum Chassis has the very best revenue generation.

In addition, fiber and resin-based material are predicted to grow over time in the market in the future.

Manufacturers are obliged to specialize in alternative materials to produce cost-efficient and high-strength Chassis.

What role do Shipping Lines Play within the Chassis Market?

A shipping line is a corporation that deals with vessel operation alongside ownership, liable for easy transportation of cargo aboard their ships.

They handle the cargo from where they originate to their terminals majorly from one port to another, transiting regular routes aboard their vessels on fixed schedules.

So they depend on the Chassis to receive containers.

What are the Road Weight Limitations and Chassis Specifications?

Keeping consistency in weight standards could also be challenging.

This is because countries have different weight standards on various cases.

Therefore it is difficult to develop the recommended standards for every specific case.

Recommended standard on the maximum gross weight of a rigid vehicle isn’t specified.

Most countries greatly vary in their maximum gross weight limits and therefore the mode values.

For instance, 32 tones are only utilized in 5 countries.

The six countries with the very best road freight volumes have either no adequate standards or unique limits.

Recent studies show 32 tones is suggested for the Recommended Standard by EU on the maximum gross weight of a rigid vehicle.

Who are the Operators of Chassis within the Shipping Industry?

Some of the main operators are:

• Truckers
• Railroads
• Ports
• Shippers
• Pool Managers

What are the Common causes of Chassis Shortages?

The Roadability Rule (Federal Motor Carrier Safety Administration (FMCSA)) – Enforcement of this rule became effective to date.

It has been of great impact on safety despite adding costs and delays all around.

Most of the Chassis is not serviced because of the low cost-benefit that they may lead to.

Exiting Ocean Carriers – For several years, steamship lines owned the container chassis.

The steamship lines were rented to logistic drivers at agreed-upon costs.

With the new Roadability rule in place and the extremely increasing costs related to pooling chassis, most of the ocean carriers are gradually running out of business.

Down Economy – After Roadability Rule enforcement was announced, it became critical for adoption.

This forced many companies to reconsider their approach towards Gizx and the long-term objectives of 8ZX.

What Effects does Inadequate Chassis Service Wear Shipping?

Cargo disruption – normal cargo flow is disrupted by a seismic and surprise external shock.

It may be a financial crisis, cyber-attack, trade war, or a worldwide pandemic causing a huge disruption within the system thereby exposing its underlying weaknesses.

Delays– thanks to the independence of equipment-leasing companies, very often there could also be a surplus of Chassis in one terminal and a desperate shortage at subsequent

How do Ports Ensure Sufficient Chassis availability?

Launching of grey pool arrangements referred to as a pool of pools.

With this, a chassis carrying a container for one shipping line at one location might be reused to hold a container belonging to a different location.

Shippers can expect fewer delays and greater efficiency, as they’re furnished with many Chassis at each ramp location.

Coming up with technology that tracks utilization, turn time, and site.

This ensures there’s the right number of Chassis at every ramp and may keep shippers’ freight moving.

What is Chassis Leasing?

This refers to an instance where a company leases a chassis to maneuver a shipping container to or from an ocean container port or a rail yard.

What are the Available Chassis Rental Models within the Shipping Industry?

There are 3 ways to lease Chassis; chassis pools, term leases, and daily rentals. The only existing difference is the length of time one is charged to use the Chassis.

Who Leases a Chassis?

The majority of the chassis usage remains to the account of the trucker who is contracted by the last word customer.

This suggests that the trucker is now passing along a chassis usage fee to the last word buyer of the transportation.

However, we’ve importers and exporters, also as Third-Party Logistics companies.

They take hold of this cost by procuring Chassis directly using one among the above options.

As a Shipper, What are the Benefits of Shopping for my Own Chassis?

Some of the benefits include:

• This leads to reduced maintenance charges
• Generally, the trucker can depreciate this capital expense
• Consistent and cost-efficient shipping
• Increased availability- easily accessible when needed
• Reduced downtime and improved reliability
• Improved service and cargo acceptance
• Improved safety

What is a ”Gray” Pool in Chassis Service?

The gray pool maybe a pool during which multiple IEPs contribute Chassis to one pool.

This allows truckers to use any of the contributed IEPs’ Chassis for any move.

Normally, this is despite the ocean carrier’s container being moved.

What does ”Open Choice” mean within the Chassis Market?

This is the capability of a shipper or trucker to make a decision that IEP is employed in merchant haulage contractual agreements.

That is, to supply a chassis for moving a container between terminals, instead of having the ocean carrier make that call.

What Challenges am I likely to Face with Chassis during International Shipping?

Cost– Profit margins have become a challenge as costs scale-up throughout the availability chain network.

The costs arise from many areas such hiring chassis, unforeseen delays, and accidents, alongside other factors.

Accessibility– time is taken to try chassis splits. Electronic logging devices adherently evaluate the 660 minutes daily for drivers who are often behind the wheel.

This implies that any time spent trying to find a chassis limits the time available to deliver cargo.

Quality of Chassis available– In many years, inclemency became a problem.

Resulting in some chassis being inoperable and resulting in aggressive reposition of chassis providers.

How am I able to Mitigate Chassis Challenges?

The most common challenges experienced by chassis users are shortages and other costs that come along.

To cub this, most truckers and even BCOs tend to shop for their Chassis with higher quality elements.

This ensures a frequent maintenance schedule and also helps them cut costs.

Data collection and predictive analytics which is caused by companies leasing Chassis, researchers, and developers of underlying technologies.

It’s also emerging as a key tool to enhance chassis accessibility and cargo velocity at marine terminals.

Forecasting comes as a challenge; including the need to predict the time of the return of Chassis to the terminals or when they are going to be available.

Equally, prediction is required beforehand to promote the ability of IEP to assemble the number of Chassis expected to be needed on a timely basis.

Take for example, company (American Intermodal Management) install in all its Chassis:

• GPS locator
• An accelerometer for communicating speed, direction, and distance
• Load sensor that notes and communicates when a container is mounted or dismounted permits shippers to trace cargo

They use data gained to improve performance in the operation of networks.

What are the Key Drivers of Chassis usage?

In most cases export and import volumes will determine the usage of chassis.

What are Container Chassis Regulations?

The United Nations and sponsored organizations have over the years voiced their concerns over international conventions.

Thereby developed laws for chassis regulations to meet the national requirements. They are listed below.

Customs Convention on containers– Effective since 1972. Plays a vital role in recognizing containers as Instruments of International Traffic (IIT).

Thereby coming up with a framework where containers can be used in international transportation.

TIR convention 1975- (UNECE) – Develops a framework for road transportation internationally.

ISO Standards– {the world organization for standardization’s (ISO) International Standards for freight containers and Chassis.

It gives room for the box to become the backbone of worldwide supply chains.

They also cover a good sort of aspects of various sorts of containers.

Roadability Regulations– Since 2009(US Federal of Motor Carrier Safety Administration) plays a role in establishing safety laws and regulations for inspection, repair, and maintenance of intermodal Chassis thus enhancing safe operation.

US safe port act of 2006¬- (US Department of Homeland Security) Comes up with security regulations for intermodal container operation within the US.

Is there a Difference Between US Chassis and those from other Parts of the World?

Ocean container chassis from the US differ slightly from those from other parts of the world.

In the US, they are built specifically to support specific container sizes and have fixed dimensions.

Usually, they are lighter than those from other countries.

