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5 Steps To Save When Importing From China

excelsior on October 15, 2018

In 2017, China replaced Japan as the top bilateral trading partner of the Philippines with a 20.7% increase in imports from 2010.

This 2018, the imports shoot up to 51.2%, which is more than twice as it was last year. The said imports include electronics and machinery, mineral fuels, iron and steel, plastics, vehicles, ceramic products, furniture and lighting, and paper among others. No wonder why many businesses, whether big or small, import from China. If you’re one of them, here are five steps to help you reduce your expenses:

Plan ahead of time

China is 3,096 kilometers away from the Philippines, which means that the importation of your goods will likely take five days or more, depending on the mode of transportation. Although you can request for faster transportation, you will be asked to pay for a rush fee.

If you want your goods to arrive on-time without the extra charges, it’s better to plan it in advance. Moreover, it will also give you more time to find a local freight forwarder that will assist you throughout the importation procedure.

Find a local freight forwarder

Most freight forwarders in the Philippines are affiliated with numerous international transport organizations and companies worldwide, including local Chinese logistic companies. Hence, you should choose a freight forwarder that can and will use its connections to negotiate for better prices on your behalf.

Furthermore, your chosen freight forwarder should also be knowledgeable about the freight peak seasons in China (e.g., Chinese New Year) because during peak seasons, importing can become complicated due to high demand, high prices, and a probability of container shortage.

If this is a no-brainer for your local freight forwarder, you’re in the right hands. Knowing the peak seasons beforehand will help you save by importing non-urgent goods during regular seasons and avoid struggling to find a container spot during peak seasons.

Choose a suitable transportation method

You can import either by sea or by air. Sea freight is ideal for large shipments that aren’t urgently needed. On the other hand, air freight is suitable for smaller and lighter shipments that are time-sensitive.

Importing by air is more expensive than importing by sea because it’s faster and more secure. It goes through fewer hands, therefore minimizing the risk of damages and theft. To cut back on expenses, use air freight only if its necessary.

Another option that you could try is splitting your shipments. For instance, if you have one hundred boxes of imports wherein thirty boxes need to be delivered immediately, and the other seventy aren’t, consider putting the thirty on a plane and the rest on a cargo ship.

Although split shipments might seem inconvenient because it involves preparing two invoices, packing lists and handling charges among others, once you already have a local freight forwarder, it will be hassle-free because they will assist you in accomplishing the necessary paperwork.

A friendly tip: When importing by air, it is best to book six to seven days in advance of the Cargo Ready Date (CRD) while when importing by sea, consider booking three to four weeks ahead of the CRD.

Ensure proper product packaging and insurance

Proper packaging reduces the risk of product damage and loss while in transit (especially fragile and perishable products), whereas cargo insurances can be converted into cash claims in case of damage and loss.

Although the proper packaging and cargo insurances might seem more like spending than saving, neglecting them will cost you a fortune in case your goods get damaged or lost. Better safe than sorry, right?

Obtain rates with the lowest GRI (General Rate Increase) possible

General Rate Increase is the adjustment of container shipping rates and is only applicable when importing by sea.

General Rate Increase and demand are directly correlated. When the demand is high, the GRI also goes up and vice versa, which means that GRIs go up during peak seasons.

The good news is, if you followed the first four steps mentioned earlier, especially planning ahead of time, you will be able to choose between multiple ocean freight rates and obtain the lowest GRI even during a peak season because as the saying goes ‘the early bird catches the worm.’

These five steps only prove that there are always ways to save when you are determined to look for them.

Here at Excelsior Worldwide Freight Logistics, we have equipped people who are knowledgeable regarding import procedures and are committed to reducing your expenditures as much as you are.

We also conduct free orientation for those who are willing to learn about importation & exportation. It is our advocacy to share our knowledge & experience for 17 years in the business.

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The Importance of Being an Accredited Importer and Exporter in the Philippines

excelsior on September 14, 2018

Over the last five years, the Philippines has become one of the most competitive economies being the 38th largest export economy worldwide and forecasted by HSBC as a potential 16th largest economy by the year 2050. Given the fact that the country’s economy itself has advanced, the implementation of trade policies is stricter and the standards, higher. Having that said, here is a detailed list and account of the importance of being an accredited importer and exporter in the Philippines:

Recognition

Businesses who aspire to be accredited are carefully assessed and evaluated by a neutral accrediting body based on numerous requirements and conditions, providing clients with a reliable and fair basis when choosing an import and export company and a guarantee of quality service. After getting accredited, chances are you will be a premier choice in the import and export industry.

