China is now the UK’s eighth largest export market. In 2017, the UK sold nearly £17 billion worth of goods and services and that figure is only going to increase.
As China’s economy grows and its middle class consumer base expands, the country will be an even more important market for the UK. For companies shipping goods to China, it can be a complex process with many things to consider. Whether you’re an experienced trading partner or expanding your business, these are the top tips to consider when exporting to China.
- Research Shipping Methods – When deciding to ship goods, companies need to consider whether they will handle the logistics themselves or enlist the services of a company to do it on their behalf.
- Transport Options – Deciding on the mode of transport that you choose to ship your items will depend on several factors; what your goods are, how much time you have, what sort of budget you have and whether you need to take special requirements into consideration.
- Sea Freight Benefits – If you are looking to ship bulky items of a high weight, sea freight is one of the cheapest options for you. If you are looking for advise on what the best option of transport would be for you, a freight forward company would be the best people to talk to.
- Cost – Before you ship your goods, it is important to know upfront the cost to do this. There are lot of potential hidden costs that you may not be aware of if you are not experienced in exporting goods overseas. Surprise costs may prevent your goods from arriving at its final destination and companies can potentially lose a lot of money.
- Declaring Goods – When importing goods from overseas, all companies must declare them with HMRC. This is done by completing a C88 form.
- Customs Charges – It is important for companies to familiarise themselves with UK Duty and VAT charges when importing goods into the UK. It is their responsibility to check and pay the correct charges for their goods. Any discrepancy could lead to delays and penalty fees which could be extremely detrimental.
- Shipping Terms – To avoid confusion, it is important for companies to understand basic shipping terms when transporting goods overseas. The following terms outline of the suppliers and buyers:
- FOB (Free on Board) – Where the supplier pays all the charges at the the shipment’s country of origin which effectively makes it ‘free’ for the buyer to have goods transported by ship.
- EXW (Ex-Works) – Where the buyer is responsible for all charges along the journey of the shipment.
- CIF (Cost, Insurance and Freight) – Where the supplier pays all costs to get the shipment to the UK. Once it is in port the shipment then becomes the Buyer’s responsibility.
- Commodity Codes – When trading with China, companies must understand and find the correct commodity code. This is a 10 digit code that is required on all imports coming from outside the European Union.
- Import Licence – Depending on what you are importing, companies may be required to hold an import licence. Companies need to be familiar on what goods are restricted or banned. There are certain import controls on goods such as food, textiles and firearms.
- Consider a Freight Forwarder – Shipping to and from China is a complex process that has many steps. A freight forwarding company will not only be able to take you through the process, they’d be able to handle all documentation and have local knowledge to ensure that your shipment gets to its final destination smoothly.
Why do Businesses Use Freight Forwarders?
Freight forwarders are seen as a necessary extension to many businesses. Mistakes made in shipping processes can be costly and delay goods getting to the places they need to go.
The wealth of knowledge and expertise they have on the process of importing and exporting is invaluable to companies and saves them both time and money. Even large Beneficial Cargo Owners such as Marks and Spencer work with freight forwarders in parts of their businesses. They are seen as a necessity and even regarded to some as an outsourced shipping department.
What Can you Expect from a Freight Forwarder?
Supreme Freight will listen to the shipping needs of your business and be able to tailor those to a logistically sound plan at every step of the way. From your budget and time requirements they will be able to recommend you the best method of transportation, whether by road, air or sea. As well as this a Freight Forwarder will be able to make recommendations on:
- Customs Clearance– From origin to destination, forwarders should be able to deal with all customs processes. This includes handling all paperwork and fees on your company’s behalf.
- Shipping Documentation– Forwarders should be able to deal with all shipping documentation including Bills of Lading, Certificates of Origin, letters of credit or any documents required by banks before payment is released.
- Insurance – A reputable freight forwarder will be able to recommend insurance services that will cover a shipment for loss or damage.
- Logistics and Supply-Chain Management – Which can include but is not limited to fulfilment, customs consultancy and contract logistics services.
If you are interested in importing goods to the UK from China, please get in touch.