This is because the US features a national gross vehicle weight standard of 80,000 lbs. on interstate highways which is less than most other nations.

An ideal ocean container chassis within the US is characterized by two axles.

Heavier container chassis that are tri-axle is usually less common within the US as compared to other parts of the planet.

They consists of about five percent of the US chassis fleet.

What is the Liability Regimen for Container Chassis?

Due to high truck road-related accidents within the recent past within the U.S, third-party liability coverage for Chassis has become significant to an equipment provider.

While there’s no particular third-party liability coverage of minimum requirement for ocean carriers, it’s customary to hold a minimum of 20 million dollars for insurance.

That is with even greater amounts being carried by chassis pools.

This also demands that repair and maintenance companies have optimal insurance coverage.

Also, the liability regime could also be an element to be considered by purchasers of intermodal transportation.

What is Wheeled vs. Grounded Operations in Chassis?

Grounded container operations are said to be the best quality type of model in the world.

In this kind of setting, containers are stacked on the terminal yard with the help of rubber-tired gantries (RTGs) or straddle carriers.

Grounded operations have an added advantage over wheeled operations since they have higher storage capacity.

Wheeled operations, usually transfer containers with one lift.

But require a significantly larger fleet of Chassis, more land for storage, and containers on Chassis.

What is Chassis Flip?

Chassis flip refers to an instance where there’s a need to move containers from one stalled Chassis to another resting chassis.

What are Some Common Reasons for Chassis Flips?

Some of the reason include the following:

• When there’s a nasty order chassis
• Due to mismatched container and Chassis
• When the driving force brings Chassis they own at terminals that are wheeled
• A point where the Chassis cannot go beyond the terminal
• When the container is stored on a chassis that cannot capacitate the weight of the container.

What is the difference between Rail and Terminal Operations with regards to Chassis?

There is a growing preference for wheeled operations at rail terminals as compared to marine terminals.

Rail terminal structures include the majority of wheeled operations while marine terminals are mostly grounded partially.

Thereby, rendering grounded the most commonly used model.

Research indicates opportunities have been opened by TOFC.

For rail terminals to limit the preference of wheeled operations to higher quality grounded operations.

This is important for Chassis specifically located at terminals that are wheeled where they serve as storage sites.

Conversion of wheeled operations for ground terminal operations is often challenging.

Since both rails terminal ought to handle both trailers and containers.

Unlike Marine terminals, rail chassis terminals have a higher tendency of Chassis and containers that are mismatched.

A reason as to why railroads can handle the equipment from different ocean carriers which are frequently owned by chassis pools that are different.

A railroad chassis, therefore, stores more different variants of Chassis.

This incorporates local Chassis, also as various sizes of marine Chassis.

When it comes to container pickups, the rail road’s terminals have generally had shorter free time allowances.

This ends up in shorter chassis dwell times as opposed to marine terminals.

At Tj chinafreight we help you in all freight forwarding from China to any global destination.

Contact us now for all your shipping needs from China.

If you have any questions about devanning, you will find the answer right here.

So, keep reading to learn more.

What does Devanning mean in Logistics?

Devanning otherwise referred to as stuffing is the process or act of taking out all the contents from a container. We can simply describe it as unloading a container.

More practically, Full container load (FCL) shipments are always devanned at the destination warehouse.

On the other hand, devanning of Less Than Container Load is carried out at the destination Container Freight station.

How are Shipping Containers Devanned?

Devanning is a process that requires maximum expertise owing to the risks and tasks involved to make the entire process a success. Normally, ships are packed to full capacity to ensure that there is maximum utilization of any available space.

Unpacking such containers not only poses a risk to the task force involved but also damage to the contents. This will however depend on the type of goods contained inside the container.

That said, seeking professional services from an experienced company is essential for an effective and efficient process.

Once the container arrives and is received, skilled and experienced container handlers carefully unload it using cranes, forklifts, or through manual handling.

Working with a professional will ensure that Health and safety precautions are upheld during the unloading process.

Different cargo will need different expertise when handling. You can as well choose the dock level unloading which involves unloading items using dock-level forklifts.

Depending on your preferences, your cargo can also be palletized as this will make it easier for you to store or ship later.

Who can Devann my Container?

Devanning a shipping container requires a skilled and qualified task force to execute every step with the care and expertise that it deserves. Not only are you looking forward to having your goods unloaded but also receiving them in good condition.

Technical skills combined with digital technology also play an important role in ensuring risks are minimized.

When choosing your logistics partner, be sure to check the following factors for better performance and results.

• Ability to palletize
• Ability to receive containers
• Ability to devann
• Storage and distribution ability from their site.

How can Devanning Services benefit my Business?

As a business person, business profits are your topmost priority and the driving factor to the growth of your business. Devanning services can greatly contribute to this in the following ways;

• Proper handling of goods by professionals prevents damages which might result in decreased profits.
• With the current technological trends such as WMS technology, you can easily keep track of your shipment. And that’s not enough, this will assist you to gain new insights and realize patterns in your business.

Not to mention that some systems go an extra mile into providing you with visual images of your products being received.

• Professional devanning services ensure a smooth, fluid, and reliable flow of the distribution and transportation processes.

Where does Devanning take place?

Devanning can either take place at the destination warehouse or the destination container freight station.

How do I load Containers to avoid damage during Devanning?

Container loading is one of the most important steps during shipping that should be carefully handled to protect your goods from damage.

During shipping, the vessel is bound to go through different waves of instability. Meaning the goods are prone to sliding off or banging against each other.

In most cases, your supplier should be held responsible for loading the container and ensuring that the cargo is well secured.

Here are some important tips to consider when loading a container;

• Secure the packages close together for better pressure distribution and preventing them from moving.
• Always put the light cargo at the top while the heavy ones settle beneath.
• Make use of dunnage to fill any empty spaces which allow for movement of the boxes.
• Find ideal securements for your cargo. This might range from; load bars, bracing plywood, and load straps. This will be determined by the type of goods you are shipping.

If you are unsure of which securement best suits your cargo, your supplier should be in a better position to advise you.

Is Container Devanning the same as Transloading?

Many might confuse these two terms owing to the close similarities that they depict. Nevertheless, you need to understand that devanning and transloading have two different meanings. Let’s find out below;

While devanning refers to unpacking goods from a container, transloading involves shifting cargo from one transport method to a different one.

Let’s take for instance you are shipping your goods from China. You might require to use at least two or three modes of transport for your goods to reach the final destination.

Shifting your goods from a truck to a ship or vice versa is what is referred to as transloading. And this not only applies to trucks and ships but any mode of transport.

Here are some of the circumstances that might require transloading of your cargo;

• When transporting your goods from the port to the desired final destination. This mostly involves unloading the cargo from the ship to the truck.

To avoid per diem charges, it’s essential to have all this organized before transporting your cargo.

• When delivering your cargo to different destinations. The transloading fee that you will be charged will cater for deconsolidation at the warehouse and palletizing it.

Afterward, your cargo will be loaded into the trucks ready to be transported to the final destination.

Amazon shipments are known to make use of transloading owing to the several Amazon FBA warehouse to which they are sent to.

How long does Devanning take?

The time taken for devanning will largely depend on the amount and type of cargo involved. Generally, this can take from as few as 1 day or less to as many as 3 days or more.

The more the cargo the more time it will consume to unload it and vice versa.

In addition to that, the listed factors affect the duration taken for devanning:

• Skills and expertise of the labor force.
• Limitation of equipment used.
• Performance of the equipment.

