Your supplier is in China.
That’s a guess, but most likely it’s true.
There are a lot of manufacturers there. In fact, according to one source, there are over 2,800,000 million factories in China of varying sizes. It is not surprising that you can get your items made there at a low cost.
Now that you have your products made, your next concern is how to ship them from China to the States. Of course, there are plenty of options on how you can do that. What you need to know is the most efficient and cost-effective way possible.
In this article, you will be learning about the options that are available to you, so you can find the means that would get the most out of your money and efforts.
You have several options when shipping from China to the USA. The main three are:
- Air freight
- Shipping by sea
- Express shipping
We’re going to be looking at the first two of these options, air freight and sea freight or shipping by sea.
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By choosing air freight when shipping from China to the USA, you could bring your products from the factory to your warehouse, or wherever you wanted it shipped in a matter of days.
Right now, only 5% of the world’s cargo is transported using air freight but it makes up 30% of its value. That means more valuable items are shipped through air freight.
If your products are valuable or if time is a very important factor to you, then shipping through air freight would be your best option.
The thing about air freight which you ought to have realized by now is that it is a lot more expensive. But the speed by which your cargo can reach the USA can be more important.
A strategy used by some merchants, especially startup Amazon sellers is to have a small portion of their cargo, say 5% to 10% shipped via air freight and the rest is shipped by sea. That way, they can have a small volume available in their stores even as the rest of the items are in transit.
Air Freight from China Process
Air freight shipping from China is quite easy and would require minimal action on your end. Here is a simplified process for it:
- You get the services of a freight company.
- You provide the details of your shipment to the freight company, including your supplier.
- The cargo is delivered to the airport by an arrangement with the supplier.
- The freight company will take care of the export clearance.
- The cargo is loaded into the plane and then flown to an airport in the USA.
- The cargo is unloaded and it goes through customs.
- The cargo is then delivered to the consignee address and the payment of taxes and customs fees are made.
Your supplier can take care of all these for you, but it is highly recommended that you do these yourself.
Another recommendation is that you get the services of an air freight forwarder. A freight forwarding company specializes in organizing air freight shipments. You should get one that is based in the States, so you can get more support when it comes to monitoring your shipment.
Shipping by Sea from China
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Sea freight shipping from China got a bad reputation in the past.
Some people think that it can be a great deal of trouble. In reality, it is part of a process that has been streamlined and established over the years.
Sea freight shipping has several players in the process. These are:
- Shipping company
- Custom broker
- Freight forwarder
The shipping company is the one that handles the actual shipment of goods. They know the correct way to package and handle shipments.
The customs broker will handle the documentation and obtain permits from the government. They can also handle the delivery of the items through trucking companies since they are usually located near ports.
We have talked about the tasks that are handled by freight forwarders. They would usually work with the customs broker.
Because sea freight shipping from China to the United States would involve lengthy travel time and may involve several port stops, it can be a lengthy process and on paper, it might seem complicated.
Here is the simplified process:
- The first part of the process is to move the cargo from the supplier to the location of the forwarder.
- The next part would be the customs clearance. This is needed in every port based on the regulations of the country where the supplier is based, which in this case is China.
- The customs clearance will be handled by the brokers as they are licensed for it.
- The next step would be the handling and loading with other cargo in preparation for the actual shipping.
- The freight forwarder will then pick shipping which will handle the actual transportation from one port to another. They usually do this based on the timeline needed for the delivery of the shipment.
- Once the shipment arrives at a port in the United States, it would have to go through import customs clearance.
- Now, the cargo will have to be offloaded from the ship and the shipment separated from other shipments and then preparing it so the consignee can then collect it.
The shipment can now be delivered to you or you can have an arrangement where it will be sent directly to another location, like say an Amazon FBA Fulfillment Center.
Image source: https://pixabay.com/photos/container-van-export-travel-cargo-2568956/
When shipping by sea freight, you must familiarize yourself with shipping incoterms. Incoterms are trade terms which are used internationally for determining where and when the cargo will be transferred.
The following are some of the more common trade terms used:
Free on Board Shipping (FOB) – This term is used to indicate when the ownership is transferred from the buyer to the seller.
