The sea shipping cost seems not to be able to reduce to the price level as it was before 2020, we have to find ways to reduce the shipping cost. What should we do? There are always so many solutions.
Table of Contents
Change The Packing Size
Take E-bikes for example you can change the carton packing size of the assembled form, to make it as small and compact as possible.
Before 2020, the sea shipping cost for an electric mountain bike is around $33-45/unit, CIF for 20ft container quantity, for 40HQ, $23-30/unit.
Normally 20ft can load 60-80 units of electric mountain bikes, 20-30units of electric tricycles and electric cargo bikes, or even less if the packing size is too big.
One 40HQ can load 156-204 units of electric mountain bikes, 50-80units of electric tricycles and electric cargo bikes, or even less if the packing size is too big.
Before 2020, the sea shipping cost is relatively lower. To America Los Angles for example $2600 per 20ft and $4600 per 40HQ, but now $7800 per 20ft and $9800 per HQ, in mid-2021, that was even higher.
Before 2020, the packing size for shipping seems not that important, because of the low sea shipping cost, but now, very important. Currently, the shipping cost is three times higher than before, and in mid-2021, four times.
Change The Assembled form to Be SKD or CKD
If your product takes more room in assembled form and the assembling is not difficult, you can choose to ship them in SKD or CKD form. In this way, you can ship more quantities in one container, so the unit shipping cost would be relatively reduced.
Importers can choose the SKD or CKD form according to your annual sales quantity, labor cost, basic equipment cost, etc.
CKD is relatively more competitive and economical, but you also need to consider the labor cost, and labor training such things. Take our E-bikes as an example, workers need about half a year time at least to become experienced employees to install and adjust the spokes on rims, and other procedures like the electric system adjusting and testing which requires workers with certain caliber education, necessary training, and experience.
SKD form is relatively less cost in labor cost and equipment cost.
You can ask your suppliers to do all the basic installation like the spokes on the rims, brakes system, and adjust the electric system to perfectly match your market, so that you only do some basic installation that a new hand can do well with certain tools.
Well, that is my advice according to my years of experience in this industry, hope this can help importers to make a better decision.
Use the Full Capacity of The Container
Remember to calculate the CMB or kg before your shipment or before you place the order with your supplier. Make sure you can fully use the room of one container, whether it is 20ft, 40ft, or 40HQ.
Use Your Own Freight Forwarder
The shipping cost offered by your supplier would be always a little higher than your own forwarder and sometimes far higher. Choose to use your own freight forwarders and compare their quotation for each shipment, in this way you can always get the most competitive price level.
Not Arrange Your Shipment in a Hurry
The shipping cost varies quickly in these two years, so maybe in these months, the shipping cost is too high, while several months later it decreases. Make sure you have enough stock and are not in a hurry for the new orders, so you always have time to compare and choose a more competitive price level.
Choose The Suitable Shipping Method
Here are the international shipping methods: by sea, air, express, train and truck from China to other Asian countries and Europe.
You can choose the suitable shipping method according to your stock. If the goods are relatively more expensive that can cover the price difference between by sea and by air, or the goods can not take a long time sea shipping, you can choose to ship them by air. But there are new ways of sea shipping to the US, the Amass fast ship with quick-release tunnel the shipping time is around one times more than by air, but shipping cost far lower than by air(if you are in the US, be careful that your forwarder takes you the shipping cost by air but in fact ship, the goods to your by Amass fast ship); And before Ukraine War, the shipping time by truck to EU countries is as efficient as by air, but the price is far lower than by air(be careful that your logistic company charge you the shipping cost by air but in fact ship to goods to your by truck).
By sea and by train is more economical but usually take longer shipping time which is around 2 months.
The sample order by express is more time-efficient.
The customs clearance procedure by express is not the same as by sea and by air, for there is a faster way of customs clearance for express company. Before 2020, the Cov-19, the transportation by express companies like DHL, UPS, TNT, and FedEx from China to USA or EU countries is within one week, in recent years 7-10 days.
Chose The Suitable Trade Term
Under the trade term EXW, FCA, FOB, CIF, CRF, DAT, and DDP, the shipping cost is different.
For bulk order quantity, you can choose EXW, FCA, FOB, CRF or CIF.
For a sample order of a small quantity, you’d better choose DAT or DDP door-to-door service.
For the discharge, the port fee is quite a lot for each shipment, and the customs clearance in both importing and exporting countries takes time too. if your shipment is of small quantity, compare to the costs of your time, discharge port fee, domestic transportation etc., choosing door-to-door service is more competitive and convenient.
Choose the DDP trade term if you can not do customs clearance in your country.
If you are a start-up company with no import license and can not do customs clearance in your company name, you can choose the DDP trade term. In this trade term, your supplier will have to ship goods to your door or your warehouse with all tax paid, of course including the customs clearance. If there is no DDP service in your country, you can choose DAT or DDU at least.
Choose The Correct Port
Choose the nearest port from your warehouse, you can save a lot of domestic shipping costs. Or choose the port which is relatively lower shipping costs than other ports in your country.
Sometimes the international shipping to one port of your country is a big price difference to other ports, like Los Angels and New York, and also a big shipping time difference. In this case, you need to compare the price difference and also the time difference and choose a relatively better solution.
Book A Shipment Directly From The Shipping Company Not From A Freight Forwarder
If your company is bigger enough and has to import or export huge quantity goods weekly or monthly, you can book shipment directly from the sea shipping company, so you can always get the lowest price. Just like your forwarder book shipment for you from the shipping company, you have to do all these things yourself and your quantity needs to be big enough. Therefore, you also need some employees who can do the same work like submitting the documents of customs clearance, applying the documents of BL, CO, etc.