Do I need Special Equipment when Devanning a Container?

There is special equipment that you will need during the devanning process to make it efficient.

Essentially, here are some equipment that you will require when unloading cargo from the container;

• Ladder – A ladder is an essential tool when it comes to unloading as it helps the workforce to climb up the container.
• Liftgate – Liftgates are ideal when loading or unloading heavy cargo that can’t be lifted. It is an automated platform fixed at the back of a truck.

A liftgate operates by being lowered or raised from the container floor level when loading or unloading cargo. Keep in mind liftgates don’t come equipped in all trucks.

That said, it’s very important to request it if need be. It is also important to know that liftgates are not applicable when shipping FCL since they cannot be fixed onto shipping containers.

• Pallets – Pallets come in handy when sorting your cartons after the container arrives. For instance, if you have several SKUs in the shipping container, they assist in grouping different types of cartons to avoid double work.

This mean you won’t have to sort them again after unloading since you already did when unloading and thus it saves time.

• Forklift – Otherwise referred to as a lift truck, a forklift is a machine that loads and unloads cargo packed in pallets or slip sheets. It requires a skilled forklift operator to raise and lower two horizontal forks off the ground.

Aside from that, a forklift can transport the merchandise over short distances.

• Conveyor –Conveyors have the ability to loading several boxes at a go. Take into account that different types of cargo will require different types of conveyors.

Some conveyors are well suited for loose bulk cargo while others are ideal for large cargo.

• Bolt cutters – When the container is at the port of origin, it is sealed using heavy-duty bolts which enhance the locking system of the container. To unlock such, you need to have a strong pair of bolt cutters.
• Straps – Straps are used to keep your cargo in place while being shipped. They prevent movement of the cargo which might otherwise result in damages.

The straps are made from a soft and flexible material and this ensures that your merchandise is kept safe and secured. Straps are also used to secure the wheels of a car when loading it into a container.

• Slip Sheets – Slip sheets are thin plastic, corrugated sheets that are positioned between merchandise to facilitate lifting off the cargo by a facelift. Not only do they utilize space but also make it easier to remove pallets.

The best bit is that slip sheets are lighter and cheaper as compared to pallets. This makes them efficient for both transportation and storage.

That’s not enough, slip sheets also minimize the warehouse storage that would otherwise be occupied by pallets.

In addition to that, they can easily be recycled and they help in minimizing untidiness in the warehouse.

Pallets are a cause of rodent infestation in warehouses. The fact that slip sheets are thin, it’s hard for rodents to get stowed away.

• Dunnage – Dunnage is a general word used to describe any material placed between cargo to protect them during the shipping process. This can range from bubble wraps to industrial solid plastics.

Dunnage is not only meant to protect your goods from damages but also humidity and contamination. Below are some of the usages of dunnage;

1. Used between the goods and the container walls.
2. Dunnage can be placed on the floor to prevent moisture-sensitive goods from going bad as a result of absorbing moisture.

• You can as well position dunnage on any empty spaces to reduce movement and falling of goods while being shipped.

1. Dunnage can be placed on top of the goods as the condensation at the ceiling might damage the cargo.
2. You can use dunnage to separate individual batches while being shipped.

• Ramps – If you have no loading dock, a ramp comes through when unloading cargo. Some ramps are designed in such a way that they can withstand heavyweights including a forklift.

You need to position the ramp from the container space to the ground to facilitate easy movement of the forklift along the ramp.

How much are Container Devanning Charges?

Different companies charge different fees when it comes to container devanning. But the truth is that you should expect fee charges starting from $175 upwards if your container is 20ft with palletized goods.

On the other hand, a fee starting from $225 upwards will be applicable when shipping bulky or loose cargo. So be sure to contact your logistics company to get an accurate quote.

Keep in mind that you get what you pay for. That said, paying for quality service at an additional cost would rather be the best way to go.

Is Devanning applicable for Amazon FBA Shipments?

Yes, devanning is applicable for Amazon FBA shipments. You can request for your cargo to be devanned and packaged as per Amazon requirements.

A good logistics company should also be in a position to advise you on the packing requirements needed by Amazon.

How do I choose the right Devanning Service?

Devanning requires a skilled workforce and identifying such can be a hassle more so if you’re new to this. To make your work easier, below are some considerations to keep in mind;

• Conduct thorough research and identify a suitable and qualified devanning company.
• Seek to find out if you can be present when your cargo is being devanned. This allows you to account for the entire operation.
• Choose a service that conducts the entire operation at the same place and time. Preferably MAF and ATF customs bonded site.

In most cases, such sites are certified and meet the required standards.

• Work with a customs broker for an easy and efficient process.

 What are the Factors involved in Devanning Containers?

Some of the factors involved in devanning containers are not limited to;

• The type, weight, size, and quantity of the cargo.
• Budget and timeline
• Container throughput
• Condition of the site and constraints
• Availability of equipment
• Ownership and hire options

Does the Type of Transport Used determine how a Shipping Container is Devanned?

Yes. Different types of transport will require different techniques and equipment to unload.

For instance, since an aircraft cargo compartment door is located high above the ground, manual unloading is never a choice. A cargo loader is often used to do the job. This however cannot be applied when unloading a truck.

What are the Key Hazards associated with Devanning Containers?

Below are some of the major hazards associated with devanning containers;

• Falling of loose cargo from a height.
• Placing the container on a sloppy surface.
• Unskillful unpacking of the containers.
• Poor lighting to facilitate safe unloading.
• Dangerous chemicals.
• Loose items can fall on workers once the doors are opened.
• Loose items which move around during transportation.
• Environmental conditions such as heat or cold.

How do I manage Risks during Container Unpacking?

Below are some ways to manage risks during container unpacking;

• Ensure the floor is even.
• There should be no obstructions around containers and pallets.
• Avoid entering the container if the load appears to be positioned unsafely.
• Seek assistance if you don’t have adequate expertise in unpacking the container.
• Ensure that appropriate PPE’s are worn when unloading.

What is the Best Way to Ensure Safe Devanning?

The best way to ensure safe devanning is by working with a supplier. This way, you will make sure that;

• The cargo is well packaged in slip sheets or pallets to facilitate unloading by a forklift.
• The load is well packaged to avoid instability of the goods during transportation.
• Each cargo of sheet material is solely secured on an A-Frame.

What is the Benefit of Inspection during Container Devanning?

Inspection while unloading a container will not only ensure that cargo meets safety and quality requirements but also quantity and weight requirements.

Additionally, inspection allows you to notice any damages that have occurred during shipping. Inspection also ensures that your load is carefully handled and all the required documents are accurate.

Do I need to arrange the return of the Empty Shipping Container after Devanning?

Once you are done with the unloading process, the drive checks the container for any left-over debris. Afterward, the container is taken away.

It’s important to note that failure to clean your container will attract additional port charges to cater for the cleaning of the container. Therefore, you must sweep the container and leave it tidy after you are done with the unloading process.

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If you’re in import and export business, probably, you have come across this freight term – detention.

So, if you have any question about detention.

Or you would like to learn more about detention, read this guide.

What is Detention in Shipping?

This is a fine levied to buyers for delaying to return container to the port or yard at the agreed time. It is charged per container, per day and varies with location, container type and shipping line.

Normally, the shipping line offer free days to the buyers, which they can empty or fill the container without charges.

What is the Purpose of Detention Charges?

