Shipping is one of the most import step when you import from China. And shipping cost makes up a great portion in the total cost of importing. In this article, we will try to give you a complete guide on what shipping cost are made of, how much these shipping cost and the best shipping combination for your import business.
1: What is shipping cost made of?
Before we go deep into shipping methods, we need to have a better understanding about shipping cost at the very beginning. Basically, shipping cost is made of three parts: two types of inland freight and international freight.
1.1: Inland Freight
Inland freight includes two parts of cost: one is the cost from the factory to the appointed domestic port; another is the cost from the destination port to the buyer’s front door.
1.2: International freight
International freight is about the shipping cost from the domestic port in China to the destination port in the destination country. Normally, there are four main methods: sea freight, air freight and express.
2: Quotation on shipping cost
Quotations on shipping cost will greatly decide what shipping methods you will choose and how much you will cost on shipping. Now, let’s briefly go through these trade terms.
EXW is more about the product’s price. It does not include any other cost, like the service fees, freight fees or others. Therefore, if you are going with EXW price, it means you need to afford all the other fees yourself.
FOB is short for Free on Board, which means the seller would cover the inland freight before the cargo goes on board, while buyers need to cover the rest, including the international freight and inland freight in destination country.
CFR means that sellers would cover every cost before the cargo arrives in the destination port. And the buyer only needs to pay the inland freight in destination country.
- DDP & DDU
This kind of shipping cost means the seller covers all the shipping cost including the inland freight and international freight. These two are almost the same except that DDP covers the customs fee while DDU doesn’t.
CIF includes an extra insurance fee. As for insurance, we suggest that if you have concerns about any damage or loss to your cargo, insurance is a good choice.
3: Main shipping methods
The shipping methods we’re talking about here is about international freight. Basically, there are 3 main shipping methods, which are sea freight, air freight, and express. Now, let’s dive into each of the shipping methods.
3.1 Sea freight
#1: What is sea freight?
Sea freight is the most common shipping methods that importers tend to choose when importing from China. Normally, there are two ways of loading containers when it comes to sea freight: LCL (short for Less Than Container Load) and FCL (short for Full Container Load). And the way you load your goods will be greatly related to your cost on shipping.
LCL means your goods are not enough for a full container. In other words, you will be sharing a container with other buyers. And the cost for LCL is calculated by cubic meters.
FCL means your goods are enough for a full container. In this way, your shipping cost is calculated by the number of containers.
There are mainly 4 types of containers and here is the cubic meters that each size of container contains.
|Cubic Meter contained||28||58||68||78|
#2: Shipping cost of sea freight
At the beginning, we need to point out that sea freight cost is not fixed and it will change according to various reasons, as it is determined by shipping companies. As for this year, due to the COVID-19, shipping cost has soared greatly.
Normally, the shipping cost quotation your freight forwarder give us are available for maybe one week or half a month at most. Therefore, contact your freight forwarder or the shipping company for real-time quotation at any time.
#3: Must-know about sea freight
- Sea freight means time-consuming. Therefore, one thing that is important is to make orders timely. If not, your goods maybe weeks or even months late for you to sell.
- Sea freight is more suitable for large amount orders. If you place a rather small order, sea freight can be both time-consumer and money-consuming. Make sure you choose the best shipping methods and get the best deal.
- There are chances that your cargoes can’t make to the destination port or some damages happened to your goods. In this way, an insurance is back-up plan not to suffer a total loss.
3.2 Air freight
#1: What is air freight?
Air freight is a time-saving but high cost shipping methods, which is usually applied when the customer wants their goods to ship urgently or the value of goods is high, as the air transportation can be faster and safer.
Normally, air freight only includes fees from airport in China to airport in the destination country. Therefore, you may have to pay another express fees to make your goods deliver to the place you want them to, or you can pick up your goods in the airport at your convenience.
#2: Shipping cost of air freight
Shipping cost of air freight is calculated by its weight and bulk. The weight of your goods is divided into bulk weight and real weight. By comparing these two weight, the airline will choose a higher one for pricing.
How to calculate the bulk weight? (Note the difference of unit used in the following two calculating methods!)
Bulk weight = Length * Width * Height （m³） * 167
Or Bulk weight = Length * Width * Height （cm³） / 6000
For example, one of our customer ordered 5760 sets of sewing needles. The packing quantity is 1440 sets per box and the box gauge is 48*40*26 cm, with each box weighing 11.4 kg. How much does it cost for 4 boxes?
Do the math:
Bulk = 0.48*0.40*4 ≈ 0.20 m³
Bulk weight=0.20*167=33.4 kg
Real weight=11.4*4=45.6 kg ≈ 50 kg
And the airline quotes $4.3/kg + 60 customer clearance fee from Shenzhen.
Then the total cost is: $4.3*50+60=$275
After you do the math, you can compare the costs of different shipping methods and decide to choose which shipping methods for shipping.
#3: Must-know about air freight
- Air freight is an airport to airport shipping method. If you need to your goods to deliver to a certain place, you will need to arrange another inland shipment.
- There is a minimum weight for air freight, which is 45 kg and some will be 100 kg. The more your goods weigh, the cheaper the shipping cost will be.
#1: What is express?
Express is also shipped by air. While express means your goods are to delivered to your front door. As express is shipped by air, it is also fast and convenient. Normally, it takes 3 to 5 days for delivery. Due to the COVID-19, it may take 5 to 10 more days for delivery.
#2: Shipping cost of express
Express’s weight is calculated almost the same as air freight, with a slight difference. Here is how you calculate the weight.
Bulk weight = Length * Width * Height （m³） * 200
Or Bulk weight = Length * Width * Height （cm³） / 5000
Unlike air freight, express cost is calculated by the price of per kg. If it is more than 21 kg, they will quote you the price per kg. If the weight is less than 21 kg, 0.5 kg is usually used as the pricing unit, like the first weight is $20/0.5 kg and the additional weight is $3.3/0.5 kg.
Generally, we will choose DHL, FedEx and UPS for express. And they almost provide similar services.
|DHL is more safe, secure and stable, compared to the other two. Generally, if to ship documents, DHL is a better choice.||Compared with DHL, FedEx is cheaper under the same weight.||UPS is a little bit inferior to DHL and FedEx. And for some countries, UPS is more likely to get inspected at the customs.|
#3: Must-know about express
- When receiving your goods, don’t rush to sign for it. Make sure you inspect all your goods and there is no loss or damage to your goods. Otherwise, it will be difficult for you demand compensation. Sometimes, some of your goods may be stolen while shipping or delivering.