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Avoid these mistakes when Shipping to Amazon FBA: China to Australia

Throughout 2021 we’ve seen a rise in new customers specifically creating their own ecommerce businesses in Australia – because of the pandemic restrictions, some people saw an opportunity to invest time into their passion, some people decided to use their time to build a business – ecommerce is the intersection of these. As a direct response to this, we’ve seen an increase in mistakes being made when shipping from a supplier in China to Amazon’s FBA in Australia.

Shipping Cargo China to Australia

Not knowing landed costs before manufacturing goods

One of the most commonly overlooked costs for new ecommerce businesses is not accounting for shipping before ordering their product with suppliers. As a freight forwarder, Personalised Freight Solutions guides businesses at all stages to help avoid situations like this where a company’s margins and cash flow are eaten up prior to their products arriving at Amazon’s warehouses in Australia.

Some of these costs included (but limited to): 

Duties, customs, taxes and shipping costs entering Australia

When hosting products on Amazon’s marketplace, Amazon see’s this process as “companies expanding their business” therefore the import/ export requirements and responsibilities being placed on the seller (company wanting or currently selling items on Amazon). For any international goods entering Australia (and for the majority of countries around the world), there are duties, taxes, shipping and customs costs associated with the international cargo shipment (this varies depending on the weight, height, density and category the product being transferred falls within). 

Failure to comply with these additional costs will result in Amazon refusing to accept the products shipped to them. Amazon clearly states this on their website, within their import and export inventory under Australia, highlighting that, “it is your responsibility to comply with all import and export laws and to ensure that the imported goods comply with applicable laws and regulations…  Amazon will not be responsible for or collect any duties, taxes or shipping costs associated with FBA inventory. All shipments are required to use Delivered Duty Paid (DDP) delivery terms. Any shipment arriving at an Amazon fulfilment centre with collect charges, including any duties, taxes, or shipping costs, will be refused without further concession”.

Shipping to multiple Amazon warehouses

As Amazon randomly assigns FBA warehouses when shipping plans are created – this means potentially the shipment can be divided into multiple locations, which can potentially increase the overall shipping costs. 

Goods in transit insurance 

To ensure your cargo is covered throughout its international journey we strongly recommend taking up cargo insurance. Due to cover and circumstances differing, we recommend speaking directly to your provider or calling us today on 07 3207 9537 and speak directly to our industry specialised team on what type of cover meets your needs – from there we will either be able to assist you directly or point you in the right direction.

Alternatively, you’re able to receive an online international freight insurance quote on our website.

Leaving shipments to suppliers

 A supplier’s and manufacturers primary source of business, is in the creation of goods – not international imports and exports. It’s important to highlight a supplier’s primary focus, as international shipping (especially with Amazon specific requirements) means keeping up to date with ever changing Amazon FBA preparation, customs clearance and the country laws of importing goods of the intended destination.

By working with freight forwarders (who specialise in international shipping), not only are they immersed with requirements and legalities – they also have extensive networks, who they work with regularly. Meaning, if there is a problem that arises they’ll have the time and resources to solve it. In comparison, to a manufacturer who potentially has a single method of working; not monitoring shipments in transit, not being able to dedicate time or have access to resources to stay up-to-date with changing legislation/ legal requirements for importing destinations and not having the networks when issues arise.

Shipping plans (or lack thereof)

Shipping plans are created as it enables the person/ company or in this case Amazon, to be able to identify what the inbound goods are and who they belong to. We recommend trying to make your shipping plan early, to ensure that your product you’re intending to ship doesn’t have restrictions in place. 

If you have any questions about creating a shipping plan or would like to work directly with Personalised Freight Solutions to see how you’re able to improve the current plan you have in place – call our industry specialised team today on 07 3207 9537. 

Not evaluating direct vs indirect international shipping to Amazon fulfilment centres

Cargo Warehouse Inventory Warehouse Cargo Warehouse Inventory Warehouse

There are two options when evaluating shipping your products from your supplier in China to Amazon’s FBA warehouses:

  1. Directly ship from China to Amazon’s FBA warehouses.
  2. Shipping to yourself (or a 3rd party) to then ship the goods onto Amazon’s FBA warehouses.