Detention charges are there as a reward to the equipment owners for use of their equipment.

Just like demurrage and storage, detention is meant to encourage buyers to utilize the equipment effectively and return on time.

A quick turnaround of containers will ensure availability to other buyers and release waiting vessels on time.

What causes Detention?

Improper Documentation

Bill of lading must be endorsed by the shipping company and have proper shipment details for it to be valid.

Any mistake may lead to customs holding the cargo thus delaying clearance process and eventually eat into free time.

Loss of Documentation

Customs clearance cannot happen without full documentation of the cargo.

Your goods will therefore lie at the port un-cleared till the day you provide all documents.

Lack of Storage Space

When you do not have enough space at your warehouse, you may be forced to hold the goods in the container.

This will lead to delay in unloading hence incur detention charges.

Lack of Finances

Shippers may be cash strapped especially when they did not plan well or unforeseen freight costs arise.

This will slow down crucial process thus leading to more penalties such as detention.

What is the Difference between Detention and Demurrage?

Detention is the penalty relating to usage of the container beyond the allocated free days.

Demurrage is failure to collect cargo from the terminal after the free days expire.

While detention is chargeable for container usage outside the terminal, demurrage cost applies within the port.

When importing goods the buyer will collect the full container for unpacking at the destination warehouse.

Shipping lines offer between 3-7 free days depending on the type of goods and the shipping line.

When the importer fails to return empty container to the port after the agreed period, detention charges start clocking.

They will only end after the empty container is returned to the port or container yard.

During export, shipping lines offer free days for collecting, filling and returning the full container to the port.

Delaying to return the full container to the port will lead to detention until the day it reaches the port.

Demurrage on the other hand operates differently.

When the importer does not collect the cargo from the port within the free days, demurrage starts applying till collection day.

When exporting goods, the full container is expected at the port on a certain day prior to export day. Bringing it back early leads to demurrage as well as failure to export it on the scheduled date for whatever reasons.

Both detention and demurrage are charged a fixed rate per, per container.

The fixed rate is dependent on the shipping line, port and the container type.

Detention and demurrages may be charged separately or combined in some countries.

It is therefore important to understand the carrier’s detention and demurrage terms before using their services.

Is Detention applicable in Both FCL and LCL Shipping?

Full container load (FCL) is shipment of cargo by a single customer using a whole container.

Less container load (LCL) on the other hand is the consolidation of cargos for different customers into one container for shipping.

Detention is the cost of utilizing a container outside the terminal beyond the expiration of free days. This applies to the FCL consignees since they need to transport the container to their destination warehouse to unpack.

LCL shipment are deconsolidated upon arrival and stored at the terminal warehouse till they are picked or transported to the consignee.

Detention charges do not apply here, however, the consignee might be charged for storage space beyond a certain period.

What is Detention Free Time?

Detention free time is the period within which shippers are allowed to use the container outside the terminal free of charge.

Beyond the free time, detention charges come to effect.

When does Free Time start and how long does it last?

The period of free time offered to shippers is affected by the location, shipping line and the container type.

The numbers of days offered should be reasonable enough for the shipper to pick up container unload or load and return it.

Usually it is between 7 to 14 days depending on the mentioned factors.

Detention start when empty or loaded container is not returned to the depot after the last free day.

This charge continues per day per container and only stops when the containers reach the terminal.

How is Free Time Calculated?

Free time is calculated from the time the cargo arrives at the port.

For instance, if the free time is 10 days, the clock starts from 0’ hours after cargo arrives.

At the elapse of the 10 free days, the charges start to apply.

When should I pay Special Attention to Free Time?

Here everything you must pay attention to:

First Time Shipping

When you are shipping your cargo for the first time, chances are you have no experience with the customs clearance process.

It is therefore important to request for adequate free time to buffer you in case of longer customs clearance experience.

Mismatched B/L Details

Before cargo is dispatched it is important to counter check details on the bill of lading against the shipping company manifest.

Any mismatching in details in both documents will lead to delayed customs clearance.

When you have longer free time, you are likely to avoid demurrage and detention.

This is because you will be able to request for document correction within the allowed time.

After Long Holiday

Holidays lead to congestion since some staff may not be working while the vessels are continuously arriving at the port.

This will therefore lead to congestion when the holiday ends.

You are likely to loose on the free time during the holiday period.

Check with you shipping company on arrival schedule and free time offered.

Longer free time will come in handy in such situation.

Lack of Storage Facility at the Terminal

At times destination port does not have adequate storage space to keep your cargo upon arrival.

It is important to have the cargo collected as soon as possible.

Who is responsible for Detention Charges?

Figure 3 Detention charges

Cargo owners or shippers take sole responsibilities of the detention charges.

The fee is purposefully levied to the cargo owners in order to compensate vessel owners for their equipment use.

It is also meant to discourage cargo owners from long use of containers.

Is Detention Charge the same as Storage Charge in Shipping?

No, it is not.

Storage charge is the cost of occupying storage space at the port terminal, container yard, or warehouse.

The charge starts when the container is placed in the storage facility during import or export and ends when removed.

Detention on the other hand is the cost of not returning the container to the port or container yard on time.

It is calculated per day and per container.

During import, it starts when the container is picked for unloading by the buyer and extends beyond the allowed free time.

While in export, it starts when the exporter fails to return the filled container to the terminal on the agreed date.

The detention only ends upon returning of the container to the yard or port.

What is Detention Charges Calculation?

Detention charge is calculated per container per day for the number of days that you fail to return the container.

The rates change with the increasing number of days such that the charge on day 1 is different from day 4.

For example:

Detention days: 5

Detention rate: USD 70

Container type and quantity 20ft: 2

Detention charge will be: 5 days x USD 70 x 2containers = USD 700

Relatively, how much can Detention Cost me?

The detention rate can be between USD 50 to USD 300 per day per container.

While the rates seem cheaper at a glance, they can be hefty if accumulated for a number of days.

Can I avoid Detention Charges during Shipping?

Yes. However certain circumstances such as bad weather, labor strike or port congestion are beyond your control thus leads to detention charges.

Use SOC Containers

Since detention is mainly influenced by container turnaround time, using a shippers’ owned container can save you this cost.

SOC do not charge per diem hence you do not have to worry about running out of free time.

Prepare for your Cargo in Advance

Ensure that your storage space and the unloading or loading team is ready to receive the cargo.

This enables you to pick up the cargo, transport to your warehouse destination and unload within the free time.

When exporting, pick up the empty container from the depot when the cargo is ready for loading.

That way, you will ensure timely container turnaround thus avoiding detention charges.

Proactive Communication

This is very vital if you want to avoid detention and other related freight terminal fines.

All the involved parties, carrier line, freight forwarder and cargo owner should continuously update each other on the cargo whereabouts.

This will enable you to initiate cargo clearance and pick up upon cargo arrival without delay.

As a result, you will be able to pick and return the container within the free time.

Request for Quotation Breakdown

Having a clearly stated detention charges on the quotation makes you prepare psychologically for the charges.

Besides, you are able to compare different rates from different service providers before committing to one.

Use Customs Pre-clearance Option

Some goods can be pre-cleared before their arrival at the port provided all the necessary documentations are provided.

Working with experienced freight forwarder or customs broker can help facilitate the customs clearance process.

Standard documents required include; bill of lading, commercial invoice, packing list and arrival notice.

Which Factors Influence Detention Costs?

