When it comes to importing from China, it can be a complex and confusing trade lane. First time importers from China need to make sure that they are familiar with the marketplace and understand their obligations and responsibilities when importing goods from China. FPF Global have a compiled a brief overview of “10 Things To Consider”, when importing from China and we hope that this short guide, will enable import clients to understand the shipping process in more detail.
Much of the information below is relevant to not just the China import trade lane, but can be used for other import shipments that are arriving to the UK from a Non EU Country.
1. What is the best mode of transport when importing from China?
Deciding on how best to transport your goods from China to the UK, will be determined by what it is you are looking to import and also the weight and size of the goods once packed. As a rule of thumb, transporting small or lightweight items from China to the UK, is usually a lot more cost effective by air courier (also referred to as Express). An importer should not be confused by the term “Express” and thinking that this means expensive! Carriers that are handle small or lightweight items, will always be a more cost effective option, when compared to traditional air freight or sea freight services.
If you are looking to import larger, heavier or bulkier items from China, then the likelihood will be that either a standard air freight or sea freight service will be your two options. To transport goods which are heavier or larger by Express, will mean the cost will be expensive and also, some carriers will restrict the size and maximum weight which they will carry on their services.
When choosing whether to transport by air or sea from China, you need to consider how quickly you require the goods in the UK. Using a general guide, importing from China to the UK by sea freight is on average 29-30 days port to port, with some ports have faster sailing times. From example Yantian/Shenzhen to the UK, has a sailing time of 24 days and Tianjin to the UK has a sailing time over over 35 days port to port. When compared to air freight services from China, the transit times are a lot faster, but obviously this comes at an increased cost. Naturally there will come a time when your shipment is a more cost effective by sea freight than air freight, but if you are importing weights of 50 – 150 kilos, the goods are dense and especially if the terms are Ex-Works, it may well be worth always checking the air freight price versus a sea freight price.
2. I am purchasing FOB from China, what does this mean?
When purchasing goods from overseas suppliers, it is worth familiarising yourself with Incoterms (also known as International Commercial Terms). Incoterms identify the responsibilities of a supplier and a buyer and will determine who is responsible for which charges within the shipping process.
The most common incoterm when importing from China is FOB which standards for Free On Board. When purchasing goods under FOB Terms, the pro-forma invoice/sales contract will usually display the incoterms. So as an example, if you were purchasing goods from a supplier in Shanghai, the terms would be shown as “FOB Shanghai”. Taking this example a step further, under FOB Shanghai terms, the supplier will know that he is selling the goods to the buyer, but more crucially, within his quote he also needs to factor in his cost to transport the goods from his factory to the port (or airport) in Shanghai. In addition he is also responsible for paying the local charges in Shanghai, such as export customs clearance, documentation fees, terminal handling/airline handling and some other local fees. Under the FOB Terms, the supplier’s responsibility is to get the goods to the local port/airport and having once done so, the responsibility then falls to the buyer of the goods to pay for the shipment from Shanghai to their door in the UK. Take a look at our guide below giving details of the different types of Incoterms and who is responsible for each part of the shipment.
3. What information do I need to provide to obtain a quotation?
When it comes to obtaining a shipping quotation from China, you need to be able to provide your freight forwarder with certain information for them to be able to provide you with an accurate freight quotation. Simply saying “I have some boxes to send from China to UK” is not very helpful and will mean there being a delay in the freight agent being able to confirm your quotation for importing from China. Ideally you need to be providing the following information in order obtain a quotation and the fastest response to your enquiry:
– The gross weight (in kilos) of the cartons/pallets/packages
– The dimensions (in centimetres) of the cartons/pallets/packages, along with a total quantity. If the cartons/pallets/packages vary in measurement, make sure to include all items
– The terms of shipment, FOB, Ex-Works etc.
– Where you require delivery to once the goods have been customs cleared at the UK airport/seaport of arrival
By providing this information to your freight forwarder, you will be able to obtain a shipping quotation from China a lot faster.
4. Do I need to obtain an Import Licence to import goods from China?
Most products that can be imported from China will not require an import licence. However as the importer, you are responsible for ensuring that you have the required import licence in place, if a licence is required for the products you are importing from China. If you are unsure, take a look at the following government website for guidance Guidance on Import Licences
5. I’ve heard stories about Peak Season Surcharges (PSS) what is this?
Peak Season Surcharges (PSS) are surcharges which are implemented by airlines and shipping lines, when there is a high demand of import cargo from China. Typically this situation occurs with the build up to the Chinese New Year, which is also referred to as Spring Festival. Virtually all Chinese people will take a long holiday and leave their major Cities and return to their family villages away from the hustle and bustle of City life. This period of Spring Festival happens towards the end of January and lasts a good a few weeks. During this holiday period, many businesses either close or run skeleton staff, so getting emails/messages replied to can take a lot longer than usual.
