/ By tjchinafreight ivy / Shipping

4 time limits for foreign trade export tax rebate

Export enterprises should pay special attention to the declaration procedures and the concept of time when handling export tax rebates to avoid losses. When exporting tax rebates, export enterprises should pay attention to the following four time limits:

One is "30 days"

After foreign trade enterprises purchase import and export goods, they should promptly obtain special VAT invoices or ordinary invoices from the supplying enterprises, which are VAT invoices for anti-counterfeiting tax and tax control, and must go through the certification procedures within 30 days from the date of invoicing.

The second is "90 days"

Foreign trade enterprises must go through the export tax rebate declaration procedures within 90 days from the date of export declaration of goods, and production enterprises must go through tax exemption and deduction declaration procedures within three months from the date of declaration of goods for export.

The third is "180 days"

Export enterprises must provide the local competent tax refund department with the verification form of export foreign exchange receipts (except for forward foreign exchange receipts) within 180 days from the date of export declaration.

The fourth is "3 months"

If the paper tax refund certificate for export goods of an export enterprise is missing or the contents are incorrectly filled in, and it can be reissued or changed according to relevant regulations, the export enterprise may apply to the tax refund department for an extension of the declaration of tax refund (exemption) for export goods within the declaration period. , the application can be extended for 3 months.

Tax classification and attached materials of tax refund (exemption) for export goods

According to the current tax system, the two types of tax refund (exemption) for export goods in my country are value-added tax and consumption tax within the scope of turnover tax (also known as indirect tax).
The tax refund (exemption) for export goods is the value-added tax and consumption tax that have been paid in all aspects of domestic production and circulation of export goods.

Keywords: turnover tax

It generally refers to the so-called tax on items characterized by commodities. As far as my country's current tax system is concerned, turnover tax includes value-added tax, business tax, consumption tax, land value-added tax, customs duties and some local industrial and commercial taxes.

Materials for export tax rebate:

1. Customs declaration. The customs declaration form is a document filled in by the import and export enterprise to go through the declaration procedures to the customs when the goods are imported or exported, so that the customs can check and release the goods based on this.
2. Export sales invoice. This is the document filled out by the export enterprise according to the sales contract signed with the export buyer. It is the main document for foreign purchases, and it is also the basis for the accounting department of the export enterprise to record the sales revenue of export products.
3. Purchase invoice. The main purpose of providing purchase invoices is to determine the supplier, product name, measurement unit, and quantity of export products, whether it is the sales price of the manufacturer, so as to divide and calculate the purchase cost.
4. Foreign exchange settlement bill or foreign exchange receipt notice.
5. For the self-made products directly exported or entrusted to export by the manufacturer, if the settlement is based on the CIF price, the export cargo waybill and export insurance policy should also be attached.
6. Contract Information. Enterprises that have the business of processing re-exported products with imported materials shall also submit the contract number, date, name and quantity of imported materials and parts, name of re-exported products, cost of imported materials and various taxes paid to the tax authorities. amount, etc.
7. Product tax certificate.
8. Proof that the export proceeds have been written off.
9. Other materials related to export tax rebates.

General trade export goods tax refund method

At present, the tax refund methods for foreign-invested enterprises export goods include "first levy and then refund" and "exemption, credit, and refund" tax.

"Tax first and then refund" means that the goods exported by production enterprises by themselves or by entrusted agents shall be taxed at the tax rate stipulated in the Interim Value-Added Tax Regulations, and then the tax authorities in charge of export tax rebates shall conduct tax rebates within the national export tax rebate plan. Approval of tax refund according to the specified tax refund rate.

Tax basis

The tax refund amount shall be calculated according to the FOB price of the current export goods multiplied by the exchange rate in RMB.

"FOB" (written as FOB price in English) is the FOB price at the port of shipment, but this FOB price is a symbolic price, that is, the seller will hand over the necessary shipping documents to the buyer to collect the payment according to the contract, and the risks of the buyer and the seller are divided. All are limited by the loading of goods on the ship. Therefore, the FOB price is for the buyer to be responsible for chartering and booking space, and to apply for insurance to pay the transportation and insurance premiums.

Start your journey and see more shipping services.

/ By tjchinafreight ivy / Shipping

Asian owners have larger fleets than Europe

Clarksons Research Services, in its latest weekly report, highlights how Asian shipowners are finally reinventing their European counterparts to become the dominant force in global shipping.

