- On January 23, 2018
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If Fred Wolf meant it when he said: “The real trick to life is not to be in the know, but to be in the mystery” he can’t have been thinking about freight. Like it or not, you’ll have to learn the ropes on making international shipments.
This article won’t help you master abstruse customs processes (sorry about that, but real ninjas train from childhood). You will, however, pick up valuable tips to avoid freight’s most common pitfalls.
I highly recommend that you also check out these two resources:
Budding freight ninjas, let’s start at the beginning – which turns out to be much earlier in the process than most people expect.
Freight Ninja Belt 1: The Freight Aspects Of Product And Sourcing
It’s tempting to lock in product, supplier, and sign a deal before even thinking about freight … but that’s a risky strategy. Follow this advice to keep it safe.
- Do an internet search to see whether there are import restrictions (banned outright, banned import from certain countries, anti-dumping duties, fumigation, etc) on your product. Better still, use an import restriction and duty estimate tool. You would be surprised how many seemingly innocuous items like sunglasses, leather linings, and some packaging materials that Customs are on the lookout for.
- Similarly, check whether your product is classified as a hazardous good. Some everyday products like battery toys are on air/ocean carrier lists of hazardous products.
- One more internet search, this time to check that you are not breaching IP laws. Copyright infringement doesn’t just relate to knock-off designer bags. If customs don’t investigate, Amazon may. So, if your product, even the wording on the package, is similar to another product, check that site for their IP details as well. Get legal advice if any hint of IP infringement comes up.
- Think incoterms when you’re striking a deal. International sales agreements must include one of these standardized freight terms. Don’t brush them off – selecting the wrong one is behind many international freight horror stories. Until you’re a ninja, cover yourself by either selecting one of Ex-Works (EXW) or Free On Board (FOB). If you select EXW expect a lower buy price because you’ll be paying for all of the freight. More experienced Freight ninjas should learn about incoterms in more detail.
- Check that your supplier is using the smallest, standard box size (that optimizes how they fit on a pallet), and that they don’t go overboard with additional packaging. This adds freight costs, especially for air shipments. That’s why pallets shouldn’t be used on planes – they can really blow out costs. Fragile products are an exception, and should use be double boxed with bubble wrap (Amazon prohibits styrofoam peanuts) in-between boxes.
- Make sure that your shipments is carefully labeled. Smaller shipments often get mixed up, so clearly mark cartons and boxes, especially carton count, country of origin and the FBA shipment tracking label.
- Until you have fully built trust with your new supplier, arrange for palletizing and packing to Amazon’s requirements to happen in the US. In a similar vein, arrange an independent quality inspection at the factory for the first shipment.
Okay, freight ninjas, now that you’ve earned your pre-Quoting belt belt, it’s time to take on the next level.
Freight Ninja Belt 2: Quoting And Forwarder Selection
Freight ninja’s prepare the information forwarders will need:
- Product measurements (from the packing list).
- Product description (from the commercial invoice).
- Full pickup and delivery details.
- Shipment value and ready for pickup date.
- Company tax ID (for customs records).
- Whether you want them to handle FBA prep.
- Whether you want cargo insurance. The answer to this, by the way, is a resounding yes – you want “comprehensive cargo insurance”.
- The freight mode you are requesting. Use the following table as a guide, as you can This freight rate calculator will give accurate freight estimates to all Amazon FBA warehouses for each mode.
< 50 kg
Refer individual courier weight and size restrictions.
50 kg <> 500 kg
Planes have a longer list of restricted cargo than ships.
> 500 kg
Ships are more prone to delays, e.g. bad weather, port congestion.
* Transit times are for a typical China-US door to door shipment. Each mode has a quicker premium option.
**Based on total shipment weight. Weight bands are approximate.
Finding a good forwarder, unless you’re lucky enough to have a trusted referral, is pretty much a random bet. Recently, however, the Freightos Marketplace has shortened the odds by posting forwarder ratings and reviews when you request a quote.
Consider smaller forwarding companies in your search. They are often better placed to focus on smaller customers and their shipments. Check which countries they specialize in and where they have trusted agents to take care of local arrangements.
Ten minute ninjas get to progress through three belts.
- First belt: Mastering freight aspects of product and sourcing.
- Second belt: Getting forearmed at quote request time.
- Third belt: Mastering the shipment process.
Freight Ninja Belt 3: The Shipment
Here’s a simplified end to end process from the shipment’s POV:
- It gets picked up by a truck in the export country.
- It’s then delivered to a warehouse near port where it is “consolidated” with other small shipments. Less than container load shipments (LCL) are “stuffed” into a shipping container. Air shipments are packed with other shipments on a skip.
- It’s trucked to port, for (possible) customs clearance before loading on the vessel.
- Once on board, it’s transported port to port.
- At arrival, it’s unloaded, “deconsolidated”, and cleared through customs.
- Finally, it’s delivered by truck – either directly to the final destination or via a prepping center.
Intertwined with this is the customs clearance process. Forwarders are often reluctant to pay your customs duties in advance. An alternative is to use Customs’ three days free-storage allowance, but that can become a last minute rush, especially if clearance happens over the weekend. Forwarders will often suggest another alternative, setting up your own account with Customs.
When importing to the US, you will need to take out a customs bond, essentially their guarantee of receiving all duties and penalties due. You have the choice of a continuous bond or single entry bond (plus an ISF bond for LCL ocean freight).
Ten minute ninjas, take a bow. There is of course a lot more to freight, but for the most part, your forwarder will handle this for you. Let me recommend those additional resources again (for two additional ninja belts!):
And you will probably find these two reference documents useful as well.
- Freight Information: Tips And Advice On Common Freight Shipping Costs, Charges, and Fees
- Key Freight Documents Explained
Not to mention, the Freightos Marketplace – a one-stop shop for instantly comparing quotes from 30+ forwarders, instantaneous shipment booking, helps you manage your shipment, and comes with 24/7 support.