Cost and Freight Shipping CFR Shipping – This term is used to indicate that the seller needs to pay for all the costs and the freight that would be needed to transfer the shipment from one location to another. Under CFR shipping, the risk of damage and loss is then transferred to the seller.
Cost, Insurance, and Freight Shipping (CIF) – Under CIF shipping, the seller is the one which will arrange the whole process of shipping the cargo by sea. The seller will also be the one to provide the documents needed to get the shipment once it has reached a port in the United States.
These are just terms that you need to be familiar with. Do not be confused by the fact that you will be the one to arrange for the shipment and that you will be the one to receive it as well.
FCL and LCL Explained
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FCL and LCL are two important terms that you must familiarize yourself with if you are shipping by sea freight from China.
FCL means Full Container Load, while LCL means Less Container Load.
Under FCL shipping, you will be paying for the whole container. This means your shipment will not be mixed with other items.
It does not matter if the container is not filled since you will be paying for it. Now, as you may have realized, FCL shipping can be very costly.
LCL shipping is the option that many Amazon sellers go for. Under LCL shipping, you will be able to ship an amount of cargo that does not take up a full container. This would mean that your cargo will be mixed with others that are headed for the same location as yours, in order to fill a container.
The charge in FCL shipping is per container, while under LCL, the charge is determined by volume, which is measured by cubic meters. LCL is ideal for small shipments because you only have to pay for the space used up by your shipment. It is a cost-effective solution and is cheaper than air freight shipping, most of the time.
For FCL Shipping from China, you only need to concern yourself with the following standard sizes of containers:
- 20ft Container
- 40ft Container
- 40ft High Cube
You might have to familiarize yourself when it comes to using cubic meters. Also, the actual volume capacity of a container might be different when it comes to different cargos and shipments.
Here are additional differences between FCL and LCL shipping:
- Under FCL, the container will be loaded at the supplier location.
- Under LCL, your shipment will be consolidated with others at the port or origin.
- Under FCL shipment, the bill of lading will be issued by the shipping line.
- Under LCL shipment, the bill of lading will be issued by the freight forwarder.
- LCL actually charges more when measured by shipping cost per unit.
Now, you might be wondering as to why LCL shipping charges more per unit when compared with FCL? It’s because LCL shipping would involve a lot of work. The consolidation of the cargo can be a long process as items should be sorted and grouped together.
At the end of the day, you would not feel the difference and the higher cost of LCL per unit.
Advantages of FCL Shipping
So, what are the advantages that you will get when you go for FCL shipping?
- It is easier to track FCL directly through the shipping company’s website. That way, you can predict its arrival with accuracy.
- Under FCL, your items will be safer. FCL means that your items will not be mixed with other shipments. There will be less risk of your cargo being damaged or getting lost since fewer people will be handling it.
- FCL can be processed faster because your shipment will be the only one that will be loaded into a container. Under LCL, the shipment will be consolidated with others first.
- As mentioned earlier, FCL is cheaper when the cost is broken down per unit.
These are the advantages of FCL shipping but remember that LCL is better when you are shipment is a small one. As your business progresses and your shipment grows bigger, then FCL may become the more cost-effective option for you.
Lead Times for Various Shipping Options from China
When you are choosing a shipping option from China to the United States, it is not just the actual cost of the shipping which you need to consider. You also have to think about the cost of missing sales if your items do not reach you on time.
Here are the lead times for the various shipping options from China:
When you choose express shipping from China, you should allow for three days. That can be faster if the supplier will drop off the items at a depot. There are even faster services than this but those are very expensive.
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The standard air freight shipping would take around 8-10 days. Now, you might be wondering as to why express shipping is faster than air freight shipping while both would use air transport in shipping your cargo.
The difference lies in the processing. Processing express shipping is a lot faster than normal air freight.
A door-to-door shipment from China to the United States would take 30 to 40 days. Most of that time is taken up by the actual transit of the ship through the ocean.
Custom delays and bad weather can also have an impact on sea freight. So, do not expect to get your shipment right away if you are shipping through sea freight.
Another important thing to consider when you are shipping from China is freight insurance.
Getting shipping insurance when you are shipping from China is very critical. This is because damage during transportation is very common. This is a reality that you have to face and accept.
Your cargo is not going to be handled in a gentle way. Starting at the factory of your supplier, it will be handled roughly, not because the intention is to damage it but because there is no time to handle everything with care.