European owners have historically had the largest share of the global fleet, with 44% of gt at the turn of the century, and Asian owners 32%.
Led by rapid growth in China, Asian shipowners overtook Europe last year, and looking at global orders, the gap will widen in the coming years. According to a recent report by Clarksons Research, by the end of 2021, Asian shipowners currently have a market share of 43% (48,472 ships, 637 million gt) of world fleet capacity in terms of gross tonnage, surpassing that of European shipowners. 42% market share of fleet capacity (30,610 vessels, 630 million gt).

Over the past decade, Chinese shipowners have increased their fleet gross tonnage from 111 million to 226 million and are now the second largest shipowner of all countries with a 15% global share. shipping goods in China

Asian shipowners now account for 43% of global tonnage, with 48,472 vessels totalling 637 million tons, according to Clarkson. This exceeds the 42% share of European shipowners, comprising 30,610 vessels with a gross tonnage of 630 million.

“The tonnage shift from Europe to Asia looks set to continue for some time, with almost half of the global order book (79m GT, 49%) going to Asia Pacific owners compared to 33% (53m GT) for European owners,” Clarksons pointed out.

Asia dominates many other aspects of maritime, including ports, shipbuilding and crew supply.

In addition, Asia's growing market share in global trade is driving a large number of newbuilding investments in many Asian countries, which will eventually lead to a significant increase in fleet capacity share.

It is worth noting that despite the fact that countries in the region have experienced some of the strictest epidemic prevention and control restrictions in the past two years, with borders effectively closed for two years, the growth of the Asian fleet has remained very strong during the pandemic. s level.

Take the shipping industry as an example. After the outbreak, the container shipping market rebounded rapidly from the second half of 2020 after a brief downturn. Due to the supply chain congestion caused by the epidemic, there is an urgent need for a large number of container ships in the market. During this period, Asian container shipping companies ordered 236 ships, with a total capacity of 1.81 million TEU. And the pace of newbuilding orders is still showing no signs of slowing down.

With the exception of Greece, fleet growth in other European countries has been relatively sluggish, or even reversed. Taking Germany as an example, the combined capacity of German shipowners fell by 34% to 62 million gt during the same period.

Clarkson also said that this trend will continue to develop. Because the current market share of newbuildings owned by Asian shipowners also accounts for nearly half - 49% (79 million gt), it is worth mentioning that the total capacity of Chinese shipowners' newbuilding orders has reached 29 million gt, 18% of the world share.

However, the newbuilding order capacity of European shipowners is currently only 53 million gt, and the share is only 33%.

/ By tjchinafreight ivy / Shipping

South Korean shipbuilding industry returns to No. 1 after 7 years

With its strong performance in the field of LNG ships, the Korean shipbuilding industry has won half of the orders in the global newbuilding market.

According to data released by Clarkson on April 5, in the first quarter of this year, the global new ship order volume was 9.2 million revised gross tons (CGT), a decrease of 41% compared with the same period last year. Among them, South Korea undertook 4.57 million CGT, and the global The market share reached 49.7%, an increase of more than 12 percentage points from 37.2% in the first quarter of last year; China has undertaken 3.855 million CGT, and the global market share has dropped from 46% in the first quarter of last year to 41.9%; Japan has undertaken 248,400 CGT , the global market share fell to 2.7% from 12.8% in the same period last year.

This is the first time in the past seven years that a Korean shipping company has ranked first in the world in terms of orders received in the first quarter. At the same time, this is also the first time since Clarkson started statistics in 1996 that the number of orders received by South Korean shipping companies in the first quarter has reached about 50% of the global market share.

In addition, in March this year, the global order volume for new ships was 3.23 million CGT. The number of orders received by South Korean shipping companies also ranks first in the world in a single month, with a total of 1.64 million CGTs, accounting for 51% of the global share. Chinese shipbuilding companies ranked second with 1.36 million CGT orders, accounting for 42% of the global share.

As of the end of March, the number of global hand-held orders was 94.71 million CGT, an increase of 1.55 million CGT from the end of February. Among them, South Korean shipping companies have the largest increase in orders, reaching 1.12 million CGT; Chinese shipping companies have increased orders by 610,000 CGT, and Japanese orders have decreased by 240,000 CGT.