1: Directly ship from China Suppliers  to Amazon’s FBA warehouses.

As it sounds, directly shipping from your supplier/ manufacturer in China to Amazon’s warehouses is exactly that, shipping directly – you are also able to choose your own freight forwarding provider (outside of Amazon and your supplier). Shipping directly, is typically the best option when a consistent and long term relationship has been established.

Benefits of Directly Shipping from China to Amazon’s FBA warehouses in Australia

          • Faster end-to-end times: by not having to make multiple shipments/ stops prior to reaching the final intended destination, the goods inevitably reach Amazon faster.
          • Money saved: on potential 3rd party costs of storing your goods + additional shipping costs. 

Challenges of Directly Shipping from China to Amazon’s FBA warehouses in Australia

          • Complex shipping plans required: when shipping directly to Amazon’s warehouses, there isn’t one centralised location. Instead there are multiple warehouses – which require specific labelling and requirements (packaging and shipping standards set by Amazon). 
          • Not being able to inspect goods prior: because the product being shipping, came directly from the supplier you’re unable to review the quality.

2: Shipping to yourself (or a 3rd party) to then ship the goods onto Amazon’s FBA warehouses

When trialing a new supplier, making your first few shipments or having just started your business – typically, the cargo is sent to the business or a 3rd party to ensure that the quality of the goods and Amazon’s processes are followed.

Benefits of Shipping to yourself (or a 3rd party) from China – prior to Amazon’s FBA warehouses in Australia

          • Goods are able to be inspected: ensuring that the quality is to standard prior to selling.  
          • Less likely to be rejected from Amazon’s FBA. 
          • Potential money saved: by initially importing a larger quality of goods and storing on premise of your business (the potential money saved here, is by ordering in larger quantities).

Challenges of Shipping to yourself (or a 3rd party) from China – prior to Amazon’s FBA warehouses in Australia

          • Complex shipping plans required: with more moving parts, typically businesses will want the assistance of a freight forwarding company to assist them.
          • It takes longer: to reach Amazon’s warehouses.

Not obtaining freight forwarding quotes

We get it, when running a business time is tight. When presented with an option which comes across as potentially requiring less steps (i.e. working directly with your manufacturing to ship your products), it can be tempting to want to say yes and “just get it sorted”. By not reaching out to specialists who worked directly in international shipments (freight forwarders), the potential can be damaging for businesses.

Think of freight forwarders as your external shipping department, they’re able to assist in end-to-end shipping management, including customs clearance, cargo transit insurance and keeping up to date with changes made for imports and exporting requirements for any of your intended destinations around the world. Initially, it may seem like time is what you’ll save when working with a freight forwarding company but their specialised skill set also includes their vast networks that they have around the world (which are unable to be made, unless you’re working day in and out within this industry). These relationships enable not only better pricing, but also more options available to them and clearer communication. 

Under Amazon’s Seller Central within an article specifically for Australian sellers, Amazon highlights the value of working with freight forwarding companies, “although you may want to handle some or all of these import/export steps yourself, it can be easier to hire a logistics provider such as a customs broker or a freight forwarder to handle the process for you. These providers may have the expertise and the time to make sure that your inventory moves from one place to another in a timely and secure manner”.

If you haven’t to date or have been questioning if working with a freight forwarder will be worth the cost. Ask yourself, how much time, money and resources are you willing to invest for potential errors and mistakes made. 

Not using a customs broker

Customs brokers help businesses to adhere to Governments laws and regulations when importing and exporting goods between the cargo’s country of origin and destination. In Australia, goods which enter the country are required to have a declaration submitted, the Customs Act 1901 (Customs Act) provides that only the owner of the goods or a licensed customs broker are able to submit this declaration.  

By utilising customs brokers, companies are able to avoid delays, fines and complications when navigating the Australian Border Force and Quarantine regulations – primarily to mitigate risk by leveraging specialists knowledge in this field.

Not accounting for Chinese holidays

Chinese New Year

 There are a number of holidays throughout the year in China, which have the potential to impact shipping timelines and costs of shipping. While this might seem obvious at first, throughout the year it’s easy to get caught up in the day-to-day operations of running a business. 

