What is the best shipping from China to the USA?

Hello there, beautiful people!

I hope you're having a fantastic weekend so far. It's me again, sharing insights about shipping from China to the USA. I decided to write this post because I've noticed that many international brands frequently outsource manufacturing to China. Even some of the big brands whose products we purchase are actually manufactured in China and then shipped to their final destination. If you are a DTC brand looking to outsource products in China, then this post is especially relevant for you—I wholeheartedly believe that.

In this blog, I've shared some key factors related to shipping from China to the USA, but these insights can be applied to other countries as well. At the end of the day, international shipping follows some standard procedures.

What are the common shipping methods from China?

Not just China, but for almost all the rest of Asia, here are three main international shipping methods that you would love to import your product from China.

Express Courier

Companies such as TNT, DHL, UPS, or FedEx are the express courier services that can help you pick up the shipment from your factory door and send it to the destination. Express couriers from China are always fast and come with online tracking systems. If you use these services to ship from China, it will normally take 2-5 days to ship goods anywhere worldwide with express service, and with standard service, it will take 7-12 days. Reading up until here, you might wonder what express and standard mean. They are basically the service tiers that these couriers offer for you to choose from, and of course, anything faster is more expensive.

During my time working in this industry, I collected some insights and would like to share them here for you to consider:

• For America, South America, Southeast Asia, and Africa, I would prefer FedEx.
• For Southeast Asia, Europe, Australia, and New Zealand, I would prefer DHL.
• Again, for America, I would prefer UPS.

Airfreight

If your shipment is too heavy for couriers, such as 500-600 kgs, shipping by air is considered, as shipping this by courier would incur a lot of cost, which is not worth it. If you prefer this shipping method, please be mindful of some tax/duties obligations you have to deal with in terms of paperwork and customs clearance. If you are new to this industry and this is the first time you are importing goods, then I suggest you work with a broker or shipping agent. Air is basically shipped by Airfreight. Some of the major airlines in the world include EVA Airline, American Airline, or Qatar Airlines.

Normally, transit from China to the US takes 2-6 days, depending on the service you opt for. I will explain details in the next blogs.

Seafreight

Let’s imagine your shipment is huge enough to build some pallets or stuff into containers. In this seafreight world, there are two main shipping methods:

1. LCL method - Less Than Container Load: This means your shipment takes up a portion of the container, not the whole container, and your shipment will load together with other sellers in a container.

1. FCL method - Full Container Load: This means your shipments occupy a container. It's just you and not other sellers or anyone else's goods stuffed with yours. In the express or airfreight, we often talk about the kgs - “weight,” but in this sector, we talk about the CBM (cubic meter).

In terms of transit time, since it moves on the water by a big ship, the transit time to get your shipment to your dedicated destination would take roughly 15-29 days, depending on the service you choose.

What should you prepare before you ship your shipment?

Trade term agreement with your factory

In the logistics industry, please remember that not all the time you work with the factory; elsewhere, you need to handle the pickup from the beginning till the end. This is not the case in this world, and you might hear about "Incoterms" somewhere.

For more formal information, you can refer to it here. For me, the easy way to talk with someone about Incoterms is the rule to split the responsibility between the exporter and importer in another way between the seller and buyer. This also governs the relevant parties such as the broker, shipping agent, or even the bank if you and your factory settle the payment with the involvement of the bank.

With Incoterms, it is defined very clearly at the cut-point between you and your agent. For example, if the trade term is FOB (Free On Board), it means you, as the buyer, don't need to execute the tasks of pickup from the factory and clearing customs at the China side; it is your factory's responsibility. But if it is EXW (Ex-Works), it means you have to take care of the scope from the factory door up until the shipment is delivered to your door. I know that if you live outside of China, you wouldn't be able to do this, so this is why the shipping line, airline, and freight forwarder or shipping agent come into the picture.

In short, please consider using Incoterms in your deal with the factory to make a clear line of who does what.

Document to Prepare

When it comes to international shipping, things become standardized and complex to deal with in terms of documentation alone with the goods. It's not as easy as asking your freight forwarding company to come to your factory and pick up the goods. For one shipment, we need to involve the customs authority, meaning we have to declare the goods for export and import. Remember, in this world, there are two streams of movement: one is the physical movement of goods, and two is the movement of documentation.

Here are the basic documents needed for international shipping:

1. Customs entry document
2. Import license
3. A commercial invoice
4. A packing list
5. A bill of lading

When it comes to some specific countries, it does require another special document such as a Certificate of Origin, Customs Bond, security number, EORI/VAT, or ABN...

Classify the Goods and Calculate the Landed Cost

For the goods you import, the first thing to ensure is that it is not listed as a prohibited product by the US Customs Authority. If it is, the shipment, while exported out of China, might encounter issues when importing into the US.

To check this, please ask your factory for the HS code (normally 6 digits), which you can refer to in the link embedded in the word.

Here are some steps I suggest you follow:

1. Ask your supplier for the HS code of the product.
2. Go to the US Border Customs to check if the product is listed in the prohibited category.
3. Based on the HS code, also using the same link, check the import duty/tax you have to pay for importing the product.
4. Inform your shipping agent or freight forwarder of your inquiry, whether you want to import port to door or door to door. They will then provide you with the freight and landed cost.

(*) Port to door: This means from the China port to your warehouse. Thus, any activities happening before this point will be your factory's cost and risk. Included in this are China customs clearance and trucking from the factory to the China port.

Door to door: This simply means from your factory door up to your warehouse, with heavy tasks for you, including China customs clearance and trucking from the factory to the China port. In this case, you need the freight forwarder/shipping agent to liaise with your factory on your behalf.