Industry insiders in South Korea said that last year, South Korea handed over the world's largest new ship order volume to China. In the first quarter of this year, the global new ship order transaction volume decreased significantly year-on-year, but South Korean shipbuilding companies worked hard and preemptively seized the place. The order finally overtook China to regain the first position. This is mainly due to the large number of LNG ship orders undertaken by South Korean shipbuilders. Regarding the reasons for the significant decrease in the number of orders received by Japanese shipbuilding companies, a Korean industry official explained that the data of the Japanese shipbuilding industry traditionally lags behind, so there may be changes in the future.

According to statistics, among the 38 large-scale LNG ships of 174,000 cubic meters or more ordered globally in the first quarter of this year, South Korea has undertaken 27 vessels, accounting for 71%; China has undertaken 11 vessels, accounting for 29%. In addition, a total of 44 container ships above 8000TEU have been ordered globally this year, of which South Korea has undertaken 21 ships, accounting for 47.7%.

A relevant person in the Korean industry said: "Although the number of new ship orders has decreased this year, Korean ship companies are benefiting from the booming LNG ship market. In the first quarter of this year, the number of LNG ships undertaken by Korean ship companies increased significantly, and the number of orders on hand It is also increasing, and the delivery time has been scheduled to the end of 2025. At present, European countries are looking for alternative sources of Russian energy, and the demand for LNG ships will continue in the future.”

/ By tjchinafreight ivy / Shipping

The epidemic will not bring down Shanghai Port and Ningbo Zhoushan Port

Recently, the epidemic prevention and control in Shanghai has been in a severe period, and the infection rate has continued to rise. Shanghai Port cannot survive alone, and is making every effort to coordinate resources from all parties to keep the port open. On the other hand, many truck drivers were diagnosed in Ningbo, and the local government immediately introduced a policy of one nucleic acid per day for truck drivers to further tighten the prevention and control policy. As the two largest ports in the world, Shanghai Port will complete a container throughput of 47.3 million TEU in 2021, and Ningbo Zhoushan Port will complete a cargo throughput of 31.08 million TEU. These two ports account for nearly 40% of the national port container throughput. In this regard, the normal operation of the two ports is related to the smooth global supply chain, and the sensitive market remains highly concerned about this.

Recently, a screenshot of densely crowded ships in the waters near Shanghai circulated on the Internet. The screenshot was accompanied by a caption saying, "Hundreds of ocean-going freighters have been stranded in the open seas of Shanghai, and the supply chain is broken here."

The impact of this round of Shanghai epidemic on international shipping has also aroused high public attention.

On April 2, SIPG also responded to the news of "severe congestion in Shanghai Port": "We have noticed that some media have published false reports on the serious congestion in Shanghai Port, which mentioned that 'Shanghai's port is delayed. The situation is getting more and more serious', 'the number of ships waiting to be loaded and unloaded in Shanghai port has soared to more than 300 this week' and other unverified remarks and pictures, according to the internal data monitoring of Shanghai port, since February, Shanghai port terminal production and operation As usual, there is no congestion of container ships." SIPG further stated that there is absolutely no "congestion comparable to the port congestion in West America" ​​in Shanghai Port. The number of waiting ships is in single digits, and the average number of waiting days is normal.

Previously, it was believed that due to the severe epidemic situation in Shanghai, the transportation of import and export goods was also affected, and some ships calling at Shanghai Port may be diverted to Ningbo Zhoushan Port or Nanjing Port.

On April 6, the "Daily Economic News" reporter asked the relevant person in charge of Ningbo Port (601018.SH) to verify the above situation. The person in charge responded: "The company is now doing a good job of epidemic prevention and control in accordance with the requirements of the superior and the actual situation of the enterprise to ensure the continuous, stable and healthy development of port production. As for the ships that previously berthed at Shanghai Port, they will be moved to Ningbo Zhoushan Port. The situation is not obvious at the moment and we are monitoring it.”

On the same day, a person in charge of a shipping agency in charge of Ningbo also told reporters that from what he knew, Shanghai's port calls are relatively normal, and there has not been a large number of changes to Ningbo port.

At the same time, Ningbo Zhoushan Port had to face the problem of epidemic spillover. From April 4th to 5th, 6 of the 7 cases found in Ningbo City were road freight-related drivers and express service area staff, and one of them was in Beilun District; as a model of anti-epidemic, Ningbo Zhoushan The port quickly made a decision to close some container shipping bases in Beilun District, and organized truck drivers to conduct nucleic acid tests every 24 hours. For example, Ningbo Meidong Container Terminal Co., Ltd. issued a notice on April 3 that truck drivers entering the port area. A free nucleic acid test needs to be completed immediately before entering the port area; at the same time, for foreign vehicles, Ningbo City requires drivers to actively cooperate with nucleic acid testing and antigen testing at the high-speed bayonet. In addition, Ningbo has implemented closed management of staff in the city's expressway service areas, strictly implemented daily nucleic acid testing measures, and suspended refueling operations.

