Importer Tips: How to Avoid Shipping Storage and Demurrage

If you’re new in the importing or exporting world, you might be surprised to receive an unexpected bill showing demurrage, storage & detention charges – terms that you haven’t even heard yet, let alone know the cause. Or you might have experienced this already for some time now, but either way, these costs might hurt your pockets big time. So, to clear up your confusion, let’s talk about when you might see these charges, and how you can avoid them.

Storage

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Storage charges accumulate at port facilities, airline terminals, and bonded warehouses when a container remains at the site beyond the allotted “free days” provided by the airline, warehouse or Arrastre operator after arrival.

Storage Fee- with standard rate for FCL (see PPA memo). Standard Free time 5 days.

for LCL (see BOC CMO 41-15)

Cut your losses by following these tips to avoid storage cost:

  • Ensure that there are no issues with the shipping documents. It is the common reason for delaying the release of container.
  • For regular cargo, consider a Seaway Bill of Lading/Telexed Release instead of an Original Bill of Lading.
  • Always keep a keen eye over your shipment and the arrival of the vessel, so you will know exactly when you free time initiates and expires.
  • Advise broker for immediate releasing.

Demurrage

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Demurrage fee is levied by shipping lines for containerized shipments only, however, this fee is charged when the containers are still full and has not been cleared up by the consignee within the seven (7) days free time & extendable as per approval of the shipping line.
Menacing as it is, here are some tips to avoid demurrage charges:

  • Talk with your freight forwarder and know in advance a number of free days granted.
  • Dispatch your shipment as early as possible. Excelsior Worldwide Logistics can help you clear your cargo ahead of time provided that all documents handed in a timely manner.
  • If your shipment comes in volumes, you may request an additional free time from your freight forwarder or carrier. (Most often, the volume of your shipments should be close to 1,000 containers per year to be granted for extended free time.)?
  • Ensure that your trucking company can pick up the shipments within the allotted free time, and a trucker has been assigned to your shipment. Set-up a backup or alternate trucker in the case of any circumstances that will prevent them from picking up your cargo in a timely manner.
  • Analyze all the papers containing the terms and conditions of your transportation, warehousing, and sales contracts to find out the situations under which your company may be held responsible for demurrage charges.

Detention

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When the container has been picked up and out gated from the terminal, it must be returned within 72 hours otherwise detention charges will be imposed.

As always, it is important to seek the help of a licensed customs broker and freight forwarder to help you avoid or lessen this unplanned additional charges you might incur in importing/exporting process. They can help you understand the whole shipping process, and makes sure that you stay ahead of schedule and your cargo will move in a timely manner.

Allow Excelsior Worldwide to help you ensure a storage free -demurrage free clearance of shipments. Contact us today to learn more about our global logistics. Call (063) 5259775 or visit our website www.excelsior.ph

Importer Facts: What to Pay and Not Pay? (Infographic)

Importation is quite tricky, especially if you’re not aware of the costs that come with it. It is important to understand the basic charges you have and you don’t have to pay in order to come up with a solid figure you have to prepare when your goods have finally arrived in the port; cleared and delivered to your warehouse.

 

Aside from the product you have purchased abroad, here are some of the costs that you should assume from the importing process.importer-facts-what-to-pay-and-not-pay-hd

 

Advantages of Having an Honest Customs Broker

Advantages of Having an Honest Customs Broker

Professionalism and Integrity have always been an imperative aspect in every industry. In trading business, it is an utmost priority to choose an honest and capable customs brokerage firm to ensure that the import and export operations are done diligently and legitimately. Likewise, getting your shipments abroad or on the local shores without worrying about legal and ethical dilemmas is the core purpose of why customs brokerage are here to be present.

Check our thoughts below and see why a truthful and straight to the point customs brokerage company is going to be your greatest ally in your import and/or export business.

