One of the two great challenges of being an exporter is having enough cash in hand to keep your business going. (The other is<a href="https://www.cogoport.com/blogs/the-great-export-challenge-how-to-find-buyers-for-your-products"> finding buyers</a> for your goods and services.) Compared to a businessman who trades domestically, an exporter has to deal with longer delivery and payment cycles. This puts a strain on their cashflow, which can be defined as the money flowing in and out of their business. A delayed payment or a default can potentially sink an export business. This makes it critical for exporters to manage their cashflow well if they wish to be successful and grow their business.In this piece, we will discuss ways you can achieve a positive cashflow in your export business, touching on the following subjects:<ul><li>What is positive cashflow and why is it important?</li><li>What are the export risks impacting cashflow?</li><li>What are the export challenges impacting cashflow?&nbsp;</li><li>Cashflow management best practices&nbsp;&nbsp;&nbsp;&nbsp;</li></ul>Read our guide to finding buyers for your export business<a href="https://www.cogoport.com/blogs/the-great-export-challenge-how-to-find-buyers-for-your-products"> here</a>‍<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 3.png" width="auto" style="width: auto; height: auto;"></a><h2>What is positive cashflow and why is it important?</h2>When a business has a positive cashflow, it means it has enough money to deliver its products or services to its customers, pay its employees and suppliers, cover other expenses, reinvest in the business, and still have some left as a buffer against financial challenges in the future. Companies across the world have time and again acknowledged the importance of positive cashflow to the success of their business. According to the findings of a<a href="https://www.business-standard.com/article/companies/steady-cash-flow-more-crucial-for-indian-firms-than-access-to-tech-hsbc-120081101816_1.html"> 14-nation survey conducted by HSBC</a> during the Covid-19 pandemic in 2020, 41 percent of companies in India and 42 percent in Malaysia said maintaining sufficient cashflow was the most important factor for building business resilience. Similarly, 39 percent of the 253 chief financial officers interviewed in Singapore in a<a href="https://gcpcms.americanexpress.com/sg/~/media/Files/GCP/sg2/business-trends-insights/Amex_AME646C_CFO_White_Paper_2016_SNG1_FA.pdf?la=en-GB"> 2016 American Express survey</a> picked ‘improving cashflow management’ as the top strategy to future-proof their businesses.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When it comes to international trade, multiple factors can impact cashflow. Exporters must be aware of both the potential risks and challenges tied to the export business.<h4>The risk factors&nbsp;&nbsp;&nbsp;</h4>Exporting comes with risks, which have a direct bearing on cashflow. What are these risks?&nbsp;&nbsp;<ul><li>Risk of non-payment: It is not uncommon for an importer to delay or refuse payment. It might be because they don’t have the funds for it, have gone bankrupt, are in dispute with the exporter, or are no longer able to sell the goods due to a demand drop in their market. Delayed payments or defaults can severely impact an exporter’s cashflow and bottomline, especially if they have a narrow profit margin.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li><li>Foreign exchange fluctuations: Exporters who are paid in a foreign currency expose themselves to currency fluctuations. For instance, the exchange rate could fall between the time they sign the contract and the time they get paid by the importer. Exporters also run the risk of getting less money when they agree to receive payment in an unstable currency.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li><li>Other currency risks: Apart from fluctuating exchange rates, there are other currency factors to consider before exporting. Many countries such as<a href="https://economictimes.indiatimes.com/markets/stocks/news/from-argentina-to-china-and-india-a-guide-to-capital-controls/ukraine/slideshow/70990942.cms"> India</a> and<a href="https://economictimes.indiatimes.com/markets/stocks/news/from-argentina-to-china-and-india-a-guide-to-capital-controls/ukraine/slideshow/70990942.cms"> China</a> have government-imposed foreign exchange controls in place. These might include restrictions on the amount of local currency that can be sent out of the country or rules that require exporters to repatriate their foreign earnings within a specific time frame. Lack of awareness of such restrictions and regulations can lead to delays in payment, which would adversely affect your cash situation.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li><li>Country/political risks: Exporting to a country without knowing about its trade practices and business culture might prove to be a costly mistake. Exporters must watch out for unfamiliar laws and rules, changes in government policy that can have a bearing on your transaction, and going into business with unstable overseas banks. They must also inquire about the country’s import requirements, such as stipulated quality and safety standards, certification compliances for certain goods, and rules governing the shipping of hazardous substances. There are other country-specific risks to consider as well, such as war, insurgency, terrorism and piracy.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li></ul><figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/60db483c17d67d81b5a463a7_shutterstock_462425929v2.jpg" loading="lazy" alt="Political risk is one risk of global export, and can have a direct effect on cashflow." width="auto" height="auto"></div><figcaption>Consider global and internal political risks before exporting to any country</figcaption></figure><a href="https://cogoport.com/signup/en-IN/?utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-2.png" width="auto" style="width: auto; height: auto;"></a><ul><li>Additional costs: Even if you plan your exports meticulously, it might be impossible to avoid additional costs. These might include storage fees such as<a href="https://www.cogoport.com/blogs/understanding-demurrage-and-detention-charges-and-how-to-avoid-them"> demurrage and detention</a> arising from<a href="https://www.cogoport.com/blogs/shipping-delays-bad-for-business-why-it-pays-to-book-and-plan-early"> shipping and customs delays</a>. You’ll also need to account for insurance, transportation, and documentation fees.</li></ul>Read our series on extra charges associated with shipping<a href="https://www.cogoport.com/blogs/incidental-shipping-charges-part-i-freight-and-customs-related-extra-costs"> here</a>&nbsp;<figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/60db49f62556235b3828055d_Exports%20%E2%80%93%20risks%20versus%20benefits.png" loading="lazy" alt="Export risks versus benefits" width="auto" height="auto"></div><figcaption>Export Risks Versus Benefits</figcaption></figure>&nbsp; <h2>‍Access to finance – an export challenge&nbsp;&nbsp;&nbsp;</h2>Apart from potential risks, the export business is challenging for one major reason – the need for ready finance, which might not be easy to come by. In India, banks and formal financial institutions are often hesitant to lend to exporters, especially micro, small, and medium enterprises (MSMEs), due to their lack of adequate collateral. Easy access to finance is a long-standing demand of Indian exporters. Export finance is also vulnerable to economic crises such as the Covid-19 pandemic. In 2020, metal exporters in the United Stateswere forced to delay or drop shipments after insurance companies cut back sharply on export credit insurance, a type of export finance.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The long wait between shipment and payment means exporters often need to tap external sources of finance. This is especially true for MSMEs who might not have ready cash reserves to fall back on. The external finance sources could be banks that offer loans, guarantees and other traditional products. Additionally, there is trade finance, which is an umbrella term for financial products offered by banks and other financial institutions to facilitate international trade.&nbsp;&nbsp; <figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/60db4ba1b1303e62b9682693_Common%20trade%20finance%20products.png" loading="lazy" alt="Common trade finance products" width="auto" height="auto"></div><figcaption>Common trade finance products</figcaption></figure>‍Trade finance not only helps exporters maintain positive cashflow, it also reduces their risk of not getting paid.&nbsp;Maintaining positive cashflow is even more difficult for exporters working on growing their business. This is because they need more working capital. A larger contract, for example, will require more raw material stock. The exporter might also have to hire more workers. It is important to understand the various finance options available to you, and weigh their pros-cons and risks-costs to know which is the best fit for your business.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To understand post-shipment credit, read our blog<a href="https://www.cogoport.com/blogs/post-shipment-credit-what-exporters-need-to-know-about-trade-finance-tool"> here</a>&nbsp;&nbsp; <h2>6 best practices to achieve positive cashflow&nbsp;&nbsp;</h2>With a bit of planning and preparation, exporting can be a profitable venture and the inherent risks can be managed to a large extent. Here are some best practices that will keep your working capital in good health while trading across borders:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Negotiate favourable payment terms: An upfront deposit, interim payments, or a shorter payment period are some payment terms that are clearly beneficial to exporters. So, too, is<a href="https://www.cogoport.com/blogs/3-ways-to-ensure-payment-from-your-foreign-buyer"> payment in advance</a>, though most importers might not agree to such a one-sided condition. A<a href="https://www.cogoport.com/blogs/3-ways-to-ensure-payment-from-your-foreign-buyer"> letter of credit</a> or<a href="https://www.cogoport.com/blogs/3-ways-to-ensure-payment-from-your-foreign-buyer"> documentary collection</a> are not only considered safe bets but are also low-risk options for both the seller and buyer. Whatever the payment terms, an exporter must make sure they are clearly spelled out in the contract so that there is no room for confusion later on.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Read about the 3 ways to ensure payment from your foreign buyer<a href="https://www.cogoport.com/blogs/3-ways-to-ensure-payment-from-your-foreign-buyer"> here</a>2. Prepare for currency risks: A fluctuating currency can mean that you end up getting paid less than expected. To avoid such a fate, you can ask to be paid a) in a stable currency, or b) at the present exchange rate when you receive payment at a later date. Alternatively, you can try to convince the importer to pay you in your local currency. This is the preferred option for most exporters. However, there is an upside to billing an importer in their own currency, especially if you do a lot of business with that particular buyer. According to the American export promotion body<a href="https://blog.trade.gov/2014/05/13/cash-flow-strategies-to-make-your-exports-more-competitive/"> International Trade Administration</a>, foreign buyers, in China for example, charge a currency risk fee when paying exporters in US dollars. An exporter should consider all these factors.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Create a cashflow forecast: Create a cashflow forecast for the period from when you receive an order up to the time you expect to be paid for it. To make such a forecast, you will need some information, such as your business expenses, cash inflows and balance sheets. A forecast is helpful because it shows if you have the resources to keep your business running for the entire transaction time. It also identifies periods when you will have more cash flowing out than in. You can then prepare in advance for any contingencies.&nbsp;&nbsp;<figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/60db4d0f4766d87639103454_Data%20required%20to%20create%20a%20cashflow%20forecast.png" loading="lazy" alt="Data required to create a cashflow forecast&nbsp;" width="auto" height="auto"></div><figcaption>Data required to create a cashflow forecast</figcaption></figure>Source: Export Finance Australia&nbsp;<img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 1.png" alt="" width="300px">4. Understand your financing options: Make sure you understand the finance options available to you, such as loans, letters of credit and export credit, among others. A conversation with your bank can be your starting point. You can also check out the websites of export credit agencies, banks, and non-banking financial corporations for the various trade finance products on offer. Many countries (including the US, India, and China) have an Export-Import Bank or Exim Bank, which acts as their official export credit agency. Their websites can be a valuable source of information. For Indian exporters who wish to avail of export credit insurance, they can reach out to the<a href="https://commerce.gov.in/about-us/public-sector-undertakings/export-credit-guarantee-corporation-of-india-limited/"> Export Credit Guarantee Corporation</a> (ECGC) for information. When you ultimately decide to borrow money, don’t forget the implications of late payments or defaults and changing interest rates, which can affect your cashflow situation. Also remember, trade finance comes for a price and some products are more expensive than others.&nbsp;&nbsp;Click<a href="https://www.cogoport.com/blogs/35-digital-resources-you-need-to-run-an-export-import-business"> here</a> for the 35 digital resources key to running an import-export business&nbsp;5. Get professional advice: Even when you do your homework on a contract diligently, you might miss out on a hidden problem. If it is a legal issue, it will be close to impossible to find a favourable solution in a foreign country with different laws. Have a lawyer with experience of international transactions construct your contract to avoid currency risks and legal hassles down the line. There are legal, accounting, foreign exchange and business advisers who can provide you with relevant information on trade compliances, rules and regulations, customs laws, tax compliances, licence requirements and so on. With their advice, you can significantly lower your risk of non-payment and avoid a cashflow crisis.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Focus on creditworthiness: Mostexporters bank on borrowed funds to keep their working capital going. But financiers will not lend to an exporter who lacks creditworthiness. To ensure your business has a sound credit rating, you must have a well thought out export strategy and an efficient and transparent accounting system. Financiers will be more willing to lend to you if you have strong ties with reputed accounting and financial advisers as well. At the same time, it is equally important to check your buyers’ creditworthiness. In India, the ECGC helps exporters by providing them with information regarding the creditworthiness of foreign buyers. The export credit insurance provider also has a comprehensive<a href="https://commerce.gov.in/international-trade/trade-promotion-programmes-and-schemes/trade-promotion-programme-focus-cis/ecgc-cover/"> risk rating for countries</a> based on prevalent and predictive economic and political settings. This can be valuable for exporters planning to explore new markets.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; By following these best practices and making them a part of your export strategy, you can avoid the risks and reap the full benefits of the export business – which include a larger pool of customers in diverse markets, and larger sales and profits.