Detention charges are fixed rates that are charged per container per day but vary according to factors such as:

Location

Location of the terminal also plays a significant role in the detention charges.

A port in China will have different detention from a port in Japan.

For example, detention charges in China can be USD 80 for a 20ft container per day.

The same container can attract detention charge of USD 100 per day.

Therefore, it is advisable to inquire about the detention charges of the terminal port from your freight forwarder.

Container Type

There are dry and special container types used by carriers and consignees to ship their cargo.

These containers have different rates charged per day for failing to return them on time.

For instance:

Dry containers; 20ft and 40ft per day per container

Day 1-3 USD 50 for 20ft and 100 for 40ft

Day 4-6 USD 100 for 20ft and USD 200 for 40ft

Day 7 USD 150 for 20ft and USD 300 for 40ft.

Special containers; flat rack, open top & tank container per day, per container

Day 1-3 USD 100 for 20ft and 200 for 40ft

Day 4-6 USD 200 for 20ft and USD 400 for 40ft

Day 7 USD 300 for 20ft and USD 600 for 40ft.

You can find out the detention rates from the carrier before shipping to help you plan your finances accordingly.

Carrier

Different shipping lines have different detention rates levied per day to its clients.

The carriers charge this cost to compensate the container owners for the use of their equipment and to facilitate quick turnaround.

Before settling for a particular shipping carrier, request for quotations from different carriers and evaluate their rates.

Furthermore, plan your shipment well in advance in order to utilize the free days and avoid detention charges.

Is Detention in Shipping Negotiable?

Carrier companies offer between 7-14 free days to collect and return the containers either empty or full to the depot.

These numbers of days can be confirmed when booking a cargo for shipment by the freight forwarders.

You can negotiate for up to 21 free days through the carrier company if you foresee a delay in container turnaround.

In some cases negotiation for extended free days may happen upon cargo arrival for situations beyond your control.

For instance, port congestion, labor strike or extreme weather conditions may lead to delay in container pick and return.

Detention charges may lead to more shipping cost for consignees, you can request for a revised rate with your freight forwarder.

Carriers are likely to consider clients with more cargo volumes in their negotiations.

Above all, plan for your shipment to arrive early enough so that you are able to utilize the free time effectively.

What is Detention Container?

This is a container empty or loaded that has not been returned to the depot on time by the shipper.

How does Detention work in Trucking?

Keeping truck driver waiting longer for cargo loading or unloading when the driver arrived on time leads to trucker detention.

Truck drivers are allowed to wait for cargo for up to 2 hours beyond which hourly detention charges start applying.

The charges are between USD 50 –USD 100 per hour depending on the carrier.

Truck detention leads to lost opportunity for other shippers’ cargos as well as lost earning time for drivers.

How can I reduce Trucking Detention Charges and Time in Shipping?

Here is everything you should do:

Having Dedicated Dock Doors

Dedicating particular doors for pick up or drop offs will reduce congestions of using same door for both operations.

This will speeding up the processes thus reducing drive congestion.

Extend Working Hours

This reduces on congestion due to backlog of cargos to be prepped for pick up by the truck drivers.

You can have staff working in shifts thus improving output and efficiency.

Pick up and drop off times can be scheduled during evening or morning hours thus reducing detention of drivers.

Increase Number of Staff

Having more staff at the warehouse will help reduce instance of unready freight whenever truck driver come for cargo collection.

Also, more labor means fast loading and unloading process hence improved turnaround time.

Improve Operation

Having an organized warehouse management system ensure smooth flow of tasks end-to-end.

Both carrier and shipper will have visibility of cargo thus avoiding delay in pick up or drop offs.

Having well trained and adequate equipment will help achieve improved operations.

In what ways does Detention Affect Shipping?

Detention is charged per day per container depending on the location, carrier and container type.

This cost increases your shipping cost thus affecting your business profitability.

Delayed empty container turnaround may lead to missed opportunity to load another cargo. Consequently, delaying to return loaded container may lead to missing shipping schedule thus leading to demurrages and storage charges, among others.

Detention leads to lost opportunity to vessel owners as well as profitability from the fines.

In some instances, when detention takes so long, the accrued charges maybe too much for the cargo owner leading to non-payment.

Does Detention apply to Shipper’s Own Containers (SOC)?

Unlike carrier owned containers, (COC), detention charges do not apply to shipper’s owned containers (SOC).

This is because the shipper does not need to return the empty or filled container to the port.

What happens with SOC is that the shipper borrows the container from the owner to use it for import or export.

Once the shipper is through with the container, they return it to the owner.

Most container owners do not charge per-diem, they quote a fixed rate that the shipper and are flexible with time.

Owners are not interested in quick turnaround, but repositioning of their containers.

This way, they are able to get more shippers using their equipment at a cost.

A win-win for both parties.

COC containers charge per day for the period of delaying to return the container to the depot.

This cost adds up to many others such as demurrages, storage, etc. eventually leading to high shipping costs.

Shippers can explore the options of using SOC to avoid detention charges.

At Tj chinafreight we will help you in all your freight forwarding needs from China.

Contact us now for the best shipping services from China.

If you want to learn everything about double blind shipment, read this guide.

It covers all information you have been looking for about double blind shipment.

Keep reading to learn more.

What is a Double-Blind Shipment?

As the term suggests, it’s blind meaning both parties involved are blind throughout the entire shipment process.

Both pick-up location and delivery point are concealed from the consignee and shipper respectively.

The shipper delivers cargo not knowing its destination and the consignee collects the shipment not knowing its actual origin.

In such a case, when the buyer orders goods, he/she believes the shipment is from the distributor, not a third party.

It’s a complicated process that’s common in Less Than Load freight.

Why use Double Blind Shipment?

Use double-blind shipment for the following reasons:

1. If you want to conceal the identity of the actual shipper and customer.
2. If you want goods to be drop-shipped directly to the customer.
3. If you want Bill of Landing information to have the name of a distributor; not the supplier or customer’s information.
4. If there’s a need to keep off the direct customer and manufacturer interaction which may lead to business at a better price hence getting rid of you from the mix.
5. If you only want the carrier company to have the actual information of the shipper’s address and customer’s destination point.
6. If there is need to cut down the shipping time frame; it eliminates the need to ship goods to yourself first, then to the end-user.

What are the Advantages of a Double-Blind Shipment?

Double-Blind Shipment comes with several benefits which may include:

1. 1. Goods arrive on the given date with minimal risk of loss or damage.
   2. It conceals supplier and customer’s identity hence prevents other business from taking away your customers and suppliers.
   3. It offers quality control services.
   4. Creates brand consistency because only your logo and personal information appear on the shipping label.
   5. The distributor can provide reliable, quality services to both parties.
   6. As a distributor you are able to increase your profit margins; you act as a middle person without their knowledge.
   7. It allows the business to ship goods to their customers secretly.
   8. It prevents direct contact between the shipper and buyer; also protects them from each other hence it ensures the distributor is not cut off from the supply chain.

How does Double Blind Shipping work?

As stated earlier, in a double-blind shipment both the shipper and the buyer are blind. The distributor is the know it all.

Here’s how the process works:

1. 1. 1. The customer decides which products they want to purchase; they contact the distributor to source the products for them with all necessary information.
      2. The distributor sources goods from the best manufacturers they know.
      3. The manufacturer produces goods and sells them to the distributor not knowing the end-user of the product.
      4. The distributor puts his/her contact information to conceal the manufacturer’s details, does all the paperwork then sends the goods to the carrier.
      5. The carrier is told the origin and final destination of the goods which he/she should keep a secret.
      6. When the buyer receives the goods, he/she accepts assuming the distributor is the producer.

