1. What can I do to ensure the entire import process goes to plan?
Ensure that your supplier for your export shipment creates all the required and necessary documentation in a timely manner such as commercial invoice, packing lists, packing declarations, free trade agreement documents, fumigation certificates, original bill of lading etc. In addition, ensure that your supplier sends the documentation to you at least 1 week before the vessel arrives, which will allow your freight forwarder to collect and lodge the appropriate documents with the relevant parties (i.e. Australian Customs) ahead of the schedule.
You will also need to check with your supplier that all payment terms are clear between you and your supplier, and verify as to whether they will send the original bill of lading to you (which will need to be surrendered to our destination agents), or to our agent overseas where it can be deemed as “telex release”.
2. What is the difference between FCL and LCL?
FCL and LCL are common terms that are frequently used in international trade. FCL stands for Full Container Load and LCL stands for Less Container Load. FCL general containers come in 20’ and 40’ versions and special variants are offered such as reefers (refrigeration), high cube (increased size capacity), open top (for tall cargo), flat rack / out of gauge (for specialised oversized cargo) and tanks (liquids).
FCL is used when a shipper has sufficient volume to fill an entire container and economise the costs of shipping a full container. The entire cargo in the container box is owned by the one shipper, and the cargo does not have to fully encapsulate the entire container box, the container could be half loaded or quarter loaded. The cost of FCL shipments per unit of freight is generally lower than LCL, and this is because it is more difficult and complex for freight forwarders to find cargo to consolidate and combine multiple shipments to fill an entire container.
However, when a shipper does not have enough cargo to accommodate an entire container, LCL shipments are used. The shipper will book with a freight forwarding agent or consolidator who will combine multiple shipments from different shippers to economise the movement of freight. Each consignee’s cargo in the container will consume a portion of space, weight and volume of the container, and generally local destination charges are calculated based on the cargo’s volume (or weight, whichever greater).
3. Are there any other benefits for using FCL over LCL (or vice versa)?
Advantages of shipping FCL; speed and lower costs per unit of freight.
FCL shipments offer reduced lead times compared to LCL shipments because when a FCL container arrives at the port of destination, it is unloaded from the vessel and can be immediately collected/delivered by/to the buyer as long as the cargo is customs cleared. In contrast, LCL shipments require more steps (such as collection and deconsolidation, processing manifests, sorting the cargo for each consignee) before the cargo is finally available to collect by the consignee. Furthermore, each additional step leads the risk of additional delays. For instance, if one shipment in a LCL container becomes flagged, every shipment for every other consignee has to be checked, and this can cause lengthy delays.
LCL shipments also increases the risks of pilferage, missing and damaged cargo as the container may visit multiple places before being boarded onto the vessel, and the consignee does not have control over what other cargo will also be loaded into the same container. There could be dangerous cargo, liquids, heavy and pungent cargo in the same container which can greatly increase the likelihood of the shipment being damaged.
Advantages of shipping LCL; allows better inventory supply chain management, reduce risk of cargo obsolescence and increased company cash flow
If a consignee is unable to accommodate a full sized container in their warehouse or storage area, then it makes sense to use an LCL service. In addition, LCL shipments offers consignees to ship cargo in smaller volumes which presents the business with better opportunities to effectively implement “just-in-time” (JIT) and lean inventory management techniques to keep the company with steady cash flows. Lower inventory levels reduces a consignee’s risk of having excess inventory that may become obsolete and a liability if not quickly liquidated.
4. What are local destination charges?
Local destination charges apply to both imported FCL and LCL cargo, and the fees cover movement, loading and terminal unloading of the containers. However, for LCL cargo, it also covers unpacking, inspection and further administrative tasks that your cargo has to undergo at the port of destination. These charges vary depending on ports, shipping lines, terminals and depots for which the cargo arrives at.
5. What is an out-turn report?
The outturn report is an actual list of cargo discharged from a ship or from a container. It also records the date the cargo is available to be collected, the date when storage occurs at a warehouse, any discrepancies in the cargo when unpacked from the container in addition to any damage caused to the cargo.
6. How does storage charges work?
Storage charges can be split into wharf and depot storage charges.
Wharf Storage Charges:
A FCL (full container load) container once discharged from the vessel is given 3 available dates to allow for container collection. Once the 3 dates have elapsed, the container will go into storage and fees will be required to collect this container. The fees vary depending on the size of the container.
Depot Storage Charges:
Once an LCL (less container load) container has been unpacked at the depot, you are given 3 days (usually 3 days) to collect this cargo from the depot. If the cargo is not collected within the allotted days, the cargo will accrue storage charges and this will depend as different depots will carry different storage rates, which are normally calculated by the volume of the cargo.
7. Does the arrival date of the vessel mean the same date that I can receive the goods?
Once the vessel arrives into port, depending on the service mode (FCL or LCL), the date that you actually receive the cargo varies but is never the same date as vessel arrival. We generally advise that it is safe to assume the cargo will be available up to 7 business days after vessel arrival.
8. Why do you require cargo dimensions, weight and volume for less container load (LCL) or air shipments?
Shipments using an LCL or air service require these measurements as the rates are based on gross weight or volume, whichever is greater. If the volume weight exceeds the actual gross weight, the shipment is rated at the volume weight. If the volume weight is less than the actual weight, the shipment is rated at the actual weight.
9. What payment methods do you offer?
We only accept bank transfer, and proof of payment may be required (bank remittance or bank receipt).
10. What is a CHAFTA Certificate of Origin (COO)?
The Australian & China government officially announced that the free trade agreement will come into force from 20th December 2015. Tariffs on most Chinese Origin goods imported into Australia after the commencement of the Agreement will be duty free. However, certain tariff percentages still apply on some cargo categories imported from China, but will eventually be phased out, generally over 3 to 5 years.
Once you book with us, we will thoroughly check and make certain that your cargo is COO compliant to ensure you receive maximum duty free benefits for your import shipments from China.
11. What are INCOTERMS?
Incoterms (international commercial terms) are trade terms published by the International Chamber of Commerce (ICC) that are commonly used in both international and domestic trade contracts. There are 13 main terms and several secondary terms that denote the points at which shipper, carrier, and consignee risk and responsibility start and end.
The parties to the transaction select the Incoterms, which determine who pays the cost of each transportation segment, who is responsible for loading and unloading of goods, and who bears the risk of loss at any given point during an international shipment. Incoterms also influence customs valuation basis of imported merchandise.