import Archives

May 12, 2022 / By tjchinafreight ivy / Shipping

Import from China: FOB, CIF or EXW Incoterm?

FOB, CIF or EXW? The Incoterm you choose to import from China can greatly affect your overall cost. But oddly, it's rarely the focus of your import activity.

Most importers tend to put the lowest possible sales price as a higher priority, ignoring other details. This could end up being a costly mistake. Given their direct impact on import costs, now is the time to start taking a closer look at Incoterms.

Product prices vary by Incoterm

The price of your purchase will vary depending on whether you imported using FOB Incoterm, CIF Incoterm or EXW Incoterm. Many Chinese suppliers include shipping costs directly into the product price, which is why they usually have different price lists depending on the Incoterms used.

Be very careful when negotiating with Chinese suppliers here, as the price difference does not always correspond to the price of sea freight. Suppliers have been known to use this to manipulate buyers into choosing a specific Incoterm that is more beneficial to the supplier. This will be explained further when we discuss the CIF Incoterm.

Incoterms determine the control you have

The Incoterm you choose will define your control over your shipment at every stage of the shipping process. Whoever controls ocean shipping has control over costs and greater bargaining power.

If you let the supplier manage the ocean freight, you must accept the price and conditions he sets with the freight forwarder.

Import from China with FOB Incoterm

FOB Incoterms are probably the favorite - and in some cases only - Incoterms of experienced importers. We are talking about countless imported products with different characteristics, each with their own unique needs.

In my opinion, if you can only choose one Incoterm to import from China, FOB Incoterm will be your best choice. Why? FOB Incoterm gives you more control over your imported ocean cargo without the responsibilities that come with it.

Import FOB and EXW from China

As mentioned, the biggest advantage of using FOB to import from China is the control you have. You also have less responsibility than EXW.

For FOB, your responsibility as the importer is freight, cost of arrival and delivery. This means that any problems at the origin will be the responsibility of your supplier in China. However, with EXW, you are responsible for any problems and unexpected expenses - both at the origin and destination.

In short, while both FOB and EXW Incoterms are considered safe options for importers, there are significant differences in how responsibility is allocated.

Import from China using CIF Incoterm

Buyer's responsibility: payment of goods, arrival fee, customs clearance at destination, inland transportation at destination from port to warehouse, and corresponding import duties.

Responsibilities of the seller: deliver the goods according to the conditions agreed with the buyer, obtain the necessary documents for export, manage the inland transportation in China, manage the customs clearance and pay the corresponding customs fees in China, rent and pay the sea freight, insurance, and original Origin port charges.

For a novice importer, a CIF Incoterm may look very tempting: no need to pay for shipping, no need to choose or negotiate with a freight forwarder, no need to organize shipments, and most importantly, the item is actually cheaper than buying under another Incoterm they.

Import from China using EXW Incoterm

Buyer's Responsibilities: Pay for the goods, manage inland transportation at origin and destination, pay origin, ocean freight, insurance, manage customs clearance at origin and destination and pay appropriate fees, and pay appropriate customs duties.

Seller's Responsibilities: Deliver on the terms agreed with Buyer, provide all required documents and proofs.

What is the best Incoterm when importing from China?

In theory, FOB, CIF and EXW are your viable options for importing from China. Each involves a different amount of risk, liability, cost, and safety.

My advice

Choose the safest Incoterms that give you maximum control over your ocean freight.

May 12, 2022 / By tjchinafreight ivy / Shipping

Why the Panama Canal Matters

Cargo ship in transit of the Panama Canal passes under the Centenary Bridge, Panama

Where is the Panama Canal?

The Panama Canal is located in Panama City and connects the Pacific and Atlantic Oceans. Comprising a 77km long waterway, it is an important gateway for ships heading to South America, saving them over 12,875km of voyages.

Panama Canal: When was it built?

The construction of the Panama Canal was the second attempt by the United States after France failed to build its own canal in the Isthmus of Panama. The construction of the canal was decided in 1906, which required moving more than 1 million cubic yards of dirt. The job requires more than 25,000 workers to complete the construction of the building facility every day.

What is the purpose of the Panama Canal?