At present, Ningbo Zhoushan Port is still in normal operation as a whole, and the warehouses that were temporarily closed due to the detection of tight connections will also be unsealed from tomorrow. In addition to Ningbo City, two freight drivers in Shaoxing City were also found to be infected with the new crown. The freight drivers and passengers outside the city are required to perform nucleic acid tests every two days on the basis of implementing nucleic acid tests every two days, and each time they return to Shaoxing Expressway.

The port circle (ID: gangkouquan) believes that if the impact of the epidemic expands, the impact of the collection and distribution problem continues to expand, and the ports in the Yangtze River Delta region cannot handle the problem of transportation route configuration, which will be a heavy blow to the global supply chain. of. On the premise of "preventing imports from outside and preventing exports from inside", Shanghai should increase the capacity of waterway barges as soon as possible to transfer the pressure of road collection and distribution, while Ningbo Zhoushan Port must learn lessons and give priority to preventing the spread of the epidemic. The two ports will not be dragged down as the outside world fears, but for a period of time in the future, whether it is the cargo owner, the shipping company, or the port, it will be under the pressure of repeated epidemics.

/ By tjchinafreight ivy / FBA

What is the difference between overseas warehouse and FBA?

  • FBA, or Fulfillment by Amazon, means that sellers send products sold on Amazon directly to local warehouses. When a customer places an order, the Amazon system automatically completes the delivery.
  • Overseas warehouses refer to storage facilities established overseas. Cross-border e-commerce enterprises export goods to overseas warehouses in batches according to general trade methods. Once the order is placed, the item is delivered to the consumer.

Advantages of overseas warehouses

Faster delivery. It effectively reduces order response time by 50-70% compared to shipping from China. Additionally, it improves user experience and greatly reduces product turnaround time.

Reduce logistics costs. Through centralized delivery to overseas warehouses, local express delivery in the United States can reduce delivery costs by 30-50%.

FBA inventory adjustment is easy. For sellers, the overseas warehouse is the buffer warehouse of Amazon FBA, which is convenient and flexible to adjust the FBA inventory.

Disadvantages of overseas warehouses

Pay storage fees. The use of overseas warehouses requires payment of a certain fee, which is generally charged on a daily basis. And the cost of warehousing in different countries is also different, and sellers need to calculate the cost by themselves.

In stock. The premise of entering overseas warehouses is that sellers need to have a certain amount of inventory, which means that they need to stock up in advance, which will bring the risk of slow sales. And not suitable for sellers who sell special customized products.

Cash flow is inconvenient. Due to the large amount of stocking to overseas warehouses, the capital investment in stocking, logistics, warehousing, etc. is large, which can easily lead to a breakdown in the capital chain.

Sellers have high requirements for warehouse management data monitoring. Sellers need to monitor the detailed data of incoming and outgoing shipments, as well as putting on and off the shelves, otherwise it will easily lead to loss of goods or data mismatch. Some Amazon sellers responded that the inventory quantity did not match the actual number of products sold. Since Amazon has a complete warehouse management system, third-party overseas warehouses cannot guarantee that there will be no problems.

In essence, there is no difference between overseas warehouses and FBA. Both provide sellers with comprehensive warehousing and fulfillment services. However, there are obvious differences between the two in terms of service content and form.

1. The difference between service providers: FBA is Amazon's official warehouse distribution service, and after-sales service is provided by Amazon; overseas warehouses are provided by third-party service providers, responsible for the warehousing and distribution of sellers' products.

2. Different service forms. Once the seller has sent the goods to FBA, there is no need to deal with shipping related issues. The whole process from sorting to shipping is completed by FBA. The overseas warehouse is divided into two parts, first sorting and packaging in the warehouse, and then entrusting the local express company to complete the delivery service.

3. The service content is different. The service content of FBA is relatively simple, that is, it simply helps sellers deliver goods. The service content of overseas warehouses is more abundant. In addition to basic warehouse distribution, it also provides related services such as labeling and labeling, single-piece delivery, transit replenishment, quality inspection, and front-end logistics. For example, worry-free overseas warehouses can also realize customized services according to customer requirements.