We recommended copying the holidays below and adding them to your calendar, so that you’re able to plan accordingly with your international shipments throughout the year for 2022: 

  • Chinese New Year Holiday 1st-6th February 2022
  • Mid Autumn Festival 10th-12th September 2022
  • Golden Week Holiday 1st-7th October 2022

If you have any questions about creating a shipping plan or would like to work directly with Personalised Freight Solutions to see how you’re able to improve the current plan you have in place – call our industry specialised team today on 07 3207 9537. 

Our Top 5 Questions about Air Freight Answered

As a freight forwarding provider, we receive frequent questions from people looking to make their first air freight transfer. Recently these numbers have increased which has encouraged us to share our answers – if we haven’t answered your question below, you can call our industry specialised team on (07) 3207 9537 and they’ll be able to help you.

Air freight involves moving cargo from Point A to Point B via aircraft. Using air freight, cargo is transported quickly across the globe, however whilst it may seem simple, the process can be very complicated.

Air Freight Cargo

1. How quickly can my cargo be transported by Air Freight?

Transit times vary depending on the route. When shipping by air freight, a shipment can often be booked on a direct flight to its destination usually in 24 hours; however, some flights are not direct and could include multiple stopovers which can increase the transit time up to 7 days. 

2. How extensive is your network?

 A freight forwarding company’s network is critical in their value towards you. This is because established relationships are required to facilitate the logistics between shipments, negating rates and being able to secure placement on shipments. If a freight forwarding company has a larger network it enables them to service their customers’ needs better. PFS has an extensive global air freight network with the ability to service almost any location.

3. Can you help with customs clearance?

Yes! We’re able to assist with organising customs clearance for your shipment – for specific information to your cargo speak to our specialist team on (07) 3207 9537 today, to hear how we’re able to help you.

4. What happens to lost or damaged goods in transit?

This situation changes depending on if you’re covered by insurance (marine insurance) for your shipment. We’ve partnered with Coverfreight to help assist make this complex process easier, as they’re our preferred supplier – you’re welcome to use an alternative marine cargo insurance provider.

If you are covered, then it would depend on your cover and you would submit a claim and wait for the insurance company’s investigation to be completed. If you are not covered for insurance then you are liable to the full cost of your cargo being lost or damaged in transit.  

5. What are the most common reasons for delays

There can be many causes for impacts of delays of cargo, shipments and flights when transporting freight.

    • Delays at port or the airport: congestion can cause delays at certain ports during peak seasons, impacting shipments being made as it compounds over time.
    • Goods need to be inspected by quarantine on arrival: if cargo is determined to be a risk, it will then be required to be inspected by quarantine. Followed by potentially being taken to a facility to receive treatment.
    • Missed shipments: this can occur due to tight turnaround times or missed deadlines.
    • Customs have opted to hold the cargo on arrival: it’s critical that all documentation is completed accurately and precisely for this reason.

Next Steps? 

If you’re looking for a quote or have a question that you would like assistance from our industry specialised team, please call (07) 3207 9537 today and we’ll be happy to help you any way we can.

How are Air Freight Costs Calculated?

The choice for companies when choosing between air or sea freight as their freight forwarding shipment of choice – typically leans towards sea freight, as “generally” the more cost-effective solution to choose. However, this is not always the case as it doesn’t include reliability and time (if impacted by delays) and differs depending on what is needing to be transported.  

Air freight services globally are currently under extreme pressure due to numerous factors including:

    • Ongoing sea freight delays are causing shippers to turn to air freight services to ensure products are arriving on time.
    • Huge reduction in commercial flights worldwide are pushing rates higher.
    • Delays in manufacturing are forcing shippers to send via air which would otherwise have been sent by sea.

Below we’ve highlighted how air freight costs are calculated, from the weight, size, route & distance travelled.

 Weight of Air Freight Cargo

The shipment cost of air freight can be calculated based on the ‘chargeable weight.’ This refers to either the actual weight of your package or the volumetric weight, typically this depends on which amount is greater. 

When calculating volumetric weight, you need to keep in mind that these are calculated at 6000 (cubic centimetres per kilograms). It means that you will find your volumetric weight by dividing the cubic centimetre volume (L x W x H) by this value.

For Example 

Volume of the shipment = 60 x 100 x 100 = 600,000 cubic centimetres. 

