Sea/ocean shipping charges

GDLadima

Hello dear colleagues!

I am new to the world of international commerce, more exactly, to sea/ocean shipping

I recently came accross some costs that have been charged to my company and I would like some assistance (if possible, of course), related to the these charges.

More exactly, I am talking about 2 charges: LOCAL CHARGES and PORT CHARGES (under CIF delivery term which I know it is not a good option). These two charges seem the same to me and I would like to get a more dinamic, realistic view of these two charges because they feel heavy for us. They have a high amount each time a shipment arrives in the port of destination and, moreover, they raise the level of the custom duties and VAT that is going to be collected by the state during customs clearance process.

Thank you in advance and I am looking forward to reading your analysis!

andrewfaulk

https://www.boards.ie/discussion/2058298417/sea-ocean-shipping-charges

Without knowing more, it is hard to comment on if the charges are high or not..

Can you advise below and I should be able to tell you more

1) Was it FCL(full container) or LCL

2) Who was the carrier?

3) What was the origin?

4) What did they charge you?

Local charges are not included in the customs value for import clearance, so these should not impact on the VAT and Duty payable.. The customs value is based on the landed value up to the point the goods reach Dublin/point of import(so normally Value of goods + Shipping cost + insurance, CIF value)

GDLadima

https://www.boards.ie/discussion/comment/120747898#Comment_120747898

Hello Mr. Andrew!

Shipment type: LCL

Port of discharge: Shenzhen, China

Port of destination: Constanta, Romania

My problem is that when the shipment arrives in Constanta, Romania, I pay two different types of charges (which are a charade if you ask me, under CIF incoterm): port charges and local charges.

My question is if that those „ port charges ” are actually charges related to the port of origin - Shenzhen, China?

andrewfaulk

https://www.boards.ie/discussion/comment/120787832#Comment_120787832

Ah, I didn't realise that these were arriving to Romania instead of Ireland... The rate levels are likely different but the same principles should apply..

Normally for CIF LCL cargo would would expect to pay these charges:

CFS Handling

Agency

Bond fee

Anything extra is likely as a result of your supplier in China arranging the freight.. You should find threads on this forum that discuss this(search China Import service fee).. What happens is that the LCL co-loaders offer cheap rates to the Chinese shipper, but then bill forward charges to their local agents(under various names) to be collected in the country of destination.. The agent in the country of destination has no option but to recover these charge, as otherwise they would be at a loss..

Furthermore, some of the Chinese co-loaders will undertake to transport the goods, even though they may not actually have enough cargo to fill a full container to the end destination port.. As a result, they will pick the nearest port to send it to, and then have it forwarded on from that port to the destination port(Irish cargo might be sent to the Uk or Netherlands and forwarded from there, for Romania, cargo could be sent to Greece and forwarded from there).. This can add even more costs, as the agent in the intermidiary port also has costs for stripping and reloading the cargo, and issuing customs transit documents(T1s) to be recovered, normally from the buyer..

rob316

Your doing it wrong if your leaving freight arrangements to your supplier in China.

Agree FOB and get a freight agency in Ireland to handle the shipment. I'm not sure if I can recommend someone but I use BIAGL.

Your charges should be Ocean freight, terminal handling, agency fee, customs clearance and then whatever delivery is to door.

GDLadima

Thank you all for your reply and help.

So, to conclude, those extra charges - for example, local charges - are the THC at the port of origin (Shenzhen, China). Correct?

Moreover, I forgot to add. I am working in a Chinese company, but my Chinese coworkers obey their orders sent from China, and the Chinese HQ SPECIFICALLY requested the use of CIF instead of FOB.

Why? I do not know. I think it is an option of returning some of the money to the Chinese state. But, if you ask me, this could be done in a more simple manner. Offer me a CIF price, separately from the price of goods. For example. 10k USD the goods, 2k USD CIF price. And that is it. As simple as that, your money still goes back to China.