4. Overall price difference. Combining all services, FBA is more expensive, while the overall cost-effectiveness of overseas warehouses is higher.

Other differences

Choose:

Amazon FBA warehouse has certain restrictions on the size, weight and category of products, so the choice is biased towards small, high and high-quality products

DH overseas warehouses have a wider range of choices than FBA warehouses.

Product:

FBA does not provide assembly services, and requires sellers to affix the outer box label and product label before entering the warehouse. If the product label is found to be damaged, it will be returned for repair.

DH overseas warehouses will provide sorting and assembly services before products are put on the shelves.

/ By tjchinafreight ivy / Shipping

The difference between virtual overseas warehouse and overseas warehouse

Cross-border e-commerce and cross-border logistics coexist synergistically. Compared with the booming cross-border e-commerce in my country, the shortcomings of cross-border logistics are becoming more and more prominent, which restricts the development of cross-border e-commerce to a certain extent. In addition to using the domestic direct mail mode, traditional cross-border e-commerce can also use the overseas warehouse mode. The virtual overseas warehouse is a mode between domestic only delivery and overseas warehouse delivery.

Virtual Warehouse is an international logistics model that combines the advantages of physical overseas warehouses, and is more intended to make up for its shortcomings. By generating a tracking number in the destination country of the domestic (Shenzhen) system, the centralized goods are directly delivered by high-quality air. In the destination country, the electronic express pre-clearing method is adopted to shorten the delivery time of the express in the destination country.

Overseas warehouse mode

1. Headway transportation
Cross-border e-commerce transports goods to overseas warehouses by sea, air, land or intermodal.

2. Warehouse management
Through the warehouse management system, cross-border e-commerce merchants can effectively view overseas warehoused goods and manage inventory in real time.

3. Local delivery
According to the order information, the overseas warehouse center distributes the goods to customers by local post or express.

Disadvantages: need to stock up, there is inventory risk and increase capital cycle costs, it is inconvenient to operate multiple SKUs at the same time, increase inventory storage costs and operating costs, overseas national policy changes will cause certain losses and troubles

Virtual overseas warehouse mode

1. First of all, the virtual overseas warehouse model does not require sellers to stock up, there is no inventory risk, and there is no financial pressure;

2. The virtual overseas warehouse mode is equivalent to having local overseas warehouse inventory at all sites on any platform;

3. The virtual overseas warehouse model shows local delivery, which improves consumers' purchasing confidence and purchasing experience, increases sales, and increases profits. At the same time, it also prevents buyers from malicious returns and exchanges because the delivery address is displayed in China;

4. The overall logistics cost of the virtual overseas warehouse model will be similar to the local delivery price, but the timeliness will be much faster. After all, it is equivalent to taking a special line to the destination country by yourself;

5. The virtual overseas warehouse model can respond to changes in foreign policies at any time, operate flexibly, reduce risks, and is more suitable for small sellers who are not particularly well-funded. Details (dimensional: ues5588)

Disadvantages: At present, virtual overseas warehouses are not recognized on e-commerce platforms.

Suitable for the crowd: small amount of capital, weak risk tolerance.

/ By tjchinafreight ivy / Shipping

International air transport knowledge

Eight elements of air freight inquiry:

1. Product name (whether it is dangerous or not)
2. Weight (charges involved), volume (dimensions and whether it's in stock)
3. Packaging (Wooden box or not, with or without pallet)
4. Destination airport (whether it is a basic point or not)
5. Time required (direct flight or transfer flight)
6. Requested flight (different flight services and prices)
7. Types of bills of lading (main and separate orders)
8. Required transportation services (customs declaration method, agency documents, whether customs clearance and delivery, etc.)

Air freight is divided into heavy cargo and bubble cargo.

1CBM=167KG The volume weight is compared with the actual weight. Which one is larger is charged according to which one. Of course, there is a little secret in the air freight bubble, which all colleagues should know, and it is inconvenient to talk about it here. Manufacturers who do not understand can figure it out for themselves.

Air freight structure composition - did you know?

There are many people who do air freight. Do you know how the air freight rates of airlines are calculated? A brief introduction, I hope to help everyone.

