First time importer to Australia tips

You don’t need to know all the shipping terms but it is essential to be familiar with the following when importing into Australia.

Ex Works

This is a term used for transactions where the buyer assumes all the transportation costs and risks associated with it. However, the seller ensures that the goods are ready for pick-up at their own place of business.

Here at FFQO we deliver Ex work services for you covering:

• Export documents/clearance
• Export pick-up
• Freight
• Destination port surcharges
• Customs clearance
• Delivery

Free Carrier (FCA) / Free on Board (FOB)

Free Carrier (FCA) and Free on Board (FOB) work similarly with Ex Works except that the risk of loss is not entirely with the buyer.

The responsibility over the goods for shipment is shifted to the buyer only after it has been transported from the seller’s premises to the port of origin. At this point both the unloading and the transportation of the shipment to its destination become the buyer’s obligation.

FFQO can handle this for you. Our services include:

• Freight
• Port surcharges
• Customs clearance
• Delivery

Cost & Freight (CFR) / Cost, Insurance & Freight (CIF)

This is where the seller of the goods assumes all the costs and risks associated with the transportation of the goods to the destination port. This includes cargo insurance. The buyer of the goods is responsible for the unloading and Customs clearance of the goods at the destination port as well as the transportation of the goods to the door.

With/less Australian customs fees

Whether the terms are Ex Works or FOB/FCA, it is optional if you wish the cost of Australian Customs fees included. If you are looking for an import freight quote that includes Australian Customs costs then the terms are with Australian Customs fees. If you wish to pay the Australian Customs fees yourself, the terms are less Australian Customs fees.

Want us to handle the Customs fees, GST, duties all straight to delivery? We can do it for you. Call us at 1300651233.

Terms do not include quarantine and insurance

Be reminded that the above shipping terms do not include quarantine fees. Talk to us if you have a product that ‘may be’ subject to quarantine.

Cargo insurance is also not included; however, you can use the following formula to get an estimate of how much it will cost:

• Insurance cost estimate = Cargo value x 0.006 AUD

Note: The minimum charge is AUD$85.00

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It is important for you to know how to calculate customs lodgement fees. Here is a guide on how you can calculate these.

Value under AUD$1,000

Other than for alcohol and tobacco products, all goods valued under AUD$1,000 are free from customs duty and GST; however, an Import Doc Lodgement fee has to be paid.

Between AUD$1,000 and AUD$10,000

Customs fee for goods valued between AUD$1000 and AUD$10,000 are calculated as follow:

• FCL Import Dec Fee AUD$65.00 + $30.00 per container
• LCL Import Dec Fee AUD$75.00
• Airfreight Import Dec Fees AUD$56.20

More than AUD$10,000

Customs fee for goods valued at more than AUD$10,000 are calculated as follow:

• FCL Import Dec Fee AUD$167.60 + AUD$30.00 per container
• LCL Import Dec Fee AUD$175.60
• Airfreight Import Dec Fees AUD$138.10

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Duty can be easily estimated based on the value of the imported goods. Here is a guide for first time importers on how it you can estimate it.

Imported goods valued under AUD$1,000

Goods valued under AUD$ 1,000 are duty free.

Estimation of duty on imports over AUD$1,000

You may calculate your duty on import product valued over AUD$1,000 by following this formula:

• Estimated duty = (Product value + Freight Value) x 0.05 AUD

Note that duty free can apply for goods coming from several countries where Australia has Free Trade Agreements. You can refer to our duty guide which covers common products and countries of origins.

To know exactly what the duty will be means knowing how to classify your goods properly. This can be tricky, as some products fit into several categories. Feel free to contact us for help on this.

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GST payable varies according to the value of the imported goods as seen earlier with duty and custom fees. Please note that gifts are not exempt from GST.

Here is a first-time importer GST calculation guide.

Imported goods under AUD$1,000.00

As mentioned above, goods valued under AUD$1,000 are GST free.

Imported goods over AUD$1,000

You may calculate your GST on import product valued over AUD$1,000 by following this formula:

• GST = (Product value + Freight Value + Duty + Insurance ) x 0.10 AUD

Ensure you are paying the right GST

Speak to us to know the exact GST you need to pay, rather than assuming your product will be 10%. There may be certain conditions that could make it lower or even nil.

Feel free to call us on 1300651233 or send us a message.

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Chargeable freight is how the cost of freight is calculated. This is how freight companies cope with having to price freight shipments that do not take up much space as to those that do take up a lot of space but do not weigh much.

Calculating chargeable freight for air and sea (LCL) is different. With air freight the chargeable is worked out based on weight, while with sea (LCL) is based on volume. Below we have examples that show how chargeable weight for air and chargeable volume for sea (LCL) is calculated.

