Freight & Shipping
Choosing the right product is a very important part of the import business but a clear understanding of freight, shipping and logistics can literally make or break your business model.
If you understand clearly how to order a mix of products that utilises cargo space more effectively; more about cargo rates and how they work; more about how containers actually move along in their travels; and more about how (and where) to buy appropriate insurance for your order; and finally, how to handle your order once it reaches your port ...
...then not only would your life (the part that is involved with ordering from someplace like Indonesia) be less stressful, but you would save a ton of money (you do want to keep the profit in your pocket, don't you?)
Each method has its advantages and disadvantages.
A container is basically a large metal box. You pay a flat rate to ship that metal box from Bali to the UK and it's your job to fill that box with as many items as you can in order to offset the flat rate.
The smallest container currently available out of Bali is a 20' container which holds up to 30 cubic metres of product.
The 40' container, as you might expect, is twice the length and has twice the capacity (up to 60 cubic metres of product).
The 40' High Cube is the same length as the standard 40' container but is taller and fits up to 72 cubic metres of product. Large-scale importers almost always take the 40' High Cube because the freight cost and local freight-related charges are only a little higher than a standard 40' container but 20% more loading capacity.
Other countries have a few more varieties of container available but these haven't yet made their way to Bali (we'll let you know if they do).
Here's how the process works:
Typically, an empty container arrives at our warehouse in the morning. We run water over it and walk around inside with flashlights in order to check for holes and problems. We reject containers more often than you might expect.
We load your products inside and either fumigate on the spot or accompany the container to a facility at the port for fumigation.
After fumigation, the container is locked and sealed and waits at the local port in Bali (Benoa) for a feeder vessel out to Java for shipping abroad.
The benefits of a container are...
The drawbacks are...
As a rule of thumb, for every £1.00 you spend on product, you'll spend another £0.30 or so on container shipping. Clever product choice and packing can bring that down to £0.20 or, rarely, even less.
Less than container load sea cargo shipments are basically small orders that are consolidated inside containers and then separated out again once they reach the destination port.
Here's how it works:
We pack up your products in standard shipping boxes (each carton works out to be around one-tenth of a cubic metre. We then cover those boxes with plastic (rain-proofing) and then combine the standard shipping boxes inside custom built sturdy wood crates for additional protection.
Your crates are then moved to our cargo company; official government documentation is completed; the shipment is then trucked to the international port on Java.
Your LCL shipment must then wait at the port while the shipping company combines or consolidates your order into a container with other small orders going to a transit port like Singapore where your crates are then unloaded and wait to be consolidated with other small orders bound for the final destination port.
The benefits of LCL Sea Cargo are...
The drawbacks are...
As a rule of thumb, for every £1.00 you spend on product, you'll spend another £0.40 or so on LCL shipping.
Clever product choice and packing can bring that down to £0.35 or, rarely, even less.
However, bulky, inexpensive products (albesia wood carvings, lamps, basketware) can end up being much more expensive in terms of shipping charges -- for every £1.00 on product, you could easily spend another £0.60 or £0.70 on shipping.
Long story short: LCL can be useful in a pinch but far from the best way of importing.
Air Cargo and Courier Companies work pretty much the same way.
The main difference is volume/weight -- air cargo usually has a minimum weight requirement of 45 or 50 kilos. If you're shipping less than that, you have to go by courier.
Here's how the process works:
We pack up your products in standard shipping cartons (or standard courier boxes), send them over to the courier or air cargo company for official weighing, confirm with you and ship. Simple as that.
The benefits of air freight and courier shipping are...
The drawbacks are...
As a rule of thumb, for air freight for every £1.00 you spend on product, you'll spend another £0.80 or so on shipping. Clever product choice and packing can bring that down to £0.30 or, rarely, even less. Courier charges are more expensive than air freight charges and for every £1.00 you spend on product, you'll spend another £1.00 or so on shipping.
Most people are shocked or sceptical when we say air and courier are super expensive but here's how it really works.
Air and Courier companies invoice by the kilo but they also calculate by volume -- it's called dimensional weight and basically, if the volume calculation works out to be higher than the real weight, you're charged for volume. If the real weight is higher, you're charged for weight.
For example, our standard shipping carton is 50 x 58 x 33 cm. According to the way the airlines think, that carton's volume is equal to about 14 kilos.
If there is less than 15 kilos of product in that carton, then you still pay for 15 kilos. If there is more than 15 kilos, you pay the greater amount.
In case you're interested to pursue this further, you can simply search Google for dimensional weight calculator or click here to run the search on google.co.uk (link opens in a new window).
In certain situations, air cargo can be utilized very cost-effectively. Small products with high retail value work fine -- some textiles, silver jewellery, etc.
We handle all the cargo arrangements and take care of all necessary official documentation (certificate of origin, B/L, commercial invoice & packing list, quota visas, etc.) for most of our customers.
A number of customers have their own shipping arrangements -- in these cases, we either deliver to their shipping agent in Indonesia or our products are picked up by their agent.
Insurance for your shipment can be purchased in Indonesia from our cargo company -- for a relatively high price.
But, worse, collecting a claim from an Indonesian carrier or insurance company can be difficult, time-consuming and very frustrating.
If you wish to insure your shipment, we suggest you check with your local insurance company or agent (the same company you buy car & house insurance from) and ask your agent to sell you a policy that insures your shipment "Ex-factory to your front door". Safest and most cost-effective way to go.
One of your responsibilities to yourself is to get on the phone and talk with about five or six customs brokers (or however many necessary) and compare pricing.
Your broker will handle all the paperwork that we send, clear your shipment through customs, settle any duties necessary and so on.
Your customs broker is also a good person to recommend the most cost-effective way of moving your shipment from the port to your front door.
When we receive your order, we will advise you the approximate cost of shipping.
In addition, we will make suggestions regarding upgrading or downgrading the size of your order so that you get the most cost-effective cargo rates and methods of shipment.