Air freight composition:

1. Airfreight freight (charged by the airline)
2.Fuel sur charge fuel surcharge (depending on the airport, the price of the destination point is different, Hong Kong is generally about the first 4 yuan now, before 3.6, last year the highest 4.8, the price is adjusted by the airport, generally 2 yuan to Asia)
3. Security check fee (fixed fee of 1 yuan/kg in Hong Kong)
4. Airport operation fee (HKD283/ticket in Hong Kong, the airport is responsible for transporting goods on the plane, etc.)
5. Terminal fee: 1.72/kg When the goods are handed over to the dealer, the dealer is responsible for the board and other things, and finally handed over to the airport for collection)
6. Air main bill fee: HKD15/bl is the fee for issuing the bill of lading - document of title.

The above is the composition of accounting fees for most airlines, mainly Hong Kong Airport. Because Hong Kong is a super-large free trade port, and Hong Kong Airport is the largest airport in the world, it has fewer restrictions, a wide range, and a large number of cargo aircraft. There are currently 78 airlines. There are more than 100 flights every day, which can be the first choice when the space and service are guaranteed. However, the cost is generally about 2 yuan higher than that in China!

What are the types of air cargo?

When you decide to ship your goods by air, you should know that there are two main types of air freight:

  • Special shipment
  • General shipment

Special cargo allows heavy, hazardous material and temperature managed cargo. It also allows human tissue samples, organs, fragile, value items and animals.
General Crago allows digital machinery, hardware, consumer goods, retail goods, toys, clothing and textiles, and more.
Air cargo is transported using different types of aircraft including passenger, cargo, charter or helicopter.

What are the factors that affect the cost structure of air freight?

Many factors contribute to the cost of air freight, such as:

  • Special event or holiday
  • Traditional/New Regulations
  • Economic situation
  • Technology (robotics, augmented reality, drones, artificial intelligence and big data)
  • Other additional charges such as cargo insurance, airline terminal handling charges, customs clearance and security surcharges are also included in the fee.

Common air freight nouns:

ATA/ATD (Actual Time of Arrival / Actual Time of Departure)
Abbreviation for actual arrival/departure time.

Air Waybill (AWB)
A document issued by or on behalf of the shipper, which is proof of the carriage of goods between the shipper and the carrier.

Unaccompanied Baggage (Baggage, Unaccompanied)
Baggage that is not carry-on but checked in, and luggage that is checked in.

Bonded Warehouse
In this type of warehouse, goods can be stored indefinitely without paying import duties.

Bulk Cargo
Loose shipments that are not palletized and boxed.

CAO (Cargo for Freighter Only)
Abbreviation for "Cargo Aircraft Only", meaning that it can only be carried by cargo aircraft.

Charges Collect
List the charges to the consignee on the air waybill.

Charges Prepaid
List the charges paid by the shipper on the air waybill.

Chargeable Weight
The weight used to calculate air freight. The billable weight can be the volumetric weight, or when the cargo is loaded in the vehicle, the total weight of the load minus the weight of the vehicle.

CIF (Cost, Insurance and Freightage)
Refers to "Cost, Insurance and Freight", which is C&F plus Seller's insurance for loss and damage to the Goods. The seller must sign a contract with the insurer and pay the premium.

Consignee (Consignee)
The person whose name is listed on the air waybill and who receives the goods carried by the carrier.

Consignment
The carrier receives one or more pieces of goods from the shipper at a certain time and place, and carries it to a certain destination with a single air waybill.

Consignor
Equivalent to shipper.

Consolidated ConsignmentA consignment of goods consigned by two or more shippers, each of which has signed an air freight contract with a consolidation agent.

/ By tjchinafreight ivy / Shipping

Export documentary collection

What is it?

The exporter (a client of UniCredit Bulbank) ships the goods to the buyer and presents the bank with documents related to the goods and their shipment, such as commercial invoices, bills of lading, cargo insurance, etc., with collection instructions. In the collection instruction, the exporter identifies the foreign buyer (payer), full details of the buyer's bank (collecting bank), a brief description and value of the exported goods, a full description and value of the type and number of documents submitted, and Conditions for handing over documents to the drawee.

UCB processes the documents and forwards them to the collecting bank, usually the buyer's bank, for processing and delivery to the buyer in accordance with the collection instructions. As instructed, the collecting or presenting bank releases the documents to the payer after paying the value of the documents, or according to a written commitment to accept/pay when due, or not to pay.