Volumetric weight = 600,000/6000 = 100 kg.

Therefore, in this case, the chargeable weight of the package becomes 100kg. 

One more thing to remember is that all measurements are per the metric system. If your shipping department uses pounds and feet, you can request them to convert it to avoid misunderstandings.

Distance between the Origin and Destination

One of the key factors that determine air freight costs is the distance between the origin & destination airports. The longer distance the aircraft has to travel the more expensive the costs. For example Brisbane to Auckland NZ would be much cheaper than Brisbane to Los Angeles.  Routing can also affect transit times & costs, a cheaper air freight rate could mean the cargo goes via many countries before it arrives at its final destination.

Rate Calculation

The most important component of air freight cost calculation is the per kg rate. Once you have the per kg (per kilogram) & the chargeable weight you simply multiply them together to get the air freight rate.

For Example

The airfreight rate is $5.00 per KG & the charge weight is 245 KG

5 X 245= $1225

Be sure to remember this is the air freight component only (airport to airport), your freight forwarder will be able to provide you with a comprehensive quote including origin & destination charges, customs clearance & final delivery costs. 

Tip – when getting air freight quotes always confirm the currency the rate is being quoted in.

Conclusion

The fact is that despite boasting terminology similar to ocean freight shipping, air freight has some evident and critical differences related to charges and shipment fees. 

Once the costs based on the actual or cubic weight have been established, all you have to do is perform simple multiplication to determine the actual cost of shipment. If you’re still unsure how to read your airfreight costs, it’s best to talk to our industry specialised team – if you have any questions, we’ll be happy to provide our assistance,  please call (07) 3207 9537 today and we’ll be happy to help you any way we can.

Our Top 4 Most Asked Questions For Sea Freight – Answered

We’ve shared the answers below to our most asked questions for sea freight shipments that we receive as a Freight Forwarding company. If you have any additional questions or would like deeper insight which is personalised to you and your business, call our industry specialist team today on (07) 3207 9537 and they’ll be happy to assist with any questions that you have. 

  1. Why do sea freight costs & rates fluctuate significantly?

One of our most frequently asked questions around freight is in regards to cost and fluctuating prices throughout the year. For businesses trying to keep ahead of these varying costs it can be frustrating.

The demand for shipping services is subject to a number of external pressures, including those of a political, economic and environmental nature. Trade sanctions, conflict, consumer behaviour, bad weather and more can affect demand, and that in turn affects cost. As there isn’t a single predictor or reason in the market, but a varying of factors including (but not limited to): 

Destination/distance – the more popular the destination and the shorter the journey, the lower the ocean freight rate. Less common destinations, including those with a reduced capacity to handle freight, are more costly, and the further goods have to travel, the greater the ocean freight rate will be.

Currency – as ocean freight rate is charged in US dollars, the exchange rate has an impact on cost.

Cargo type – the types of goods that are likely to attract higher fees include those that are dangerous, heavy, perishable, or out of gauge (OOG).

Fuel Costs – Bunker Fuel, that’s the name for fuel used to power a ship’s engines, and the cost can fluctuate, meaning the ocean freight rate charged will fluctuate. Bunker fuel has a big impact on the cost of ocean freight.

Seasons – certain goods are in demand, or in higher demand, due to the seasons, for example, in the run up to Christmas or the Chinese New Year. When demand is high prices often rise, whereas when demand is low, they fall.

Vessel size – as the biggest single cost in ocean freight is bunker fuel, the size and capacity of the vessel is important. Bigger vessels might use more fuel, but there are also more containers on board for that cost to be shared between.

Environment – 1 January 2020 saw the implementation of IMO 2020, new legislation introduced by the International Maritime Organisation. The aim is to reduce sulphur oxide gas emissions by using marine fuels with a maximum sulphur content of 0.5%, a hefty reduction compared to the previous limit of 3.5%. The expectation is an increase in cost.