Promotion and advertising

Getting accredited is an excellent marketing strategy because after passing the accreditation assessment, you will be awarded a certificate of accreditation that you can publish in your website to demonstrate your commitment to providing quality to your present and potential clients.

Keeping ahead of the competition

Not every import and export business volunteers to undergo the accreditation process because they lack knowledge of its importance and only a few passes the assessment done by the accreditation body. That is why getting accredited gives you an edge over your competitors.

Exemptions

As an accredited importer, you have the privilege of getting exempted from payment of import duties upon the observance of formalities and regulations, while an unaccredited business doesn’t.

Minimized expenses

If you have numerous shipments to be made, you can reduce your expenditures by directly processing your entries with the Bureau of Customs instead of paying third-party consignees to do the job.

The main objectives of accreditations in the Philippines are to prevent smuggling, combat tax fraud, and evasion, and to transform the Philippines into an exporting nation through cooperation between government and private entities.

But, as you can see in this article, it is just as beneficial to every business inside the country because it encourages each business to improve and excel in their chosen industries constantly.

Here at Excelsior Worldwide Freight Logistics, we have equipped people who are knowledgeable regarding import and export legalities and are willing to help you get accredited.

We also conduct free orientation for those who are willing to learn about importation & exportation. It is our advocacy to share our knowledge & experience for 17 years in the business.

To learn more about the importance of being an accredited importer in the Philippines, see this infographic on the advantages of being an accredited importer.

Sources:

How to Ensure Successful Partnership with a Freight Forwarder

excelsior on August 15, 2018

A productive and efficient partnership with a freight forwarder is critical in today’s challenging import-export landscape. Not only it is important to generate the best return for your investments, but it can also significantly boost your competitiveness in the market because a freight forwarder streamlines the overall logistics operations of your business in the long run.

Here are the ways to ensure a successful partnership with your chosen freight forwarder.

Communicate Your Priorities

If your freight forwarder knows what matters to your import-export business on the get-go, they will be able to provide you with the solution best suited to meet your goals. For instance, if you want to achieve significant cost-savings, then they can help ship your cargo by sea. If you need to receive your goods quickly, they can offer to ship your goods by air instead.

An experienced freight forwarder should be able to help you on every aspect of shipping, from which type of container to use, choosing the right Incoterms, and releasing your cargo in customs yard, but they need to know your business priorities first.

Know Your Compliance Responsibilities

Hiring a freight forwarder for your business doesn’t free you up from compliance responsibilities. It is essential that you understand your compliance obligations as an exporter since failure to comply with compliance regulations can put you and your freight forwarder to severe legal and financial implications.

As an exporter, there are four key compliance considerations which you need to deal with:

Proper classification of what you’re shipping.
Trade policies and regulations in your country.
Proper labeling in your cargo.
Proper documentation requirements.

While a reliable freight forwarder will be more than willing to help you in these aspects, lack of basic understanding in this area can lead to serious issues, since most forwarders often tender shipments based on information that exporters give to them.

Only Work with a Reliable and Trustworthy Freight Company

When choosing a freight forwarder, reliability and trustworthiness are two factors that most business owners tend to overlook. Don’t make the same mistake of taking the risk of partnering with a freight company without these characteristics because it will only affect your reputation in the industry.

That said, accreditations and affiliations with reputable trade and logistics organizations can be an indicator of these qualities of a freight forwarder. Excelsior Worldwide Freight Logistics partners with International Container Terminal Services, Asian Terminals Incorporated, and Chamber of Customs Brokers.

We are also duly licensed as Total Logistics Company by the Bureau of Customs, and holds a Philippine Economic Zone Authority accreditation, which has the additional benefit of simplifying and speeding up the customs process for your shipments.

Excelsior Worldwide Freight Logistics conduct free orientation for those who are willing to learn about importation & exportation. It is our advocacy to share our knowledge & experience for 17 years in the business. Contact us today to learn more about our service.