What is the difference between Double Blind Shipment and Blind Shipment?

Double Blind Shipment, the shipper is uninformed of where the shipment will be delivered to and the buyer on the other hand doesn’t know the origin of the cargo.

Double simply means both the parties ‘the shipper and consignee’ are blind.

The distributor protects their identity from each other.

On the other side of the equation, blind shipment the consignee is unaware of the shipper. Manufacturer information’s is hidden then replaced with those of the distributor

It’s also used to cover goods shipped from a third party.

Unlike the double shipment, in blind shipment, only the buyer is left in the dark.

Is Double Blind Shipment Legal?

Absolutely!

It’s a common supply chain management technique that protects businesses by keeping shipper and buyer’s information anonymous.

It sounds unfair but it’s quite beneficial to all the parties involved.

Customers don’t have to deal with a product manufacturer where they may get scammed and may lose their products in the long run.

However, double-blind shipment is not done by many carriers because the process is too complex.

How does Double Blind Shipment Vs Drop Shipping compare?

There is a thin line between these two terms.

In fact, some people use them interchangeably due to their similarities which may include:

1. 1. 1. Products are sent directly to the end-user.

Hence there is no need for warehouse storage. It cuts down the supply chain costs.

1. 1. 1. Double-blind shipment is a type of drop shipping.
      2. The seller doesn’t have to manage orders, shipping, and handling.
      3. In both, details of the shipment are sent to the distributor.

Can I Double-Blind Drop Ship Goods Internationality?

Not really.

Am sure you have noticed this is a combination of two terms; Double-blind and dropship.

Double-blind removes the shipper and buyer information from the order before it’s shipped.

As a result, none of them may come across information you didn’t  want them to see.

Drop shipping on the other hand shipment is done directly.

Not many international couriers offer double-blind shipments apart.

 Drop shipping is common among couriers.

However, for the double-blind drop shipping of goods might be tricky.

Does Amazon allow Double Blind Shipment?

Yes, it does.

In fact, this is what online storefronts like amazon survive on.

Double-Blind Shipment protects their sources of goods; hence it ensures customers don’t contact their producers directly.

As a result, they are able to get to many clients without the need for a warehouse.

How do I prepare a Double-Blind Shipment?

First thing first, partner with a reliable freight broker or freight company to help you set up the process.

They’ll help you conceal information and to provide a fortified destination and address for the shipper and customer.

They’ll put up three Bills of Landing which includes:

1. 1. 1. Once the distributor receives the goods, he/she replaces the information on the Bill of Landing with their own.
      2. The document is issued to the buyer with concealed supplier information.
      3. The carrier is issued with the Bill of Landing then goods are shipped directly to the customer.

It contains complete shipping information.

It’s worth noting, to do a double-blind shipment, the cargo is prepaid for and the request is done prior to shipment.

Only the freight broker, the distributor, and the carrier know the actual origin of goods and their final destination

How much does a Double-Blind Shipment cost?

The double Blind shipment fee is calculated by your carrier.

More often than not it’s similar to blind shipment.

The fee depends on the level of services and the nature of your goods.

The following qualities may affect the costs of your shipment:

1. 1. 1. 1. Package weight and size- you’ll pay more for a heavier cargo compared to a light one. The size of boxes used will affect the weight.

Try to use the exact size of boxes.

If they are too big, they’ll increase the weight of the shipment.

1. 1. 1. 1. Shipping destination- the more the distance from the supplier to the end-user, the more the shipment cost.
         2. Value- You may pay more for high-value products due to the extra care needed.
         3. In addition, you may also need to insure such goods; it may increase your shipping costs, but it’s worth it.
         4. Delivery time- if you want the process to be quickened, say you were to receive goods after a week but you want them in five days, you may pay more.
         5. Unexpected problems during shipment may also affect the cost of your goods.

What are the Additional Fees associated with Double-Blind Shipping?

Double blind shipment has additional fees due to the complexity of the process and extra work needed.

Ensure you familiarize yourself with the following additional fee to issue an accurate freight quote.

They include:

1. 1. 1. 1. Accessory fees
         2. Lift gate delivery charge
         3. Inside pickup or delivery fee
         4. Relabeling fee
         5. Re-delivery charge

Note, these are just a few additional fees.

Some carriers may have more than others.

Consult from your carrier.

Can I do Double Blind Shipment without a Freight Broker?

Unfortunately, you can’t.

Double-Blind Shipment involves work, and I mean work. It’s a complex process that is very tedious.

You really need a reliable freight broker with who you have a good relationship to execute the shipping process.

Consult one and focus on better things.

What are the Advantages of working with a Freight Broker or any other 3PL for Double-Blind Shipments?

Working with a freight broker or a third-party logistics company comes with a lot of benefits which includes:

1. 1. 1. 1. They’ll set up, plan and execute the entire process. They will also assist you to set the three different Bills of Landing.
         2. Outsourcing will give you ample time to focus on other aspects of your business such as sales and marketing.
         3. They’ll help you improve your order accuracy.
         4. They may provide the following services:
         5. Transportation
         6. Pick and pack
         7. Order fulfillment
         8. Freight forwarding

And the list goes on and on.

What is the required Double Blind Shipment Paperwork?

Unlike regular shipping, Double-Blind Shipping doesn’t require a lot of documentation.

See blind shipment aims to hide identity.

If a customer is issued with a certificate of origin, he/she will know where goods came from and in the future, they’ll contact the producer.

The document containing the name of the supplier, return address, invoice, and coupon codes are not included.

Documents required are:

1. 1. 1. 1. 1. 3 Bills of landing of which two of them are ‘dummy’. Only one is correct.
            2. Packing slip without the manufacturer’s details.

What is a Double-Blind Packing Slip?

It’s a document that gives a detailed list of the shipment.

It’s meant to inform the shipper to release the inventory.

However, it doesn’t contain information about the company that manufactured the products.

A double-blind packing list is customized. It can be designed for you; to contain your logo, own business information, etc.

If you have paid for blind shipping you may get the slip for free.

Do Double-Blind Shipments have any Restrictions?

Yes, in fact, they are several.

It all depends on your carrier.

Carriers place restrictions to establish correct billing on their end.

Meaning, the business name, street address, contact information can be incorrect; however, they demand a correct zip code and city address.

Others only need a correct zip code while other carriers demand all address information on the Bill of landing to be correct.

Each carrier handles double Blind Shipment differently.

Check with them before moving the freight.

Confer with your freight broker to understand particular restrictions that apply to your shipment.

Do all Carriers accept Double Blind Shipping?

Unfortunately, not many international couriers offer double-blind shipments apart from UPS, USPS, and FedEx. UPS has added requirements.

Confer with your carrier to find out whether they offer such services before sending your freight or placing an order.

How does Double Blind Shipping differ from Private Label Shipping?

These two shipping strategies are very similar.

Simply because both of them involve re-labeling of products.

However, the re-naming is done for different purposes.

In Double Blind Shipping, the shipper is unknown to the buyer and the buyer is not aware of the shipper either.

The distributor is the middle person.

Once they receive the goods, he/she replaces the identity of the shipper with their own.

When the buyer receives the goods, they’ll assume the distributor is the actual producer.

The distributor conceals the shipper’s identity to remain in the game.