The Panama Canal is one of the most strategic man-made waterways in the world, providing vital services for the movement of goods. It reduces the sailing of ships by providing a passage that takes them directly to South America. This reduced travel time by more than 15,000 kilometers.

Routes to North and other South American ports also facilitate easy travel through the Panama Canal, saving more than 6,500 kilometers. On the other hand, the use of the Panama Canal reduces voyages from East Asia and Europe to Australia by 3,700 km.

What is the Panama Canal for?

Today, the Panama Canal is used for the transportation of goods, mainly in the import and export industry. It became an important gateway to different parts of the world by allowing easier routes and faster voyages.

Why is the Panama Canal important?

The importance of the Panama Canal lies in its import and export advantages as well as its international trade relations. It has commercial and military importance.

Commercial importance

The Panama Canal provided a cheaper and easier way to move cargo and commercial goods between the Pacific and Atlantic. It eliminates the need for ships to sail around Cape Horn and the southernmost tip of South America to reach their destination. From a voyage that took 67 days to cover 12,000 miles, the canal paved the way for a voyage of just 8,000 miles, which was only 8 to 10 hours.

Military importance

The Panama Canal was of military importance in the 1900s, when the United States provided money and a naval blockade to Panama for its revolution. This led to the independence of Panama, which enabled the United States to enter into a treaty with them to build the canal. In 1999, the military presence in the Panama Canal Zone was strong, especially when U.S. military bases were closed.

To this day, the Panama Canal is still used to transport military watercraft.

How did the Panama Canal affect the world?

The Panama Canal is hailed as one of the few projects that changed the face of the planet and created transoceanic shipping routes. From 1914 to the present, it is one of the most important waterways facilitating international trade and import and export.

May 6, 2022 / By tjchinafreight ivy / International

Could the U.S. lift tariffs on Chinese imports to the U.S.?

May 6, 2022 / By tjchinafreight ivy / Shipping

Shipping delays still at peak levels

Delays in container shipments from Asia increased in the first quarter. Shipping data released by supply chain platform company E2open shows that in the first quarter of 2022, the total time from booking to receipt for global shipping will be the same as in the fourth quarter of 2021.

Take a company as an example. In April this year, after booking space with liner operators, it took an average of 73 days to complete the shipping process of goods, which was 9 days longer than the average of last year. It should be pointed out that one-third of the additional time from booking to customs clearance at the destination port is due to delays at the origin port, while delays due to supply chain congestion account for 44%.

While the global average on-time ship was unchanged from the previous quarter, there were more delays on outbound routes. Among them, the Asia to North America route, the transit time increased from 77 days in the fourth quarter of 2021 to 80 days. Despite a slight drop in bookings, transit times have increased by five days since last quarter as ships continue to wait longer for berths, E2open said. While transit times on the Asia to Europe route decreased by 2 days to 79 days, it was still a fifth of the time compared to the same period in 2021. Actual shipping days from Asia and Europe to North America have increased by 5 and 4 days, respectively, since last quarter.

Currently, the biggest impact on the transportation market is the cost of fuel, which directly affects the economics of ocean transportation and indirectly pushes up global commodity prices.

April 29, 2022 / By tjchinafreight ivy / Shipping

EU imports of Russian LNG surge by 50%

Shipping brokerage Banchero Costa said in its latest weekly market report to Xinde Maritime that the EU's total LNG imports from Russia in the first quarter of this year soared by 50% year-on-year.

It is for this reason that the EU became the world's largest importer of LNG in the first quarter of 2022.

Europe frantically imported LNG in the first quarter

The latest data provided by Banchero Costa for Xinde Maritime Network shows that in 2021, the European Union (27 countries) is the world's third largest importer of seaborne LNG, accounting for 15.8% of global seaborne LNG imports

In 2021, China will be the world's largest LNG importer with a share of 20.2%, followed by Japan with 19.7%.

Earlier in 2020, the EU imported 62.8 million tonnes of LNG, down 4.2% from 2019.

In 2021, EU LNG imports will actually decrease further, to only 58.5 million tons, a further 6.8% drop from 2020.

But the turning point came so suddenly. In the first quarter of this year, with the outbreak of the Russian-Ukrainian conflict, dramatic changes took place.