Importer Tips: Tips to Effectively Manage Your Import Supply Chain

excelsior on June 11, 2018

Most importers will testify that managing shipments – from proper documentation to clearing cargos at the docks – is not a simple task. The import process involves a plethora of interactions and complying with dozens of regulations. These requisites can have a significant impact on your supply chain. Therefore, careful planning and fluid supply chain execution are required to minimize the uncertainties throughout the whole process.

Here are some tips that you can implement to optimize imports supply chain and speed up cycle time while complying with increased regulatory requirements in the industry.

1. Identify All Potential Pain Points

To optimize your supply chain, you must identify all the potential pain points that may cause hiccups in your operations along the way. Knowing these disruptions before they arise will enable you to create a proactive strategy with your service providers.

Aside from factors such as weather and catastrophic events, planning for the following common pain points in the supply chain will help ensure seamless import operations in the long run:

Port congestion and labor disputes
An unexpected change in vessel route
In-transit capacity crunches
Holidays, especially Chinese New Year.

2. Weigh the Benefits of LCL vs. FCL Shipping

When importing from overseas, you will likely choose between less than container load (LCL) and full container load (FCL) as a means of shipping your cargo. Each method has its own advantages and drawbacks. For instance, LCL will help you save on cost since the shipping price is shared among other importers. One of the drawbacks of this shipping method, however, is that the arrival schedule of shipments is often inconsistent. Nonetheless, there are services providers that offer regularly scheduled LCL services.

3. Hire a Trustworthy Customs Broker

Auditing your customs documents consistently is must to protect the operations and the namesake of your import business. If time is an issue, you can hire a trustworthy customs broker who will look over your records and will make sure everything matches up. In doing so, you will not only be able to ensure legitimate import operations, but you will also be able to focus on other important aspects of your growing business.

4. Ensure All Your Logistics Service Providers are Linked

Finally, a streamlined import-based supply chain will ultimately depend on the ability of your transportation and logistics partners to communicate with you and one another.

Since there are so many moving parts within international logistics, failures tend to occur in the spaces between each parties. If your service providers are communicating well with you, but you are still encountering issues, you may want to ensure that they are on the same page with each other.

It is very easy to get overwhelmed by the nuts and bolts of the complex import-based supply chain management. Being well-informed and asking your trusted customs broker and freight forwarder the right questions can significantly help you avoid costly surprises.

Is Your Customs Broker Helping You Save Money from Import Cost?

excelsior on May 14, 2018

When getting your goods into a country as an importer, passing through customs is an inevitable hurdle. As with any situation, you can either decide to whether or not you should do all the legwork alone or use a local customs broker to help you steer through often-rough seas of customs compliance.

Another question to be answered when looking at using customs broker is whether the price of doing so affects total import cost.

An Honest Customs Broker Can Impact Your Total Import Cost

If you to clear their goods at customs alone, you’re going to have to be at points of entry to receive goods, handle the tariffs, taxes and documentation and get the goods warehoused and/or moving into the supply chain themselves. Working with an honest customs broker that are experienced with all of the above is the best way to stay compliant and up to date with the importing process.

As a business owner, it is very important to work with someone who understands your unique requirements and delivers the level of service you need to succeed in your marketplace. And most importantly, you only want to work with a broker that will help your business save money in a legal and ethical manner in all your import dealings.

To know if your customs brokers are helping you save money from import cost, you must ask yourself if they are providing you with the following benefits:

Saving time on paperwork

The customs clearing process can be an extremely laborious task. If your customs broker is still giving you tons of paperwork to fill out, you may be missing precious time from other aspects of your business. Your customs broker should take care of all the necessary documentation for you, which will help you save time, which in the business world, equates to money.

Reduce errors on customs documentation

In relation to previous point, all the documentation that your customs broker has done on you behalf must be free from any mistakes or issues. If your current broker filled out the forms and made a mistake, your goods may be held up at the customs yard.

Ultimately, that can slow order processing down significantly. It can also make clients unhappy, which can tarnish your business reputation. Finally, it may result in product returns. All of that can cost your business but turning to a trusted and reliable customs broker can help you avoid costly documentation mistakes.

