1. Know your shipping terms
Firstly you will need to clarify how you and your supplier split the responsibility for the shipment. Try to buy your goods on FOB (Free on Board) or Ex Works. FOB is usually the best way to control your shipping costs. When importing on Ex Works terms the buyer is responsible for the whole shipment from door to door. All costs and liabilities are with the buyer. These are the best ways of controlling your costs as the final price is clear from the outset.
Avoid CIF/CFR terms (where your supplier sends the goods to the UK), particularly for part container loads, as your costs can spiral out of control. CIF (Cost, Insurance and Freight) and CFR (Cost and Freight, sometimes called C&F or CNF) are widely used international shipping terms. They are identical apart from an additional marine insurance policy paid for by the seller. The terms allocate the division of responsibility between the shipper (usually the supplier) and the consignee (usually the buyer) in the process of shipping the goods from one to the other.
2. Check UK duties and taxes
UK duties and taxes can be complicated. As a customs clearance agent we can advise on this but it is always good to know the following:
· What is the tariff code for your product? This will give you the duty percentage payable.
· Is there any relief on duty and VAT via the GSP scheme? The GSP (Generalised System of Preferences) scheme is an EU directive that allows for products being purchased from suppliers in certain countries to be lower rated or even free from duty. This scheme is in place to allow businesses in developing countries to trade on a wider scale internationally. If you are importing certain products from countries such as India you may be entitled.
· Are there any anti-dumping or countervailing duties on your product? There can be anti-dumping duty on products like bicycles or crockery and the percentage could be over 100%.
3. Select the mode of transport
Which method will you use to ship your cargo? If the product is lightweight and valuable then air freight may be the best option but if the product is bulky and heavy then airfreight could be too expensive.
How urgent is the shipment? If you can wait 6 weeks you could make a substantial saving. With a small shipment (less than about 100kg) a courier may be a better option.
4. Check delivery details
If you work certain hours you may require a more specific delivery time. If goods are heavy and you don’t have access to a fork-lift then a tail lift may be your best option for unloading. Is there access for larger vehicles or will you need a small truck?
5. Do your calculations
It is vital to do your calculations before progressing with your order. The costs of an import do not stop at goods and shipping. Be sure to know your margins and landed costs. You should consider:
· Product cost – has your supplier quoted to sell you the goods on the desired shipping term?
· Duty and taxes – do you know how much UK duty and VAT you will pay on your items?
· Shipping costs – have you got a quote on the correct shipping term and is it to your door?
· Transit time – bear in mind that sea freight can take 6 weeks for delivery after the goods are ready. Are your goods urgent?
Importing or exporting always begins with your choice of transport. There are many factors to consider – the weight and size of the goods, the destination, when it needs to arrive by. What transportation… air, sea, train or road? Here we attempt to simplify your choices…
Air freight is typically used when transporting small, high value items or goods urgently required. These are placed in the hold of a regular passenger aircraft, or in a specially designed freight plane. Air freight options include buying a small amount of freight space on a regular flight, to chartering an entire plane yourself. The costs are typically high but it is much quicker to move goods by air than by sea or road.
Prices are calculated based on weight, value and volume of goods. Each destination will have different costs and timelines. The amount of import duty to the UK is calculated on the cost of goods plus the transportation fees. VAT is then worked out by adding the cost of goods to the transportation fees and the duty paid. Paying more for transport means higher duty and VAT costs.
Sea freight is a relatively cheap way to move large volumes of product around the world. Most importers choose to take either a full container (approx 20–45 feet long) or, for smaller quantities, to share space in a container with other shipments. It takes several weeks for sea freight to reach its destination but the cost is significantly less than using air transport (four to six times cheaper on average).
The costs associated with sea freight are usually worked out based on volume rather than weight and take into account the type and value of the items being shipped.
Sea freight is better suited to large volume shipments (over approx 100kg). In this case, the costs of sea transport tend to be significantly cheaper than any other method and the duty and VAT are generally lower too.
Rail transport is a cost-effective choice in some areas. European rail services are frequent and fast but they don’t offer the flexibility of road haulage, which can be an issue for importers. Rail transport is environmentally friendly but usually more expensive than moving goods by road. You’re also likely to need further transport to move cargo from the original supplier to a rail depot, and from your destination depot to your warehouse. This can add complexity and cost.
Moving goods by truck is a flexible option within Europe. The road network is good and using trucks means that it is easy to move large volumes of merchandise. Costs are reasonable but account tolls and fuel prices need to be taken into consideration and these can be high. There are also some risks – longer journeys mean a greater chance of congestion or other disruptions and road transport can result in more damage than air freight. Road haulage is a popular method of transport but often used in conjunction with sea freight to move items for longer distances at a good price.
Need further information? Please contact us for expert advice on importing or exporting your goods… https://allstarcargo.co.uk/
What you will need…
Importing into the UK involves many different steps and documentation. Due to Brexit, companies have faced further challenges with extra paperwork and administration. It can feel daunting at first with so much to learn. The key is to be organised and know which forms are relevant… read more…
1. What is an EORI number?
EORI stands for Economic Operator Registration and Identification. Any individual or business involved in importing or exporting must have an EORI Number. If your business is VAT registered, you probably have an EORI number already, as it is usually generated automatically when you register for VAT. If not, you can apply online and get it within a few days.
2. What details should the invoice/packing list include?
Your packing list is an inventory of the contents of your consignment. It includes information required for international customs, such as the size and number of your parcels, and an itemised breakdown of your consignment contents. They are now required for UK-EU shipments.
3. Check if you need a licence or certificate for your goods
There are special rules and you may need to get licences or certificates if you are importing goods such as animal products, plant products or human medicine.
4. Shipping docs i.e. AirwayBill (AWB) or Bill of Lading (BL) or Movement Reference Number (MRN)
These are like a receipt, issued by agents, air or shipping lines when they accept goods to be transported. They also form part of a contract of terms and conditions for the movement of your goods.
5. Full KYC instructions: ID, Deferment Account Number (DAN), delivery address, etc
You will need detailed KYC (Know Your Customer) instructions. A deferment account provides an easy solution for your customs duties and taxes. When goods are imported into the UK they may be subject to import sales tax and customs duties. These duties must be paid in full to the customs authorities at the time of import.
As a reliable and experienced customs clearance company we can guide you through the often complex imports process. Contact us…
Copyright © 2017 Allstar Logistics Limited - All Rights Reserved.