6 Ways: Export Business To Positive Cashflow  

Have you ever noticed how many products carry the fine print ‘Made in China’? Sure, the term ‘Made in China’ has been associated with cheap, low-quality, and imitation goods, but that is set to change soon. &nbsp;China has been working on aggressive strategies such as ‘Made in China 2025’ for years. The country hopes to change its image of a low-end producer by 2025 and position itself as a high-end producer. The COVID-19 pandemic brought China into the spotlight, with the virus being called the Wuhan Virus and the Chinese Virus right from the beginning. Despite the negative publicity and the financial impact of the pandemic, China was the only major economy to record a growth from 5 percent to 6.5 percent in 2020. &nbsp;In this article, we will explore the top China ports, how they contribute to China’s economic growth, and the role they play in global imports and exports. Here is a quick list of the ports we will be covering: <ol start="1"><li>TaPort of Shanghai </li></ol><ol start="2"><li>Port of Shenzhen </li></ol><ol start="3"><li>Port of Hong Kong </li></ol><ol start="4"><li>Port of Ningbo-Zhoushan </li></ol><ol start="5"><li>Port of Guangzhou </li></ol><ol start="6"><li>Port of Qingdao </li></ol><ol start="7"><li>Port of Tianjin </li></ol><ol start="8"><li>Port of Dalian </li></ol><ol start="9"><li>Port of Xiamen </li></ol> <a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 2.png" width="auto" style="width: auto; height: auto;"></a><h3>China’s Port Dominance: 158 Ports Enabling International Trade </h3>From GDP indices to export lists to research and development spending, China dominates indexes and lists worldwide, underscoring its relevance to the global economy. Seven of the 10 largest ports in the world are in China, which makes sense considering China’s role in global trade, its competitive costs of shipping, and the fact that it is the world’s largest container manufacturer. &nbsp;China has 34 major ports and 2000 minor ports, many of which are globally relevant in terms of their economic and historical contributions. The 158 ports on China’s eastern and southern coasts play a particularly important role in import-export activities. &nbsp;<figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/60ddae3dd801131e5e83d1fa_shutterstock_1240820863%20(1)%20(1)%20(1)%20(1)%20(1)%20(1).jpg" loading="lazy" width="auto" height="auto" alt="China's ports play an important role in global trade"></div></figure>A port’s selection can significantly impact your business. Therefore, it is essential to <a href="https://www.cogoport.com/blogs/everything-you-need-to-know-about-importing-from-china-to-india" target="_blank">plan your strategy</a> accordingly. Althoughthe Port of Shanghai is the biggest port in China and one of the busiest ports globally, other Chinese ports may better suit your needs and those of different traders because of their size, accessibility, growth, and preferential policies. Click <a href="https://www.cogoport.com/blogs/everything-you-need-to-know-about-importing-from-china-to-india" target="_blank">here</a> to learn everything you need to know about importing from China to India <h3>Shanghai Port </h3>Opened in 1842 as part of the post-Opium War treaty settlement, the <a href="https://www.cogoport.com/en-IN/knowledge-center/resources/port-info/shanghai-cnsgh" target="_blank">Shanghai port</a> overtook the Port of Singapore to become the world’s largest port in 2010. Located on the Yangtze, Huangpu, and Qinghai river systems, it is a deep seaport. Furthermore, it is bordered by Hangzhou Bay to the south and the East China Sea to the east. &nbsp;Shanghai has been designated as one of the four large port megacities globally due to the trade volume that passes through it and its economic effect on the local population. Smaller ports surround Shanghai; consequently, it is the Chinese port that processes the most cargo. The Shanghai port was also ranked as the ‘Best Connected Port’ by the United Nations Conference on Trade and Development (UNCTAD) in 2019. &nbsp;Yangshan Port in Hangzhou Bay, within the Port of Shanghai network, is the busiest container port in China because of its proximity to major manufacturing and industrial hubs. Its high level of efficiency and extensive use of automation solutions, from robots to software automation for processing, has resulted in it being often referred to as the ‘Largest Automated Port’ in the world. China Ocean Shipping Company (COSCO), the world’s third-largest commercial fleet owner, is headquartered in Shanghai, emphasising just how relevant the port is for large-scale shipping. &nbsp;Get more Shanghai port information <a href="https://www.cogoport.com/en-IN/knowledge-center/resources/port-info/shanghai-cnsgh" target="_blank">here</a>, to plan your shipments<a href="https://cogoport.com/signup/en-IN/?utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-3.png" width="auto" style="width: auto; height: auto;"></a><h3>Shenzhen Port </h3>Several Chinese ports are located along the 260-kilometre coastline in Shenzhen, Guangdong. Among them, the Shenzhen Port is one of the busiest. It is also one of the fastest-growing container ports in the world, China’s second-largest port, and the third-largest container port in the world. &nbsp;As part of the Hong Kong-Shenzhen Western Corridor, the Shenzhen Port transports cargo to border provinces via road. The port has a natural protected harbour in the Pearl River area. The port includes a range of areas that handle various cargo and goods. Donjiaotou, Da Chan Bay, and Neihe are some of the largest areas with 162 berths collectively. These include 51 berths for over 10,000 deadweight (DWT) vessels, 43 berths to accommodate 10,000 DWT vessels, and nine berths for consignees. There are also 18 berths each for containers and passenger ferries and 23 berths for non-production activities. &nbsp;Get more Shenzhen port information <a href="https://www.cogoport.com/en-IN/knowledge-center/resources/port-info/shenzhen-cnsnz" target="_blank">here</a>, to plan your shipments <h3>Hong Kong Port </h3>In the mid-1800s, when it was administered by the British, Hong Kong became a transit hub for goods transported between India and Europe. Today, it is under the administration of China and is a major financial and commercial centre. Hong Kong port is located in Victoria Harbour in South China. Once a tiny fishing village, Hong Kong has transformed into one of the most important ports in the world, thanks to the port’s excellent connectivity. &nbsp;Apart from being one of the most populated and largest deep-water ports in the world, in the past few decades, it has been a critical hub connecting Chinese manufacturers with the world. &nbsp;Nearly 500,000 vessels and close to two hundred and fifty million tonnes of cargo pass through its ports each year, along with close to 30 million passengers. Compared to other ports in the region, Hong Kong has one of the fastest turnaround times. Container vessels have a 10-hour turnaround time, while turnaround time is roughly 47 hours when it comes to off-site-anchored tankers. This is over twice as fast as the 23.5 hours <a href="https://unctad.org/system/files/official-document/rmt2019ch3_en.pdf" target="_blank">median turnaround time</a> for ports worldwide. &nbsp;COSCO Information and Technology HK and Hong Kong International Terminals (HIT) are among the major container terminals. DP World (DPW), which is also a part of the port, operates nine terminals with 18 berths at Kwai Chung, Tuen Mun, Stonecutters Island, and Tsing Yi. With annual passenger traffic of more than 15 million, Hong Kong port operates frequent ferries to Macau as well as other mainland China ports. Apart from the commercial sector, the port also has a dedicated dockyard for government and stations fleets of national importance. &nbsp;Get more Hong Kong port information <a href="https://www.cogoport.com/en-IN/knowledge-center/resources/port-info/hong-kong-hkhkg" target="_blank">here</a>, to plan your shipments <h3>Ningbo Zhoushan Port </h3>Ningbo is one of the oldest ports in the world. It was opened in the 8th century AD during China’s Tang dynasty. Since then, it has become the world’s largest cargo destination. Until 2006, Ningbo and Zhoushan were two separate ports. In 2006, post a merger, they overtook Shanghai to become the world’s leading cargo port. This port dominates the global trade scenario because it is the world’s busiest port for cargo, shipping about a billion tonnes annually. It is located on the east coast of Hangzhou Bay, across from Shanghai, and has good access to inland China through waterways, rail, and roadways. &nbsp;Five hundred and sixty ports are connected to the Ningbo port from 90 different countries. Crude oil is handled at a dedicated terminal. The ore handling yard in Ningbo is among the largest in the world. A hub for international companies, the Zhejiang Free Trade Zone is conveniently located near Ningbo Zhoushan port. &nbsp;Get more Ningbo Zhoushan port information <a href="https://www.cogoport.com/en-IN/knowledge-center/resources/port-info/ningbo-pt-cnnbg" target="_blank">here</a>, to plan your shipments <h3>Guangzhou Port </h3>The port of Guangzhou has been a major hub of Chinese trade for over 2000 years, dating back to the Qin Dynasty, circa 200 BC. It was a key stop in the historic ‘Maritime Silk Road’ that connected <a href="https://www.cogoport.com/blogs/china-emerges-as-indias-top-trading-partner-in-2020-amidst-diplomatic-rifts" target="_blank">China to the coastal regions of Southeast Asia and India.