In the first three months of 2022 (the first quarter of this year), the EU imported 22.1 million tons of LNG by sea, a jump of 72.8% from 12.8 million tons in the first quarter of 2021. This made the EU become the world's largest LNG importer in the first quarter, with a share of 20.9%!

The United States and Russia are the main sources of increased European imports

The US is a major incremental contributor to European LNG imports, with the EU importing 10.4 million tonnes of LNG from the US in the first three months of 2022, an increase of 234.8% from 3.1 million tonnes in the first quarter of 2021. In the first quarter of 2022, U.S. gas accounted for 46.9% of European seaborne LNG imports.

In the first quarter of 2022, the EU imported 4.1 million tons of LNG from Russia, an increase of 49.1% from the 2.7 million tons in the first quarter of 2021. This is an all-time high. The EU has never imported more LNG from Russia than this year. In the first quarter of 2022, Russia accounted for 18.3% of EU seaborne LNG imports.

In fact, March 2022, when the Russian-Ukrainian conflict broke out, is also the highest month in history for Russian gas imports into the EU.

In March 2022, the EU imported 1.6 million tonnes of LNG from Russia, a 14.5% increase from February 2022 and a 34.3% increase from March 2021.

April 27, 2022 / By tjchinafreight ivy / Shipping

Brazil removes import duties on some goods

Affected by the epidemic in the past two years, Brazil's poor population has increased, the proportion of the middle class has shrunk, and the inequality between the rich and the poor has widened.

Inflation has caused the prices of basic materials in Brazil to rise again and again, and the prices of canned food, preserved food, olive oil, vegetables, beef, coffee, etc. have all continued to increase. In addition to Brasilia being the most expensive city, Salvador, Curitib and Belo Horizonte also saw very big price increases.

Wages can't keep up with inflation, and Brazilians have begun to reduce expenses, change the family diet, replace more expensive beef with chicken, sausage, cream, etc., and reduce life and entertainment activities.
In order to fight inflation and stabilize prices, Brazil recently announced a reduction in import tariffs on some commodities.

Brazil removes import duties on some goods

The Executive Management Committee (Gecex) of the Foreign Trade Commission (Camex) of the Brazilian Ministry of Economy announced:

1. From now until the end of this year, import taxes on seven products will be cancelled, including: ethanol (the original import tax is 18%, the same below), coffee (9%), margarine (10.8%), cheese (28%) ), pasta (14.4%), sugar (16%), soybean oil (9%).

2. From April 1 to the end of this year, the import tax rate levied on electronic products and mechanical equipment will be reduced by 10%. This measure aims to promote the purchase of equipment for industrial production and reduce the prices of some technical items. In March last year, the Brazilian government cut tariffs on capital goods and telecommunications imports by 10 percent. Overall, the cuts will be 20%.

The changes came into effect after they were published in the Brazilian Federal Official Gazette on March 23. Combining all the tax cuts, the tax cuts generated this year are around R$ 1 billion.

However, the skyrocketing sea freight has also affected the Asia-Brazil route. The current sea freight is 5.7 times higher than before the outbreak!

April 27, 2022 / By tjchinafreight ivy / Shipping

Some countries or regions toy certification system.

In order to ensure the safety of children, many countries or regions have formulated strict laws, regulations and safety standards for toy products, and formulated corresponding certification systems according to international practices and national conditions. As an import and export party, it is necessary to understand the laws and regulations, safety standards and certification systems of the corresponding countries, and always pay attention to their changes and make corresponding adjustments accordingly, so that toy products can be exported smoothly and avoid the risk of notification and recall. This article briefly summarizes the certification systems of some countries or regions.

China

CCC certification

The full name of CCC certification is "China Compulsory Product Certification", and the English name is: China Compulsory Certification (CCC). It is a product conformity assessment system implemented by the Chinese government in accordance with laws and regulations in order to protect the personal safety and national security of consumers and strengthen product quality management.

EU

CE certification

CE certification is a pass for toy products to enter the EU market. In order to protect the life and property safety of the people of the EU member states, whether it is a product produced by an enterprise within the EU or a product produced by any country or region outside the EU, if it wants to circulate freely in the EU market, it must be affixed with compulsory certification. CE mark to indicate that the product complies with the essential requirements of the EU Directive on New Methods for Technical Harmonization and Standardization.

