Thinking of Importing from Asia?
Importing can be really simple. To make your venture go off without a hitch follow these simple tips:
- Know your full expected costs – Calculate your Shipping Costs and UK Duties and Taxes
- Understand your shipping terms – These affect your costs and responsibilities
- Be sure that sea freight is the best option for you – Is your shipment too small or too urgent?
Once you are ready to place an order with your supplier come to us and we’ll provide you with an accurate quote and walk you through the shipping process…. in the meantime, make sure you know your stuff:
Know Your Shipping Costs
The first thing to take into account is your shipping cost. We can help you with an estimate for your calculations before you commit any money to buying the products so feel free to put the approximate shipment size in the quote request block at the bottom of the page.
What alters your quote?
- The size, volume (in cubic metres (CBM)) and weight (KG), of your shipment
- The shipping terms your supplier offers (FOB is easiest)
- The origin location/port of loading
- The delivery address
All our shipping quotes (unless you ask otherwise) will include delivery to your chosen location. Here’s how delivery takes place.
Another potential cost to consider would be Marine Insurance. This can be quoted for if requested. Insuring your goods gives you security and more confidence; you may never need it and its not a requirement but it’s always good to have it in place.
Demystifying Shipping Terms
Shipping terms (or Incoterms) are used when shipping cargo internationally to outline the responsibilities of suppliers and buyers. These terms include FOB, EXW and CIF/CFR. These are all abbreviations and have very different meanings…
FOB – (Free On Board) When using these terms it is essentially “free” for the buyer to get the goods on board the ship as the supplier pays all the charges in the country of origin. Your supplier will add these costs into the price of the goods.
Shipping on FOB terms is the often easiest way to import goods from Asia as you are in control of your costs. You pay your supplier for the goods, on FOB terms, and then a shipping company (such as us) to get them to your door, with no hidden fees.
FOB Shipping terms are usually referenced to a port. This is the port in which the supplier intends to ship from.
For example, your invoice may state “FOB Shanghai” shipping terms. This means your supplier will pay all the Chinese charges up until the shipment is on a vessel in Shanghai. These include haulage to the port, documents, port handling, customs clearance, export licenses etc.
When buying on FOB terms, you, as the buyer/importer are responsible for all the UK costs including:
- Freight costs
- Port handling at destination
- Customs clearance at destination
- Delivery to their final location
Want to know more about FOB Shipping?
EXW – (EX-Works) When using these terms the buyer is responsible for all the costs and risks from their supplier’s door, to their door in the UK. You (as the buyer) would pay all the costs to the shipping company to make the arrangements. It’s slightly harder than on FOB terms to get an exact quote until we’ve spoken with your supplier as the licenses they have in place and their distance from the port add variables. When working on EXW terms your costs are clear and there should be no hidden costs but it may take slightly longer to establish them.
If you are importing goods to the UK on EX-W shipping terms, outlining your responsibilities as an importer is pretty simple. You are responsible for all costs, arrangements and liability. From assuring the cargo is collected from your supplier’s factory all the way up to ensuring the goods are delivered to yourself in the UK. This isn’t as daunting as it sounds as we are here every step of the way to make everything as simple as possible.
Don’t panic even on EX-works shipping terms, Shippo can make the import process simple.
Want to know more about EX-W Shipping?
CIF/CFR (Cost, Insurance & Freight or Cost & Freight) – Both are very similar the only difference being is that on CIF shipping terms the supplier pays for the insurance as well. On these terms the supplier will pay for all the cost to get the goods to the UK. The buyers responsibilities begin once the goods are in the UK Port.
Shippo advises most first time importers to steer clear of these terms, as they can become complicated – while they may look like the cheap option, there can be a lot of hidden costs associated.
If you have not prepared there can be a lot of panicking and calling around for help (we get these calls every day)! We’d suggest you don’t put yourself in a situation where you are swimming in choppy waters.
- Your costs are out of control. It may look cheap but it’s very difficult to estimate what fees you’ll be incurring when the shipment lands in the UK.
- There will almost certainly be hidden charges (Chinese Import Service Fees etc.) that you won’t be prepared for if you’re shipping less than a container load of goods for the first time.
- Costs of services you expect to pay for can be inflated.
- There can be delays and extra costs when the goods land if you’re not fully prepared.
On CIF Terms it’s not the suppliers responsibility to inform you of your requirements as an importer. Make sure you are aware of everything you need to import your goods to the UK! Everything from having an EORI number to knowing what costs you’ll have to pay when the goods land.
Want to know more about CIF/CFR Shipping?
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If you are unsure on the shipping terms your supplier is offering, why not give our expanded Shipping terms page a read.
If you are still confused please do not hesitate to contact us at email@example.com or call us on 0203 384 0498.
So you now know your shipping cost and understand your shipping terms. The next step to working out your full importing costs is to understand UK Duty and Import VAT:
UK Duty & VAT
When importing goods to the UK from outside the EU you’ll have to pay UK Duty and VAT:
UK Duty is determined by a percentage given to the type of goods you are importing (All based on Tariff Codes!). Usually between 0% – 12%, you can work out your own Tariff code on the Tariff Classification website. The Import VAT rate usually stands at the standard rate (currently 20%):
VAT on Taxable Import = 20 % of [Cost to buy your goods] + [UK Duty] + [Shipping Cost & Insurance]
To make your calculations simple please feel Free to use the Shippo UK Duty & VAT Calculator.
You are importing goods from outside of the EU. If you pay your supplier $2500 (let’s call it £2000) for your goods, the UK Duty rating for these particular goods is 5% and the shipping quote is £300 then :
UK Duty = 5% of £2000 = £100
VAT = 20% of (UK Duty [£100] + Shipping [£300] + Cost of goods [£2000]) = £480
Therefore the total cost of duties and taxes payable to import these goods would be £580 (£100 for UK Duty and £480 for VAT) in addition to the £300 Shipping cost.
Following our tips can make calculating your importing cost as simple as this.
Is Sea Freight Right For You?
We don’t want you to choose sea freight if it’s not right for you so here are the main things to consider:
- The minimum we advise to ship to make Sea Freight viable for you is 100kg in weight, 0.5cbm in volume. Any smaller than this and you may be more suited to the use of courier service…. often your supplier can help with this.
- Sea freight shipment from Asia can take 6-7 weeks to ship from door to door (around 4 weeks or more on the water and a week at either end for processing). If your shipment is urgent or on a tight schedule sea freight may not be for you.
We are Specialists in LCL (Less than Container Load) Sea Freight Shipping but can provide FCL (Full Container Load) and we’re even able to provide an Air Freight service for anyone who is up against the clock!
We aim to make your experience of importing for the first time simple and stress free! We do everything from the paperwork in order to clear customs to arranging delivery right to your door! If you feel Why not take a deeper look at what we can do for you?
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If you are looking for a safe, cheap method of importing your goods, Sea Freight may be for you so why not fill in the form below to gain a quote?