</a> Located on the Pearl River delta, Guangzhou lies between the rivers of Dongjiang, Beijiang, and Xijiang. It is among the busiest seaports in mainland China. &nbsp;After the merger with Huangpu in 2014, Guangzhou has become one of the biggest and most comprehensive ports in Southern China. It handles traffic from more than 80 countries and 300 ports. &nbsp; The port has good connectivity to the Nansha Wetland Park base and industrial hubs. It also has rail, road, air, and inland connectivity. It has many storage areas, secured warehouses, customs gates and entry points, and logistic centers. Almost all cargo, from agricultural goods to industrial machinery, is transported through the port. Get more Guangzhou port information <a href="https://www.cogoport.com/en-IN/knowledge-center/resources/port-info/guangzhou-cncan" target="_blank">here</a>, to plan your shipments <figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 1.png" width="auto" style="width: auto; height: auto;"></a></figure><h3>Qingdao Port </h3>The Port of Qingdao is relatively new as compared with Ningbo and Guangzhou. Qingdao port opened in 1892 and was declared a free port in 1899, where traders from across the world could visit. That gave Qingdao port an advantage because it was not allowed at other Chinese ports; under China’s laws, only certain ports were open to foreign trade. &nbsp;Qingdao was declared an ‘open city’ in 1984. Since then, the city itself and the port have received a large amount of foreign direct investment (FDI). As a result, Qingdao has world-class infrastructure even though it is not the largest port in the country. In terms of traffic, Qingdao ranks 8th worldwide and 3rd in Asia. Also, it has become a major seaport in eastern China. &nbsp;Qingdao handles traffic from over 130 countries and directs ships to 450 other ports. Although Qingdao receives ships from eastern China, it primarily services vessels from other Pacific countries such as Japan, South Korea, and the <a href="https://www.cogoport.com/blogs/us-china-trade-war" target="_blank">US</a>. &nbsp;The Qingdao harbour is split into four zones, each acting as a separate entity. Dagang and Qianwan zones deal with cargo and containers. Qingdao is primarily a port for oil and petroleum tanks. The Dongjiakou zone deals with containers, cargo, and iron ores and is located farther away from the city and other ports. Get more Qingdao port information <a href="https://www.cogoport.com/en-IN/knowledge-center/resources/port-info/qingdao-cnqin" target="_blank">here</a>, to plan your shipments <h3>Tianjin Port </h3>The Tianjin port or the Port of Tanggu, operational since the 1st century BC, has been a major hub of trade in historical northern China. One of the largest deep-sea and riverine ports in China, Tianjin port occupies the most extensive area in northern China. It is the largest man-made harbour in China. Moreover, it forms the primary shipping route to Beijing. &nbsp;It lies alongside the Haihe River, close to Bohai Bay and near smaller ports in the region. Tianjin port covers over 120 square kilometres, which makes it one of the largest globally. Tianjin State-Owned Assets Supervision and Administration Commission (Tianjin SASAC) owns the port, while the Tianjin Port Group (TPG) operates it. The port of Tianjin caters to all sizes of ships, with 200-plus berths to accommodate passenger, container, and cargo vessels. In 2015, the port saw just over 100,000 passengers. Based on its freight traffic (tonnage), Tianjin ranks 4th worldwide. Further, it ranks 9th for container traffic. The port’s network covers more than 600 ports in 180 countries. It services vessels from all over the world. Close to 100 shipping lines from across the world stop by in Tianjin, while 60 liners have operations in the port. &nbsp;Tianjin port can be split into nine zones. Of these, the principal zones are Dongjiang, Beijiang, and Nanjiang. In addition to ship locks, the harbour is sheltered from adverse climate conditions by tidal barrages. With Police, Ambulance, and Emergency Services available within its premises, the port is completely autonomous. &nbsp;Additionally, Tianjin has several shipyards that provide comprehensive maintenance and repairs and shipbuilding facilities. The main yards of the port include the CCCC Bomesc Maritime Industry, CSIC Tianjin Xingang shipyard, and Taku dockyard. Get more Tianjin port information <a href="https://www.cogoport.com/en-IN/knowledge-center/resources/port-info/tianjin-cntxg" target="_blank">here</a>, to plan your shipments<img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-3.png" alt="" width="300px"><h3>Dalian Port </h3>Founded in 1899, China’s Dalian port is relatively new. The first container vessels arrived there in 1972, and since then, it has become a busy seaport in northern China. A large percentage of container and cargo traffic in Dalian originates from nations along the Pacific Rim and the northern and eastern regions of Asia. Dalian is a deep-water port located on the Yellow and Bohai Seas, making it the second-largest centre of transhipment activity on the Chinese mainland. It serves vessels from over 160 nations. Most of Dalian’s revenue comes from local shipments of commodities and minerals. &nbsp;The Dalian port has signed an agreement with the port of Yingkou to integrate its management with them. Seven berths, previously owned by PSA China, Singapore Dalian Port Investment, and Nippon Yusen, are now operated by Dalian Container Terminal (DCT). In addition to being accessible by both rail and road, the port has a large container and cargo storage area. Modernised deep-water berths that are equipped to handle heavy vessels go as deep as 16 metres at the port of Dalian. &nbsp;Get more <a href="https://www.cogoport.com/en-IN/knowledge-center/resources/port-info/dalian-cndal" target="_blank">Dalian</a> port information here, to plan your shipments <h3>Xiamen Port </h3>Previously known as Amoy, the Port of Xiamen was a major hub for the spice trade during the medieval era. Xiamen’s rise as a modern port began after the Opium Wars when it was opened for Western trade. It is positioned on the island of Xiamen along the estuary of the Jiulongjiang River. It ranks 17th globally for its cargo thoroughfare. After its 2010 merger with the Port of Zhangzhou, Xiamen became one of the world’s largest and Southeast China’s biggest ports. Xiamen is among the few ports globally that are capable of handling sixth-generation ships and mega vessels. &nbsp;With 74 berths in total, the port is divided into different zones. Among them, around nine handle containers exclusively, while the rest handle cargo. Each berth averages 10,000 tonnes of cargo handling. However, some berths also have a capacity of over 100,000 tonnes. &nbsp;The port is spread over 30 kilometres of the harbour, with an anchorage depth of around 17 metres. The port’s main operational zones include the Haitian and Liwudian zones. Technologically advanced, Xiamen provides services to all the leading shipping lines. Each month, it serves almost 500 vessels from close to 50 countries. It also provides regular service along 70 routes, including ones that go through the top ports in Europe, North and South America, and Africa. &nbsp;Additionally, the port operates a small passenger ferry. The ferry joins Xiamen to other ports on the mainland. It also provides ferries to the nearby islands of Hong Kong, Guangzhou, and Shanghai and occasional services to Kinmen. Get more <a href="https://www.cogoport.com/en-IN/knowledge-center/resources/port-info/xiamen-cnxmn" target="_blank">Xiamen</a> port information here, to plan your shipments &nbsp; With aggressive strategies such as Made in China 2025, <a href="https://www.cogoport.com/blogs/india-trade-china" target="_blank">China</a> is changing how the world views its products. Driven in large part by massive exports from its ports, China’s growth has contributed to fighting poverty globally. If China succeeds in its current efforts to further industrialise, 20% of the world’s population will live in an industrialised environment. This will mark a notable increase from the present-day number, which is less than 10%. China’s ports are hubs connecting the country with the world and are engines of growth for one of the most remarkable economic success stories in history. &nbsp;Also read <a href="https://www.cogoport.com/blogs/china-emerges-as-indias-top-trading-partner-in-2020-amidst-diplomatic-rifts" target="_blank">China Emerges as India’s Top Trading Partner In 2020 Amidst Diplomatic Rifts</a> ‍