Germany

GS certification

GS certification is a voluntary certification based on Germany's "Product Safety Law" and tested in accordance with the European Union's unified standard EN or German industrial standard DIN. It is a German safety certification mark recognized in the European market. However, it should be noted that while the product meets the GS certification, it must also meet the requirements of the EU CE certification.

U.K.

UKCA certification

On December 31, 2020, the UK officially left the EU. The UK Toys (Safety) Regulations UKCA certification is revised and fully effective on 1 January 2021. On August 24, 2021, the British government issued the latest announcement on the requirements for the use of the UKCA logo on the official website: It was originally scheduled to be launched in the UK market (including England, Scotland and Wales from January 1, 2022, but not applicable to North America). Ireland) the period in which the CE marking can no longer be used has been extended until 1 January 2023. However, it should be noted that this notification is based on the premise that the UK and EU regulations are still consistent, that is, if the EU updates its regulations, and the CE marking on the manufacturer's products complies with the new regulations, then these CE marked products will not be used. UK market accepted. From 1 January 2023, products entering the UK market must be marked with the UKCA mark in accordance with regulations.

U.S.

"CPSC certification + UL certification + FCC certification"

CPSC (Consumer Product Safety Committee) is an important consumer protection agency in the United States, namely the Consumer Product Safety Commission. CPC (Children's Product Certificate) is the Children's Product Certificate. The United States requires manufacturers and importers to certify in writing that their children's products comply with the applicable US safety regulations, based on the qualified test report issued by a CPSC-accredited laboratory that meets the requirements of CPSIA and ASTMF963-17, toys and children sold to the United States Products must have CPC.

In addition to the regulatory tests that meet the CPC requirements, related products sold to the U.S. market for children under the age of 12 must also comply with the Tracking Label requirements. The purpose of this move is to ensure that when there is a problem with the product, consumers can trace the source to the responsible party to deal with related compliance issues. Therefore, traceability labels are required on both packaging and products (except for exemptions). If it is a durable product for infants and young children, it must also meet the relevant requirements of the Product Registration Card.

In addition to obtaining CPSC certification, some toys also need to apply for UL certification and FCC certification.

April 26, 2022 / By tjchinafreight ivy / Shipping

Simple guide to Warehouse receipt

Shot of a young man using a digital tablet while working in a warehouse

Meaning of warehouse receipt

A warehouse receipt is a form of document used in the futures market to ensure the quality and quantity of a specific commodity stored in an approved facility. Warehouse receipts are part of the processing of business transactions involving physically delivered futures contracts.

Instead of immediately moving the actual goods under the contract, the warehouse receipt is used to settle the futures contract. In the case of precious metals, a warehouse receipt can also be called a vault receipt.

Warehouse receipts can be transferable or non-transferable.

Negotiable warehouse receipt

Negotiable warehouse receipts specify that the goods can be delivered to the document holder, which means they can be used as collateral for a loan. If the borrower defaults, the lender takes over the warehouse receipt and can sell the goods for payment of the loan.

Non-negotiable warehouse receipt

A non-negotiable warehouse receipt specifies to whom the goods should be delivered.

How to use warehouse receipt?

Stored goods cannot be delivered without a receipt.

Warehouse receipts are used to settle futures contracts. A vault receipt is an example of a warehouse receipt, but it is for metal. Vault receipts show ownership of precious metals stored in warehouses, banks and other approved facilities.

Warehouse receipts are used for stored goods that will be delivered or used at a later date. They are called physically delivered commodities. Physically delivered commodities are used in the production and manufacture of many commodities.

Tracking physical inventory is a critical process for future contracts. Inventory of goods must be registered with the designated authority and must be inspected and certified before it can be used in the future market.

When to use warehouse receipts?

Warehouse receipts are typically used when a seller signs a contract with a manufacturer to purchase some item that is not in stock, and then uses the warehouse receipt to collect the product at the warehouse.

April 24, 2022 / By tjchinafreight ivy / Shipping

Packing list – Simple Guide

Aerial view of an International port, Business logistics concept, Cargo Container ship in import export and business logistics, Shipping harbor.

What is a packing list?