  1. They Will Take Proper Care of Shipping All Your Products
Steel Container on Container Dock

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A genuine customs broker makes sure that all of your freights will arrive at your local warehouse on-time and with no legal requirements bypassed. A legitimate customs brokerage firm ensures that you are complying with various Customs Regulations. If these regulations are neglected or avoided, it may cause time delay on delivering the shipments, or worst, get the shipments confiscated by customs authorities.

If you leave your customs responsibilities to a non-seasoned and incapable customs broker, you might just be surprised to see your products all piled up in the port- seized by authorities, and you ending up paying a large sum of penalties or even face criminal liabilities, which can taint the reputation of your company.

An honest customs broker, aside from assisting you with all legal requirements, will give you advice on additional up-to-date Customs compliance on constantly changing trade rules and security requirements- thus protecting your business against costly penalties and customs audits.

  1. They Allow Your Company to Retain More Money Than Losing It.
Free stock photo of money, finance, bills, bank notes

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Basically, doing the customs responsibilities in-house requires having various hardware and software to carry out the task. In addition, these installations will also incur periodical maintenance cost and other associated overhead related to having an in-house Customs expert. A customs broker firm who is dedicated to serving its clients truthfully and to the full extent is equipped with various programs and technology to help you perform your import and export task or communicate with Customs officials.

Also, although it is the basic duty of a customs broker to steer your company clear of shipments problems, they will also seek out and take advantage of applicable trade agreements opportunities. Trade agreements like ASEAN, JPEPA, and EFTA free trade agreement can reduce shipping duties and taxes, allowing your company to retain more money.

 

  1. An Honest Customs Broker Will Tell You Which Goods They Specializes In
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Truth to be told, some customs brokerage companies today doesn’t mind the type of product that your company is shipping. Having said that, it is important to get an honest customs broker that will tell what kind of products they specialize in or is at least familiar with the goods you’re shipping. For instance, if you’re shipping electronic components for export, you don’t want a broker a broker that mostly handles household commodities.

If your customs broker is honest with you, they will tell you right ahead that they are not yet capable handling the product you want to ship, but given that a professional relationship has been established, they will give you the best options on how you can ship your products with without worrying too much about its safety. Of course, this includes trust, formal agreements, and other arrangements that will ensure that your goods are handled properly.

  1. They Understand Your Goals and Reason for Shipping.
3 Women in Suit Sitting

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Another thing that makes an honest customs broker investment worthy is that they analyze your goals and reason for merchandising such product. This not only enables them to form a much stronger partnership with you but also giving them the foundation for the proper distribution strategy that they have to employ.

A professional broker will take an interest in learning the mechanics of your business and asks questions about your business model- giving an outside yet fresh perspective and insights subsequently. To achieve this, a two-way communication must exist first, and a thorough understanding of your company’s key strengths and weaknesses must be established during the negotiation stage.

 

  1.  They Are Willing to Correct Mistakes and Prompt for What’s Missing.

 

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Image from Forbes

If you want to seek the help of a customs broker, you must first provide all the necessary paperwork to them. And because you are ultimately responsible for the filing and paying taxes and duties, you should look for a reliable and a sincere customs broker who are willing to correct mistakes and is quick in notifying you for missing important details. If it is your first time to ship products, an honest customs broker should recognize that you are right after you talk to them. They will assist on every aspect of customs along the way, and wouldn’t wait for you to give them what they need.
They are proactive, and will provide it because it is part of the relationship. Given that you have checked their credibility- some unique situations wherein they were able to help other companies on certain issues or their level of emphasis on details, accuracy, and compliance- it is guaranteed that a synergetic type of relationship will ensue between your chosen broker and your company.

In conclusion, a reliable and ethical customs broker should give you the peace of mind and confidence in every importing and/or export endeavors. At Excelsior Worldwide Freight Logistic and Excelsior Customs Brokerage, we ensure that your shipments will be able to cross international borders in a safe and efficient way. And because we strongly believe that your time is a critical element in your business strategy, we want to offer you a customs brokerage service that is  well-grounded on professionalism, integrity, and efficiency.

To know more about Excelsior, visit http://www.excelsior.ph.

Excelsior Worldwide Logistics Corp.