China Ports Driving Global Trade and Growth  

When goods cross international borders, they attract a government-imposed tax called customs duty. When customs duty is levied in the country of export, it is called an export duty. When it is applied in the country of import, it is called an import duty. The import and export of items can attract not one but multiple customs duties, along with various other charges. These duties and charges, when combined, can add up to a considerable amount and impact your total shipping costs. Therefore, it is essential for importers and exporters to fully understand the customs duties applicable on their goods and how to calculate them.In this blog, we will be discussing import duties in India. If you plan to import goods into India, this article will give you an idea of the various import customs duties, taxes, and other government charges you will be paying.&nbsp;‍<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 1.png" width="auto" style="width: auto; height: auto;"></a>Import duty in IndiaIndia, like any other country, levies import duties to a) protect the local economy from cheap foreign products, b) earn government revenue, and c) monitor the movement of goods crossing its borders. The duty rate or tariff varies from product to product and is determined on the basis of factors such as where the product is made or acquired, and what it is made of.In India, import duties (or rather, all customs duties) are governed by the Customs Act, 1962, and the Finance Act. These charges are collected by the Central Board of Indirect Taxes and Customs (CBIC). Changes in customs duty rates are announced in the annual Budget, which is presented on the first day of February, or through notifications in the Gazette of India.&nbsp;Types of import duties in India<ul><li>Basic Customs Duty (BCD): As its name suggests, this is the basic tax levied on imported goods. The rate of duty ranges from zero percent to 100 percent. The government might exempt certain goods (Covid-19 vaccines and life-saving drugs, for example) from BCD by imposing a zero percent rate. Imports might also invite a reduced or zero percent BCD rate if imported under a free trade agreement.&nbsp;</li><li>Countervailing Duty (CVD): Also called Additional Customs Duty,this is charged on goods that have benefited from government subsidies and/or tax breaks in the country of manufacture. The CVD ensures local products are not at a disadvantage due to cheaper imports. In India, CVD is levied at rates of zero percent, six percent and 12 percent.&nbsp;&nbsp;&nbsp;</li><li>Anti-dumping Duty (ADD): This is a duty charged on goods that are imported at a much lower value than their normal market price. Exporting countries might resort to<a href="https://www.dgtr.gov.in/faq" rel="noopener noreferrer" target="_blank"> dumping</a> to gain an unfair advantage in a foreign market or to get rid of excess stock. Importing countries use the ADD to protect the local industry from a flood of cheap imports. In April,<a href="https://www.financialexpress.com/economy/india-imposes-anti-dumping-duty-on-chemical-from-4-regions/2242011/" rel="noopener noreferrer" target="_blank"> India levied an ADD</a> on certain chemical imports from the European Union, Saudi Arabia, United Arab Emirates and Chinese Taipei for a period of five years to protect local producers. Under Indian law, the ADD charged cannot exceed the dumping margin, which is the difference between the product’s normal price and the price at which it is imported.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li><li>Social Welfare Surcharge (SWS): This surcharge was introduced by the Indian government in 2018 to fund its social welfare projects related to health, education, and social security. It replaces the Education Cess and the Secondary and Higher Education Cess that were previously applied on imported goods. Goods exempt from Education Cess do not attract SWS. Social welfare surcharge is levied at a rate of 10 percent on the aggregate of duties and cesses applied.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li><li>Safeguard Duty: Indian Customs levies a safeguard duty on goods whose increasing import volumes are deemed a threat to domestic producers. For example,<a href="https://www.livemint.com/industry/energy/govt-imposes-safeguard-duty-on-solar-cells-for-one-more-year-till-july-2021-11596093358953.html" rel="noopener noreferrer" target="_blank"> solar cells imported from China</a> currently attract a safeguard duty. The objective of this duty is to give temporary relief to local industry. The duty rate is notified by the government and is usually calculated on the basis of potential losses incurred by local industries.&nbsp;&nbsp;&nbsp;</li><li>Protective Duty: Similar to safeguard duty, protective duty is levied on imports with the objective of protecting the interests of domestic producers. Protective duty is imposed on the recommendation of the Tariff Commission, which must be approved by the government. The Commission also recommends the duty rate. Protective duty is considered a more permanent form of relief to domestic industries than safeguard duty because it requires the government to <a href="https://indiankanoon.org/doc/1130442/" rel="noopener noreferrer" target="_blank">pass a Bill in Parliament</a>, which might then become law.&nbsp;&nbsp;&nbsp;</li><li>National Calamity Contingent Duty (NCCD): This is levied on imported goods specified in the Seventh Schedule to the Finance Act, 2001 (tobacco products, petroleum oils, certain types of motor vehicles, etc). The duty rate is also specified. The NCCD finances the National Disaster Response Fund, which the government uses to meet expenses incurred on disaster relief and rehabilitation.&nbsp;</li><li>Agriculture Infrastructure and Development Cess (AIDC): This is charged on 29 products, including gold, silver, apples, alcohol (excluding beer), pulses, palm oil, urea, petrol and diesel. It was introduced in Budget 2021-22 with the objective of funding agriculture infrastructure development. The<a href="https://www.indiatoday.in/business/budget-2021/story/union-budget-2021-agricultural-infrastructure-cess-100-imposed-alcoholic-beverages-1764763-2021-02-01" rel="noopener noreferrer" target="_blank"> AIDC rate</a> ranges from 1.5 percent (coal, lignite, peat) to 100 percent (alcoholic beverages).&nbsp;&nbsp;&nbsp;</li></ul>Other import-related charges<a href="https://cogoport.com/signup/en-IN/?utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-1.png" width="auto" style="width: auto; height: auto;"></a><ul><li>Integrated Goods and Services Tax (IGST): In addition to customs duties in India, imported goods invite IGST. It is charged at rates of 5 percent, 12 percent, 18 percent, and 28 percent, as stated in the IGST Act, 2017. The IGST is levied on the assessable value of the imported goods plus the value of import duties charged. (The GST is a single, indirect tax replacing multiple Central and state taxes such as excise duty, sales tax and value-added tax. It has two components – Central GST or CGST and State GST or SGST. The IGST is CGST plus SGST)&nbsp;</li></ul><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/60f17043fb2a0c60e4e7c4c7_1.png" alt="60f17043fb2a0c60e4e7c4c7_1.png">Note: This example is for an imported product that attracts BCD and no other import dutiesAre you an exporter? Read our guides on exporting with and without payment of IGST<a href="https://www.cogoport.com/blogs/gst-refunds-part-2-exports-with-payment-of-igst" rel="noopener noreferrer" target="_blank"> here</a> and<a href="https://www.cogoport.com/blogs/gst-refunds-part-1-export-without-payment-of-igst" rel="noopener noreferrer" target="_blank"> here</a>.&nbsp; <ul><li>Compensation Cess: In addition to IGST, certain notified imports (tobacco products, coal, petroleum, cars) attract a compensation cess. This cess seeks to compensate the Indian states for any loss of tax revenue arising from the implementation of GST in its first five years (2017-2022). With GST, the states lost the right to impose local indirect taxes on goods. The cess covers imports because imports are treated as inter-state supplies under GST. To calculate compensation cess, the prescribed rate is applied to the transaction value, which is the assessable value of the goods plus import duties charged.&nbsp;&nbsp;&nbsp;</li><li>Customs Handling Fee: In addition to import duties, India charges a one percent customs handling fee on all imports. This is charged on the total value of the goods plus the freight costs and insurance.&nbsp;</li></ul><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/60f1713094039c106d361de1_2.png" alt="60f1713094039c106d361de1_2.png">How import duty is calculatedImport duty is calculated as a percentage of the assessable value of the imported goods. If the goods are imported under the <a href="https://www.cogoport.com/blogs/incoterms-2020" rel="noopener noreferrer" target="_blank">Cost, Insurance, and Freight (CIF) Incoterm</a>, assessable value is CIF plus customs handling fee (of one percent). To get the CIF value, simply add the cost or invoice value of the goods and the insurance and freight costs.&nbsp;&nbsp;Here’s an example of how to calculate the total duty due on an import consignment that is shipped under CIF and on which basic customs duty, social welfare surcharge and IGST are applicable.&nbsp;&nbsp;<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 2.png" width="auto" style="width: auto; height: auto;"></a><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/60f171b2d7f5a4b72cbfc431_3.png" alt="60f171b2d7f5a4b72cbfc431_3.png">Note: Assessable value might vary depending on the Incoterm used.How to pay import duty in IndiaAfter the imported goods are cleared by Indian Customs, you can pay import duties online on Icegate, the Indian Customs’ electronic data interchange platform. Just follow these steps: <ul><li>Go to the Icegate e-payment portal</li><li>Log in using your Icegate credentials or by entering your Import/Export Code</li><li>Click on the e-payment option</li><li>You will see all your unpaid e-challans or electronic payment demands</li><li>Select the challan you wish to pay</li><li>Select your bank and payment method</li><li>You will be redirected to the bank’s payment gateway</li><li>Make your payment</li><li>Once payment is complete, you will be redirected to Icegate</li><li>Here, you can take a print of you payment receipt&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li></ul>Note: IGST payments must be made on the<a href="https://www.gst.gov.in/" rel="noopener noreferrer" target="_blank"> GST portal</a> or in cash.&nbsp; Factors affecting import dutyThere are several factors to keep in mind while calculating import duty: <ul><li>Harmonised System (HS Code): The rate of import duty charged on a product depends on its HS Code. The<a href="https://www.cogoport.com/blogs/hs-code-all-about-classification-of-goods-in-export-import" rel="noopener noreferrer" target="_blank"> HS Code</a> is a universally-accepted classification system for traded goods. Under this system, each product is assigned a unique six-digit code. Customs authorities check a product’s HS Code to assess the duty due on it. Countries are allowed to add more digits to the six-digit HS Code for further classification. As a result they have their own versions of the HS Code. The Indian version is called the<a href="https://www.cogoport.com/blogs/hs-code-all-about-classification-of-goods-in-export-import" rel="noopener noreferrer" target="_blank"> ITC-HS Code</a>, which assigns an eight-digit code to each traded product.&nbsp;&nbsp;&nbsp;</li><li>Free Trade Agreements (FTAs): Remember to check if your country has a free trade agreement with the country you import goods from. Lower duty rates – called preferential tariffs – are one of the many benefits of FTAs. India has FTAs with multiple countries and regions. Under these agreements, partner countries enjoy reduced import duty rates and even duty exemptions on certain traded goods.</li><li>Rules of Origin: Preferential tariffs under FTAs depend on ‘originating status’. This means a trader importing goods into India is eligible for preferential tariffs only if the goods are made in the country of export with which India has an FTA. To claim a duty benefit under an FTA, the importer must furnish at the time of import a Certificate of Origin as well as a <a href="https://economictimes.indiatimes.com/small-biz/trade/exports/insights/closer-scrutiny-of-imports-under-ftas-importers-now-need-to-comply-with-stringent-norms/articleshow/78328665.cms" rel="noopener noreferrer" target="_blank">self-declaration</a> that the goods qualify as originating goods and are, therefore, eligible for preferential tariffs. Furthermore, the importer is required to find information regarding the goods’ originating status and maintain this for at least five years.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li></ul>Read about India’s experience with FTAs<a href="https://www.cogoport.com/blogs/foreign-trade-agreements-can-boost-indias-exports-if-done-right" rel="noopener noreferrer" target="_blank"> here</a><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-2.png" alt="" width="300px">Duty exemption – what is it?India has several duty exemption schemes that allow the duty-free import of raw materials that go into making products for export. These schemes not only apply to raw materials and items that are physically incorporated into the finished products but also fuel and packaging material used in the production process. The main objective of these duty exemption schemes is to help Indian exporters and promote Indian exports. Hence, they are also called export promotion schemes. Two popular duty exemption schemes in India are: <ul><li>Advance Authorisation (AA) Scheme: Raw materials and inputs for export production attract zero percent import duty, provided a minimum 15 percent value addition is made to the final product. To benefit from this scheme, an exporter must apply for an AA licence from the website of the Directorate General of Foreign Trade (DGFT) and import the inputs within 12 months of receiving it. Furthermore, they must export the final product&nbsp;within 18 months of receiving the licence.&nbsp;&nbsp;&nbsp;</li><li>Duty-Free Import Authorisation (DFIA): Under this scheme, an exporter can import inputs without paying basic customs duty on them. However, there is a 20 percent value-addition requirement. Also, DFIA imports can be made only after the export process is completed. The exporter can apply for a DFIA licence, valid for 12 months, from the regional port authority within 12 months of the export date.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li></ul>To know more about India’s export promotion schemes, click<a href="https://www.cogoport.com/blogs/export-incentives-types-benefits-and-everything-else-you-need-to-know" rel="noopener noreferrer" target="_blank"> here</a>.&nbsp;

