Introduction to Air and Sea freight Strategies
The world of import and export be it air or sea freight can be a tedious, competitive industry. We all try to ensure our products are of best quality while obtaining it at a bargain price.
Although importers concentrate on obtaining the best quality whilst keeping the price in mind.
It has never occurred to some importers that there are other means of reducing their overall costs. In today’s article we are going to look at a few things.
Firstly how you can keep an eye when governments enter into free trade agreements with our neighboring countries. Secondly when to take advantage.
What does this mean?
Well, lets say that you are currently importing. Most of the time Customs love to ensure they receive their Duty and tax’s on every consignment. If the goods are worth at about 15 000USD. The tariff of those particular goods state that the duty rate for those goods are 5%.
You will end up having to pay that duty rate along with other tax’s which increases your purchase price.
This means a lower profit margin. When we look at what countries have a free trade agreement in place, we can ordinate with new or existing suppliers. Within that region you can take advantage of the duty free rates.
YES, when free trade agreements occur you need to take advantage of them. Instead of paying that 5-10% duty and tax to Customs you could save that in your purchase price which means more profit in your pocket.
In Australia we have the department of foreign affairs and trading. Usually we can go to this site and see what upcoming free trade agreements they are negotiating and when it will come into effect. If there are already existing free trade you can research you product, to see if that actual tariff classification relating to your goods is duty free !.
Not sure what a tariff classification is? Then speak to a freight agent / Customs broker. Tariff classification is described as identifiable indexed number used to classify those import or exported goods for the purpose of duty and tax. Check the rates for your goods. If you have imported before you freight agent can help you show what the tariff of your goods and then you can see where you can make the savings.
Conducting Sea Freight Imports?
If you are already conducting sea freight imports out of Europe, check to see if there is a country nearby that you can obtain the same quality, at a cheaper rate and see if there is a free trade deal in place that you can consider. When trying to obtain new suppliers for an existing business, this can be a real penny saver. Every factory in the world is looking to sell their products.
Your looking to have a timed and efficient service ensuring your costs are low and margins are up. This is just a small tip to look into. In most cases the department of foreign trade or the right authorities in your country can give you the proper support. They can advise what the required certificate or declaration is. This you will need to ensure that you can claim the 0% duty preference when declaring your goods to customs.
What Current Free trade agreements are in place?
When we look at what free trade agreements are currently in place.
We are utilising an economic and business advantage in where we may be able to co ordinate negotiations with different suppliers.
Having even a 5% different in a landed price from offshore can result in a higher return.
The Australia – New Zealand Closer economic Relations Trade agreement known as Azcerta is currently in force between our countries. That means if you decide that you have a willing supplier who can produce quality goods at a discounted price then this Free trade agreement in place may be a perfect dessert for your importing or exporting requirements. Most of the tariffs are already at a reduced rate, practically to a zero so it will ensure competitiveness against larger firms if you are a starting or new business operator.
Australia and New Zealand are partnering countries. With air and sea freight rates low due to the continuous trade among our countries and a trade agreement in place this can significantly give you the edge you need in bringing quality goods to the country. The great pick of New Zealand is also the quality of the products. New Zealand is also one of the countries that places strict compliance and standards on the quality of the products they produce.
What does this mean for you?
This means you will also have a higher quality range of goods that would most likely be approved by the SAI GLOBAL STANDARDS. Ensuring you even meet Australian Standards. A great factor when you are operating a business within the international trade realm. Cheap freight rates, Exceptional quality control and a free trade agreement in place makes your business ahead of the game.
This would also be a great opportunity for importers or exporters to continuously travel between the countries to check quality. Importers can make manufacturing queries with suppliers.
An easy flight to our nearby neighbor makes you in more control of your trade.
Speak to your freight broker about the compliance and paperwork you require so your goods are duty free.
For the Anzcerta agreement to take place, there needs to be compliance that the goods are made of New Zealand origin. When you obtain your free trade certificate which you can reach out to your supplier. The supplier will arrange for the good either to be inspected or documents passed to the regulating body. They will approve the goods for export and issue the free trade certificates.
Freight brokers and customs brokers require these to process your paperwork with Customs.
Australian Customs Entry
Customs evaluate each air or sea freight entry. Freight agents and brokers lodge declarations that is true and correct. Supporting this self-appraisal condition are administration procedures to recognize the declaration and the country of origin ( New Zealand). Cargo declaration are then reviewed for consideration. In addition various consistence administration checks are conducted on the Declaration and its documents including ongoing checking of sections and reviews.When a air or sea declaration is lodged with NZ Duty preference. This will be taken to demonstrate that the merchant of the merchandise has data, or learning that the cases made on the affirmation are right.
Criteria for qualification for inclination rates of obligation
The criteria for qualification for New Zealand inclination rates of obligation are in Article 3, Rules of Origin to ANZCERTA. This is located in Division 1 E of Part V111 to the Customs Act 1901.
