A freight forwarder company can import your products from China with ease. This article from Sourcing Nova helps determine what to look for in a freight forwarder company. Making the right decision could turn a higher profit with your Chinese products. Sourcing Nova proudly has their own freightforwarding for their customers.
Sourcing Nova previously introduced product certificates that may be required in your destination country when importing from China. If you are very clear about what certifications your products need, then you can go through your country’s customs clearance without having to find a customs broker. If you do not fully understand the product requirements of your country, then Sourcing Nova suggests that you still consult customs for the correct information. If you don’t know where to find a customs broker, you can ask a domestic freight forwarding company for help. They usually cooperate with customs brokers. In this article, we will talk about the role of third party logistics, 3PL, or freight forwarders (the names are synonymous) for importing products from China. After reading this article, you will know how to choose a freight forwarding provider, and what kind of documents you need to provide. Additionally, you will gain understanding of the services a freight forwarder can offer.
The first question to ask when looking for a logistics service or provider is:
I need freight forwarding. Where do I look first?
Here are the three simplest ways to find the information:
- Use corporate yellow pages;
- Use Google’s search engine. If your port of destination is New York, query “freight forwarder company New York “(without quotation marks);
- Allow your supplier to recommend. Every Chinese supplier who does import and export works with several third party logistics companies.
The second question to ask when looking for a logistics service provider is:
What assurance do I get that the freight forwarder company is professional?
The easiest way is to speak to a company representative and ask questions. Provide your packing list and invoice; ask the representative to quote you a price, and then check their communication and business capabilities.
A professional freight forwarder company can often provide a complete quotation form within a short period of time. They will use a fixed format form that clearly lists the details of each service and can accurately estimate the validity of the quotation form. They can also use your product pictures and description information to determine what kind of product certification you need to clear customs successfully into the importing country. Freight forwarding companies are familiar with the terms of international trade and will tell you the responsibilities and obligations of both parties, export and import.
When you communicate with the third party logistics company, understand that the sea freight rates fluctuate. Rates are usually adjusted once a month during the low season and every half a month during the high season. Your quotation table usually states: Valid until a certain day. If the expiry date has passed, you need to ask the freight forwarder for another quote in order to accurately estimate the cost of purchasing products from China.
What types of freight forwarder are available for importing Chinese products?
There are many freight forwarding companies in this world. Some giant companies have tens of thousands of employees, and some companies have only a few people.
Which is the better choice?
This may not be a cut and dry decision for you and your business.
Sourcing Nova cannot simply say which kind of freight forwarder company is best. We can only say which kind of freight forwarder company is more suitable for you and the products you are importing from China. In order to figure out what 3PL company may be more suitable for you, we need to look at the pros and cons of big and small companies.
Pros of Big Freight Forwarder Enterprises
- Their company has offices throughout the world;
- They have their own heavy assets: warehouses, trucks and other facilities;
- They can get first-hand, latest information related to import and export;
- They have globally connected IT systems to track the geographic location and status of goods;
- They have large shipments and have bargaining power with shipping company carriers;
- They have standard specifications for their daily documentation operations;
- They can accurately estimate the full cost;
- They are familiar with all Incoterms.
Cons of Big Freight Forwarder Enterprises
- They want their customers’ shipments to be stable without too much unexpected fluctuations;
- They prefer to work with large customers. If you ship less than 20 containers per year, they will consider you a “small customer”;
- They have a lot of rules, and these rules are usually exceptionally strict. A slight non-compliance will result in many additional fines and fees.
Pros of Small and Medium-sized Freight Forwarder Enterprises
- They give more personal attention to small and medium customers;
- They have fewer rules, can be flexible and are more flexible, which is conducive to providing customized services.
Cons of Small and Medium Logistics Freight Forwarder Enterprises
- They rely on the network of large companies to track goods because they do not have their own IT systems;
- They are all asset-light enterprises, usually without their own facilities: ships, semi-trucks and warehouses;
- They usually act as coordinators and dispatchers, relying on subcontractors. In the busy seasons, they may not be able to order trucks, docks or cabins. This can slow your product delivery.
Some overseas importers think, “I need to cooperate with large freight forwarding companies.” Sourcing Nova suggests that you think through that decision carefully. If you own more than 20 containers each year to import from China, then a large third party logistics is the best good choice. Otherwise, you still need to find a suitable partner. Although small and medium-sized freight forwarder companies have certain disadvantages, do not forget that there is another trick in a Chinese purchasing company sleeve, Guanxi.
Sourcing Nova has its own freight forwarder company, which is registered in Yantian, Shenzhe. The company founder has worked and lived in this area for a long time. If you know something about Shenzhen ports, you will know that Yantian Port is the third largest port in the world.
Our logistics CEO and founder has been in logistics in the bonded warehouse here since graduating from university in 2005. He has 15 years of logistics experience, and in these 15 years, he has established long-term contacts with various parties, customs brokers, customs, shipping companies, warehouses and trucking companies. As long as it is related to logistics, he has close personal relationships to these companies and also has good guanxi with them.
In the West, Sourcing Nova often hears “Business is business” and “this is not personal.” In China, business and personal are usually inseparable. Once guanxi is established through the diner, bar and KTV, it is often unbreakable. At many important times, Sourcing Nova will have priority.
In the busy season, Sourcing Nova can book cargo space on an airplane when others cannot; we can also book semi-trucks and trailers when others cannot. While space may be taken to make room for orders for large companies like Wal-Mart or Target, we have the rights to keep our boarding space. We can get on board and ensure our own container will not miss the container yard closing date. While other freight forwarding services do not know where the goods are, we can check it with a single email. Other companies cannot book the storage location of the bonded warehouse in free trade zone. For us, this is not an issue. We have our own long-term lease in the Yantian Port Free Trade Zone. As long as we are still in the freight forwarder business, this warehouse will be reserved for us exclusively. Our shipping and air freight costs may not be comparable to those of the logistics giants, but Sourcing Nova still has many advantages over most third party logistics companies on the market.