Costs to Clear your Imported Goods in India

When a business based in one country purchases a product or service provided by a business based in another country, it is called import. Imports are important because they help countries source products for domestic consumers that might not otherwise be available within their borders.&nbsp;If you are a regular visitor to Cogoport’s blog page, you might have read our guide to the export process. If you haven’t, you can take a look at it <a href="https://www.cogoport.com/blogs/export-process-from-india">here</a>. Next, we tackle the import process.Shipping by sea and by air are the most popular modes of transportation in international trade. Importers can have their shipments delivered by ocean liner either as a Full Container Load (FCL) or Less than Container Load (LCL). A consignment that takes up an entire container is called an FCL shipment while one that occupies just a part of a shared container is called an LCL shipment. An FCL shipment is larger than an LCL shipment and also has a shorter transit time. Alternatively, importers can have their time-sensitive and valuable cargo delivered by air, although it costs more to transport by air than by sea.&nbsp;Check out Cogoport’s FCL shipping guide <a href="https://www.cogoport.com/blogs/complete-guide-to-fcl-shipping-everything-exporters-importers-need-to-know">here</a>, LCL shipping guide <a href="https://www.cogoport.com/blogs/complete-guide-to-lcl-shipping-everything-exporters-importers-need-to-know">here</a>, and air freight guide <a href="https://www.cogoport.com/blogs/complete-guide-to-air-shipments-everything-exporters-importers-need-to-know">here</a>.&nbsp;&nbsp;&nbsp;<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 2.png" width="auto" style="width: auto; height: auto;"></a>In this piece, we explain the multiple steps involved in importing goods into India via sea, using an FCL transaction as an example. Read on for:<ul><li>The stakeholders in the import process</li><li>The processes involved in the import process </li></ul><h2>Stakeholders in FCL import‍</h2><ol><li>Exporter: The exporter produces or procures the goods and ships them to another country. Also called the shipper, supplier or seller. There are various <a href="https://www.cogoport.com/blogs/export-process-from-india" target="_blank">types of exporters</a> – merchant exporter, manufacturer exporter, service exporter, third-party exporter, project exporter and deemed exporter.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li><li>Importer: The importer is the end-customer who buys the goods shipped by the exporter. Also called the consignee, customer or buyer. As with exporters, there are several <a href="https://www.cogoport.com/blogs/export-process-from-india" target="_blank">types of importers</a> as well – the actual user, established importer and registered importer.&nbsp;&nbsp;</li><li>Origin Country: The country from where the goods are shipped. Additionally, the port in the origin country from where the cargo is shipped in containers is called the port of origin (POO) or port of loading (POL).</li><li>Destination Country: The final country where the goods are sent. The final port to which the containers are shipped is called the port of destination (POD).</li><li>Shipping Line: The carrier, ship or vessel that carries the cargo from origin to destination.</li><li>Origin Agent: The freight forwarder in the origin country who liaises with the shipping line, exporter and destination agent. In some cases, depending on the origin country’s shipping practices, the origin agent also works as the<a href="https://www.cogoport.com/blogs/export-process-from-india" target="_blank"> customs agent</a> at origin.&nbsp;</li><li>Destination Agent: The freight forwarder in the destination country who liaises with the shipping line, importer and origin agent. In most cases in India, the destination agent also stands in as the customs agent at destination.</li><li>Customs Authorities: Customs authorities at origin clear the goods for export while customs authorities at destination clear the goods for import.</li><li>Port Authorities: Present both at the origin and destination countries, they clear the goods to be loaded and unloaded from the ship respectively.</li><li>Intermodal Transportation Providers: Truck, trailer and rail service providers facilitate the movement of goods from the factory to the port of loading at origin and from the port of destination to the final destination of the imported goods.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li></ol><figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center" data-rt-max-width=""><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/5f8999b03172fde3aff61b6b_151020_Cogoport_Infographic_FCL%20Import%20process-02.jpg" loading="lazy" alt="Step by Step guide to Import Process in India" width="auto" height="auto"></div></figure> <h2>FCL Import Process in India: An In-depth Look&nbsp;</h2>The infographic above traces the main steps in FCL imports. But there are many small steps in between. Here’s a detailed guide to how the FCL import process works in India for a<a href="https://www.cogoport.com/blogs/incoterms-2020-expected-changes" target="_blank"> free on board (FOB)</a> shipment.&nbsp;<h3>1. Origin activities (till vessel departure)</h3>After the exporter and importer finalise the deal and make the shipping arrangements, the exporter shares the following documents and details with the importer and destination agent:&nbsp;&nbsp;<ul><li>Container details</li><li>Shipping Instructions (SI) filed with the carrier at origin</li><li>Draft<a href="https://www.cogoport.com/blogs/types-and-usage-of-bill-of-lading-meaning" target="_blank"> house bill of lading</a> (B/L) issued by the origin agent. At times, the importer might seek corrections in the draft house B/L</li><li>Confirmation of payment of local charges (for services availed of at port/terminal of origin) by the exporter</li><li>Courier details after the <a href="https://www.cogoport.com/blogs/types-and-usage-of-bill-of-lading-meaning" target="_blank">house B/L</a> is dispatched to the importer</li><li>Surrender details, if B/L is surrendered at origin. (The exporter surrenders the original B/L to the carrier at origin unless the shipment is under “documents against payment” or letter of credit)&nbsp;&nbsp;&nbsp;</li><li>Shipped on board (SOB) confirmation of containers and details of planned vessel movement. (The SOB confirmation on the B/L confirms the goods have been loaded on the ship)</li></ul><ul><li>The carrier issues a master B/L to the origin agent. Unlike the house B/L, which mentions the exporter as the shipper and the importer as the consignee, the master B/L designates the origin agent as the shipper and the destination agent as the consignee. The origin agent sends the master B/L to the destination agent.</li></ul>Note: The origin activities listed here are all relevant to the importer. For origin activities handled by the exporter, refer to our guide to the export process<a href="https://www.cogoport.com/blogs/export-process-from-india" target="_blank"> here</a>.&nbsp;<h3>2. In-transit activities</h3><ul><li>After the goods receive export clearance and the ship leaves the port of origin, the destination agent tracks the shipment in-transit and informs the importer of any developments, such as delays.&nbsp;&nbsp;</li><li>Two days before the ship’s scheduled arrival at the port of destination, the carrier files an Import General Manifest (IGM) with customs. The IGM contains details of all the import shipments carried by ship along with their corresponding B/L numbers. This document is mandatory for import customs clearance.&nbsp;</li><li>If the shipment’s final destination is not the port of destination but an inland container depot (ICD), the carrier files a Sub-Manifest Transhipment Permit (SMTP), which details the import shipments being moved from the port to the ICD with their corresponding B/L numbers.</li><li>The carrier sends a Cargo Arrival Notice (CAN) to the importer and the “notify party” mentioned on the B/L (who could be the importer or the destination agent). The CAN has a description of the goods, their weight, the number of packages, and collection charges if any.&nbsp;</li></ul>‍<a href="[Tuesday 11:10 am] Raghav Sand https://app.cogoport.com/en-IN/?utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-1.png" width="auto" style="width: auto; height: auto;"></a><h3>3. Container movement at destination</h3>After the ship arrives at the port of destination, the containers are off-loaded, loaded on trailers and moved to a <a href="https://www.cogoport.com/blogs/container-freight-station-meaning-functions-and-role-in-import-export" target="_blank">container freight station</a> (CFS) nominated by the carrier for customs clearance.If the final destination of the goods is not the port of destination but an ICD, the containers are shifted there by inland haulage, which is of two types:<ul><li>Carrier haulage – The carrier nominates the haulage provider, decides the haulage charge and is fully responsible for the carriage of goods to the ICD.</li><li>Merchant haulage – The importer appoints an independent haulage provider, negotiates the rates directly, and bears the responsibility of safe haulage of the goods.</li></ul><h3>4. Bill of Entry filing</h3><ul><li>Within 48 hours of the ship’s arrival, the destination agent/customs agent files the Bill of Entry (BOE) – the most important document for import clearance. The BOE marks the entry of goods into a country before their consumption or warehousing and is a legal requirement.</li><li>To file the BOE in India, the customs agent enters the required information on <a href="https://www.cogoport.com/blogs/container-freight-station-meaning-functions-and-role-in-import-export" target="_blank">ICEGATE</a> – the official website of the Central Board of Indirect Taxes and Customs – after which an Import Checklist is generated. The purpose of this checklist is to help the importer verify that the information provided by the customs agent is correct.</li><li>Once the checklist is verified, the customs agent does the final filing of the BOE and receives an electronically generated BOE number for the shipment.</li></ul><h3>5. Customs assessment, examination, and clearance</h3><ul><li>After the cargo arrives at the CFS/ICD and the BOE number is generated, the customs department’s electronic data interchange (EDI) system or a customs officer assesses the duty applicable, as per the declared cargo value and its classification based on the international Harmonised System of Commodity Classification.</li><li>The EDI system/customs officer checks if the cargo is restricted/prohibited for import or if the importer needs additional licences/permissions for its import.</li><li>If the customs officer isn’t sure about the cargo value or if the cargo is red-flagged by the EDI system, the officer requests an open examination of the goods.</li><li>On successful completion of the examination and assessment, the customs officer endorses the BOE with a “Pass Out Order” stamp.</li><li>The importer receives the BOE and completes payment of import duty.</li></ul>Note: In most cases, customs assessment is done by the EDI system and no assessing officer is involved.<h3>6. Document handover to the carrier</h3><ul><li>Following import customs clearance, the importer hands over the commercial invoice cum packing list, purchase order, house B/L, import licence copy, declaration form, certificate of origin, letter of credit/bank guarantees, BOE number to the destination agent.</li><li>The destination agent submits the same set of documents to the carrier with one exception – the master B/L replaces the house B/L. Additionally, the agent submits a release letter/endorsement to the carrier, asking it to issue the import delivery order (DO) directly to the consignee listed on the B/L (who could be the importer, their agent or their bank).&nbsp;</li><li>The carrier issues the DO to the consignee.</li></ul><h3>7. Last-mile delivery</h3>The next and final step in the import process is last-mile delivery of the shipment. At this stage, the importer de-stuffs the containers takes delivery of the cargo and returns the empty containers to the carrier-appointed container yard. This plays out in two ways:<h4>Case 1:</h4><ul><li>The containers are de-stuffed at the CFS/ICD&nbsp;</li><li>The importer takes delivery of the de-stuffed cargo after handing over the DO to the CFS/ICD</li><li>The cargo is then loaded on trucks and moved to the importer’s premises</li></ul><h4>Case 2:</h4><ul><li>The stuffed containers are collected from the CFS/ICD, loaded on trailers and taken to the importer’s premises, where they are de-stuffed</li></ul>And those are the steps involved in the import process. But before you go, there are a few things you must watch out for when importing goods and services from another country.&nbsp;&nbsp;&nbsp;<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 3.png" width="auto" style="width: auto; height: auto;"></a><h2>Watch out for these hurdles</h2><ul><li>Make sure that the documents/information you submit at various stages of the import process are accurate and complete as inaccuracies cause delays</li><li>Don’t forget to check if the goods you wish to import are restricted/prohibited or if they need additional licences or permits</li><li>Know the right classification for your cargo as that will help you calculate and budget for the import duty applicable&nbsp;&nbsp;</li><li>Just as you would supervise the de-stuffing of your cargo at your own warehouse, it is wise to have your agent monitor the de-stuffing process at a CFS/ICD to avoid damages. This is because not all CFS/ICD workers are trained to know if some shipments require special handling&nbsp;&nbsp;</li><li>In the case of factory de-stuffing, pick up your stuffed containers at the port/CFS within the allotted free time to avoid <a href="https://www.cogoport.com/blogs/incidental-shipping-charges-part-i-freight-and-customs-related-extra-costs" target="_blank">demurrage fees</a></li><li>Return empty containers to the container yard within the allotted free time to avoid <a href="https://www.cogoport.com/blogs/incidental-shipping-charges-part-i-freight-and-customs-related-extra-costs" target="_blank">detention fees</a></li></ul>Register with <a href="https://www.cogoport.com/blogs/incidental-shipping-charges-part-i-freight-and-customs-related-extra-costs" target="_blank">Cogoport</a> to make your imports a breeze. We provide:<ul><li>Transparent and competitive freight quotes instantly</li><li>Trustworthy freight forwarders and customs agents</li><li>Verified trucking services and logistics providers</li><li>Cargo tracking from pick-up to drop-off</li></ul>