2. What causes sea freight cargo to become delayed?

 Delayed shipments are one of the most frustrating parts of freight forwarding for many companies – the time involved, additional costs and waiting customers which has the potential to incur a larger cost (potentially losing clients/ customers). Vessels essentially move in a giant loop, calling from port to port then back again. if one tiny delay occurs at one port it can cause a chain reaction for all the other ports that the particular vessel calls in on, this can add days or even weeks to a transit time. Things that can cause these delays are:

  • Impacts from weather conditions.  
  • Industrial action.
  • Vessel quarantine.
  • Overbooking of cargo on shipments.  (its common for shipping lines to overbook space during peak season, just like airlines do.)
  • Vessel malfunctions/mechanical issues. 
  • Natural disasters. 
  • Seasonality. 
  • Equipment shortage. (no empty containers)

3. What is the wait time at wharfs typically?

“Waiting time” or “Demurrage” refers to the free time a freight or transport company allocates at a wharf – typically these are around 45 minutes. The purpose of this time is to be used to process freight and shipping collections within this time allocated. But this is of course dependent on the demand, traffic and resources available to have the cargo processed.

4. What happens if my goods are damaged in transit?

This depends whether or not you have insured your cargo and are covered for marine transit insurance – we strongly encourage our customers to cover their cargo and we have a partnership with Coverfreight, to make this process easier.

When you’re covered by marine transit insurance: you’ll be eligible to claim on the insurance that you’ve taken out and will follow the process to see how much you’re eligible to receive post their investigation.

If you’re not covered by marine transit insurance: you’re liable for the complete costs of your goods lost.

Having marine transit insurance also covers you if General Average is called. General Average is a principle of maritime law that essentially establishes that all sea cargo stakeholders (owner, shipper, etc.) evenly share any damage or losses that may occur as a result of voluntary sacrifice of part of the vessel or cargo to save the whole in an emergency.  This includes the cargo owners, which means exporters and importers may be liable to pay towards the losses of a major incident on the vessel, such as:

  • a fire on board 
  • the ship gets stranded or grounded 
  • a container stack collapse 

Cargo might be partially or fully damaged. And, even if there is no damage to cargo, there will be extreme delays in deliveries until the general average procedures are completed, which may result in penalties, fines and chargebacks from end buyers.

The last time a general average was called was in 2021 with the Ever given being grounded in the Suez canal, Prior to that was 2019 after a fire on the Yantian Express.

General average claims are a risk for importers. Having cargo insurance is peace-of-mind in the case of these extreme cases.

Have another question for our team at PFS?

If you still have questions we weren’t able to answer above – or would prefer to speak directly with our industry specialist team, call us directly on (07) 3207 9537.

4 benefits of using Sea Freight for international shipping

If you currently use sea freight as your choice of international shipping or are considering using sea freight, you might be evaluating the advantages of this freight type. We’ll be sharing the top Four benefits of using sea freight as your transportation choice,  if you have any questions our team at Personalised Freight Solutions will be able to help you. If you would like to see more of our range of services in regards to sea freight – please don’t hesitate to visit our Sea Freight page here.

1. You’re able to save money on heavy + large freight loads

In any business, money is an important  part of decision making – especially when it comes to transporting large quantities or bulky items. 

Your average commercial ship  exceeds the size of an average commercial plane by at least 5:1 in terms of cargo space, in fact some commercial ships can hold over 20,000 shipping containers -by using sea freight  you’re benefiting on savings that is able to occur in these huge vessels by sharing the overheads with other companies that have containers on the ship. Even greater savings can be found with sharing containers with other shipments (this is called less than container load or LCL).  

 2. Freight size is less restrictive for oversized, heavy or bulky items

If it fits, it ships! When transporting large quantities of items, oversized or bulky goods,  a 20ft shipping container which has approximately 25-28 cubic meter of usable space could be an option, alternatively, a 40ft container has approximately 58 – 62 cubic meters of usable space. Need more space, consider a Roll on Roll off or Break bulk freight option. If you have smaller quantities of cargo, consolidation could be a better fit and is charged based on a minimum of 1 cubic meter. Typically if you have around 13 -15 cubic meters of cargo, ask your freight forwarder to provide a comparison cost between FCL and LCL shipping.

3.  Fewer restrictions on permitted goods

Unlike air freight, sea freight doesn’t have the same strict level of requirements and restrictions in place – enabling a greater range of cargo being able to be transported. This by no means that there are no restrictions when it comes to using sea freight to transport goods internationally, but by having fewer restrictions in place it does eliminate as much red tape along with being able to actually transport an additional range of items.

