Dalian port in China’s Liaoning Province is one of the busiest international ports along the Pacific ocean. The Liaoning administration has created an internationally consistent environment so that when importers ship through Dalian port, they enjoy the same treatment as in the UK. If you are thinking of importing from China to the UK, the port of Dalian is a good choice. Here is a guide on how to go about importing from Dalian port to the UK.
All UK customs processes require an EORI number, and the UK customs office uses these numbers to keep records of all imported and exported goods. UK customs no longer accept EU EORI numbers, so if you have been operating with one, you will need to get a new number corresponding to your region in the UK. Get a GB EORI number for importing into England, Scotland or Wales and an XI EORI number if your goods will be moving from Dalian to Northern Ireland. Your supplier in China will need your EORI number to write on his export declaration, commercial invoice and other export documents.
China currently applies three types of controls on goods for export:
The type of licence you need depends on the type of the items, their volume and your trading terms. As an importer, you will only need an export licence if you buy Ex Works terms. EXW means that your supplier has not included the procedural export fees in the quoted price, and you need to take care of this yourself.
In comparison, if you are importing from Dalian on FoB terms, the supplier handles the export fees in China, and the responsibility of getting a licence is on his side. When trading on EXW terms, it’s best to choose an expert freight forwarder. All Foreign Trade Companies (FTC) in China must have a license to export from China; therefore, a good freight forwarder will have an export licence.
EXW, FoB and CIF are incoterms that essentially outline who will bear certain transportation costs and risks. If this is your first time importing from Dalian, you need to pay special attention to these trading terms as they can greatly alter your shipping costs.
If you get a quote listing EXW or Ex Works, it means that you will be responsible for transporting your goods from the supplier’s warehouse to your destination and handling all costs in between. You will be responsible for getting your cargo through customs at Dalian port and managing all export documents, licences, and fees. Ex Works terms may cost you a fortune if your supplier is based far away from the port and does not have an export licence.
In addition to handling local customs in China, you will also handle the cost of shipping your goods to the UK and getting them through UK customs. Ninety per cent of traders in China offer FoB terms, but as business profits continue to plummet, more and more suppliers are shifting to EXW terms.
Most of the quotes you get from suppliers will be FoB, meaning that the supplier will bear the cost of transporting the goods to the port, preparing export documents and filing an export declaration. You will only need to worry about shipping to the UK and getting your cargo through UK customs. Because your supplier will be handling local shipping costs, he will most likely sell to you at a higher price than on EXW terms. However, because suppliers can transport goods cheaper than any freight forwarding company, your total trading costs will be significantly lower.
CIF and CFR are nearly identical. Both terms mean that the supplier will get the goods from his warehouse through the Dalian port and cover the cost of shipping to your destination port in the UK. The only difference between the two is that with CIF, your supplier will handle the insurance cost, and with CFR, you will handle the insurance cost yourself. With CIF/CFR, you only need to worry about getting your goods through UK customs. However, this will come at a high price.
Generally, EXW is the cheapest, and CIF is the most expensive. If two suppliers give you nearly identical prices, but one quotes EXW shipping terms and the other quotes FOB or CIF, the second quote will cost you significantly less.