A Step-By-Step Guide on the Import Process

An Introduction to India-China Trade

Plan your shipment in advance. You’ve come across this piece of advice often enough in our blogs, but it must be said again. Early planning and booking helps you make timely deliveries, keeps your import-export business running smoothly and your customers satisfied. Leaving it till too late could likely mean a delayed shipment, leading to unhappy customers, missed business opportunities and extra expense.While shipment delays are all too common, you can avoid them to a great extent. That is the focus of this blog. Read on to find out:<ul><li>Why shipments get delayed</li><li>How delayed shipments impact your business</li><li>How to book and plan early</li></ul><a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 3.png" width="auto" style="width: auto; height: auto;"></a><h2>Why shipments get delayed</h2>Some of the most common reasons for shipment delays are:&nbsp;&nbsp;<ol><li>Vessel delays: Bad weather, port congestion, strikes, container shortages and changes in service schedule can delay a ship’s departure, arrival, loading and unloading. Additionally, ships can get held up at sea due to navigational hazards (floating ice) and technical malfunctions. Delays also occur when the ship takes a detour, makes additional stops or skips a port. According to a<a href="https://theloadstar.com/eesea-reveals-a-more-in-depth-probe-into-liner-schedule-reliability/" rel="noopener noreferrer" target="_blank"> Schedule Reliability report</a> covering the east-west trade lanes, less than 50% of ships were on time while 10% were late by three days in 2019.</li><li>Overbooking and rollovers: Shipping lines are known to overbook carriers in anticipation of last-minute cancellations and no-shows. When a ship is overbooked, it might stop your cargo from being loaded and roll it over to another vessel that sails on a later date.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li><li>Carrier space shortage: If you wait till too late to book space on a ship, the slots might all be gone. Even if you do get a slot, the rate might be too high and you might be forced to delay your shipment.</li><li>General rate increase: Another price deterrent that could push back your shipment is a general rate request (GRI) – a base price hike implemented by carriers in response to high demand.&nbsp;</li><li>Peak season: Carrier space is tight and prices high during the August-November peak season, when traders ship at higher volumes to catch the Christmas and New Year holiday shopping season. (In India, the peak season falls in February-March, coinciding with the harvest season.)</li><li>Holidays: Major holidays such as Chinese New Year, Golden Week and Eid also see demand and prices go up.</li><li>Customs hold-ups: Violations such as incorrect cargo declaration and incomplete documentation can lead to your containers being held up for customs inspection and examination.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li><li>Transshipments: A transshipment is when a shipment is moved from one carrier to another when in transit. Your cargo might have to be transshipped if there is no direct route between your ports of origin and destination. A missed transshipment can cause a delay of days, even weeks.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li><li>Vessel sharing: There are instances where two or more shipping lines share vessels on a specific route to expand their service network. When you make a booking with one such company, your cargo is transported part of the way by another company. The two might not use the same routes and your shipment might end up on a ship with a longer route.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li><li>External factors: Then there are conditions you have no control over, such as wars, terrorist attacks, piracy, natural disasters, vessel collisions, and lost or stolen cargo.</li></ol><a href="[Tuesday 11:10 am] Raghav Sand https://app.cogoport.com/en-IN/?utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-2.png" width="auto" style="width: auto; height: auto;"></a><h2>What plagues shipping today?&nbsp;&nbsp;</h2>These days, shipment delays can also be blamed on two problems facing the container shipping business – shrinking carrier space and a drop in shipments. Why is this happening?&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<ol><li>Reduced sailings: The carrier space shortage can be attributed to an overall shipping slowdown brought about by Covid-19. In the first half of 2020, carriers announced<a href="https://www.cogoport.com/blogs/booking-cancellation-no-show-fees-return-as-covid-19-bleeds-shipping-lines" rel="noopener noreferrer" target="_blank"> record blanked sailings</a> in response to<a href="https://www.cogoport.com/blogs/booking-cancellation-no-show-fees-return-as-covid-19-bleeds-shipping-lines" rel="noopener noreferrer" target="_blank"> unprecedented booking cancellations and no-shows</a> and<a href="https://www.cogoport.com/blogs/booking-cancellation-no-show-fees-return-as-covid-19-bleeds-shipping-lines" rel="noopener noreferrer" target="_blank"> plunging container volumes</a>. A blanked sailing is when a carrier skips a port or cancels the entire voyage. By mid-July, the number of ships arriving at ports each week had fallen to 8,722, an 8.5% drop year on year. This improved to 9,265 in early August, but it was still<a href="https://unctad.org/news/covid-19-shipping-data-hints-some-recovery-global-trade" rel="noopener noreferrer" target="_blank"> 3% short of levels during the same period in 2019</a>. With fewer ships sailing, shippers struggled with reduced carrier space. At the same time, thousands of full containers were stranded at ports for months as a result of government-imposed lockdowns. This created a container shortage. With the outlook for global trade still risky, analysts say<a href="https://unctad.org/news/covid-19-shipping-data-hints-some-recovery-global-trade" rel="noopener noreferrer" target="_blank"> tactical sailing cancellations by carriers will continue</a> for some time.</li><li>Falling imports and exports: The drop in shipments, on the other hand, is a direct result of falling global imports and exports, again due to Covid-19. Exports fell 15% while imports contracted by 13.6% in the April-June quarter, according to this World Trade Organisation report. North America recorded the steepest fall in exports (24.5%) while imports declined the most in Europe (19.3%). The report, however, showed a declining trend in exports and imports since the fourth quarter (October-December) of 2019, before the pandemic hit the global economy with full force. With trading down, shipment volume has also dropped sharply this year. The good news, though, is that<a href="https://www.wto.org/english/res_e/statis_e/daily_update_e/merch_latest.pdf" rel="noopener noreferrer" target="_blank"> China – the world’s </a>largest exporting nation by value and a manufacturing powerhouse – is <a href="https://www.weforum.org/agenda/2020/10/chinas-imports-exports-surge-global-economy-covid19-recovery/" rel="noopener noreferrer" target="_blank">showing signs of recovery</a> with exports and imports picking up strongly.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li></ol><h2>Shipment delays: Bad for business&nbsp;</h2>Any delay is bad for business. A shipment delay tends to affect all aspects of your trade:<ul><li>Unhappy customers: An importer is less likely to buy from an exporter who cannot keep to the promised delivery time.</li><li>Cash flow trouble: If you don’t deliver your goods on time, you don’t get paid on time. This creates cash flow problems that affect your day-to-day operations.&nbsp;&nbsp;&nbsp;</li><li>Manufacturing hold-up: If the delayed cargo is raw material you imported for an important project, you would be forced to halt production.</li><li>Additional expense: Having your shipment stuck in a port for an extended period of time will invite demurrage, detention and port storage charges, which can prove costly.</li><li>Loss of cargo value: An extended transit time can be disastrous for perishable cargo. By the time the shipment reaches its destination, it might be worth nothing.&nbsp;&nbsp;</li></ul><a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 2.png" width="auto" style="width: auto; height: auto;"></a><h2>Book in advance: But how early is early enough?</h2><ul><li>We recommend two to three weeks before cargo pick-up. This increases your chances of finding space on the carrier of your choice, at a competitive rate&nbsp;&nbsp;</li><li>Before booking, find out the transit time and then add a few extra days as a buffer. This is critical when shipping during peak seasons and holidays, when ports are more likely to be congested</li></ul>At<a href="https://www.cogoport.com/" rel="noopener noreferrer" target="_blank"> Cogoport</a>, you can receive<a href="https://www.cogoport.com/" rel="noopener noreferrer" target="_blank"> multiple freight rates instantly</a>, make <a href="https://www.cogoport.com/rate-discovery" rel="noopener noreferrer" target="_blank">bookings within minutes</a>&nbsp;&nbsp;&nbsp;<h2>Plan your shipment well&nbsp;&nbsp;</h2>Booking early isn’t enough. Proper planning is just as important if you want your deliveries to be on time and your customers happy. A few tips:<ul><li>While booking, mention the correct number of packages and double check your cargo details</li><li>Make sure the packaging, labeling and dimensions are proper</li><li>Ensure your shipment is picked up and gated in on time. Try<a href="https://www.cogoport.com/en-IN/knowledge-center/resources/shipping-terms/barge-169" target="_blank"> Cogoport</a> to connect with reliable transport providers who will guarantee your cargo is on time&nbsp;&nbsp;</li><li>Share the shipping schedule with your freight forwarder, customs agent, transport providers and other partners. Cogoport offers the services of verified<a href="https://www.cogoport.com/en-IN/knowledge-center/resources/shipping-terms/barge-169" target="_blank"> forwarders</a> and<a href="https://www.cogoport.com/en-IN/product/logistics/cross-border/managed-supply-chain" target="_blank"> customs agents</a> you can rely on&nbsp;&nbsp;&nbsp;</li><li>Prepare and submit documents on time. Make sure they are accurate and complete to avoid delays and extra costs</li><li>Buy insurance for your shipment on the off chance it is lost, stolen or damaged&nbsp;&nbsp;</li></ul>If you didn’t book early enough, you can still take some last-minute action to ensure timely delivery:<ul><li>Book a direct route. With transshipments, your cargo is at greater risk of getting rolled over or delayed at a transshipment hub</li><li>If you cannot avoid a transshipment, try to restrict it to just one. You can also request your carrier to flag your shipment as a priority transhipment&nbsp;</li></ul>Just follow these simple tips to increase your chances of getting carrier space and shipping your goods on schedule. Register with<a href="https://www.cogoport.com/" rel="noopener noreferrer" target="_blank"> Cogoport</a> for a wide range of services designed to get your shipment to its destination on time.

