freight forwarder Archives - Personalised Freight Solutions

How Much is Your Product Worth?

Posted by Personalised Freight Solutions Pty Ltdon June 29, 2017Leave a comment

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.

China Freight Rates – 2015 vs 2016

Posted by Personalised Freight Solutions Pty Ltdon April 5, 2016April 5, 2016Leave a comment

With the first Quarter of 2016 behind us, it is interesting to check in to see where the freight rates Ex China are sitting.

As you can see from this chart, rates are significantly lower than that of 2015. It was around this time last year that we reported in on rates and how they were trending. What seemed like rates too good to be true in March, April or May 2015 now seem a little high when we you place them in comparison to March or April of this year.

What are the drivers of low freight rates? And why is it a constant up and down situation? It is a simple case of supply and demand. With the low Australian dollar (in March for Example as low as 0.67) and the down turn in mining in Australia, the vessels out of China are carrying less cargo.

To try to make a comparison it is like the circle of life

Today’s media is full of reports on the unrest in our government, the Australian dollar movement, Mining and taxes all these economic drivers will affect where the freight rates sit.

Have You Considered? Documentation

Posted by Personalised Freight Solutions Pty Ltdon June 15, 2015June 15, 2015Leave a comment

As your freight forwarder we will liaise with your supplier to ensure documentation for importing your goods is correct leading up to departure from the port of loading and prior to arrival to Australia. We do however like our clients to have a working knowledge of requirements when it comes to documentation.

There is a few reasons for this:

1. These are your goods and ultimately your responsibility. A customs declaration (which is created through the information provided on the shipping documents) is a legal document that through the information provided will provide the amount of duty and GST that is payable to Australian Customs on arrival. The shipping documents along with the corresponding customs declaration is to be kept on record by the importer for a minimum of 5 years. Treat it as you do your tax return!

2. Some required documentation such as import permits can only be applied for by the importer (not the freight agent), guidance will be given but again it is the importers responsibility to ensure these are in place prior to arrival.

3. When negotiating terms of sale with your supplier, ensure they are prepared to provide all necessary documentation. Treatment certificates and packing declarations are the most common that a supplier would need to provide in addition to a commercial invoice. Getting into a position where by you have purchased the goods and engaged a freight forwarder to move the goods to then find out the supplier will not provide a crucial document for clearance may result in costs that have not been planned for or time delays on arrival.

Some Important links to provide further guidance and information on your documentation requirements:

Australian Customs

Australian Quarantine – Examples of Acceptable Documentation

We are also always available to discuss requirements specific to your business, contact us anytime!

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