Handling duty payments

Lastly, an honest customs broker should help you create a reasonable appraisal of your items. If necessary, they should also be able to negotiate with the customs officials to keep the valuation relatively low, and subsequently, keep the duties low as well. These negotiations are another way that a customs broker helps to save your business money.

Excelsior Worldwide conduct free orientation for those who are willing to learn about importation & exportation. It is our advocacy to share our knowledge & experienced for 17 years in the business. Visit our website today at www.excelsior.ph to learn more about our service.

Philippine Importers: Here’s How to Compute Your Import Tax and Duty

excelsior on April 26, 2018

Paying the right customs tax and duty in your import business is crucial to ensure that your operations are legitimate. That is why it important that you hire a legitimate licensed customs broker is critical to avoid the hassle of facing significant penalties or even legal ramifications from the Bureau of Customs.

In the Philippines, the Customs Law indicates that all imported goods above P10,000 are subject to payment of duties, taxes, and other local charges. If you have just started your import business and not sure on how your trusted customs broker will come up with the import tax and duty for your upcoming shipment, we detail in this post how to calculate import tax and some of the additional charges which you should be aware of.

How to Calculate Import Tax and Duty

Customs Duties or Import duty will be pending and need to be cleared while importing goods into the Philippines. Customs clearance can be executed either by a private individual or a commercial entity. The valuation method often used to arrive at dutiable value is CIF (Cost Insurance and Freight), i.e., the cost of the imported goods, the shipping cost, and the insurance cost. Imports are also subjected to Sales Tax.

Excelsior conducts free orientation for those who are willing to learn about importation and exportation. It is our advocacy to share our knowledge and 17 years of experience in business. You can contact Excelsior Worldwide Freight Logistics Corp. today at (+632) 525-9775 or email us at wecare@excelsior.ph

Exporter Guide: Steps to Make Sure You Will Get Paid

excelsior on April 15, 2018

In our previous post, we discussed how you could effectively find overseas clients for your export goods. Provided that you have already established a substantial client base, the next you need to do is to make sure that all your efforts will pay off.

So, while learning to grow your export business and getting familiar with common mistakes that exporters must avoid is crucial, making sure you collect what you are owed is just as important.

To help you out, we compiled on this the actionable ways to ensure your export customers will always pay you on time.

Negotiate Payments Terms Ahead

The first step to ensure payment is to negotiate payment terms that work for both you and your customers. Most customers would prefer to pay 100% of what they owe sometime after they have received the goods, while you would rather be paid in full before you even ship.

To strike a balance between the interest of your business and of your customers, ask them to pay for a deposit shortly after the order. This not only helps your cash flow, but it also commits your client to work with you, and it reduces the likelihood that they will cancel their order.

Obtain Letter of Credit

A letter of credit (L/C) is an effective tool to establish trust between you and your client. Essentially, L/C is an agreement between your bank and the customer’s bank stating that the customer bank will send payment to your bank once you show proof that you have shipped the goods.

With an L/C in place, you can expect to receive payment within about three to four weeks following shipment. Although L/C come at some financial expense—typically around 0.5% to 1% of the payment to be made – it is definitely worth the price as it greatly reduces your risk of not receiving payment.

Use Sight Draft

Another common financing tool used by many small- and medium-sized export businesses is the sight draft. To use one, you need some help from your bank and your shipping company or freight forwarder.

In essence, a sight draft allows you to draw a check on your client’s bank account and comes hand to hand with a letter of credit. Unless your client signs a document that a shipment has been made, they will not be able to take possession of the shipment.

Consider Getting a Trade Credit Insurance

Trade credit insurance is an effective financial risk management tool that protects your export business against losses from non-payment of trade-related debts. In the Philippines, many trade financing companies such as UCPB and QBE offers trade credit insurance and other trade finance programs which helps minimise the financial risks that growing export businesses face.

If All Else Fails

When nothing else works, – the client cannot pay due for whatever reason there is – do everything possible to address the non-payment issue to receive at least partial payment. Surely, you would rather have 80% of the payment in the bank than to sue for 100%.

Not only pursuing legal action in a foreign country can be expensive, but it is also time-consuming and frustrating as well. If your export product includes a warranty or a component which needs to be serviced regularly, you can use those as leverage to extract payment.