4.  You have more options in sea freight types

Unlike air freight, which is restricted to rigid size limitations based on the type of plane, sea freight can provide options for transporting cargo with different pricing structures  based on the method chosen:.

Sea freight services include; 

  • Less than Container Load (LCL): is used where the goods being transported won’t fill the entire container and share the remaining space with items belonging to different people/ businesses.
  • Full Container Load (FCL): refers to the company and/ or person transporting the items within the entire container, only belonging to them. The containers have standardized dimensions. They can be loaded and unloaded, stacked, transported efficiently over long distances, and transferred from one mode of transport to another—container ships, rail transport flatcars, and semi-trailer trucks—without being opened.
  • Roll on/Roll off (RORO): Vessels designed to carry wheeled cargo, such as cars, trucks, semi-trailer trucks, trailers, and railroad cars, that are driven on and off the ship on their own wheels or using a platform vehicle, such as a self-propelled modular transporter. This is in contrast to lift-on/lift-off (LOLO) vessels, which use a crane to load and unload cargo.
  • Breakbulk (LOLO): also referred to as “lift on/ lift off”, Break bulk cargo or general cargo are goods that must be loaded individually, and not in shipping containers nor in bulk as with oil or grain. Break bulk cargo is transported in bags, boxes, crates, drums, pallets or barrels. The cargo is brought to the quay next to the ship and then each individual item is lifted on board separately.

If you are looking to order your first overseas shipment, or just want to bench mark your current freight forwarder, please contact the PFS team to discuss your personal requirements and how we can add value.

What are the 11 incoterms in 2021?

But first, what Incoterms are & why they’re important

‘Incoterms’ is the short and simple way of saying International Commercial Terms. First published way back in 1936 by the International Chamber of Commerce, they’re a set of 11 terms defining who’s responsible for what during international transactions.

Or more simply, Incoterms spell out all the tasks, risks and costs involved during the transaction of goods from seller to buyer. Because they’re known and accepted worldwide and are a requirement on every single commercial invoice, they greatly reduce the risk of potentially costly misunderstandings.

The 11 Incoterms & their descriptions

1. EXW – Ex-Works or Ex-Warehouse

  • Ex works is when the seller places the goods at the disposal of the buyer at the seller’s premises or at another named place (i.e., works, factory, warehouse, etc.).
  • The seller does not need to load the goods on any collecting vehicle. Nor does it need to clear them for export, where such clearance is applicable.

2. FCA – Free Carrier

  • The seller delivers the goods to the carrier or another person nominated by the buyer at the seller’s premises or another named place.
  • The parties are well advised to specify as explicitly as possible the point within the named place of delivery, as the risk passes to the buyer at that point.

3. FAS – Free Alongside Ship

  • The seller delivers when the goods are placed alongside the vessel (e.g., on a quay or a barge) nominated by the buyer at the named port of shipment.
  • The risk of loss of or damage to the goods passes when the products are alongside the ship.  The buyer bears all costs from that moment onwards.

4. FOB – Free On Board

  • The seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment or procures the goods already so delivered.
  • The risk of loss of or damage to the goods passes when the products are on board the vessel.  The buyer bears all costs from that moment onwards.

5. CFR – Cost & Freight

  • The seller delivers the goods on board the vessel or procures the goods already so delivered.
  • The risk of loss of or damage to the goods passes when the products are on board the vessel.
  • The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.

6. CIF – Cost, Insurance & Freight

  • The seller delivers the goods on board the vessel or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the products are on the ship.
  • The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.
  • The seller also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage.
  • The buyer should note that under CIF the seller is required to obtain insurance only on minimum cover. Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements.

7. CPT  – Carriage Paid To

  • The seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such site is agreed between parties).
  • The seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination.

8. CIP – Carriage & Insurance Paid To

  • The seller has the same responsibilities as CPT, but they also contract for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage.
  • The buyer should note that under CIP the seller is required to obtain insurance only on minimum cover. Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements.

9. DAP – Delivered At Place

  • The seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination.
  • The seller bears all risks involved in bringing the goods to the named place.