Under export documentary collection, the bank only receives and transmits documents according to the exporter's instructions on how to handle the documents, without any payment obligation to the exporter. Payment for documents sent on a collection basis depends solely on the goodwill and creditworthiness of the buyer.

A step-by-step guide to understanding export documentary collections

Broadly speaking, from your (as the exporter) perspective, the export documentary collection process can be broken down into five steps:

1. Terms and Conditions:

You and your importer agree to terms of transaction and payment, including the use of export documentary collections. At this point, you should also negotiate whether:

Acceptance Document (DA) – Once the importer agrees to pay later, a document related to the sale of the goods will be provided.
Payment Document (DP) – Once payment is made and finalized, the importer will get the document.

2. Shipment and receipt of documents:

You ship the goods and receive documentation from the carrier or freight forwarder that the shipment has occurred.

3. Submit documents to the bank:

First, fill out the export documentary collection application form and the draft. Next, submit these documents along with your shipping documents to OCBC, which is also known as the remittance bank during the process. Your remittance bank will then proceed to:

Forward these documents to your importer's bank, the collecting bank.
The collecting bank will then notify your importer that the documents have arrived and will release the documents when the payment terms are met (this depends on whether your payment term is DA or DP, as described in step 1 above).

4. Receive payment from importer and own the goods:

Importers will pay their bank and obtain documentation via DA or DP (as above).

5. Payment receipt from OCBC Bank to exporter:

OCBC Bank will deposit funds into your account immediately upon receipt of funds from the importer's bank (in the case of DP) or on the scheduled date when the draft has been accepted (in the case of DA).

Key point

D/C is less complex and less expensive than LC.
Under a D/C transaction, the importer is not obligated to pay for the goods before shipment.
If properly structured, the exporter will retain control of the goods until the importer pays the draft amount at sight or accepts the draft to meet the legal obligation to pay at a later date specified.
Although sea transportation can control the goods, it is more difficult to control air and land transportation. Foreign buyers can receive the goods with or without payment, unless the exporter hires an agent in the importing country to pick up the goods until the goods arrive for payment.
The exporter's bank (the remittance bank) and the importer's bank (the receiving bank) play a vital role in the letter of credit.
Although banks control the flow of documents, they neither verify documents nor take any risk. However, they can affect the mutually satisfactory settlement of D/C transactions.

/ By tjchinafreight ivy / Shipping

FOB Shipping Point vs. FOB Destination

Container ship in the harbor in Asia 

International business terms (incoterms) were designed by the International Chamber of Commerce (ICC) to simplify international trade by creating a common standard language, a globally recognized list of terms related to the international transport and transport of goods.
Importers and exporters need to be proficient and proficient in many terms. Some terms are more common than others, such as Free On Board (FOB), Free Carrier (FCA) and Ex Works (EXW). FOB, while common, is largely misunderstood.
Although their language is largely drafted in legal language, it is the responsibility of all parties involved in a shipment to ensure that they understand all Incoterms, otherwise a simple shipment can turn into a costly accident .

Incoterms are important for several reasons. If you find yourself wondering what FOB means in shipping, be sure to take the time to understand FOB shipping

Free shipping on board

The FOB point of dispatch, also known as the FOB origin, is when title and responsibility for the goods pass from the seller to the buyer when the goods are placed on the delivery vehicle.
Since the FOB shipping point transfers title to the shipment of the goods when they are placed at the shipping point, legal title to those goods passes to the buyer. Therefore, the seller is not responsible for the goods during delivery. FOB Shipping Point is a further limitation or condition of FOB as liability changes hands at the seller's shipping terminal.

For example, suppose that ABC Company in the United States purchases electronic equipment from its supplier in China, and the company has a FOB point-of-ship agreement. If the nominated carrier damages the package during delivery, ABC Company will be solely responsible and cannot claim compensation from the supplier for the loss or damage. Suppliers are solely responsible for bringing electronic equipment to the carrier.

Free destinations on board

Conversely, for FOB destinations, title transfers at the buyer's loading dock, PO box, or office building. Title to the goods passes from the seller to the buyer once the goods have been delivered to the place designated by the buyer. Therefore, the seller legally owns the goods and is responsible for the goods in transit.

