Chapter 3: Shipping from China to Europe Costs
Well, as a bulk importer of items from China to Europe, this is unquestionably a fundamental aspect that you have to comprehend.
In fact, it is your responsibility to figure out the net cost of shipping from China to any destination in Europe.
Freight cost calculator
You see, import business is somewhat tricky especially when doing it to Europe where many considerations have to be put in place.
Ideally, the costs of shipping goods to Europe from China tend to vary depending on numerous elements.
In this section, we want to look at all the necessary aspects revolving around shipping costs between these two destinations.
The significance of this is that it will enable you to grasp an idea of what it takes and the amount you approximately need to have when shipping goods.
So first of all, let’s look at the costs relating to logistics.
a) Hiring Freight Forwarder or Customs Broker
Listen, the truth of the matter is that import/export business is something you can never do alone, regardless of your experience or knowledge.
If you have to attain best results, trust me, you’ll need the assistance of a freight forwarder or customs broker.
It never matters how better you are or the kind of networks that you have established.
All you need to know is that you have to work with other professionals in this sector.
Hiring the services of a freight forwarder or customs broker also needs input in terms of money.
It happens that these experts will or must be able to handle almost every aspect of your consignment.
By this, I mean that they need to have the ability to make sure that your goods are safely transported from the factory to your commercial residence.
So this is what makes the whole process to vary in terms of rates.
Definitely, you expect different freight forwarders to charge different rates for their services.
And like I did mention earlier, the shipping rates also tend to vary depending on a wide range of factors.
So for that reason, you have to be extremely sensitive when dealing with customs agents or freight forwarders.
What I mean here is that you have to select and work with an agent who offers value for your money.
Remember this alone can be costly, and something you never want to imagine is getting substandard services after investing much of your money and time.
So you have to be particular and making sure that the agent you select to work with offers quality and efficient services worth the money you’re spending.
b) Insurance charges
This is also another form of logistic expenditure that you need to have in mind when importing goods to Europe from China.
In this business, ensuring your consignment is apparently one of the best practices which you must never forfeit.
Container ship accident
This aspect gives you significant peace of mind no matter how long your shipment will take to get to your destination.
Remember that once you insure your shipment, in most cases, the provider will always be liable in case of an unfortunate event happening.
For instance, should you lose your cargo, the company has to compensate you accordingly.
Indeed such incidents might cause immeasurable inconvenience, but you stand a better chance of getting the compensation that losing it all.
Marine insurance policy document
Of course, the actual amount for insurance depends on many factors such as mode of transport, types of goods as well as the insurance broker among others.
While at it, you also need to understand the specific terms and conditions that the premium you’re purchasing entails.
There is absolutely no way you’re just going to engage in a business with an insurance company who never wants to reveal all the nitty-gritty of the premium.
And apparently, some of these insurance premiums can be somewhat costly hence the need for ensuring that you get the best deal.
For that matter, it is always ideal to work with a reliable customs agent or freight forwarder who understand most of the terms of such premiums.
You know, freight forwarders, and of course deal with such issues from time to time.
Therefore, they can easily advise you on what to do and not to do.
c) Customs duty charges
It is also another logistics-related expenses that you need to factor in when shipping products from China to Europe.
What happens is that customs usually are the pad in two fronts; first at the country of origin and destination.
In this case, China and European country respectively.
Still, you have to know that the customs duty also depends on many factors.
In other words, what you’ll pay for a certain product is dependent on numerous elements that surround it.
Nonetheless, it is vital that you understand all the aspects of customs duty charges as a way of preventing you from incurring losses.
You have to understand what the customs policies of the county you’re importing to stipulate regarding the particular consignment.
Incidentally, this is something that you’ll have to pay for.
Because for a very long time, many authorities have established ways of making sure that importer/exporters pay for the relevant taxes accordingly.
And they are also ensuring sealing off all possible loopholes for sneaking goods into a particular country without paying customs duty.
In a nutshell, just be ready with the entire amount to pay for such taxes.
It will save you from encountering unnecessary inconveniences with the customs officials.
And for that reason, you should include it as part of your budget when importing goods t Europe from China.
d) Local transportation charges
One thing that many importers ought to know is that not all manufacturing companies are situated within the ports locality.
Even though, in China, the location of most of these factories are often strategic, as a way of enhancing the convenience of transportation.
And so you’ll find that the designated industrial areas in China have a suitable transports network including train and roads.
That notwithstanding, it is important to understand that you have to cater for the expenses for transporting goods from the factory to the port of loading.
Also, you will cater for expenses related to transporting the shipment from the port of destination to your actual residence.
But then, all these are dependent on the particular shipping incoterm that you prefer.
These are basically the policies which outline the tasks of importers/exporters to deliver goods by the sales contracts.
Don’t worry much about the incoterms at this stage.
We will exhaustively discuss it in the next chapter.
Back to the main point here;
So you have to know which specific mode of transport you’ll use and also calculate the distance to get a better deal.
I know that probably you could be having your own means of transport especially from the port of destination to your premises.
Well, this could be advantageous in one way or the other.