10. DPU – Delivered At Place Unloaded (replaces Incoterm® 2010 DAT)

  • DPU replaces the former Incoterm® DAT (Delivered At Terminal).  The seller delivers when the goods, once unloaded are placed at the disposal of the buyer at a named place of destination.
  • The seller bears all risks involved in bringing the goods to, and unloading them at the named place of destination.

11. DDP – Delivered Duty Paid

  • The seller delivers the goods when the goods are placed at the disposal of the buyer, cleared for import on the arriving means of transport ready for unloading at the named place of destination.
  • The seller bears all the costs and risks involved in bringing the goods to the place of destination.  They must clear the products not only for export but also for import, to pay any duty for both export and import and to carry out all customs formalities.

Check out these useful links:   Video   Quick reference chart

What are the most economic Incoterms terms? 

From our experience, FOB & EXW are the most common terms used when you are the buyer. This ensures you have control over a larger portion of the shipment & costs. If you are the seller then EXW,CFR & DAP are the recommended terms. 

Looking for additional advice? Speak to our industry specialised team today! 

If you’re looking for a quote or have a question that you would like assistance from our industry specialised team, please call (07) 3207 9537 today and we’ll be happy to help you any way we can.

What are Free Trade Agreements (FTAs)?

Businesses navigating free trade agreements can often find it an overwhelming process of finding the right information. Below we’ve broken down what free trade agreements (FTAs) are, countries Australia has them with, and links to comprehensive resources to assist businesses within Australia navigating freight forwarding – if you have any questions our team at Personalised Freight Solutions will be able to help you.

If you would like to see more of our range of services in regards to sea freight – please don’t hesitate to visit our Sea Freight page here .

What are Free Trade Agreements (FTAs)?

A free trade agreement (FTA) is an international treaty between two or more economies that reduces or eliminates certain barriers to trade in goods and services, as well as investment. FTAs benefit Australian exporters, importers, producers and investors by reducing and eliminating certain barriers to international trade. The Oxford English Dictionary records the use of the phrase “free trade agreement” with reference to the Australian colonies as early as 1877.

What counties does Australia have Free Trade Agreements with?

Australia currently has free trade agreements in force with Brunei, Cambodia, Canada, Chile, China, Cook Islands, Hong Kong, Indonesia, Japan, Kiribati, Laos, Malaysia, Mexico, Myanmar, Nauru, New Zealand, Niue, Peru, Philippines, Samoa, Singapore, Solomon Islands, South Korea, Thailand, Tonga, Tuvalu, United States, Vanuatu, and Vietnam.

Australia’s entry-into-force date’s per country for FTAs

The following are Australia’s free trade agreements (listed with the entry-into-force date).

What resources are available to support Australian businesses navigate FTAs?

DFAT’s FTA Portal is a comprehensive resource for exporters, and importers of goods and service providers looking to explore the benefits of Australia’s current free trade agreements and how to apply for preferential treatment under those FTAs.

You can access the FTA Portal at ftaportal.dfat.gov.au.

Another great resource is the Free Trade Advantage Online platform. The Free Trade Advantage online platform brings together a range of practical advice and resources to help Australian businesses access the benefits of Australia’s FTAs.

Filled with videos, animations, interactive quizzes, and a glossary to explain all the technical terms – Free Trade Advantage is designed to help new and experienced exporters alike navigate the FTA process, making sure Australian businesses make the most of all the benefits FTAs have to offer.

There’s also a range of business case study videos, webinars and other resources available for sharing and creating tailored FTA learning journeys.

Check out the useful links above & If you need further assistance with your individual circumstances please feel free to contact the PFS team anytime!

How to choose between Sea or Air Freight Forwarding

Whether you’ve just started your first business or have years of experience, selecting the right type of freight forwarding for your company can be a stressful process. While it’s easy to think in black and white when reviewing between sea or air freight, it’s important to us at Personalised Freight Solutions that every business has the right information to make the best decision for them – especially, in logistics where changes can occur instantly  and have a significant impact on your business positive or negative.

We wanted to share our knowledge and experience when choosing between sea or air freight, as often new clients come to us only possessing rote knowledge which doesn’t take into account the context of their requirements and the wider environment. The most effective way we thought to share this information at a general level was to cover frequent questions that were asked, which are related to; cost, reliability, flexibility, fastest, safest and if we had to pick only one means of transport – what would we pick?