The only way that you can protect yourself from all the potential loss that can hit you because of the damage goods is to have freight insurance. Without insurance, there is no way that you can claim compensation for the damages to your cargo.
There are several means that you can get your cargo insured.
- When you buy cargo through CIF shipping then your cargo is insured automatically. But you cannot assume that, so it would be best if you can get a copy of the insurance policy.
- You can also get shipping insurance through your freight forwarder. You can order for insurance that would cover the whole transshipment period.
Filing for an Insurance Claim
If you will be shipping from China on a regular basis, there will be a point in time when you will have to file for a freight insurance claim.
The good news is that filing for a claim is quite straightforward.
When you receive your cargo, the first thing that you ought to do is to check for damages. When you see that your cargo has suffered damages during the shipment, you need to act quickly.
You must provide the following info to your freight forwarder:
- Video or images showing the damage to the cargo.
- A list of the products that have been damaged.
- The value of each product that was damaged.
- Proof of the value of the products.
- Proof that you have received the cargo.
Ideally, you should provide this information to your freight forwarder within 48 hours after you have received the cargo, which is why you need to inspect your cargo as soon as possible.
You could receive compensation for the full amount of the cargo or at least a portion of its value. That would depend on the kind of merchandise and the amount of damage that it has sustained.
Usually, your freight forwarder will be able to assist you in handling the claim. You might not have to deal with the insurance company directly. Once a claim has been filed, you can expect a payment made to your bank account anywhere from 1 to 3 weeks.
The risk of damage in air freight is significantly lower when compared with sea freight, still, there might be a chance that your cargo could suffer some damage, which is why getting an air freight insurance is still highly recommended.
Tips to Save Time and Money When Shipping From China to the USA
Here are a few tips that you can use in order to save time and money when you are shipping from China to the United States:
Keep Track of Chinese Holidays
This is such an easy thing to do but a lot of importers forget to check this. Aside from the fact that most companies are closed during this time, there is also port congestion then, since many merchants want to ship their cargo as soon as possible.
Not being aware of Chinese holidays can cause a delay in your shipment.
Pick Experienced Companies
Picking a Chinese company that you will work with can be tricky if you are just starting to import. Working with experienced suppliers and freight forwarders is one way that you can guarantee to minimize the problems which you might face.
Completing Clearance Paperwork
One of the things that can cause delay upon the arrival of your shipment is the failure to complete the clearance paperwork correctly. Your shipment is going to be stopped at customs if the paperwork is not complete or if there are missing details.
Most of the time, errors are honest mistakes. But there are also times when some suppliers will make intentional errors with the aim of making more money.
Make sure that you pick a supplier that has worked with clients in the United States before. There are ways that you can find that out.
Get Documents Ready
Make sure that all your documents for the shipment are ready even before it arrives. One of the most important documents that you need would be the International Security Filing or ISF.
Keep in mind that shippers will file the ISF even if they don’t have all the info about a shipment. They usually do this even before the cargo is loaded into a ship.
Now, you can make changes to the ISF before your shipment reaches its port of destination.
Remember that if your shipment arrives without an ISF, or if it is filled with incorrect information, then you could be fined. The fine could be as high as $5,000. Other documents that will be needed in order to get the shipment through customs are:
- Entry or Immediate Delivery Form
- Bill of Lading
- Certificate of Origins Commercial Invoice
- Packing List
If you are shipping your cargo via sea freight, then you should have enough time to prepare all of these documents.
Find the Right Timing for Your Shipment
As you gain more experience in importing from China, certain periods are more expensive when shipping from China to the United States. For example, it can be more expensive to ship during the holiday season as there would be a shortage of workers willing to work then.
Pick the right timing for your shipment and save a great deal of money.
Packaging for Efficiency
This can be a bit hard to implement since you will not be the one doing the actual packaging but you can ask your supplier if there is a way that your items can be packaged in a more efficient manner, that would save on the amount of space that it would take up.
However, it is more important that your products are packaged in such a way that it will not be damaged during the transit.
Whether you will be shipping by air freight or sea freight, you can get your products from China into the United States. The process might seem to be complicated and there are a lot of things that you need to know which was not covered here.
Still, this article should give you a clear idea as to how you can get your products shipped safely and as efficiently as you can.