The value of international trade in goods is almost three times higher than the cost of international trade in services.
This is a consequence of the nature of some services, which makes it challenging to provide them across borders. Trade-in goods in EU countries account for 15% of world trade.
For this reason, the economy of all countries of the world depends on the cheapest branch of transport, maritime transport, which is often the only way of transporting goods across continents and between land and islands.
Maritime trade flows are the leading carriers of trade in the world and account for more than 65% of total international goods traffic.
The endpoints of maritime goods flow and the origin of all sea activities are ports. They function as a focal point of different economic, political and cultural forces. Among the ten largest ports in the world, six are from China and the leading one is in Shanghai.
In the world economic system, ports are an essential link in international transport logistics chains. Containers transport most of the cargo.
Container shipments have the largest share in the overall freight transport on maritime freight flows. There is almost no direction on which this type of traffic is not represented.
Among the most crucial maritime commodity flows are those transporting oil, coal, iron ore and cereals. General cargo, which consists mainly of industrial goods, is mostly carried by a container.
Containerization of a large part of maritime transport imposes the need for international standardization, specialized ships and container terminals.
Container shipping countries are in China, followed by Japan, Singapore, Taiwan, Hong Kong, South Korea and Anglo-America.
In each export and import business, the critical person who coordinates the transport, ie, the transportation of goods from the end producer to the end-user, is the logistics operator.
The primary task of the logistics operator places in the scope of importing and transporting goods from abroad.
The logistics operator has a few essential duties. He or she has to make the right choice of transport, enable it to overcome the mileage barriers, import license outcomes, provide customs guarantees, take care of transport insurance and goods in general until it reaches its ultimate destination set by the originator.
All these complex activities carry some risk. The logistics operator needs to know clauses, legal regulations of his country and the importing country. He or she also needs to have good relations with transport companies, insurance companies, shipping agents, banks, customs offices and other export participants - the import process.
For easier tracking of consignments on the transport route, the freight forwarding companies have their network of business units, which covers the essential traffic routes on which most business activities take place.
In areas where they do not have their business units, they hire other logistics operators, so-called correspondents. They may employ third parties for specific stages of the transport process.
Imports from China
The world's most populous country is the world's largest exporter.
China has the largest container ports whose annual traffic is exceptionally high. In addition to China, other Asian countries have seen a steady increase in container traffic. Still, the Asian region is one of the fastest growth in container traffic and by far the enormous volume of goods.
Its export value makes up about 13.5% of the total exports globally. There is usually only one reason for importing goods from China, which is the price. Chinese manufacturers sell their products at much lower prices than other suppliers.
If you are considering importing from China, you will need the help of a specialist to do this. In the shipping and freight forwarding business, it is essential to have contacts and know the right people who will manage your shipment in the best possible way.
When ordering goods directly from a supplier from China, a few things you need to know before you enter the import process.
Whether you plan to find a supplier online or travel to China for you, the quotes given to you by a Chinese supplier will almost always be in US dollars. They will base on an absolute parity on which the basis on which you pay customs duties will depend.
Suppliers from China usually form their bids on FOB, CIF, FCA (and rarely EXW) parity. According to the official international rules of Incoterms (International Commercial Terms), in practice this means:
FOB - “Free on Board” (place of destination): FOB is a term in international commercial law specifying at what point respective obligations, costs, and risk involved in the delivery of goods shift from the seller to the buyer under the Incoterms standard. It's a very commonly used parity in shipping and implies that your supplier will pay for all export costs, shipping to port and port costs in China. It is up to you to pay for transportation from the designated port to your desired destination.
CIF - Cost, insurance, and freight (port of destination): CIF is a standard method of import and export shipping. The seller fulfilled his obligation when he delivered the goods exported on board the ship designated by the buyer at the named port of departure. At that point, the risk over the products passes from seller to buyer. However, the seller is obliged to contract and pay all costs, freight and insurance, and unloading fees at the designated port of destination.
FCA - free carrier (designated place of delivery): The seller is responsible for the delivery of goods to a specific destination. This rule pushes the responsibility of delivering the goods to the buyers nominated premises onto the seller, so they have to organize shipping and various export documents. Obligations and the cost and risk of the goods pass to the buyer when the seller makes the products available to the carrier (or another person designated by the buyer), exported at the seller's premises (loaded onto the buyer's vehicle) or at another named place on the seller's vehicle. This parity is suitable for all modes of transport - air, road and container or multimodal transport.
EXW ex-works (designated place): This is the most basic shipping intercom term that a supplier can provide. The seller makes the item available to pick up at the factory and is not responsible for the product once it leaves the factory doors. The buyer is responsible for transporting it from the factory and covers all export and import clearances as well as insurance costs.
The two most important things are safe, risk-free imports and the total cost of goods ordered and imported.
Import from China is a complicated endeavor that needs to be dealt with effectively step by step to succeed in the customs clearance of goods.
Like any other country, China has its own rules and regulations that you must follow to buy its products and import them into your country.
Although complicated, imports from China is a successful tactic for many companies. Products made in China such as footwear, clothing, electronics, furniture, furniture, medical equipment and many others are famous worldwide.
