Terms Used when importing from China
1. EXW (Ex Works)
EXW or Ex Works refers to the international trade agreement whereby the supplier is expected to make goods ready for pickup at his/her business place. The buyer will be responsible for all costs and liabilities of the shipment once it leave the sellers business address.
When using these shipping terms, the cost and risks of shipping goods lie with the buyer alone. This implies that Ex Works enables the buyer to have a clearer picture of the costs involved ahead of time. The buyer will also be in control of the whole shipment thereby preventing the seller from increasing their local costs.
2. FOB (Free on Board)
FOB or Free on Board is an agreement that demonstrates whether the buyer or the seller has liability for goods that are damaged in transit. "FOB shipping point" implies that the buyer will bear the risk if the goods are shipped while "FOB destination" implies that the seller will bear the risk of any loss until the buyer gets the goods. The term FOB is employed in non-containerized sea freight or inland waterway transport. It does not refer to the transfer ownership of goods.
3. C&F (Cost and Freight)
C&F or Cost and Freight refers to a legal recourse term that is employed in international trade whereby the seller does not need to procure marine insurance against the risk of loss or damage to the goods being purchased while shipping goods. Under this term, the seller is expected to cater for the carriage of goods by sea to a port of destination and give the buyer the necessary documents.
4. CIF (Cost, Insurance and Freight)
CIF or Cost, Insurance and Freight is a trade term that requires the supplier to arrange for the transportation of the goods by sea to a port of destination and also provide the buyer with the necessary documents. EU countries use the CIF value for calculating the duty that must be paid on an import.
B/L (Bill of Landing) refers to a document issued by a carrier or its agent to a shipper. It stands as a contract of carriage of goods. It also acts as a receipt for a cargo that is accepted for transportation and needs to be presented before the goods' delivery can be taken at the destination.
A bill of landing contains a number of components, these include;
- Consignor's and consignee's names,
- Ports of departure/arrival
- Vessel name
- Dates of departure/arrival
- List of goods being transported
- Packaging details
- Weight, volume and cost of freight
AWB (Airway bill) is a type of bill of landing that enables tracking of the cargo. Once the airplane departs, the cargo rights will be changed from the supplier to that of the consignee. Airway Bill serves as a receipt of goods by a carrier, contract of carriage between the shipper and the carrier. It provides information about the conditions of carriage and the carrier's limits of liability and claims procedures. AWB is a non-negotiable instrument and does not state the flight that the shipment will arrive with or the time of delivery.
ETA and ETD (Estimated Time of Arrival and Estimated Time of Delivery respectively) refer to the time and date that a ship will arrive at a particular port. The estimated delivery date depends on the supplier's handling time, the shipping service used and when the supplier receives the cleared payment. Knowing the estimated delivery date will enable you to determine how long it will take you to get your item.
7. FCL and LCL
FCL (Full Container Load) and LCL (Less Container Load) are terms used in shipping under international trade business. FCL refers to one full container load (20" or 40") that contains cargo for one importer. It is the cheapest means of transportation when importing products from China.
LCL refers to a cargo that is owned by different importers and grouped together in one and the same container. It enables importers to ship a small amount of cargo that are not large enough to fit into the FCL option.
8. POD and POL
POD (Port of Destination) refers to the intended final point of arrival of a shipment.
POL (Port of Loading) refers to the place where the cargo is loaded by the carrier onto the ocean vessel.
RMB (Renminbi) is the official currency of the People's Republic of China. Its basic unit is the yuan.
PI (Proforma Invoice) signifies a sales contract or an estimated invoice that is being sent by a supplier to an importer in advance of a shipment or delivery of goods. It portrays the nature and quantity of goods, their value and other important information like weight and transportation charges. They are often used as preliminary invoices with a quotation or for customs purposes while importing goods.
MOQ meaning is Minimum Order Quantities. Chinese suppliers are utilized to 10,000 amount orders for their domestic industry. Therefore they typically look down at something under 500 portions, which do not all the time fit well with a small-scale business or start-up.
What are the things you can M&M International?
- Mobiles & accessories (100% Import)
- Electronics & electrical
- Medical Products
- Computer Products
- Fashion Products
- Solar Products
- Small household commodities
- Agriculture products
- Baby & Children Products
- Garments & Textiles
- Gifts & Premium Stationery
- Security Products
- A - Sourcing
- B - Inspection
- C - Buying
- D - Inland transportation
- E - Custom clearance in China
- F - Shipping
- G - Shipment tracking
- H - Custom clearance in India
- I - Indian customs and excise tariffs
A - Sourcing
The foremost job is to source the product. You may provide us the basic information and specifications about the product through a mail or otherwise, and we shall source your product through our marketing network. However, you may source your product through our categorized product range at our site or the various sites floated by Chinese companies as well as other Chinese selling portals.
B - Inspection
We may undertake inspection of goods by our staff on your direction or we may appoint technical Chinese government approved inspection agency if required by paying their FEE as RITES in India.
C - Buying
Once you have sourced the product or it is an already sourced product, we shall act as a buying agent for you. The communication between you and your supplier shall be directed but through us. You shall inform your supplier about us. We shall pay the price to your supplier in China and shall procure the goods from your suppliers for shipment after carrying out the inspection instructions given by you.
D - Inland transportation
The inland transportation is being taken care by your suppler but if required then we can take care of this aspect also. We will receive the goods from your supplier in our warehouses.
E - Custom clearance in China
Custom clearance in China is our responsibility and we completely take care of this. There is no custom duty on export from China only few negligible clearance changes are taken which we include in shipping changes.
F - Shipping
Shipping the goods is our main duty. We hire containers and load your goods in that and charge you as per the volume and weight of your goods.
G - Shipment tracking
The container number and other codes of reference along with the details of shipping lines and website addresses shall be provided to you so that you could track down the course of your goods off-shore (sea) and on-shore (land).
The same shall be applicable for air shipment.
H - Custom clearance in India
Our counter part franchises provides these service, if you require you can contact us or directly to them.
I - Indian customs and excise tariffs
The customs rules and regulation can be read at the below mentioned website:
How do we charge or bill the customer?
We charge the actual in INR only. Our commission is 5% as shown in the table below:
- Cost of product (RMB or USD * conversion rate): A
- Freight Charges (Rs.5000 per cubic meter by sea) (Actual as paid by air): B
- Custom duty (% tariff Rate * (A + B)) = C
- Commission : 5% of (A + B + C) = D
- Applied VAT/CST (%as per tariff*(A + B + C + D)) = E
- Total Inland Cartage(Actual)= F
- Total Amount to be Paid (A + B + C + D + E + F)= G
- Advance payment (if any)= H
- Net amount due (Balance Payment) = G-H = I