Shipping Amazon Items With Ocean Freight

 

Hello, my friends!

I’ll talk about logistics in this article. It’s not my fav cup of tea, anyway, products need to be delivered to warehouses and this point is vitally important for every Amazon seller.

A few notes before we start. Of course, I won’t be able to cover the full topic within one article. I hope I’ll mention enough details that will make your logistics work easier. One more thing is that different countries have various importing/exporting rules, but I’ll tell you about importing products from China to the US. And the last point, you have to perform your own research work basing on my experience, but not to copy it from A to Z, as it won’t work the same way.

 

Why is it better to work with Ocean freight?

Pros:

  • A cheap price. It is usually more than 50% cheaper than shipping by air.
  • This option is scalable for long terms. Every business is aiming for cutting expenses everywhere it is possible. Shipping costs are the first thing to cut. When doing that, you’ll need to make sure that there is enough of items left in the warehouse and that you won’t run out of the stocks while you are waiting for a new product party coming from overseas. If you consider all these points, you’ll be able to increase your margin with using ocean freight.
  • Nice experience. Maybe it’s not the best experience when you have a lots of paperwork, but it can surely help to form some effective habits, such as researching suppliers and manufacturers, gathering and comparing prices, understanding how much hidden costs are there, building relationships with suppliers/vendors/investors, etc. Such things may be useful in your future work with Amazon.

Cons:

  • Lots of paperwork. While you need just a couple of document for air shipping, ocean freight shipping requires much more documentation. You may pay your vendors for managing with that work, if you don’t want to deal with it by yourself.
  • Time. Usually it takes from 4 to 6 weeks to ship a freight by ocean. The exact time limits depend on your and cargo’s locations. It is much longer than air delivery, but still, it’s much cheaper. So, try to order goods in advance, while you have products in stock.
  • More costs on middlemen. Yes, in general, ocean freight is cheaper, but there are lots of additional fees, taxes and duties that must be payed.

 

A customs broker VS a freight forwarder

Freight forwarders move product from some country to another one. They act like agents and make sure your freight is shipped according to the international laws. They can be intermediaries between importers and exporters, or between shipping firms.

A forwarder makes logistical arrangements with manufacturers and suppliers, get your items and ship them to the country you need.

Customs brokers have more specialized work. They follow the logistics process until your cargo crosses the US border. They work with taxes, fees, duties, documentation, etc. Such person gets your products through customs on your behalf, like a trusted guide in a maze of paperwork. :)

Many firms offer both options that belong to different departments.

 

When do you need a customs bond and what is it in general?

It is a special proof that you've collected all fees and taxes with your imported freight. In other words, if you've brought a cargo for the further commercial use, you may have a customs bond that ensures that you've paid all the necessary fees to the government.

As for me, I've got a 'continuous' customs bond, as it can save money comparable to a 'single entry' customs bond that is needed to be got every time you import something from overseas.

For example, a continuous one costs $450, while a single entry one is $40 for a freight that costs less than $10K.

 

Are there some issues with customs clearing?

Delays and holds up are not exclusions for the clearing process. It usually continues for 2-4 days, but sometimes it can take more time.

Customs inspection can hold up to several weeks, if you're unlucky. In fact, I'm not aware of the causes for such situations, so I can recommend filling all forms and documents as accurately as you can with the hope for the best outcome!

 

Some best practices of ocean freight

Here is the list of the necessary paperwork:

  • An invoice;
  • A packaging list;
  • Supplier's location and the final destination (your or Amazon's warehouse);
  • Parameters (size&weight) of the shipped products;
  • Terms (EXW, FOB, and so on).

Gathering quotes. Get and compare shipping costs from various companies to choose the best option. Look at what services do they offer and whether they have comfortable conditions. Try to get all the info from the list above beforehand, it will make choosing the best shipping provider quicker. They say, time is money, so save your time everywhere you can.

Writing down all the details. Check how your items are packed (in boxes, in pallets, mixed inventory, and so on), how many pallets/boxes there are, their weight, size.

Asking about the ISF (Importer security filing). As every importer, you must file basic documentation before your cargo comes from overseas to the US. You may face additional customs fees or inspections, if you file them inaccurately. Freight forwarders usually care about those documentation, but better to check twice by yourself to avoid unpleasant situations in future.

Find an importer of record. Amazon won't play this role for any shipment. So, find one, if you want to avoid delays, rejects and any other problems.​​

Calculate all the hidden costs. There may be some additional hidden costs that you are not aware of. You can think that your forwarder cheats you, but it can be not true, so always check all costs and write them down somewhere. Here are some examples of such costs:

  • Insurance of the cargo. It can cover the costs in case of damages and other issues with your imported products. Insurance can be worth it, especially if you import expensive luxury items.
  • Customs clearance. Pay to a forwarder or a customs broker to bring your products through the customs inside the United States.
  • Customs bond. If you have a plenty of shipments, think of a continuous bond, or you'll need to pay it in every single situation.
  • Fees for arrival agents. If your freight forwarder doesn't do this work, you'll need to find someone to manage your domestic logistics inside the country.
  • Fees for warehousing. Find a place outside Amazon to store your excess products, if Amazon's warehouse can't place all your inventory.
  • Shipping to Amazon's warehouses. Always check whether Amazon's partner fees have left on the same level, as they can affect your budget.

Don't let your supplier sending the cargo to Amazon, cause you need a forwarder to handle it, you need an importer of record.

Be honest with your freight forwarder with goods you're importing, as some additional clearance may be needed.

 

A short glossary:

Here are the most frequently used phrases that you'll need during importing products. You'll likely come across them, so I'll tell you what do they mean.

Bill of lading (BoL or B/L) is a document of a shipper and a carrier that proves that products are received for the further shipment and contains the info on quantity, type and destination of products. It is needed for all shipment types and all kinds of goods. It has to be signed by everybody: a carrier, a shipper and a receiver.

Cost insurance and freight (CIF) means that products are delivered to the US port. Buyer takes all responsibilities such as taxes, duties and delivery.

Delivery duty paid (DDP) says that the cargo is shipped all the way to the destination point (Amazon warehouse). All duties has paid already.

Free of board (FOB) means that a supplier assumes the expenses of delivering your cargo to the port (it may be Shanghai in China, as an example). Buyer takes all responsibilities on the international shipping and fees.

Less than container load (LCL) means that your cargo doesn't fill one container, as your goods are shipped with others. It's a good option if you need a certain quantity of products and it's not enough for filling an ocean freight container.

Full container load (FCL) is an opposite option to the previous one. It means that you fill the whole container.

 

Conclusions

All this info may seem a bit complicated at the very beginning, but if you hire a good customs broker or freight forwarder, he'll manage everything for you.

Contact them, compare the prices and proceed further.

I hope that my article was useful and shed the light at the ocean freight question. Of course, it's not everything, but here is enough informations for novices. Contact me, if you have some question left!

And please share this material with your friends who work on Amazon!