Expected cash gains on imports can often be very quickly “dissolved” due to extended shipping and delivery times, rising or fluctuating shipping costs, foreign exchange rates, ignorance of customs import regulations and fees and unexpected delays.
What needs to be known about container shipping?
For maritime transport, a container is a technical transport that connects goods (cargo) and a ship into a chain.
There are various definitions of a container, but it is a generally accepted definition of the International Organization for Standardization (ISO2).
The definition states that a container is a transport device or box of rectangular, weatherproof, intended for transportation and stacking of cargo. The content inside a container is secured and protected from damage and other defects. The container achieves the security of cargo transportation from the point of loading to the destination.
The most general sorting of containers by purpose refers to the division into two primary groups - universal and special containers.
The primary characteristic of universal containers relates to the transport of packaged goods intended for general consumption. In contrast, the special containers are best for the transport of goods which require specific conditions of carriage.
By size, there are three types of containers - small, medium and large. Each container must meet certain conditions. It has to be resistant to impact during transport, stacking against one another, to handling stresses and to have an impermeable interior.
The three main types of containers used to ship imports from China include 20-foot, 40-foot and 40-foot HC containers, which are the most popular.
How to import from China and make the process more efficient?
The import process itself is not an easy task. It is very complicated, confusing and expensive, but also very cost-effective and efficient if you work with people who know their business.
For a successful, profitable and time-efficient import process from China, there are several essential things to keep in mind.
Identify the goods you want to import and specify the import tariff
If you choose the wrong products, you lose time and money. To be a successful importer, the first thing you need to do is find and select the right product.
Before embarking on the process of ordering and importing goods, it is crucial to identify the product and to know its tariff heading.
The tariff depends on the cost of customs duties on goods, which can be up to 20%, so you need to be sure that the products are correctly tariffed. Otherwise, you can have additional costs.
The tariff heading helps to determine whether certain goods (phytosanitary, veterinary checks, etc.) should be carried out during customs clearance on specific goods you plan to import.
All extra activities lead to costs that you must account for to know the values of the entire process of purchasing and importing goods from China.
Ensure the goods you want to import are permitted into your country
Certain types of goods are not allowed for import, while other specific products need a special import license. Different countries have different prohibited products.
Make sure that the goods you intend to import are subject to any of your country's permits, restrictions or regulations.
It is the importer's responsibility for assuring that the goods comply with a variety of specific rules and regulations.
Imports of unsafe goods that fail to meet specific safety requirements, health standards or that violate restrictions could lead you to reasonably high fines.
At the very least, such products would be detained and possibly destroyed at your cost.
Arrange your cargo transport
There are many costs associated with shipping goods, including container fees, packaging, terminal handling, broker fees, and transportation choices. To get a complete picture of shipping costs, you have to consider each of these factors.
Always consider delays that might happen during the process, such as the vessel might not sail as scheduled or the customs might hold the goods. Be ready for any difficulties and plan your entire organization accordingly.
For example, it takes at least 1 to 2 days for cargo transport from the factory to the port, so it is unrealistic to expect that everything will go according to your plan.
Choose the right freight forwarder partner
Logistics is a highly valued aspect of modern business. Shipping costs include direct and indirect costs of transporting the product from the point of departure to the destination market.
If you choose an excellent logistics provider, you will have a successful and smooth operation and manageable costs.
If the logistician misunderstands your job, it could end up costing you more. At worst, you would face a failed business model and lose money due to poor logistics.
Track your cargo and prepare it for arrival
Shipping goods internationally takes a long time. For example, it takes an average of 14 days for products to ship from China to reach the West Coast of the United States or 30 days to reach the East Coast.
It is essential to periodically check your commercial invoice, packing list, bill of lading and other related cargo-related documents.
If there's a problem you need to solve, you should know the steps your goods go through when being cleared by Customs of your country.
Due to the high-capacity, relative simplicity, speed in transshipment and the cost-effectiveness of shipping, maritime goods flows form the basis of trade.
As the world's second-largest economy, China has by far the most massive container traffic and has an impact on global commodity, economic developments and the level of global prices. These are the reasons why China is a competitive and desirable country when it comes to importing goods.
The future will undoubtedly bring an increase in the number of containers. Therefore, it is necessary to invest in the development of new technologies, which will enable greater automation of container terminals and meet the requirements of local and regional markets.
It achieves higher quality and faster worldwide exchanges and allows logistics operators to benefit most from operational factors.
For the safe, efficient, affordable import at minimal cost, the person you entrust the import process must be a professional logistic operator who knows his job.
The operator task is to make the right transport choice, to choose the size of the container, to take care of the goods, transport insurance and the overall organization of transport from the point of departure to the destination.
The main challenges of the logistics industry are time travel and its variations in transit times. Also, reliable and fast service is of value.
The import process itself is a complex task, but with logisticians who know their business, you have no reason to worry.
Once the goods arrive from import and pass customs, it is up to you to finally pick up your shipment. And if you choose Hubbig digital platform service, you can only wait for your delivery to arrive at your designated address.