Why Shipping Delays are Bad for Business?

In <a href="https://www.cogoport.com/blogs/incidental-shipping-charges-part-i-freight-and-customs-related-extra-costs" target="_blank">Part I</a> of this two-part guide on incidental charges in the shipping process, you read about freight-related and customs-related incidentals. In Part II, we take a look at two other stages of the shipping process where exporters and importers might run into unexpected expenses:<ul><li>Transportation</li><li>Marine cargo Insurance</li></ul>It might not be fully possible to anticipate these incidental charges. Even then, a certain amount of planning and budgeting goes a long way in saving yourself the trauma of a huge shipping cost.&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 3.png" width="auto" style="width: auto; height: auto;"></a><h2>Transport-related Incidental Charges</h2>While shipping your cargo door-to-door, door-to-port or port-to-door, it is important to factor in the cost of ground transportation, some of which might go beyond the typical transportation charges you would encounter. Here are some common incidental charges related to inland transportation:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<ul><li>Repositioning (REPO): When you have your nominated trucker pick up an&nbsp; empty container from the port and store it at your premises or at the carrier’s yard to avoid demurrage fees, it is called repositioning (REPO) or pre-pull. (Demurrage is the per-day charge a shipper pays for use of a container within a port beyond the allotted free demurrage time). A repositioning is usually done for cargo on a tight loading schedule. The shipper pays a repositioning fee, which is almost always lower than demurrage charges. Repositioning is also common when containers are not available at the port closest to your factory from where you intend to export your goods. So, you have the containers picked up from the next nearby port and then have the stuffed containers driven to the first port for export.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li><li>Re-delivery: A re-delivery fee becomes a reality when a sudden situation forces your shipment to be returned to a location and be brought back at a later time or date. There could be many reasons for such a move. For example, your carrier fails to complete loading, so it has the trucker drive the container to a secure facility for overnight storage and then brought back the next day for loading to be completed.&nbsp;</li><li>Chassis re-delivery: A chassis is another word for a trailer or undercarriage that is used to move containers. If the chassis is in a different location from the one where the container is being loaded or unloaded, the trucker charges a fee for delivering the chassis at the loading/unloading facility. This is called a chassis re-delivery fee.&nbsp;</li><li>Extra container loading time: If the time taken to load/unload a container goes beyond the specified free time, then the trailer operation will charge a per-hour late fee. A common cause of delayed loading is weight instability due to incorrect stuffing, which means the shipper has to repeat the stuffing process.</li><li>Destination unloading: Once the cargo reaches the destination warehouse, the trailer service provider or FTL service provider will charge a fee for unloading the goods from the container or unloading the container and loading it onto another truck. This is usually not part of the freight quote, so don’t forget to budget for it.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li><li>Halting charge: Truckers will charge an hourly halting charge when they do not receive cargo within six hours of loading time at the loading site, or when the cargo isn’t unloaded within the allotted reporting time at the unloading site.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li><li>ELD (US-only): Trucks in the US are equipped with Electronic Logging Devices (ELD), which automatically record driving time and the distance driven. They were introduced to help implement a federal law that restricts truckers to a specific number of driving hours in a day. An ELD overnight fee comes into play when your trucker reaches the stipulated driving time limit before delivering your container and is forced to stop and rest for the night.</li><li>Container damage charge: Damage to containers during transport (due to a road accident, improper packing/stowing, loading/unloading accidents, etc) can lead to the shipper paying damages to the container owner. Checking containers before use and taking photographs as evidence can help you avoid paying these charges if the fault doesn’t lie with you.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li></ul><figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-2.png" alt="" width="300px"></figure><h2>Marine Cargo Insurance-related Incidental Charges</h2>With hundreds of containers lost at sea every year, shipping is fraught with risks. Even if you’ve paid the utmost attention to packaging and securing your cargo, you can never account for every danger out there. A marine cargo insurance is the best way to protect yourself and have peace of mind while your cargo is in transit. To understand the extra charges you could incur on your marine cargo insurance, it is first important to understand what the insurance covers and what it doesn’t.A marine cargo insurance covers loss or damage to cargo caused by:<ul><li>Bad weather</li><li>Natural disasters – cyclone, earthquake, volcanic eruption, etc</li><li>Man-made disasters – theft, piracy, violence</li><li>Vessel collision, sinking, derailment and stranding&nbsp;</li><li>Loss of cargo during loading/unloading</li><li>Spillage from other containers</li><li>Expenses such as survey fees, forwarding costs, reconditioning costs</li></ul>A marine cargo insurance does not cover loss or damage to cargo caused by:<ul><li>Negligence, misconduct, delay and improper packaging</li><li>Inherent vice (deterioration caused by the cargo’s inherent nature as opposed to an external factor)</li><li>Customs rejection</li><li>Abandonment</li><li>Failure to pay or collect</li><li>Use of weapons</li><li>War, strikes, riots and civil commotions</li></ul>A marine cargo insurance is, however, not a water-tight defence against cargo loss and damage, and incidental charges might still arise in certain situations:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<ul><li>If cargo damage was caused by a peril (risk or hazard) that was not insured against, then survey fees and other charges associated with proving a claim are not paid by the insurance company but by you. (A survey fee is the cost of an inspection of the insured cargo by a marine surveyor). Buying an “All Risks” marine cargo insurance is the only way to avoid such a fate.</li><li>When a carrier is lost at sea in extraordinary circumstances not under its control (fire, storm, collision), the vessel and cargo owners share in the loss under the maritime law of General Average. This means the shipper must pay for the loss of the ship even after losing their cargo. What’s more, the amount to be paid might be more than the cargo value. Again, an “All Risks” insurance is perhaps the one way to escape all liability in such a case.</li><li>Additionally, when a carrier makes a General Average claim, it will seize all cargo and release them only when the general average deposit (cargo owner’s share of the loss) has been calculated and paid. Such hold-ups can affect the shipper’s business and lead to extra expenses.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</li><li>It is <a href="http://agriexchange.apeda.gov.in/Ready%20Reckoner/Cargo_Insurance.aspx#:~:text=The%20term%20cargo%20insurance%2C%20popularly,to%20all%20modes%20of%20transportation.&amp;text=The%20seller%20is%20obligated%20to,the%20DDU%20and%20DDP%20terms." target="_blank">mandatory</a> for an exporter to provide the importer with evidence of marine cargo insurance, in the form of a policy certificate, under the CIF and CIP (Carriage and Insurance Paid To) Incoterms. Because it is not mandatory under the remaining Incoterms, it might qualify as an incidental charge – though it is highly recommended that all shippers give their cargo the added security of a marine cargo insurance.</li><li>If you use the services of a broker/intermediary to buy marine cargo insurance or make a claim under one, you pay a brokerage fee.</li></ul>That wraps up the guide on incidental charges in the shipping process. Extra costs are a given in international trade and it might be impossible to avoid them all. But a little research and planning can help you avoid a good many of them and save you a lot of grief later.Register with <a href="https://www.cogoport.com/" target="_blank">Cogoport</a> for the most competitive and <a href="https://www.cogoport.com/rate-discovery" target="_blank">instant freight rates</a>.

