We talked to Shypple and they kindly provided a brief introduction to freight shipping. Especially on shipping from China up to Amazon warehouses in Europe. Enjoy their insights!
Before we go into details about freight forwarding and arranging transport overseas, let’s take a look at the numbers below with regards to imports per geography and import modalities on a global scale, but also more into detail with regards to Europe.
As could be observed in the tables above, when importing, Europe tends to bring in lots of goods by road and a small portion by rail. Overseas imports are usually handled via sea and airfreight. For a good understanding of both overseas modalities, the below tables give a good overview of numbers per geography.
So when shipping goods overseas, there is a basic choice to be made between either sea freight or airfreight. There are several aspects to take into account when choosing between these modalities:
These criteria can easily help you decide whether to import goods via sea or airfreight. After this, it is important to consider under which Incoterm (International Commercial Term) you are buying goods. The Incoterms are an essential part of global trade contracts of sales. The Incoterm clearly states which party (shipper or consignee) is responsible for which parts of transport, port handling, customs, insurance and import duties. Let’s take a look at the most commonly used Incoterms when importing:
Under ExWorks, the buyer (the importer) is responsible for the full transport from pick-up location up to delivery address. This includes pick-up, stuffing, consolidation, origin (air)port handling, customs export clearance, sea or airfreight, destination (air)port handling, customs import clearance, on-carriage, insurance and import duties.
Under FOB, probably the most commonly used Incoterm, the seller is responsible for delivering the cargo to a port or an airport, handling charges at the (air)port and customs export clearance. Consequently, the buyer is responsible for ocean/airfreight, customs import clearance, on-carriage, insurance and import duties.
Under CIF, the seller is responsible for delivering the cargo to a port, handling charges at the port, customs export clearance, ocean/air freight, destination port handling charges handing over the cargo and insurance. Consequently, the buyer is responsible for customs import clearance, on-carriage and import duties.
For a full coverage of all the possible Incoterms, see below table:
A freight forwarder typically acts as a “broker” or intermediary between a buyer, seller, several transportation agencies and customs brokers. The forwarder strings together the various aspects of the transport needed to get goods from A to Z. See below table for a quick understanding of the services a freight forwarder offers as a combined package for their clients.
As you can see, the freight forwarder acts as a middlemen who strings together all the executing / operating companies and their services for the process of shipping goods from shipper (exporter) to consignee (importer).
On the top level there’s an exporter who needs to ship goods towards an importing company. The forwarder is the middlemen who arranges the actual services required to arrange the shipment. This means arranging pre-carriage, warehousing, appointing a customs agent, arrange terminal handling, sea freight and the same local services after arrival in port of discharge.
If you ever purchased consumer articles (like clothing) online, you must have noticed the relative ease of doing so and being able to receive these goods (even when seller is located in another country) with much ease and transparency.
Unfortunately, when shipping freight, this is a bit harder and less transparent.
Putting things into motion when you have agreed on the Incoterm can be a pain in the ass. Requesting prices at three different forwarders can easily result in three completely different quotes, with lots of varying cost items, some “if applicable” some “if arriving on terminal x” or “excluding surcharge x.”
This makes it hard to easily compare quotes you receive, and though seasoned importers and exporters might be able to quickly compare prices, it remains unclear and not very transparent.
After accepting a quote and selecting a forwarder, the follow-up processes of a forwarder may vary and take quite some time. Let’s take a look at the chronological process:
The customs duty is determined on the basis of the commodity code and the customs value. The customs duty is usually an ad valorem duty, calculated as a percentage of the customs value of the goods. The customs duty can also be a specific duty, e.g. euros/kilo or euros/litre.
As a rule, the customs value is the purchase price of the goods + the transport and insurance costs up to the EU border.
Every imported or exported item is assigned a commodity code that corresponds to its product type. These numerical codes are used by countries worldwide for statistic- gathering purposes, determination of import tariff rates, determination whether a product qualifies for a preferential (lower) tariff under a free trade agreement, guideline for the required import documents etc. This commodity code is often referred as a HS Code. For more information on a tariff system, please visit the Taxation and Customs Union website.
In addition to customs duty, VAT is something which is normally paid when importing. Importers must pay VAT on top of the total sum of the customs value and the import duty. VAT is paid to the state, in the country of entry and according to the local rate. Each EU member state sets its own VAT rate. Each state can also set different VAT rates for different products or services – or even implement exemptions (0% VAT). For more information on standard VAT rates across EU, please check the following PDF document “VAT rates applied in the Members States of the European Union”.
Customs Value: EUR 10,000
Import Duty: 5% (EUR 500)
Sum: EUR 10,000 + EUR 500 =EUR 10,500
VAT Rate: 20% (DE Rate)
Total VAT: 20% x EUR 10,500 = EUR 2100
Total Amount: EUR 10,500 + EUR 2100 = EUR 12,600
FBA uses barcodes to identify and track inventory throughout the fulfillment process. Each product sent to an Amazon fulfilment centre requires a barcode. There are two kinds of barcodes that are used to identify products:
Products that do not use the manufacturer barcode for tracking, require an Amazon barcode. A seller can print Amazon barcodes from within the seller account and apply the barcodes. If a seller does not want to apply the barcodes, they can sign up for the FBA Label Service and have Amazon apply the labels for a per-item fee ($0.2).