On the other side of the coin, private label is involved in normal shipping where no one is blind. The manufacturer produces unique merchandise for the distributor to sell under their brand.

The product contains information and the logo of the distributor.

Here no one’s identity is concealed.

How do I do Quality Control for Double-Blind Shipments?

Well here is where a reliable distributor say one you have worked with before or a freight broker comes in.

You may not see the product before it gets to you.

The best you can do is to send a prototype of the goods you want to your distributor who will send it to your supplier.

The supplier can then make products from your sample.

You can decide to trust your distributor, ask them for photos of the products, have a video call where you can see goods and approve whether they are in order.

Equally, you can ask a third party like a friend who stays around to verify the quality of the goods before they are shipped to you.

Can I lose Money while Double Blind Shipping?

Yes. All businesses are risky.

While starting you don’t know where you’ll make any profit or a loss.

It’s important to have business strategies.

Here’s what to do to avoid losses:

1. 1. 1. 1. 1. Don’t get in with both feet; test the waters first.
            2. Build a good relationship with your customer- the internet has made the world a global village.

While trying so hard to make your customers ‘blind’ they may find other means of contacting the actual producer for better prices of goods.

Create extra value with your client; offer fair prices and outstanding customer care services.

1. 1. 1. 1. • Before settling for a double-blind Shipment, compare it with drop shipping.

These two are more or less the same but most suppliers charge more for blind shipment.

1. 1. 1. 1. 1. Do a random sample check of your products to verify quality before shipping them.

 Is Double Blind Shipping applicable to all Shipments?

Yes, it is.

You can also choose blind freight shipping for bulky shipment.

How long does it take to Ship a Double-Blind Shipment?

Statistic shows, shippers expect to receive their shipment quickly and at an affordable price. They forget faster transit time can be costly.

Double-blind shipment cuts down the shipping time frame, however, it’s still affected by factors such as:

1. 1. 1. 1. 1. Nature of goods
            2. Season- peak or off-peak
            3. Means of transport
            4. Destination

Can I use Double-Blind Shipping if Ordering Goods from Different Suppliers?

Yes, you can

Liaise with your freight broker on this.

How do I deal with Suppliers Making Mistakes with Double-Blind Shipment?

Double-blind shipment is a complex shipping strategy hence mistakes might occur.

Here’s how to deal with errors you come across:

1. 1. 1. 1. 1. When three Bills of Quantities are involved, ensure the carrier has the right one at hand. One with the right pickup and delivery point information on their records.

Failure to which the incorrect Bill of Landing may be used resulting in freight delivery to the wrong location.

1. 1. 1. 1. 1. Ensure you have a good relationship with your supplier in case of anything.

The reason being carriers may do their best to conceal both identities however they are not responsible for any errors.

In case received goods are not what you expected, communicate with your supplier for replacement immediately.

At Tj chinafreight, we will help you in all your freight forwarding services from China.

Contact us now for all your shipping needs.

In this guide, you will find all information you’re looking for about disbursement service fee.

So, if you want to learn more about disbursement service fee, read this guide.

What is a Disbursement Service Fee?

Disbursement Service Fee is charges made for the clients who in one way or another do not directly pay taxes and duties to customs.

Remember, this not only applies to customs, but also other relevant government authorities.

Delivery and transportation fees can be categorized as disbursement service fees.

Normally, the Disbursement service fee is calculated in the form percentage. This means getting the percentage charges of the outlaid duty fee and taxes.

Why do Third Parties charge Disbursement Service Fee?

Third parties are individuals who are involved in carrying out transactions or activities without direction from the main participant.

Usually, third parties charge a Disbursement service fee for the following reason:

Third parties pay charges on behalf of the customers by acting as the agents of the customer.

Normally it is the client’s responsibility to make payments on goods ordered and therefore involving third parties requires you to be charged for the disbursement service fee.

Third parties also charge the disbursement service fee and present it as a separate cost on the invoice hence, clients can pay them separately.

The third-party receives instructions from the customer to make any necessary payments.

This means all the payments done excluding the actual cost of products are chargeable by the third party.

The customers know very well that the goods are not directly from the third party but from the supplier.

Hence, the disbursement service fee used must be charged.

Timely payment of the disbursement service fee enhances the timely delivery of goods. These as a result allow the customers to get goods faster and safely.

What Services do Third Parties offer to assist with Customs Clearance?

Third parties are most important when the client wants to import shipments from other countries.

They act as intermediaries between the seller, relevant government authorities, and the client by offering the following services:

Besides, they prepare all paper documents required to avoid any additional documents that may cause an increase in charges.

They ensure the presentation of the correct documents to the customs officers to prevent any unnecessary charges

Third parties also provide the clients with relevant information. For instance, they provide information on refundability of duties and taxes in case they are paid.

They are used as agents by the customer to pay for the customs clearance fee which is mandatory before the release of the shipped goods.

Third parties offer negotiations with customs agents in case of any arising issues by contacting the seller for any possible solution.

This reduces the rate at which goods are pontificated by the customs agents.

They also offer delivery services to the customer’s location. Third-party ensure that goods are delivered to the customer at right time and in the right state.

What are the Benefits of using Third-Party Logistics Service to pay Customs Duties and Taxes?

Third-party logistics contain third parties that have a stake in the transportation segment and its physical assets.

Thereby, offering a comprehensive distribution of services along the chain. These services include packaging, loading, warehousing, and terminal operations.

Third party logistic services provide ways of reducing the costs spent on paying the customs duties and taxes.

Negotiations can be done to suit the right amount of duty charges and tax to be paid for the goods.

Third-party logistic service provides rates of customs duties and taxes to be paid on different shipments of goods.

Therefore, prevents overcharging or undercharging of these goods.

Third party logistics are aware of the relevant procedure and logistics to be followed when paying for custom duties and services.

Therefore, they make the process efficient and faster.

For beginners in shipments of products, it’s the safest way since you do not have enough knowledge to do it alone.

It also saves on time that the client would spend going through all the relevant authorities to make payment and ensure proper clearance of goods by custom clearance body.

 Does the Disbursement Service Fee include the Customs Duties and Taxes?

No, a disbursement service fee is not inclusive of the custom duties and taxes.

A disbursement service fee is commonly used to settle for transportation and delivery of the shipped goods.

However, if the customer decides to pay charges for the dutiable international shipment, the customer caters to all the charges incurred.

This means the customer works directly with customs to settle all the tax and custom duty chargers for the goods to be released.

What is the difference between Disbursement Service Fee and Customs Clearance Fee?

The disbursement service fee is always calculated in form of a percentage by getting the outlaid charges on duties and taxes.

For instance, 2.5% and 3.5% of the combined duties change after the shipped goods arrive.

Custom clearance fees are charges paid to the customs clearance agent to incur the cost of submitting the documentation and processing of the duty’s payments.

Custom clearance fee is not included in the client quote as unlike in the disbursement service fee where it is included in the client quotes.

A disbursement service fee is charged before the goods are shipped to the country of destination.

Whereas, the customs clearance fee is charged by the custom or relevant authorities during inspection of the shipped goods.

How much is Disbursement Service Fee?

Disbursement service fee usually varies depending on:

• Type of shipped goods
• Mode of transportation to be used in shipping goods
• Import destination
• Number of goods shipped

Putting the above factors in mind, the disbursement service fee mostly varies from 2% to 3.5% of the total amount of the product

Note that the disbursement service fee is calculated as a percentage of outlaid duties and taxes.