What is the cheaper option between Sea and Air Freight?

Most often sea freight is the cheapest option for companies to choose when selecting a freight carrier type – but this is often because there are a greater range of container types and has the ability to transport large quantities or bulky items. Sea freight is charged per cubic meter for LCL options or  per container rate for full containers. Airfreight is either based on the actual weight or volumetric weight (the space the cargo takes up) – whichever is greater, which is called the chargeable weight.

What is the more reliable option between Sea and Air Freight?

Reliability often depends on the season because of the changes in demand, rather how long of a delay are businesses impacted by freight types. When delays occur with air freight, whether there’s a missed flight or a delay due to weather – typically, you can expect another flight within the next day or two. In comparison to sea freight, which if your cargo misses the cut-off date for a departing vessel or the ship is delayed in meeting a transhipment vessel – you can expect a delay by up to week or more. Where we have seen this in full impact, was during COVID  lockdowns for a lot of countries through 2020, sea freight then became the more reliable option as there were less flights during this time.

What is the more flexible option between Sea and Air Freight?

Sea freight gives greater flexibility in referring to shipping container options when transporting – air freight, unfortunately, due to higher regulations has stricter policies and procedures in place. The impact of these stricter policies and procedures impact what can be transported, whether it’s restricted all together due to  it’s bulky size or the type of commodity the item  is.

 What is the fastest option between Sea and Air Freight?

If you require your item yesterday and it’s not bulky (leaving shipping as your only method of transport), air freight will enable you to receive your items ASAP. Unfortunately, if you have bulky items and you need these products to be transported ASAP you still are (in some circumstances, depending on what you’re transporting) able to  use air freight but it is likely that you would have to charter an entire plane – a path which is rarely taken due to the prohibitive cost associated with such an activity. It will all depend on the commodity and actual weight and dimensions of your cargo.

What is the safest option between Sea and Air Freight? 

Air freight is typically seen as the safer option when compared to sea freight, because of the high regulations associated with planes and air travel (in addition to the shorter time period of travel, which indicates less time for interferences to occur).

The verdict – is Sea or Air Freight better? 

When it comes to selecting sea or air freight, there isn’t a single black and white answer on which freight option is better – as with most decisions in both business and life, it’s circumstantial. If you’re stuck deciding what’s the best option for you and your business, we encourage you to call our team at Personalised Freight Solutions to answer any of your questions or to click below to find out more about our air and sea freight service offering.

How Much is Your Product Worth?

Personalised Freight Solutions (PFS) job is to assist, educate and facilitate.

An important service we provide is to assist our clients in understanding the value of their product when it lands at their door here in Australia.

What is Landed Cost? “A landed cost is the total price of a product once it has arrived at a buyer’s door. The landed cost includes the original price of the product, all transportation fees (both inland and ocean), customs, duties, taxes, insurance, currency conversion, crating, handling and payment fees”

Knowing the landed cost of the goods you are importing is vital to be able to gain an understanding on the viability of it in a retail market. The cost of importing your goods can equal if not exceed the actual purchase price of your goods.

Just today, on two occasions both myself and Christine heard “but the goods are only worth……….. and the shipping is double that!”.

It is important to research the cost to import your goods including all the import taxes prior to setting up an entire business model on your product. For example, you have a Chinese supplier who will sell you a 20′ container of chairs, they are offering a sale price of USD 22.00 (AUD 29.00 at today’s exchange) per chair for minimum order of 450 chairs. When looking at the retail market, you can sell these chairs for AUD 45.00 max to be competitive. This gives you a total profit AUD7,200 when you sell all 450 chairs.

However, what will the chairs be worth after you import them to Australia? I can tell you, by using our landed costing model that they will be worth AUD 39.00. This reduces your profit to AUD 4,500 total. To maintain your AUD 7,200 profit if that is what you have based your business model on you would actually need to sell these chairs for AUD 55.00 per chair. Does this make you AUD 10.00 per chair more expenses then your competitions? Can you sell all 450 at this price in the chair market?

Your freight forwarder should be more than a supplier who moves your freight into (or out of) Australia. Your freight forwarder should be able to advise you on the true value of your goods landed so that you have the confidence that your business is making viable decisions on the products it is selling.