Allow Excelsior Worldwide Freight Logistics Corp. to help you navigate the world of import and export. For any queries that you may have about our customs brokerage service, you may call us at (063) 525-9775, or you can send us an e-mail through wecare@excelsior.ph

Things to Consider When Shipping for Trade Shows

excelsior on March 16, 2018

As mentioned in our previous post, attending trade shows is one of the most effective ways to grow the client base of your import-export business. In fact, studies have shown that 81% of trade show display attendees have buying authority – which means that 4 out of 5 people that you might talk to during the event could be your next customer!
Since potential customers and quality leads thrive in this kind of event, it is only essential that you give your best when presenting your product. One of the first steps to ensure a successful trade show is to ensure a smooth logistics.

Successful attendance at trade shows requires timely arrival of your materials at the destination. To help, we detail in this post the things you need to consider when shipping for trade shows.

1. Ensure Efficient Transportation Planning

Trade shows are very time-dependent events. Thus poor transportation planning could lead to a variety of penalties even before the show begins. It is therefore critical to choose a logistics partner with proven event logistics expertise.

There are certain types of information that your chosen carrier will need to know to ensure that your trade show shipments will arrive on time at the convention center. These are:

Name and address of the convention center
Name of the show
Specific event room or hall
The booth number
Name and contact number of your company’s on-site contact
Dock number for delivery

2. Plan for Show’s Conclusion as Well

The numerous instances when your company can incur penalties during move out.
One of such is not meeting requirements included in the Material Handling Agreement (MHA). MHA is the bill of lading for the movement of your booth, and it basically lists all pieces that the shipment contains as well as what company is assigned to the carrier.
If the company is not specified, the decorator will not allow the carrier to pick up the freight after the show. Due to this delay, the decorator may take control of your shipment and picks another carrier to transport your freight. This can increase your transportation cost significantly.

3. Build Relationship with the Parties Involved in the Logistics Process

Facilitating a successful trade show requires collaboration between Installation and Dismantle (I&D) teams, freight forwarders, decorator, and exhibitor. If you plan to maximize your trade show experience, you need to have a clear understanding of the entire logistics process – from unloading and installing to dismantling and loading out.

Penalties and additional overtime costs can escalate quickly if there are any inefficiencies in these processes. Having the right logistics partners, therefore, can help you navigate these time-critical tasks and avoid the heavy penalties that trade shows levy.
Overall, attending trade shows, though quite demanding and exhausting, can be an effective way to grow your import-export business. By partnering with a trustworthy and reliable logistics provider, you can improve your chances of achieving a successful trade show event.

Allow Excelsior Worldwide Freight Logistics Corp. to help you navigate the world of import and export. For any queries that you may have about our services, you may call us at (063) 525-9775, or you can send us an e-mail through wecare@excelsior.ph

Customs Broker vs. Attorney in Fact

excelsior on February 16, 2018

During the process of importing-exporting, many companies will decide to hire a licensed Customs Broker to clear goods through customs and ensure all documentation is filled correctly. Customs Brokers are regulated by the Philippine Bureau of Customs (BoC) and are therefore authorized to assist importer-exporters in meeting the rules and regulations governing imports and exports.

However, with the passing of Customs Modernization and Tariff Act (CMTA) in 2016, the BoC has declared that engaging the services of licensed customs broker by an importer or exporter is now optional. According to BoC, the Act provides the importers and exporters with the option to

1) engage the service of a licensed customs broker,
2) assign an attorney in fact that will deal with the customs authorities on their behalf,
3) clear their import/export goods by themselves.

Since the customs clearing process involves a series of tedious tasks, the latter may not be a viable option for most importer-exporters. This leaves us the question of who is more apt to do the customs clearing process: a customs broker or an attorney in fact?

What is a Customs Broker?

The Section 102(n) of the CMTA states that term Customs Broker refers to any person who is a bona fide holder of a valid Certificate of Registration/Professional Identification Card issued by the Professional Regulatory Board and Professional Regulation Commission pursuant to Republic Act No. 9280, as amended, otherwise known as the “Customs Brokers Act of 2004”.

Advantages of Hiring Customs Broker

Expertise in customs laws, rules and regulations for the clearance of imported or exported goods.
Has basic knowledge of how to prepare customs documentation and ensure that shipments meet all applicable laws to facilitate the import and export goods.
Can sign documents under power of attorney.

