Business Times

Basic guide to shipping and exporting (products)

By Viranjan Karunaratne

There are several basic aspects to shipping or exporting a product. These apply regardless of the item, where it gets shipped. These are price, condition and protection and the local rules.
There are three variables in pricing which will affect how costly your shipping will be. The first factor is weight.

Often this is fixed for smaller shipments. However, with certain products this may not always be the case. For instance, would it make more sense to ask the customer to buy a product locally? An extra kilo may add another couple of US dollars for a package from one country to another.

The second factor is size. For freight there would often be extra charges for items with a low density and high cubic capacity. If you are shipping by container then the charge will often be for a container load.
The third factor is time. The cost difference between the next day air delivery and by sea transport is huge, and is magnified for large items. It is vital to plan ahead.

Another consideration an exporter must bear in mind when shipping is the condition and protection of the cargo. Packaging material can be expensive, therefore the exporter must do a risk assessment, taking into account the risk of damage, risk to reputation and the typical cost of re-shipping. Included in the exporter’s risk assessment should also be the cost of insurance.

Things do go wrong and the exporter doesn’t want to be left out of pocket by something which is not the exporter’s fault, which often happens. Many freight companies have limited liability for cargo under International Law.

Local laws and taxes are the most important consideration. To avoid costly delays items should have Commercial Invoices, a Certificate of Origin and of Export at the very least. Most vital is that one considers local import laws. For instance, any organic materials (including wooden objects) going into Australia without an appropriate license will almost certainly be destroyed.

For valuable items, duties, sales taxes or cargo fees need to be paid. There is nothing more damaging to customer confidence than having to pay your fees for you. In conclusion, when shipping and exporting first consider weight, then size, then time and value, then local rules. If you follow these considerations then your item should arrive in a safe and cost efficient way.

(The writer works in the shipping and freight forwarding industry).

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