Still, additional expense including fuel, workforce, and others will be apparent.
The bottom line nonetheless, is that you need to ensure that you factor in all these possible local transport expenses.
So that you don’t necessarily find yourself in a situation where you cannot cater to the needs for the task at hand.
These are the essential logistics costs that you’re likely to spend on whenever you’re shipping a consignment from China to Europe.
Of course, we also have other miscellaneous charges which you might essentially be aware of.
But these are the major ones as far as logistics cost is concerned.
Container Shipping Rates from China to Europe
This is yet another ideal element which you have to know as an importer of goods from China to Europe.
You see, shipping involves a lot of factors.
And this is something that you also need to realize can have a ripple effect on your turnover.
What I mean here is that you have to accurately calculate the shipping rates of a particular consignment if you have to get better deals.
It is also imperative because it makes it possible for you to at least prepare appropriately if at all you want to partake this business.
The truth is that shipping rates from China to Europe depends on many factors.
One is the mode of transport you are using to ferry your consignment to the particular destination within Europe.
Transporting container by road
This, necessarily means that you’ll have to diligently find out the best means of transport to choose if at all you have to get better returns.
The good thing, however, is that you have so many shipping options for goods from China all the way to Europe.
You can choose to ocean freight, air freight or railway transport.
Ocean freight is arguably the least expensive.
It is a preferable mode of transport for importers who ship bulk goods.
Air freight is relatively costly, but then it is quite faster hence ideal for shipping urgent orders which have to get to the market.
The railway is also a suitable mode of transport which is becoming quite popular nowadays among many European importers.
We will discuss all these modes of transport in the subsequent sections; hence you’ll understand the impact of each in the entire shipping process.
But as we continue with this point, it is also important to note that container shipping rates are calculated on a different basis.
Some of this basis include the following;
a) Type of container
In a realistic export/import business, shipping containers are what people use to ferry their consignment to the respective places.
These containers are vital because they make it possible for you to safeguard your shipments irrespective of the weather or distance.
Types of shipping container
So in general, there are two types of containers that are normally used for shipping purposes.
These types of containers include LCL and FCL.
LCL simply means or preferably is an abbreviation for Less than Container Load whereas FCL means Full Load Container.
Well, I know the question lingering in your mind right now is what necessarily these types of containers entail.
This is the thing, in terms of construction, there is absolutely no difference between LCL and FCL.
The only major difference between these two come in the form of the size and the quantity that each can hold.
Just as the names suggest, FCL is loaded fully before leaving the port whereas LCL can leave the port when it’s partially full.
FCL vs LCL Shipping
It thus means that the FCL is somewhat larger compared to the LCL.
Still, the size could be the same, and only the quantity of cargo is what might vary.
In most instances, if you choose to go for FCL container, you’ll notice that cost might be significantly high, but it’s worth it.
The cost of the LCL might be a little bit cheaper.
The most crucial aspect in this regard is finding the best or rather most suitable type of container for your needs.
All you need to know nevertheless is that the particular type you choose determines the amount of shipping cost you’ll have to incur.
b) Overall distance
The distance between China and Europe varies depending on the specific area in Europe that you are shipping to.
Therefore, the overall distance is what will make many freight companies to charge the particular amount they peg on the shipment.
Sea route from China to UK
Again, you also need to know that shipping routes also determine the distance.
For instance, when shipping your consignment via the ocean, there’s the likelihood of using different sea routes.
Now, some of these routes are quite longer whereas others are shorter.
Of course, it is the freight company that chooses the specific route they prefer based on different factors.
Sea route from China to Spain
For that reason, you’ll realize that you will have to pay a different amount of money depending on the overall distance to your actual destination in Europe.
Still, in this guide, we will look at the key shipping routes from China to Europe bearing in mind that many shipping companies use different routes.
For now, though, let’s look at the third aspect of this chapter.
Well, it is common knowledge that you never engage in any import/export business without paying taxes.
So in other words, import/export taxes are statutory payments that you have to pay either way.
To get a clear picture, you need to calculate the import taxes that the European Union charge upon importing a particular item from China.
EU Tariffs – Photo courtesy: Tutor 2u
At the same time, you also need to know the factors surrounding export taxation when buying goods from China to Europe.
In most instances, the customs brokers and freight forwarders will always find a way to help you out in calculating the applicable taxes.
Incidentally, remitting such taxes is ideal for your convenience since it prevents you from having encounters with the relevant authorities.
In Europe, calculating import tax is quite involving bearing in mind that different countries also have different taxation tariffs.
But knowing how to calculate the taxes is suitable since it also enables you to also communicate the cost even to other potential investors.
There is a tool that you’ll often use to calculate import tax.
The tool helps you to identify and tabulate all the cost that you need to pay as tax.
The good thing, however, is that when working with customs agents, they will be able to assist you in calculating the pertinent taxes.
They understand the market and other dynamics of a particular European country as far as import/export taxes are concerned.
Furthermore, this is the best way for figuring out the ideal import strategy which suits your particular needs.
So in general, these are the elements that you need to factor in when thinking of costs related to shipping to Europe from China.