With 15 years of working experience in third party logistics, we have sufficient ability to handle any professional business. No matter whether you choose to transport by sea or air; no matter which route you take; no matter where the port of destination is; whether you choose LCL or FCL; no matter what trade terms you choose (FOB, CIF, DAP, DDP, etc.); no matter if you are newbies or experts in importing from China, Sourcing Nova can solve all your problems.
What documents are necessary for freight forwarder companies to export from China?
It depends on the trade terms you choose.
If you choose FOB, then the Chinese freight forwarder company is only responsible for the customs clearance of the export port. In this case, there are three kinds of documents to be prepared:
This file is provided by the supplier and contains the information: SKUS (shows how many different products are in it), quantity (cartons, pieces, units, etc), total weight and volume; according to this data, the freight forwarder company knows that is FCL or LCL and can arrange the appropriate transportation means.
It tells us the amount of tax to be declared, and only products that have passed the tax clearance can be successfully cleared. Tax evasion will cause unnecessary trouble.
The freight forwarder company you selected in the importing country will help you handle the customs clearance procedures and costs required for the import. You select will check your customs clearance documents and costs before import
If you choose DDP, in addition to the above documents, China’s freight forwarder companies will also require you to provide product-related certification.
For example, FDA, FCC, and FPLA are common certifications in the United States; LFGB, CE, RoHS, and Coo Mark are common in Europe. The freight forwarding company in the exporting country needs to check these certification documents and deliver them to the partner company in the importing country. This way the partner company can handle customs clearance before the ship arrives at the port of destination.
Please note that if you choose Sourcing Nova as your purchasing agent in China, we will prepare all these documents and procedures for you.
What documents do freight forwarder companies need to clear customs and take delivery at the port of destination?
Each country and region has different requirements. Let us take the United States and Europe as examples to explain the specific situation.
If the destination is the United States, the documents you need are:
- Customs Bond: A Customs Bond is a contract between the importer and customs to guarantee that the importer will fulfill his obligations for any given imported goods. The main purpose of the customs bond is to guarantee the payment of import duties and taxes. Customs Bond is divided into Single Entry Bond and Annual Bond, and the specific amount depends on the size and nature of each company;
- ISF: Importer Security Filing: ISF, sometimes referred to as “10+2,” requires U.S. importers to declare 10 items, and shipping companies to declare two(2) items. This must be approved 24 hours before the shipment of the cargo and is required by the CBP, U.S. Customs and Border Protection. AMS or ABI systems send electronic filing data to U.S. Customs. In the ISF declaration operation, the importer can entrust a Chinese agent to do the declaration on its behalf. Importers who fail to file the ISF in time will face a fine of around $5,000.00;
- Bill of Lading: There are two types: House Bill of Lading and Master Bill of Lading. This is the carrier’s receipt of the goods from the shipper, and it promises to send the goods to the destination specified by the shipper. Master Bill of Lading, referred to as MBL, is issued by the Shipping Line (carrier) to the NVOCC Operator or Freight Forwarder receipt for the goods. House Bill of Lading, referred to as HBL, is a receipt for goods issued by NVOCC operator or Freight Forwarder;
- Packing List: The actual quantity, volume and weight of the loaded goods;
- Commercial Invoice with Harmonized Tariff Codes: This is the main basis for customs duties;
- Shipping Advice: The shipping advice mainly refers to the notification including the details of the goods issued by the exporter to the importer after the goods are loaded on the ship. It mainly includes the contract number or letter of credit number of the goods issued, product name, quantity, amount, name of transportation means, sailing date, place of departure and destination, waybill number, transportation signs, etc. and to be consistent with other relevant documents;
- Industry Certificates: Industry-related product certifications and labels, such as FDA, FCC or FPLA.
If your destination is Europe, the freight forwarder at the port of the importing country needs to provide the following documents to clear the customs:
- Commercial Invoice: Customs tax basis;
- Packing List: The actual quantity, volume and weight of the loaded goods;
- Certificate of origin: required by some countries, not required by others;
- Bill of Lading: A document of goods issued by a carrier to a consignee;
- Shipping Advice: Same as above;
- EC-Declaration of Conformity: Sometimes called the EU Declaration of Conformity, but the most common is the EC-DOC abbreviation. This is a legal document and must be accompanied by all CE marked products sold or traded in the European Union. This document declares that the product concerned complies with all relevant requirements of the European Product Safety Directive. It provides proof that the design and manufacture of the product meets the appropriate conformity assessment requirements. CE marked products must be accompanied by a declaration of conformity.
If you choose the FOB clause, you need to submit these documents to your own designated inland freight forwarder company. If you choose the DDP clause, Sourcing Nova will arrange all these issues on your behalf. All you have to do is wait at home for your products to arrive.
To Sum It Up
Engaging in the logistics of import and export trade is a complex task, and usually no importer or exporter will complete each step of the process independently. A trusted third-party logistics or freight forwarding company is necessary to arrange these documents properly. Sourcing Nova’s logistics leader has 15 years of working and living experience in Yantian Port, Shenzhen. Our guanxi with all parties in the production matrix helps our customers prioritize customs clearance and delivery. If you want to import products from China, you can rest assured that we use our own purchasing agency services and freight forwarder services. With our all-in-one package, you can focus on marketing and customer relations. Helping our customers succeed is our mission, and we will continue to work hard to make your purchase from China very easy and create for you a profitable business.
If you require the services of a freight forwarder for delivery of your products imported from China, Sourcing Nova has its own freight forwarder team on staff. We save your business time and money.