What are the advantages of Clearing Customs with the Help of a Third Party versus clearing myself?

Clearing customs with the help of a third party have more benefits compared to clearing them by oneself.

This means that the client is not directly involved in all the activities to be undertaken during the customs clearing process.

• The third party provides efficient and cost-effective shipment solutions based on what the client requires.
• If you are a beginner in shipping activities, using a third party will make the process of shipment process seamless and avoidance of unnecessary expenditures.
• They also can negotiate the duty rates of the shipped goods. This as result may lead to a reduction of these charges.
• Third-party provide and process all the documentation required for the shipping and customs clearance process. This process can be very tedious when carrying them out by myself.
• Third parties are well informed with different modes of transportation and also the safety of goods. Unlike, doing it by yourself where you question every action you take towards the shipping process.
• Clearing customs by myself will involve a lot of money needed to see that all activities from shipment to delivery are accomplished. Involving a third party prevents direct involvement in all these activities.

Will, I still pay Disbursement Service Fee if I pay Duties and Taxes directly to Customs?

No, you are not required to pay the disbursement service fee once you directly pay the duties and taxes to customs.

Therefore, when the shipment arrives, it is directly delivered to the client.

Disbursement service fee is applied in cases where the clients do not directly pay taxes and duties to customs.

When you are a regular importer, it creates a platform or an account with the custom regulatory bodies that allow the clients to withhold tax and duties.

In what ways does the Disbursement Service Fee impact the Total Import Cost of a Shipment?

Disbursement service fees have different impacts on the total import cost of a shipment. These impacts include:

• Withholding of shipped goods by the customs agents if the disbursement fee has not been included in the client’s quote.

These as result may include higher charges that are not budgeted for.

• When a client pays for the disbursement service fee, customs duties and taxes can be evaded.

Thus reducing the amount spent in the customs clearance process.

• Choosing what mode of transportation to use in shipping the goods, determines the disbursement fee charged.

Therefore, being conversant with these means is important.

• Quicker and shorter transportations mean help in saving in the end game of total import cost of the shipment.
• Sellers imposing high disbursement service fees may lead to clients evaluating whether to pay for the customs duties and taxes or not.

These may result in the added budget of the cost that was not initially planned for.

• Enquiring the disbursement service fee before ordering the shipment prevents the quotation of charges that are included in the invoice.

Over quotation of these service fees leads to the customer paying extra charges thus increasing the total import cost.

Which Factors influence the cost of Disbursement Service in International Shipping?

The cost of disbursement service in international shipping varies due to the following factors:

• Import destination
• Net weight and gross of the shipment
• Amount of goods
• Nature of product
• Duration of the clearance process
• Special clearance needs
• Type of packaging
• Duty rate

When all these factors are considered, the customer can determine the total expenditures to be spent while shipping, and during the clearance process.

Who is responsible for Disbursement Service Fee Payment?

We may apply and invoice these fees, which are subject to changes to the following:

• Shippers
• A third party based on the customers
• Consignees

Are all Imports subjects to Disbursement Service Fee?

Yes, all goods imported from other countries are subjects to disbursement service fees.

Factors that determine the cost of disbursement service fees are importantly considered in this scenario.

You should consider the destination location and the mode of shipping these products for you to determine the amount of disbursement service fee to charge.

When customers order goods from sellers upon arrival to the destination location, customers can evade paying the customs duties and taxes.

Disbursement service fee allows goods to be released by the seller.

Disbursement service fee is always added to the VAT and the client’s quote that enable the clearing of shipment and clearance of goods by customs.

Will I get charged a Disbursement Service Fee if importing to a Country where Duties and Taxes don’t Apply?

Yes, the Disbursement service fee is applied even in countries where custom duties and taxes are free.

Most third parties charge a flat rate of 2.5% of the value of imported goods.

Normally the disbursement service fee is paid by the customer or through a third party.

That is, you will pay the seller before the release of a shipment to the required destination. Therefore, for you to receive the ordered goods you have to pay for these service charges.

Relevant authorities in countries that are duty and tax-free do not provide any regulations concerning the disbursement service fee.

How long does Customs Clearance take when I use a Third Party Agent?

There is no one size fits period when it comes to customs clearance because this depends on the type of shipments, the country, and the destination country.

Authorities in different countries have different clearance requirements, and how long it takes depends on the paperwork required based on the type of goods you are shipping.

However, third parties make your customs clearance process quick and hassle-free. They use their knowledge, connections, and experience to make the clearance faster.

Which Customs Documents do I need to provide for Import Clearance with a Third Party?

There are many documents required for import clearance of the goods shipped.

These documents vary depending on the type of goods you are shipping.

Completing the relevant documents accurately not only saves you from the delayed custom clearance process but also reduces the risks of high penalties.

More importantly, documentation varies depending on the country you are importing from and also the destination of the shipment.

Some of these documents include:

Commercial invoice: this document allows the customs duty officers to compare the value of stated products in the invoice with the actual amount in the market.

This prevents over quoting or underquoting that may lead to penalties.

Import license: under any government for you to import goods from other countries, it’s mandatory for you to possess the license.

Third-party should provide this document for the goods to be cleared.

Transport documentation: the third party should have the correct transportation documentation depending on the mode of transportation of the goods.

Such include, Bill of landing, Airway bill, Road waybill among others.

What happens if my Shipment gets stuck at Customs in relation to Disbursement Service Fee?

In most cases, the shipment gets stuck due to incomplete payment of the charges required. Customers are charged with a disbursement fee that is inclusive of transportation and delivery of the goods.

This as result may lead to shipping back of the goods to the seller.

However, to prevent these nasty scenarios should involve a third party to settle the misunderstanding with customs.

Third-party contacts the seller to enquire if there any outstanding disbursement service fees and is so, provides ways of settling the charges.

How can I reduce or avoid Disbursement Service Fee when Shipping Internationally?

You must have the required knowledge of how much a shipment is charged depending on the goods you want shipping.

This enables you to know some of the fee charges that you can avoid hence, ease the movement of shipped products.

Proper packaging; ensures that the shipped goods are not damaged.

It also reduces the cost incurred during shipping as the goods are not overweight.

Importation of domestic goods rather than goods with harmful components. This saves you on the cost of importation.

It also prevents you from the constant encounter with relevant authorities.

Ensure that you have the correct information of the destination country to avoid wrong location delivery.

Deliver package with duties: This prevents the clients from abandoning the goods due to charges that are not included in the invoices.

What Payment Options are there for Disbursement Service Fee?

Some of the payment options used for the disbursement service fee include:

Visa direct: use of both credit card and debit card can be used to pay for this disbursement fee to customs or relevant authorities.

This is also applicable when dealing with third parties.

PayPal enables scheduling and automation of disbursement fees to a list of recipients.

This means if you have ordered different shipments, you can conveniently make the payments.

Can I claim back the Disbursement Service Fee? |

Yes, the disbursement service fee is claimable.

Disbursement service fee includes transportation and the delivery fee of the shipped goods.

These charges are normally included in the VAT and are included in the invoice presented to the customer. You can claim any VAT charges paid for the shipped goods.

Therefore, you should always find a suitable way to separate these charges by ensuring that goods delivered meet the threshold. Also, you should be able to provide all VAT documentation to the relevant seller for easy processing of the fee.

At Tj chinafreight, we will help you in all the freight forwarding services from China.

Contact us now for competitive prices when shipping from China.