By Dr Tim Nielsen (Adelaide, South Australia)
[this article was published in Flying Solo on 16/11/2013]
Shipping your merchandise to Australia and clearing it through customs is a complicated logistical operation that is best left to an expert – the freight forwarder (FF).
The FF is an expert in supply chain management. His business is not to move the merchandise himself, but to co-ordinate the process through different carriers (freight companies) in each country. Most FFs are also customs brokers, meaning that they can prepare and process all the necessary documentation required for your merchandise to clear through customs at both ends. The FF can also provide advice on import duties, restrictions, taxes and charges. In essence, the FF is a “one-stop-shop” for moving international freight: acting on your behalf, they organise for your merchandise to be collected from your supplier, they clear it through customs in the country of origin, put it a ship or plane, clear it through customs here in Australia, and then deliver it to you via a local carrier. Prior to delivery, they present you with a single bill which incorporates the cost of the freight and customs brokerage service, plus all the applicable government fees, charges and taxes (e.g. import duty and GST), which they will have already paid on your behalf.
Freight forwarders differ widely in terms of the shipping rates they are able to obtain for you, so it’s worth shopping around. Once you know the size (volume and weight) of your consignment, a FF should be able to give you a reasonably accurate quote. Bear in mind that their quotes are usually only valid for a limited time, sometimes only a few days, as international freight prices can be volatile. Be sure to ask for a complete quote that includes not only freight and customs services, but also the applicable government fees and charges at both ends, as these can quickly run into the hundreds of dollars. Once you know the dollar value of your consignment, your FF will also be able to help you work out the applicable duties and taxes.
Freight forwarders can also vary in terms of reliability, which is important not only because of the financial value of your merchandise, but because it can impact upon your ability to deliver for your clients on time. And as is so often the case, it’s not until something goes wrong that you find out just how good they are at their job. Again, shop around. It’s worthwhile getting recommendations from your network, or asking for the details and testimonials of their existing clients.
As you can see, engaging a FF streamlines the shipping process for you and leaves all the hassles and paperwork to the experts, and is therefore an absolute necessity for all but the largest importers. As shipping costs and transit times will impact upon such instrumental things as calculating your margins, setting your product prices, and determining your lead times (i.e. the period of time between receiving an order and delivering it), you should liaise with a FF as early as possible – ideally, as part of developing your business plan. The FF is a critical part of your importing business, and their level of competence can reflect directly on you, so the level of trust you have in your FF should equal that of your accountant or legal advisor.