You’ve sourced the products you want from a supplier in Guangdong, Shandong or Shanghai. Now you need to understand the costs involved in getting those shiny consumer electronics or fashionable shoes to the UK for sale…
As well as import duties, VAT and insurance, there’s the actual cost of transport to consider. From couriers and air freight, to rail freight along the new Silk Road from China and sea freight in full or partial container loads, different shipping modes bring their own unique cost implications. And important cost-versus-time trade-offs that a skilled freight forwarder can advise on.
For help or advice on import costs or any other aspect of shipping from China, call 01268 525444 or email us today
More on the costs to import from China to the UK
For this page, let’s assume that you’ll be importing from China by sea, tackling the challenge of moving goods halfway around the world, then addressing China import fees when your goods arrive..
Your choice of Incoterms affects your import costs
One of the most important things affecting your import charges from China will be the Incoterms (International Commercial Terms) in the contract you agree with your Chinese supplier. Because of the allocation of hidden costs, the difference between FOB (Free On Board), Ex Works (EXW) and CIF/CFR (Cost, Insurance and freight/Cost and Freight) can make a huge difference to the cost of importing from China. Read more about the difference between FOB and CIF/CFR here.
Armed with a good basic understanding of these shipping terms and their cost implications, you can start considering other factors that will determine the price you get from your shipping partner. Here’s the minimum information they’ll need to quote for shipping goods from China to the UK:
- Weight, dimensions and volume of your goods (sea freight costs are based on the greater of volume or weight – from experience, volume is usually used. Look out for the industry shorthand of ‘Weight or Measure’ or ‘w/m’ that equates a volume of one cubic metre to a weight of 1000 kg).
- The Chinese port of departure (e.g. Shanghai, Port of Shenzhen, Ningbo-Zhoushan or Guangzhou) – read on for more about the cost implications of different outbound ports in China.
- The delivery address for your goods in the UK (it could be round the corner from The Port of Southampton, just off the M6 in Birmingham or outside Lerwick on Shetland). Each will have a different impact on door-to-door shipping costs.
- Agreed shipping terms (FOB, EXW, CIF etc.).
Different costs from different ports in China
Before considering the cost implications of shipping through different outbound ports when importing from China to the UK, it’s worth familiarising ourselves with the basic economic geography of China’s ports. A quick look at Google Maps or a visit to MarineTraffic.com will show the ports on China’s 14,500 km-long coast between Dandong and Dongxing – and the considerable distances between them.
For various reasons, including economies of scale, sea freight rates vary between these ports. According to the Port Technology website, and based on 2018 statistics, The Port of Shanghai is the busiest port in China (and the world). It handled around 42 million TEU (twenty-foot equivalent, an industry cargo capacity indicator based on standard 20 ft shipping containers) each year. Smaller ports don’t enjoy the same economies of scale. Sometimes, they won’t even have direct container connections with the UK. That will need extra transit and transshipment en route – with correspondingly higher sea freight costs.
Another consideration is your supplier’s location in relation to Chinese ports. With an area about 42 times the UK’s, China is a huge country. Many manufacturers are based near the coast. However, you could easily find yourself sourcing from far inland, such as Yichang (Romanised to Ichang), a major inland port on the Yangtze River and the second largest city in Western Hubei Province. Being over 1000 km from the coast means significant overland transit costs to get your goods to a port. If you think the 69-mile run from Southampton to London is annoying, imagine the impact on shipping costs and transit time of moving goods from China’s heartland…
The geography of manufacturing and logistics in China suggests that if you’re sourcing electronic products, you’ll probably favour factories in the electronics ‘hotspot’ around Shenzhen on Guangdong’s coast. Similarly, for consumer goods, textiles, furniture, bicycles or household appliances, the Yangtze River Delta (served by ports such as Shanghai, Suzhou and Ningbo) may be rewarding.
Regardless of where you decide to source your products, rest assured that with our experience we can advise on the most favourable outbound port and shipping options. Trust us; they aren’t always the ones that appear most obvious from the map of China!
Length of voyage from China to UK
Then, of course, there’s the voyage distance between the outbound port in China and the container ship’s destination in the UK. After travelling nearly 12,000 nm (22,224 km) from Shanghai to the UK, the effect of the 202 nm between Southampton and, say, Felixstowe is minimal. However, at the start of the journey from China, the 1714 nm between, say, Shenzhen (in the south) and Tianjin (north) is much more significant for both time and fuel costs.
Other factors influencing costs of sea freight from China to the UK include the distance of your factory from the nearest port and the relative susceptibility of full and part container loads to price variations. Fortunately, we can demystify this for you, help you navigate container pricing and save you from a lot of hassle.
Consider a shared container for small shipments
If you’re not importing a full (or close to full) container, Less then Container Load (LCL) shipping, where your goods share a container with other importers’ merchandise, is usually the way to go. This can be appropriate when testing the market with a small initial order. Just tell us what you want to ship and we’ll work out whether FCL or LCL will be best for you. Over 20 years’ integrity in freight forwarding means you can trust the advice we give you.
What are typical container shipping rates to the UK?
Container shipping from China to the UK isn’t just about part or full containers. The size of the container itself also has a bearing on cost. Whether it’s a standard 20 ft (6.06 m) or 40 ft (12.2 m) container or an extra-tall ‘high cube container’ (also, ‘Hi-cube’) also affects the price you pay.
For a firm quotation that takes into account all the factors involved, please call 01268 525444 or email us today
Keeping your costs transparent and manageable
Good freight forwarding is about keeping your costs transparent and understandable from when goods leave your Chinese supplier to the moment we deliver them safely to your UK address.
Avoiding hidden charges
Keeping costs manageable is all about avoiding hidden charges that can surprise you once your shipment reaches the UK. We do this by advising on the most suitable Incoterms. Typically, this means FOB rather than CIF/CFR, though getting an EXW price from China might be okay for samples or small trial shipments. We’ll also advise on the most appropriate way to ship your goods. This could be by air or sea, in full or part containers, with a suitable choice of outbound port based on our understanding of local geography.
When your shipment arrives in the UK, we’ll help you further by clearing your goods through UK Customs with the lowest possible duty rating. And, of course, with access to a huge fleet of different vehicles, we can also arrange cost-effective onward delivery to any UK or European address.
As our separate article on FOB vs. CIF/CFR shipping terms explains, choosing FOB is key to keeping the costs of importing from China under control and avoiding nasty surprises from hidden costs before your goods can be released. With FOB, as any experienced freight forwarder will confirm, all your costs are clearly visible from the beginning.
Customs charges from China
Lastly, a few words about customs charges on goods you’re importing from China. Along with UK VAT (Value Added Tax), this is another cost that can quickly increase once your goods are unloaded at their UK port of entry. Importantly, you won’t be able to get the goods released and delivered on to your UK location, without paying the Government.
The only exception to settling in full on arrival is if you’re registered for a recognised duty relief scheme that allows you to pay reduced (or no) tax or duty on imports. Historically, duty relief schemes have applied in situations such as import for short-term use in the UK or storage in UK customs warehouses. With Brexit (‘EU Exit’), expect the former EU-centric GSP (Generalised System of Preferences) scheme to change. In turn, expect changes in tariffs and duty relief schemes applicable to imports from China. For updates on the fast-evolving post-Brexit situation, please bookmark our Brexit page.
For advice on freight forwarding and the cost of importing goods from China call 01268 525444 or email us today