It is therefore worthwhile planning for the major issues that can present themselves during this time when trying to ship goods. Firstly it is always like that the import rates will fluctuate and quite often “peak season surcharges” are implemented, meaning that freight charges become that more expensive. You should where possible try to have your cargo ready and on a plane or ship prior to this busy time. This will remove the risk of any potential delay and/or higher freight costs.
6. What is a commodity code and where do I find this?
A commodity code (also referred to as a tariff heading, harmonized code or HS code for short) is a numerical reference, that identifies the type of product(s) you are importing into the UK. All goods being imported will have a commodity code and this must be correctly declared at the time of making the import customs declaration at the port of entry. If you are importing the same product time and again, then you will only need to identify this number once. However, if your import shipments from China consist of multiple products, then you will need to be able to provide your customs clearance agent or freight forwarder with a breakdown of each commodity code and the value associated with each product. This is because import duty varies from commodity code to commodity code, so depending on what you are importing, will determine the percentage of import duty that is payable. If you are unsure on the commodity code for the product(s) you are importing, you can search for free using the Trade Tariff on the government website.
7. Will I need to pay Import Duty and/or Import VAT from China?
If you are importing goods from outside of the European Union, then you will be almost certainly need to pay import Duty and/or import VAT. There are only a handful of times that import Duty/VAT is not payable, such as importing a low value item less than £18.00, or importing used personal effects which you have owned for at least 6 months. Other than these scenarios, you will be having to pay import Duty and/or import VAT when importing from China. How much you pay in import Duty and/or import VAT is a little like asking “How long is a piece of string?”. The amount you pay to HM Revenue & Customs is determined by a few factors, namely the following:
– The purchase value of the goods
– The freight cost & UK Landed cost
– The commodity code(s) applicable to your imported goods
These 3 pieces of information are crucial when calculating your import Duty and/or import VAT liabilities.
8. How long will it take to ship my goods from China to UK?
Due to the size of the country, there are numerous ports that goods are shipped from and therefore there is a range of sailing times, depending on the port of departure and routing. As a guide however, FPF Global is able to offer sailing times for its sea freight customers of around 24 days port to port from places such as Shenzhen and Yantian. From Shanghai and Ningbo, the sailing times is around 28-29 days depending on the UK port of arrival and frequency of sailing.
For those customers sending goods by air freight, naturally transit times are a lot faster. Direct flight options are available from places such as Beijing, Shanghai and Hong Kong, with airport to airport transit times of just 1 day. These direct flights will be very expensive, when compared to indirect or more economical carriers. Generally speaking 3-4 days is an average, with some flight options taking a little longer of 5-6 days depending on routing.
9. My supplier is arranging my LCL Shipping from China, how does this work?
If you are arranging an LCL (Less than Container Load) sea freight shipment from China to the UK, we would urge you not to leave the shipping to your supplier. From our experience it is not wise to purchase shipments under CIF or CFR terms from the Chinese supplier, due to the way the Chinese marketplace is. From our many years of experience in the shipping from China market, we have seen some very underhand pricing take place, where the UK client believes they are paying a very low price for shipping, but in reality, the underpaid charges in China, are simply added to the UK destination charges, which the UK importer is not always aware they will be having to pay. We would always advise an importer to purchase under FOB Terms or Ex-Works, when shipping LCL shipments from China to the UK.
FPF Global will be shortly publishing a post on our blog about this very subject and will be providing an overview of what can be done to avoid these excessive fees when importing from China. In the meantime if you would like to discuss the possibility of changing your terms of shipment to FOB instead of CIF or CFR, please call our office on 01256 861474.
10. I am planning to sell my products or goods on Amazon, can FPF Global help me?
Yes FPF Global are very well experienced in handling shipments from China that are for onward delivery to an Amazon Fulfilment Centre. We are able to arrange delivery using a major parcel carrier to both UK and European Amazon warehouses, as well as arrange pallet deliveries and full trailer loads. We have Amazon FBA shipments arriving daily by air freight and sea freight, from a few cartons, to full container loads. Get in touch with FPF Global today to discuss your next Amazon FBA shipment.