A packing list is a document used in international trade. It provides exporters, international freight forwarders and final consignees with information about the shipment, including how the shipment was packaged, the dimensions and weight of each package, and the markings and numbers on the outside of the box.

Why do I need a packing list?

A packing slip provides you with information about your shipment and requires your signature upon receipt.

It is only required when the goods being transported are packaged into larger units (for example, containers or aircraft consoles).

What is the purpose of a packing list?

It can be said that the packing list is one of the important documents for sending or receiving shipments.
Therefore, it plays a fundamental role in achieving the efficiency of the entire transport process.
The shipping department uses this document to enable them to know the delivery details of the goods.
It allows shippers to ensure that they have included all items in the shipment.
Additionally, recipients or consignees can refer to this document to confirm that each item is included in the shipment.
Also, packing slips help with order management.
It facilitates smooth transition, processing and shipping of orders.
Order management mainly involves managing the life cycle of a product and keeping track of it until it reaches the customer's destination.
As a result, entities can easily check and track the status of product shipments, simplifying the management process.
This is also important when an order arrives in multiple packages.
In this case, what it does is keep track of what has and hasn't arrived.
As a seller, you may also consider using this document as an additional branding opportunity.
Ideally, you can create a design similar to your brand and use microcopy to express your voice.

Why is a packing list important in shipping?

Physical proof of the item shipped
Check and Cross Check
Identification of lost or damaged goods
Strengthen business relationships
Allow customs to estimate the value of goods
Express freight booking

Is there a legal requirement to provide a packing list in international shipments?

Different countries have different policies on the need for import orders.
In some countries, a packing list is a mandatory requirement for any type of imported product.
Essentially, this document is always required by the customs authorities of these countries to clear the goods
On the other hand, some countries only require packing lists for certain imported products.
Simply put, there are certain products that can only be cleared at customs after submitting a packing list.
In short, the legality of this document is based on whether it is mandatory or not, depending on the specific country.

April 18, 2022 / By tjchinafreight ivy / International

How dependent is Europe on Russian coal?

Europe imposes sanctions on Russia

The disruption to global coal trade flows caused by Western sanctions on Russia and the resulting increase in ton-mile demand will benefit the dry bulk market.

On April 7, local time, EU countries agreed to impose a coal embargo on Russia and give a 120-day phase-out period, a month later than originally proposed, giving EU member states time to find alternative sources of supply.

It should be noted that among the "three major items" of coal, oil and natural gas, coal is undoubtedly the easiest to start with. Russia is the main source of thermal coal in Europe. The import volume in 2021 will be 33 million tons, accounting for the total import of European thermal coal. more than half of the amount. On the Russian side, the ban will affect a quarter of Russia's coal exports, according to the European Council.
Relative to coal, there is currently no agreement within the EU to embargo Russian oil and gas. The largest trade between the EU and Russia is oil and natural gas, which is extremely important to the European economy. For the EU, the embargo on oil and gas is undoubtedly an act of "harming others and not oneself".

One broker said: “The flow and flow of the coal trade market is changing as European coal buyers rush to switch suppliers. The US, South Africa, Australia, Colombia and Indonesia may become alternative sources, increasing demand for dry bulk. The ton-mile demand for cargo ships. In theory this should have a positive impact on freight rates, but we need to focus on how long this is likely to last.”
Another market player added: "If a large number of ships go to Europe as a result, the results may be unexpected."

Because of the ban or the buyer's voluntary sanctions?

Europe relies on Russia for coal imports

In fact, there have been signs for weeks that European buyers want to increase the supply of non-Russian coal. Either because they expected such a ban, or because they decided to sanction themselves.

It is not easy for the EU to find alternative sources of Russian coal. Coal exporters Australia and Indonesia have reached their production limits, and South Africa is also constrained by logistical issues, and a global rush to buy coal is expected to keep coal prices higher.

But this sudden collaboration is difficult. After all, alternative coal producers have their own supply needs, mostly from China and India. So if China or India's coal import demand increases, they don't have the extra capacity to sign long-term contracts with Europe.

The European Union is not the only region to impose a ban on Russian coal, with Canada, France, Germany, Italy, Japan, the United Kingdom and the United States jointly saying on April 6 that they would all "phase out and ban the import of Russian coal."

Tag: <span>import</span>