Calculating chargeable weight for air freight

Example 1

1. Know your actual volume in cubic meters (cbm).

Formula: length x width x height
Example: 1.0m x 1.2m x 1.3m = 1.56cbm

2. Know your volumetric weight.

Air cubic conversion factor = 167
Formula: actual volume x 167
Example: 1.56 cbm x 167 = 260.52 kg

3. Compare the volumetric weight and the gross weight. Whichever is greater will be your chargeable weight. As actual weight is 200kg the chargeable weight is then 260.52 kg.

Example 2

1. Know your actual volume in cubic meters (cbm).

Formula: length x width x height
Example: 1.2m x 1.5m x 0.5m = 0.9cbm

2. Know your volumetric weight.

Air cubic conversion factor = 167
Formula: actual volume x 167
Example: 0.9cbm x 167 = 150.30kg

3. Compare the volumetric weight and the gross weight. Whichever is greater will be your chargeable weight. As actual weight is 300kg the chargeable weight is then 300kg.

For a summary of sample chargeable freight calculations for air and sea, download the PDF.

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Calculating chargeable volume for sea freight LCL (less than container load)

Example 1

1. Know your actual volume in cubic meters (cbm).

Formula: length x width x height.
Example: 2.0m x 3.5m x 1.5m = 10.5cbm

2. Know your weight-based volume.

Sea cubic conversion factor for sea freight LCL = 1,000
Formula: actual weight / 1,000
Example: 12,000 / 1,000 = 12.0 cbm

3. Compare the weight-based volume and the actual volume. Whichever is greater will be your chargeable volume. As actual volume is 10.5cbm then the chargeable volume is 12.0cbm

Example 2

1. Know your actual volume in cubic meters (cbm).

Formula: length x width x height.
Example: 1.5m x 3.0m x 1.2m = 5.4cbm

2. Know your weight-based volume.

Sea cubic conversion factor for sea freight LCL = 1,000
Formula: actual weight / 1,000
Example: 4,000 / 1,000 = 4.0 cbm

3. Compare the weight-based volume and the actual volume. Whichever is greater will be your chargeable volume. As actual volume is 5.4cbm, the chargeable volume is 5.4cbm.

For a summary of sample chargeable freight calculations for air and sea, download the PDF.

Calculating chargeable freight for sea freight FCL (full container load)

You only need to work out the chargeable freight for sea freight FCL (full container load) when the cargo is usually heavy. It is best to contact us if you think this is the case, as it likely that the shipment is quite specialised and will have other conditions that need addressing.

Feel free to call us on 1300651233 or send us a message.

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Your choice of transit depends on the speed of delivery required to ship your goods. Here is an example showing you the three main transit options available.

Say we have a box of collectable magazines (100 kg) we wish to ship from Hong Kong into Australia.

Note that this is an example of price difference between the options to show the likely savings. It does not include local delivery and fees at the destination.

Direct

This will ship via main hubs, such as Hong Kong, Dubai, Abu Dhabi, Bangkok and Singapore

• Transit option: Ship item via Cathay Pacific
• Transit time: 1 day
• Cost: USD$9.75/kg x 100 kg = USD$975.00

Premium deferred

This ships through the hub in Bangkok

• Transit option: Ship item via Thai Airways
• Transit time: 1 to 3 days
• USD$9.00/kg x 100 kg = USD$900.00

Non-premium (cost-effective) deferred option

This ships via hub in Denpasar

• Transit option: Ship item via Garuda Airways
• Transit time: 4 to 6 days
• Cost: USD$7.50/kg x 100 kg = USD$750.00

You can see when you have flexibility in the required delivery date that the change in cost is significant.

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This is a common question for first-time importers, and the answer varies depending on several factors; however, the most important is usually the required delivery date.

Sea freight when time not an issue and over 100kg

The most economical option to send cargo is via sea freight. Especially when:

• delivery can be several weeks to months away
• the exact date is not critical
• your shipment is over 100 kg

While we use premium ocean carriers, there can still be short delays of 2-3 days for sea freight during transit due to weather or port delays. Look closely at this method if your “customers” would consider this “acceptable.”

Air freight when speed needed

When the required delivery date is tighter or needs to be exact, it is best to air freight. It will generally get there in less than a week or two but it’s more expensive – especially when the cargo is heavy or bulky. There are several air freight transit options you can consider that make the delivery time a little more flexible and so reduce the cost.

What about reliability?

You also need to consider the shipping companies you will be dealing with. Remember that shipping companies are also trying to reduce their cost and run in the most cost-effective fashion. How aggressively they are driving down costs can make them more prone than others to delays. To know exactly who is best to use for what situation takes experience and expertise. That’s why we are here to help.

Feel free to call us on 1300651233 or send us a message if you need more help working out whether air or sea freight is best for you.

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