What is an Attorney in Fact?

According to Investopedia, an Attorney in Fact is a is a person who is authorized to perform business-related transactions on behalf of someone else (the principal, or in this context, the importer/exporter). To become someone’s attorney in fact, a person must have the principal sign a power of attorney document. This document designates the person as an agent, allowing him to perform actions in the principal’s stead.

Two Forms of Attorney in Fact

General Power of Attorney – Allows the attorney in fact to conduct all business and sign any document on behalf of the principal.
Special Power of Attorney – Allows the persons to sign documents and conduct business on the principal’s behalf only in specific situations.

Advantage of Hiring Attorney in Fact

Has knowledge on legal matters.

Overall, a licensed customs broker can provide more specific expertise about customs regulations and laws compared to an attorney in fact. This specialized knowledge very handy especially if you are new in the import-export business.

At Excelsior, we value your business and your time. This is why we want to offer you a customs brokerage service that is efficient, professional, and ethical.

Importers/Exporters Primer for Break Bulk Shipment and Container Loading

excelsior on January 16, 2018

If you are just new in the import/export business, then one of the first shipping methods you should get familiar with is the break bulk shipping, better known as Less Container Load (LCL). Probably it is because you are still testing the waters first, i.e., your first orders are likely to be small or, perhaps, your product’s dimensions do not fit or utilize standard shipping containers or cargo bins. Either way, knowing when to use break bulk shipment is essential as you grow your trading business.

What is Break Bulk

In the old-world context, break bulk means the extraction of a portion of the cargo on a ship or the beginning of the unloading process from the ship’s holds.

In the modern context, break bulk is meant to encompass cargo that is transported in bags, boxes, crates, drums, or barrels – or items of extreme length or size. Compared to Full Container Loading, this type of shipping involves paying for space your load takes up in a standard container.

To be considered break bulk, these goods must be loaded individually, not in intermodal containers nor in bulk as with liquids or grains.It is without a doubt the most common form of cargo ever since time immemorial. Examples of commonly shipped break bulk cargo include:

Bagged or sacked cargo.
Baled goods
Barrel, drums, and casks,
Corrugated and wooden boxes or containers
Reels and rolls
Equipment, vehicles, and components
Steel girders and structural steel
Any long, heavy, or over-sized cargo

Benefits of Break Bulk Shipment

The main advantage of this shipping method is that it allows you to move oversized, over-weight load that would not otherwise fit into a container or cargo bin. It can also be an affordable way to ship large cargo since the item will not have to be dismantled to ship

Take note, however, that even when you are not shipping over-sized cargo, break bulk shipment can still be a very advantageous mode of shipment. If you can find a freight forwarding company that specializes in break bulk, you will be able to control your shipping expense when you are shipping a small trial order.

For exporters, shipping in break bulk requires them to put an extra care in packing and labeling goods because break bulk shipments are more prone to theft and damage. Typically, break bulk cargos are packed using the following materials:

Pallets
Slip sheets
Crates

Container Loading

Since the late 1960s, break bulk cargo has declined while containerized cargo has grown significantly. Moving containers on and off a ship are much more efficient than having to move individual goods. This efficiency, therefore allows ships to minimize time in ports and spend more time on the sea.

There are different types of container units that cater to different types and sizes of cargo. The most commonly used by small to medium-sized importers/exporters are the 20-foot container, while large-sized companies often use the 40-foot and 45-foot containers.

The following are approximations of how many pallets or skids can into each type of containers:

Ten standards (40”x48”x48”) pallets can fit into a 20’ dry ocean container.
22 standard (40”x48”x48”) pallets can fit into a 40’ or 40HC (high cube) dry ocean container.
24 standard (40”x48”x48”) pallets can fit into a 45’ dry ocean container.

Overall, choosing between break bulk and container loading are mainly depends on the type and quantity of your goods.

Allow Excelsior Worldwide Freight Logistics Corp. to help you navigate the world of import and export. For more information on our breakbulk service, visit our website today at www. excelsior.ph. For any queries that you may have, you may call us at (063) 5259775, or send us an e-mail through wecare@excelsior.ph