Confirmation of Preference qualification
Procedures of consistence checking may occur at entry of the goods at port or airport. At any stage up to 6 months can Customs check your warehouse.
Qualification of Preferential Duty
To obtain the duty preference, customs require you to make queries and obtain sufficient evidence from the supplier.
The data ought to affirm that the products meets one of the prerequisites recorded in the archive titled “New Zealand Originating Goods – Sample Declaration and its requirements.
On the off chance that a particular product meets an item particular in Annex G to Article 3 of ANZCERTA, at that point the data should detail precisely which item particular has been met and why it has been met. Your Customs or freight broker can help you meet this.
Is an endorsement of inception required?
Article 3.16 of ANZCERTA does not require an endorsement of inception. An importer can have the goods entered for preferential duty with a declaration made by the supplier.
How is the data utilized by Customs?
Customs officers always check the information provided to them. All origin preferences must meet legislative requirements such as the Customs Act 1901.
On the off chance that Customs accordingly finds that the products don’t meet the pertinent terms and conditions. Customs will request any obligation short-paid and may enforce further penalties onto the importer or party responsible for the goods. Always take the time to see the Customs Infringement Notice Guidelines
SAFTA- Singapore – Australia Free Trade Agreement
Singapore is a country that importers and exporters can dive into. From 2016 statistics of exports out of Singapore has increased. We can see that the country has increased its exports in Feathers, Artificial flowers, fur skins, rail equipment and more much.
Singapore is another one of our picks that exporters and importers should look into the market. Goods out of Singapore will also be accepted if those goods are manufactured soley in the country. Even from originating materials sourced in Singapore. They have extensive quality control, so the business trader can be relieved that there are strict quality requirements for when the small country exports its good. It is also another small designation that most larger distributors tap into to obtain niche products due to their high service levels.
If you are looking into importing or opting for a supplier from Singapore, then check out some of their exhibition trades that they hold annually. Its one sure way of meeting and greeting with some great suppliers and products. Suppliers are quite well known for new technology and new items that the Australian market has not seen. This is where your competitive edge will come into full force.
From our previous dealings with Singapore consignments most of the freight is conducted via air freight and sea freight. More common so, sea freight. The freight rates are actually quite cheap in comparison to shipments out of the USA. In our opinion they are right on par with the cost of China in terms of freight rates but of better quality according to our statistics.
Always ensure you check that the supplier has the proper export licenses. This will help you acquire the free trade certificate so that your business can succeed in lodging and obtaining the duty free tariff concession It should have a relevant government or authorized body stamp on the document. This requirement ensures its legitimacy.
linking all certificates is a must!. Basically the certificate has to have a commercial invoice or container number on it.
What are some goods you can look into in Singapore?
- Electrical devices and equipment
- Mineral Fuels including oils
- Medical or tech equipment
- Organic Chemicals
- Gems and Precious metals or stones
- Aircraft parts
Ausfta – US Australia Free trade agreement
The U.S free trade agreement means that when you purchase goods from the states. The quality and product can obtain preferential duty. The only problem about this would be that the states contain a lot of inland trucking. You will end up having to liaise with your freight agent, to see if its worth trucking the goods to the nearest port. You can then opt to see if the waiver in duty will help in the landed costs of the goods being drastically reduced. There is currently no requirement apart from a declaration made by the supplier that the goods are of U.S Origin.
an example of the free trade certificate – Us Origin Certificate
The U.S are well developed in manufacturing and are quite recommended by us to find a supplier over there. The quality of the goods are exceptional. There has been minimal complaints in terms of complaints of the quality within our opinion. Their manufacturing has increased dramatically in an attempt to compete with rival China. In this development of new products has unleashed a steam of never before seen products. If your after a product not yet on the Australian market. Try to get into a trade show over at the states as you will be amazed at what is really out there. The sea freight rates are more expensive from the U.S in comparison to China. When you read our article of how to import we give you more tips on how to minimize more costs and get a great supplier to contact.
US Supplier Support on Sea freight.
From sources we have discovered that the U.S have a quick response and contact etiquette when liaising with them for purchasing goods. Our clients and network agents have received positive feedback in terms of warranty, return of goods and a relaxed approach to entering into a business relationship. If you are looking for a reliable supplier in our opinion some of the US suppliers can outrank and outmatch most countries customer service and performance.
Lastly our tips on air or sea freight shipments will concur that all your shipping movements be accompanied by the bill of lading and packing declaration for custom purposes. In our next article we will be covering in detail the other free trade agreements have with Australia. China is on a rise and if your entering the market, be prepared to have strategy and a sharp mind. Business and negotiating can turn sour. With out tips it can help the new starter stay afloat to develop and grow their business. Till then leave us a comment.
DFAT WEBSITE – LEARN MORE ABOUT FREE TRADE