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Import Shipping from China – A Freight Forwarder Case Study

We were recently approached by a UK based company, Nim s Fruit Crisps, to assist with the import shipping of some machinery that they were purchasing from China. Nim s had purchased the goods from the Chinese manufacturer on an FOB (free on board) basis. FOB is one of many international trade terms (INCOTERMS) which sets out who is responsible for different parts of the international shipment. It is generally recommended to agree to purchase your goods FOB when they are coming from China. FOB means that the supplier of the goods (the exporter) will arrange for your shipment to be delivered either to the port or warehouse in China. From there, you are free to arrange for any UK based freight forwarder to take control of the shipment and arrange for the freight to the UK, UK customs clearance and delivery to your door. FOB is best used when importing from China because it gives the UK agent ultimate control of the UK costs once the shipment arrives in the UK. We have found that sometimes if the exporter (the company/person you are purchasing the goods from in China) arranges the ocean freight for you, the cost may seem competitive compared to what the UK freight forwarder is offering. However, we have seen many importers stung financially, as once the shipment arrives in the UK there are extremely high charges to be paid upon import which cannot be avoided. It works whereby the exporter has arranged for a UK agent to accept the shipment once it arrives, for which the exporter expects a remuneration in kind for giving the shipment to that particular agent. The collection of this remuneration in kind unfortunately is built into those high charges you did not expect to be billed for. It s essentially a back hander .

Import Shipping From China – A Freight Forwarder Case Study

Fortunately Nim s agreed an FOB term, and so they contacted us to handle the ocean freight, UK clearance and delivery for them. Our agent in China assisted to liaise with the Chinese exporter to arrange the drop off of the machinery to the origin port: Huanghua. Huanghua port is just outside Beijing and Tianjin, in the north-east of China. We were then able to arrange the sea freight from China to Felixstowe port in the UK. As the cargo was not enough to fill a full shipping container, we arranged for the crated machinery to be loaded and shipped in a shared container. Opting to ship goods as an LCL (less than container load) shipment brings the cost of the freight down. Sea freight from China takes around one month. Once the shipment arrived in the UK, Mercator complied the documents, arranged to pay HMRC import VAT & Duty that was due on Nim s behalf, and then arranged for a truck to deliver the machinery to their door.

It is always recommended that you speak with a freight forwarder before you commit to buying goods, just to make sure that the commodities you are hoping to purchase will not be costly or impossible to import into the UK, to get advice about which Incoterm you should negotiate and to find out how much importing the goods might cost you. If you want to import goods from China, then get in touch to discuss or to get a quote: +44 2392 756 575 or email

Get a Quote for Import Shipping from China

References

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UK Ports Announce Solutions for SOLAS Verified Gross Mass (VGM …

The new SOLAS (Safety of Life at Sea) regulations will require all sea freight cargo to be weighed prior to shipping. The weight will need to be verified, so it will require specialist equipment either at loading or at the ports. The new VGM (verified gross mass) regulations will come into force as of the 1st July 2016 and are applicable worldwide. There has been some concern about how freight forwarders will be able to implement the new changes, how it might affect the costs of services and there have particularly been worries about the availability of the services required in order to verify the gross weight of UK export cargo. Lack of a verified weight of the shipping container will mean that the goods cannot be shipped. In the last few weeks, three of the major UK sea freight ports have come forward with help to assist shippers to comply with the VGM regulations. The Port of Felixstowe, DP World London Gateway and Southampton have all announced that they will be offering weighing services for UK exporters. The shipping containers will be weighed shortly after arrival at the port, and the weights will assist the ship planners to stow the cargo on the shipping vessels in an efficient and safe manner.

Mercator is a freight forwarder in the UK who exports goods from the UK on a daily basis. We have direct connections and accounts with Port of Felixstowe and the two DP World Container Terminals at Southampton and London Gateway. If you are currently exporting from the UK and are concerned about the new VGM regulations and how it may affect you, then get in contact. Our freight forwarding services cover all aspects of shipping, from UK pick up (and packing), drop off at UK ports, ocean freight, local customs and to delivery at your destination.

To discuss your UK export requirements, give us a call: +44 2392 756 575 or email

Get a Quote for UK Exports

References

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Important Changes to Freight Shipping Regulations

SOLAS Convention initiation (Safety Of Life At Sea) 1st of July 2016 VGM (Verification of Gross Mass) Container Weight Implementation

With less than six months to go before the implementation of the SOLAS VGM (verified gross mass) regulations for accurate declaration of ALL shipping containers globally, the freight forwarding and shipping market is full of confusion and misunderstanding over the new procedures and how it will affect us all, including our customers. The scheme, in a nutshell is designed to avoid any injury or damage caused by mis-declaration of container weight for all global container movements, in theory a good idea, but in practice the industry, including ocean carriers and freight forwarders alike, are having problems implementing effective solutions to make it viable. At Mercator Cargo we have been aware of the upcoming changes for some time, and have been working with carriers and professional associations to be ready for the start date.

The scheme offers two choices for declaring the correct container weight:

  • Packed/Loaded containers to be weighed using calibrated and certified equipment (such as weighbridges)
  • Weighing all packages, cargo, dunnage and packing materials, again using certified equipment and adding to the container tare (weight) of the unladen container.

Both of these options have obvious flaws. The lack of public or indeed any weighbridges in the UK is a huge problem, and finding one is also an issue, it would be most useful if a list of them was published, and made easily accessible to use for option 1. Calibrated equipment is the flaw in option 2 how can any agent, freight forwarder or carrier be sure that the equipment is calibrated and certified and is correct.

At the time of writing I must say I have huge reservations about this, and I am not alone. Of the carriers I have spoken with, most of them have no idea how they are going to comply with these terms, and it seems unlikely to change in the near future.

And the UK is fortunate that most export containers that are loaded are certainly