Types of free destinations on board

  • FOB freight prepaid and allows the named seller to be obligated to pay the freight and have the goods in transit. The seller bears the risk of loss of or damage to the goods in transit. Title to the goods passes to the buyer at the buyer's place of business.
  • FOB shipping prepaid and adding the specified seller is obligated to pay shipping. However, the seller charges the buyer for shipping. The seller bears the risk of loss of or damage to the goods in transit because the seller owns the goods in transit. Title to the goods transfers to the buyer's place of business.
  • FOB freight collect specifies that the buyer must pay the freight upon receipt of the goods. However, the seller bears the risks associated with shipping the goods because the seller still owns the goods during the shipping process.
  • FOB freight collect specifies that the buyer must pay the freight. However, the buyer deducts the fee from the seller's invoice. The seller is responsible for the goods because the seller still owns the goods during shipping.

Main difference

Another key difference between the two terms is how they are calculated. Since the buyer is liable after the goods are shipped, the company can record an increase in its inventory at this time. Likewise, the seller records the sale at the same time. If the goods are damaged or lost in transit, the buyer can file a claim as the company holds title during delivery.

The accounting rules for FOB destinations have changed. In this case, the seller completes the sale on its records once the goods arrive at the receiving dock. That's when the buyer records the increase in their inventory.

There are also differences in the division of costs. For the FOB shipping point option, the seller bears the shipping costs and charges until the goods arrive at the port of origin.

Once the goods are loaded on the ship, the buyer is responsible for all costs associated with shipping, as well as customs, taxes and other charges. For FOB destinations, the seller bears all costs and expenses until the goods arrive at the destination. Once in port, all costs - including duties, taxes and other charges - are borne by the buyer.

/ By tjchinafreight ivy / Shipping

What is the Low Sulphur Surcharge

The low sulphur surcharge (LSS), low sulphur fuel surcharge or low sulphur fuel surcharge (LSF) is known to be derived from regulations originally agreed by the International Maritime Organization (IMO) in 2012 to reduce sulphur fuel emissions in ports and densely populated The coastline was burnt by cargo ships. Fuels with high sulfur content result in large emissions of sulfur dioxide, which are known to be harmful to public health.
From January 1, 2015, carriers will require ships passing through designated Emission Control Areas (ECAs) to use fuel with a sulphur content of 0.1% or less, a significant reduction from the 1.0% concentration fuel currently used in maritime transport . The Emission Control Area (ECA) to be enforced in 2015 includes the Baltic Sea, the English Channel, the North Sea, and an area 200 nautical miles from the coast of the United States and Canada.

The low sulphur surcharge is a surcharge imposed by the line to cover costs associated with the use of low sulphur fuels compliant with the IMO 2020 sulphur cap.
Despite the use of the term, different shipping lines have referred to it by different names - Low Sulphur Surcharge (LSS), Green Fuel Surcharge (GFS), Emission Control Area Surcharge (ECA), various amounts of low Sulphur Fuel Surcharge (LSF). ! !
All routes are said to be preparing to impose mandatory surcharges in addition to freight and other surcharges in 2019 on all trade routes, especially the ECA area.

Should the low sulphur surcharge be included in the dutiable value?

Article 5 of the "Measures of the Customs of the People's Republic of China on Examination and Approval of the Dutiable Value of Imported and Exported Goods" stipulates that the customs value of imported goods shall be reviewed and determined by the customs on the basis of the transaction value of the goods, and shall include the time from the arrival of the goods to the place of import within the territory of the People's Republic of China. Transportation before unloading and related costs, insurance. Article 35 stipulates that the transportation of imported goods and related expenses shall be calculated according to the expenses actually paid or payable by the buyer.

The low sulphur surcharge is a fee charged by the logistics provider to the relevant parties for the use of low sulphur fuel oil for its ships in the emission control area, which is closely related to the transportation process and is It happened before, so it belongs to the transportation and related expenses described in the "Measures of the Customs of the People's Republic of China on the Verification of the Dutiable Value of Imported and Exported Goods".

Under normal circumstances, if the transaction method of imported goods adopts FOB (free on board) terms, and the low-sulfur surcharge is clearly borne by the consignee of the imported goods, it should be included in the dutiable value of the goods and truthfully declared to the customs. If the transaction method of imported goods is CIF or CNF (cost plus freight) terms, it needs to be determined according to the specific agreement between the buyer and the seller. If it has been included in the freight and related expenses paid by the foreign seller, it will not be included in the customs value; such as If it is not included in the freight and related expenses paid by the foreign seller, and is actually borne by the consignee of the imported goods, it should be included in the dutiable value of the goods and must be truthfully declared to the customs.