Shipping fees Part II: Transport & insurance 

Incidental Shipping Fees and Customs Costs

Export and import coordinators working with small and medium-sized enterprises or SME business owners will be familiar with the following scenario. Your team promised a customer that they would deliver their order by a particular date. Your production or procurement team closely monitored progress to ensure the shipment moved according to schedule. The cargo was picked up and taken to the port on time. Things seemed to be going well.<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 2.png" width="auto" style="width: auto; height: auto;"></a>At the port, however, one of your previous shipments, which was about to be gated in, ran into trouble. You had so much on your plate that you missed the deadline to submit the packing list – a mandatory document that contains details of the weights and dimensions of each item, pallet or crate – to the customs broker. As a result, your containers were not loaded on the ship they were meant to sail on.Your shipments get delayed. Faced with unhappy customers, your stress levels go up.In an ideal world, export and import coordinators should have an automated tool that helps them book new service requests, remind them about pending tasks, and get real-time updates about shipments. Moreover, all service providers such as freight forwarders, truckers, custom clearing agents and shippers should be able to communicate with each other easily for documents needed to move the shipments.&nbsp;But this rarely happens. Most export and import coordinators or SME owners largely depend on their own notes or records to make bookings and keep track of documentation requirements and the movement of cargo. Additionally, any communication with service providers is usually routed through them. This is an unreliable system.‍This new tool allows SMEs to:&nbsp;<ul><li>Manage shipments using just a smartphone.</li><li>Coordinate with all service providers for better collaboration.</li><li>Access all information such as financial documents and shipping records in a single place.</li></ul><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-2.png" alt="" width="300px"><h3>How Does Cogoport’s Smart Bookings Tool Make Your Life Better?</h3><ol><li>Reduces chances of errors in shipment management: Get informed about all the tasks you need to complete for your containers to move. Complete those tasks on priority to ensure smooth sailing. </li></ol><ol start="2"><li>Allows you to offer improved customer service: Track the live status of your containers and keep your customers informed 24/7.&nbsp; </li></ol><ol start="3"><li>Increases your productivity: By keeping you informed and making it easy for you to visualize all your shipments in a single place, it helps reduce the time you spend on each task and helps you manage shipments more efficiently.&nbsp; </li></ol><h3>Manage Your Shipments Like an Expert</h3>Step 1: Go to ‘Bookings’ on your left navigation panel.<figure class="w-richtext-figure-type-image w-richtext-align-fullwidth" style="max-width:2118px" data-rt-type="image" data-rt-align="fullwidth" data-rt-max-width="2118px"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/5ef2fde3cc5395aed5873aa2_Step%201.png" alt="Cogoport Book and Manage Shipments: Main Dashboard for Importer Exporter" width="auto" height="auto" loading="auto"></div></figure>Step 2: Check the pending tasks for all your shipments on the left.<figure class="w-richtext-figure-type-image w-richtext-align-fullwidth" style="max-width:2118px" data-rt-type="image" data-rt-align="fullwidth" data-rt-max-width="2118px"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/5ef2fe19cc5395623e875116_Step%202.png" alt="Cogoport Book and Manage Shipments: Viewing pending tasks for upcoming shipments" width="auto" height="auto" loading="auto"></div></figure>Step 3: Select a ‘Shipment’ and check all the tasks required to be done.<figure class="w-richtext-figure-type-image w-richtext-align-fullwidth" style="max-width:2118px" data-rt-type="image" data-rt-align="fullwidth" data-rt-max-width="2118px"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/5ef2fe46593a1138fab68412_Step%203.png" alt="Cogoport Book and Manage Shipment: Selecting a Shipment in the Booking Management Feature" width="auto" height="auto" loading="auto"></div></figure>Step 4: Use the ‘Services’ option to see all the services availed.&nbsp;<figure class="w-richtext-figure-type-image w-richtext-align-fullwidth" style="max-width:2118px" data-rt-type="image" data-rt-align="fullwidth" data-rt-max-width="2118px"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/5ef2fecc5b33a53af39db32c_Step%204.png" alt="Cogoport Book and Manage Shipments: How to see the service providers for the bookings placed" width="auto" height="auto" loading="auto"></div></figure>Step 5: Select ‘Billing’ to verify the quotation and to set invoice preferences.<figure class="w-richtext-figure-type-image w-richtext-align-fullwidth" style="max-width:2118px" data-rt-type="image" data-rt-align="fullwidth" data-rt-max-width="2118px"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/5ef2ff39cb5d960ea0054a03_Step%205.png" alt="Cogoport Book and Manage Shipments: Checking the Final Quotation for the Shipment" width="auto" height="auto" loading="auto"></div></figure>Step 6: Click on ‘Documents’ to track all the documents of the shipment<figure class="w-richtext-figure-type-image w-richtext-align-fullwidth" style="max-width:2118px" data-rt-type="image" data-rt-align="fullwidth" data-rt-max-width="2118px"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/5ef2ff6f05a7850a9dc82513_Step%206.png" alt="Cogoport Book and Manage Shipments: Checking the documents related to the bookings" width="auto" height="auto" loading="auto"></div></figure>Step 7: Get add-on services by going to ‘Additional Services’<figure class="w-richtext-figure-type-image w-richtext-align-fullwidth" style="max-width:2118px" data-rt-type="image" data-rt-align="fullwidth" data-rt-max-width="2118px"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/5ef2ffadd1bad9430fd2aa02_Step%207.png" alt="Cogoport Book and Manage Shipments: How to get additional services once the booking is confirmed" width="auto" height="auto" loading="auto"></div></figure>Meanwhile, if you face any issues, go to ‘Comments’ on the right and raise your concerns. This will alert all stakeholders such as forwarders, customs agents and truckers to the issues you have flagged.&nbsp; <figure class="w-richtext-figure-type-image w-richtext-align-fullwidth" style="max-width:2118px" data-rt-type="image" data-rt-align="fullwidth" data-rt-max-width="2118px"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/5ef2fff3c2d1864a731ca89c_Step%208.png" alt="Cogoport Book and Manage Shipments: Adding comments to collaborate with service providers" width="auto" height="auto" loading="auto"></div></figure>Our ‘Bookings’ tool helps SME exporters and importers manage shipments seamlessly by enabling them to track the live status of their shipments, coordinate with service providers all at one place, and carry out any required tasks from their smartphone from anywhere in the world.What are you waiting for?<a href="https://cogoport.com/signup">Book your containers</a> and manage them easily on Cogoport today

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