If you have shipped anywhere before, not the ‘buy-from-Amazon’ type of shipping, then you have an idea what headaches accompany the process.If you are a Serial Shipper, you have probably had your fair share of frustrations, bottlenecks, stresses, surprises, disappointments and so on.
For our new entrants, taking note of the points below can greatly have a positive impact on your shipping experience.Call this “Freight 101”.
SHIPPING RATES ARE NOT STANDARD
We all kind of assume that if it is the same task to be done and the same company carrying out the task then prices should be the same for all. However, that doesn’t always work, particularly in freight forwarding. This is because freight forwarders have different contractual relationships with different clients and with carriers. So, for same shipment, it may cost $100 or $40 depending on which freight company you are asking, or even if it is the same company, quotes may differ depending on which client is asking.
AIR FREIGHT IS NOT ALWAYS EXPENSIVE
It is popular knowledge that Sea Freight is cheaper than Air Freight, but that is not always the case. It depens on what you are shipping. This is because Sea Freight consolidation (LCL) charges a minimum of 1cbm, equivalent to 1000 kg and so if your package doesn’t come close to that weight, do consider a courier or regular Air Freight option
THE COST OF YOUR SHIPMENT DOES NOT MATTER
We often note that people find it difficult to pay high amounts for shipments of little worth, this is quite understandable. However, carriers simply don’t care. An iPhone valued at $1000 and weighing 500 grams would cost only $30 to ship while Shea butter valued at $50 and weighing 25 kg would cost $400 to ship. This is because carriers only care about weight and dimensions, and whether your cargo is contraband/not. The value of what you are shipping is only good for insurance and customs.
KNOW YOUR INCOTERMS
Incoterms are simple, internationally recognized commercial codes with precise meanings that help you know the totality of the service you are paying for. Services may include Freight only, Pick-Up, Freight & Delivery, Customs Clearing, Insurance and so on, depending on the terms you choose. You can visit the International Chamber of Commerce website to know more about Incoterms.
ACTUAL WEIGHT VS DIMENSIONAL WEIGHT
You put your shipment on a scale and it weighs 5 kg so why are you being billed for 8 kg? That is an issue that frequently comes up. The explanation is this: carriers came up with a method to ensure that charges are fair and equitable; so, you are billed based on how heavy your package is- the actual weight, or the amount of space it occupies on the vessel, i.e. dimensional/volumetric weight. The higher of the two is your chargeable weight. Volumetric weight for most air cargo is calculated by multiplying Length x breath x height in CM and then dividing your answer by 5000, the result is then stated in Kg.
BEWARE OF LOCAL CHARGES
After you have paid your Freight cost, it is not over. Once your shipment gets to its destination there are other local charges you need to take care off. This varies by country and by Mode of Shipping. Catch: For Sea Freight Consolidation (LCL), don’t hasten to book when offered “Cheap” Freight charges as you will be hit with much higher local charges so be on your guard. On the converse, higher freight rates usually come with lower local charges.
We hate to break it to you, but it still isn’t over yet. You may have to take care of Customs, Duties and Taxes, the process is usually referred to as “Clearing”. Don’t assume that the quote you receive includes duty costs if your freight forwarder does not say so explicitly- usually it doesn’t.Duties, taxes and levies are fully dependent on destination country customs. In some countries it is mandatory that you have a customs broker, in others you don’t necessarily need one. In some come countries you need to pay for clearing when exporting and importing, in others you only pay for clearing when importing. Check to confirm from your customs broker/agent when you see clearing itemized.HS codes will be helpful in ascertaining duty costs and requirements in advance. You can learn more about HS codes from the World Customs Organisation website.
Lastly, deal with the EXPERTS. You can always talk to us at Swiftly for all your logistics needs.
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