This blog is mostly intended to newer trading companies (except the last paragraph) requesting freight bids for their prospective products. As a licensed freight forwarder, we always favor thorough questions from the importers or exporters to prevent giving partial answers that can develop into a limited & not always resulting in accurate cost estimations.
For newer shippers, what constitutes thorough freight questions that would prevent shipping companies & freight forwarders alike from miss-quoting?
Freight Terms also called Incoterms – Schedule B number.
Access through us or follow the link for incoterms as well as the schedule B number used universally by customs here & abroad determining who pays for the freight, duty & insurance (Schedule B Number: https://2016.export.gov/faq/eg_main_017509.asp / Incoterms: https://library.iccwbo.org/clp/clp-incoterms.htm ) & know that the freight term you will choose will drive your quote & that the schedule B your duty rate(s). Everything being equal, you may see too many terms & get confused, you would not be the first one. So, here we have for you the easy, no time consuming, but rather useful choices that you the shipper, importer or exporter can use.
Freight Terms / Incoterms.
If you are an importer, I recommend (based on 40 years of experiences) that the freight term, also called incoterms gives you control over your freight cost as well as the level of service you would wish to receive.
When buying a shipment from overseas (importing), preferably, you should not give the suppliers more authority than producing the goods on-time & at the right price. Importers have the best outcomes when retrieving their shipments; a) from the factory door, incoterms: EX-FACTORY / DDP (delivery duty paid) giving yourself through your freight forwarding company here like ETC International Freight System & their international freight network, the control to handle the pick-up from the factory to the airport or port of departure, shipping, USA terminal, Customs clearance/duty & warehousing or door delivery to your site. Do not forget to have your forwarder, shipping company quote you for cargo insurance from the factory to your door. B) FOB (Free on board) overseas port or airport of departures. Free on board does not mean that the expenses from the factory (trucking) to the origin port/airport be free, it means the factory or its sales office will include this FOB cost into your purchase price of your shipment. So, all charges from the origin port / airport all the way to your USA site is for your account (shipping, USA terminal, Customs clearance / duty & warehousing or door delivery to your site. Cargo Insurance should also be purchased from your shipping company, the freight forwarder like ETC International Freight System.
You can refer to the Schedule B link, but your supplier should, must give it to you when the pricing inquiry takes place, as it drives your duty rate per item.
When initiating a prospective purchase with an international manufacturer or its sale office, always, depict your purchase(s) clearly with references, manufacturing & shipping delays. Require pricing from your supplier based on the Ex-factory or FOB departure port/airport. Further, to get a valid pricing & figuring out closely all of the future charges, you will need the packaging details: weights & dimensions per box & quantities. All the information should be contained into a purchase order numbered. If the sales happen, it must be based & acknowledged on the purchase order / pro-forma invoice you received from the suppliers (require it).
When selling a shipment to an international destination (exporting), again, shippers, preferably, you should not give the overseas customers more authority than paying the goods on-time. Exporters have the best outcomes when selling; a) from your factory / supplier’ s site to the overseas destination port or airport. Your Incoterms: CIF (Cost of freight + insurance) working with your freight forwarding company here like ETC International Freight System to handle the pick-up from the factory to the USA airport or port of departure, shipping overseas up to the port or airport of destination only. So, all charges from the destination port / airport all the way to the customer / consignee’s door is for the customer’s account (Overseas terminal, Customs clearance / duty & warehousing or door delivery to their site handled by the consignee).
Many new importers or exporters already go through the penance to locate the products. They find themselves in a swirl of confusion, time consuming details, and with any oversight could jeopardize profits. Unfortunately, most of the times, new importers & exporters experience serious, expensive grievances.
How to avoid costly mistakes & an ocean of aggravation?
Our consultant is on staff working in-house or on-site within the USA or internationally. Should you choose to develop your inbound or outbound (imports or exports) activities, Reid Malinbaum, founder & formerly owner of ETC International Freight System with 40 years of expertise & keen organization skills, sell his consulting deep knowledge with you at your site or from his office. You can choose from a level of services, consulting with him on new products & get directives with step by step instructions or letting him set-up your pro-forma invoice with your supplier(s) with cost of goods, shipping, customs charges & everything in between (inspection, storage, warehousing, storage & distribution) analysis as well as staying on the job from the start to the delivery to your site. Existing manufacturers, seeking audit & re-structuring for cost as well as speed efficiency, Reid can spend a few days or months to insure that you have the best set-up possible with the right vendors in place, whether in the USA or abroad. Just contact our company via our website: www.etcinternational.com or send Reid an email at Reid@etcinternational.com. This can be your best investment.
Happy shipping starts here.
Reid Malinbaum (Founder)
ETC Intl. Freight System since 1984