Each box or pallet shipped to an Amazon fulfillment center must be properly identified with a shipping label. Guidelines for labelling boxes:
Besides product barcode and shipping label, there is a question of a shipping mark. A shipping mark is simply a mark on the outside of the exterior shipping carton of an item being exported. At the minimum, shipping mark should include weight and dimension of a single carton, the number of the carton and total number of cartons (such as 1/50, 2/50, 3/50), the number of units in carton and information on actual product (content), country of origin (“Made in China”), manufacturer’s information.
TIP: It’s important that information on the shipping mark matches the information on the packing list.
Further Resources on this topic by Amazon:
Whenever you’ve shipped goods, you have probably come across several types of documentation required for exports and imports. Let’s take a look at the most common documents:
In recent years, a lot of industries (travelling, transportation, wholesale) have been disrupted by digital processes that enabled easier and more transparent processes. Freight forwarding is currently heading the same way as new parties are coming up with innovative products, platforms and ways of working. In airfreight, small parcels can usually be arranged and sent online with relative ease via parties such as DHL and Parcel International. For the larger airfeight, road freight and sea freight shipments, such possibilities are only just being introduced on a global scale.
Many importers and exporters do not and should not need to have all the knowledge required to ship their goods. A forwarder is usually the broker that helps with all these aspects. However, recent developments in digital infrastructures in almost any industry have created some sort of necessity for companies to gain more insights, overview and status updates over their processes. As typical freight forwarders have not yet digitized their working methods, shippers are usually stuck with more conventional working methods. Therefore, freight forwarders are now increasingly looking to offer importers and exporters the insights they are starting to demand. Among others, these include the following demands and wishes:
At Shypple, we offer our shippers a very easy and intuitive web-app that foresees in these possibilities, as can be observed below.
Shippers can easily select the services they need, add weights and dimensions and request (when door to door / ExWorks) or book a shipment (when port to door / FOB) directly from the easy to use web-app. Several shipping possibilities will be shown for sea freight, whereas airfreight can be easily requested via this search tool. By offering direct insight in shipping tariffs and sailing schedules from and to Rotterdam and Antwerp (Hamburg also possible as request) we can offer cheaper rates and the possibility to directly arrange a shipment via our web-app, instead of hassling over phone and email!
After a shipment is booked, a central overview is created, with several tabs that offer all the required information. Both our shippers and our operations managers can up- and download information, documentation and add comments. Whenever you or your colleagues add information, documentation or comments we will receive notifications and vice versa when we do so. This foresees in very fast communication, limits errors and offers more insight and control in / over shipments.
Another great tool for shippers is our integrated track & trace plugin, which foresees in live insight of the current location of your shipment (for both sea and airfreight shipments). Is your shipments’ estimated time of arrival delayed? You will be notified within 15 minutes. This helps you to better inform clients in time and enables us to work towards possible solutions faster.
Shypple highly believes that providing these possibilities to a shipper will not only help a shipper, but also improve the inbound processes of a freight forwarder. It limits unnecessary e-mail streaks going back and forth, offers faster and more ways of communication and a mutual dashboard to and from which information and documentation can be uploaded and downloaded. This lowers the relatively high margin of error in traditional freight forwarding and foresees in a somewhat more pro-active service instead of a reactive one (where shippers have to request information a lot themselves).
Besides the necessity of such insights becoming ever more clear in this digital age, one can also observe the influence of large e-commerce parties such as Amazon and Alibaba. As a starter, these parties are the ones that introduced importers and exporters to the new ease and pace with which goods can be bought and sold globally. As a logical next step, the e-commerce giants will increasingly look for new possibilities for their users. In the coming years, it is expected that many of these parties will actively look at ways to improve international trade by offering some logistics solutions themselves from the same dashboards their users are already purchasing and selling their goods.
One can only question what the impact will be for shippers, forwarders and even carriers/airliners but we can only expect the entire industry to be further digitized and becoming ever more transparent from purchase up to delivery.
As a digital forwarder, Shypple offers customs brokerage, freight forwarding services, labeling, deliveries and all aspects Amazon stores such as yours need. However, Shypple’s experienced operations team is empowered by our digital way of working, which is why Shypple is increasingly being described as the “disruptor in a traditional industry.” We offer importing and exporting enterprises a central and digital web-app that acts as a supply chain dashboard for all in transit, planned and delivered shipments.
The web-app helps importers and exporters as it foresees in a variety of booking, planning, delivery and communication possibilities. Multiple users from your company can access this tool and are in direct contact with our operations coordinators. When a shipment is booked within our web-app, users within the company are automatically updated via a milestone overview that sends automated updates with regards to ETA adjustments and milestone achievements (for instance: booking confirmed, shipment departed, customs clearance completed, delivery date can be planned).
In essence, this lowers the traditional margins of error in shipping, it ensures faster communication, foresees in more insight per shipment and oversight upon the entire supply chain and it lowers both direct and indirect costs related to shipping goods.
In the last year, we have experienced an ever-increasing demand from European based Amazon buyers and sellers to have more visibility, insights and control over their shipments and have helped out a wide variety of businesses from purchase, collection and labelling of goods up to warehousing or delivery, all from an easy to use digital dashboard.
Are you looking for new ways of organising your freight shipments from or to Europe or are you planning to start buying or selling goods via Amazon in Europe? Get in touch with our e-commerce expert Milan at email@example.com, we would be glad to help you!
Michiel was the 2nd person to join Shypple, as commercial manager. Shypple offers importing and exporting companies a digital supply chain dashboard that helps to ship freight in an easy, transparent and cheaper way. Together with Milan Borkovic (e-commerce specialist), he is currently expanding the e-commerce aspect of Shypple and helping out Amazon sellers in Western-Europe.