How to Decide Which Shipping Method Suits Your Shipping

This can be the challenging part if you make the decision on your own. One of the best ways is to get a freight forwarder/shipping agent to help you with this. After gathering the details of the goods from your suppliers, provide them to the freight forwarder/shipping agent and ask for a quotation. They will work on the options for you. However, it's important to note that not all of them offer the same service level. Some may try to recommend the more expensive option. Sorry, guys, I don't want to sound negative here, but this is a fact. 🙂

 Here are some insights I can share to help you determine the shipping methods. There is a rule to decide on which shipping method for your shipment:

This is screenshot from the 101 Logistics Ebook

When it comes to Express and Air, consider the weight for decision-making. If your shipment is up to 70 kgs, consider express; if it is over 100 kgs to 600 kgs, consider choosing Airfreight. If it's above 600 kgs, then think about Sea movement instead of moving via Air, as it is much more costly.

When it comes to Sea, we need to change the way we talk. We will discuss the CBM (cubic meter) instead of kg as it doesn’t matter how many kgs you have up until this point. If your shipment is total up to somewhere below 13 CBM, then consider shipping by LCL; if it is over 13 CBM, then consider shipping by container.

These are the break-even points for cost-effectiveness that you should consider. I hope this gives you a bit of a sense of how it works. If it isn't clear, please feel free to leave comments, and I'll address them. No worries, my friends.

Shipping Cost from China

You can calculate the shipping cost from China according to the shipping method you are going to use. The price depends on the weight and volume of your product.

International freight forwarders use a term called ‘Volumetric Weight’ to apply the package’s chargeable weight for Express and Airfreight. The shipping cost from China largely depends on this. If the volumetric weight is higher than the actual weight, the agency will charge you for the volumetric weight, and in the reverse case, the other.

So, before delivering your product for shipment, it’s your responsibility to check your product’s weight and calculate the volumetric weight.

Below are the methods of calculating each shipping method:

**Express service:** (H x W x L in cm)/5000  

**Airfreight service:** (H x W x L in cm)/6000  

5000 or 6000 is known as the volumetric factor

Example:

Your shipment has 100 cartons, and each carton is 30 x 35 x 40 cm in L x H x W and weighs 5 kgs. Then the exercise is how to calculate the chargeable weight?

Answer:

Chargeable Weight = max(Actual Weight, Volumetric Weight)

Step by Step Calculation:

Step 1: Calculate Actual Weight

The actual weight is the weight of the shipment in kilograms.  

For each carton: 5 kg  

So, for 100 cartons: 5 kg/carton × 100 cartons = 500 kg

Step 2:Calculate Volumetric Weight

For each carton:  

Volumetric Weight = (30cm × 35cm × 40cm)/5000 = 8.4 kg  

Now, for 100 cartons: 8.4 kg/carton × 100 cartons = 840 kg

Step 3:Compare and Choose Maximum

Compare the actual weight and volumetric weight, and choose the greater of the two  

Chargeable Weight = max(500kg, 840kg) = 840 kg

So, in this example, the chargeable weight for the shipment of 100 cartons would be 840 kg. This is the weight used for determining the shipping cost. Apply the same for Air Freight calculation but remember the volumetric factor is 6000 instead.

Calculating CBM:

Formula: (L x W x H in cm) x total number of packages and divide by 1,000,000

Example:

Let's say you have three individual packages with the following dimensions:

Package 1: 30 cm × 20 cm × 15 cm  

Package 2: 40 cm × 30 cm × 25 cm  

Package 3: 25 cm × 15 cm × 10 cm

Calculate Volume for Each Package:

Package 1 Volume: 30 × 20 × 15 = 9000 cm³  

Package 2 Volume: 40 × 30 × 25 = 30000 cm³  

Package 3 Volume: 25 × 15 × 10 = 3750 cm³

Sum Up the Volumes:

Total Volume = 9000 + 30000 + 3750 = 42750 cm³

Convert to CBM:

CBM = 42750/1000000 = 0.04275 CBM

Since it is just 0.04 CBM, we should ship this by LCL instead of FCL for sure.

Hope it helps, guys! This is the very initial stage to interpret the cost of shipping from the freight forwarders. When they offer you the quote, please consider the freight cost and landed cost.

Freight Cost

This represents the basic cost associated with the main movement from A to B. Here are some examples:

- Express service ex China to US: $7-14 per kg

- Airfreight service ex China to US: $5-10 per kg

- LCL ex China to US: $25 per CBM

- FCL ex China to US: $1800/$2500 per 20’/40’

Some DTC brands interpret this as an "All-in" cost for importing from China to the US, up until delivery to their warehouse. However, in our industry, this is just the Freight Cost and does not include other associated expenses.

What I mean by "others" is often known as the "landed cost."

Landed Cost

This cost includes customs clearance, transport, warehousing, duty/taxes, and any associated costs not included in the freight cost.

Please be mindful of this to make the right decision. I have my logistics 101 here to provide you with more insights on this.

How to Find Shipping Agents that Can Handle Your Shipment

In today's IoT (Internet of Things) world, knowledge is key. For DTC (Direct-to-Consumer) brands making money from their E-commerce business, understanding how their goods circulate in the logistics industry can lead to better decision-making. Experience shows that some brands have been overcharged by their shipping agents due to a lack of understanding. Utilize resources like Google and websites like thefutureecom.com to gain insights into the logistics industry.

Thorough Research

Use Google to research shipping agents. Look at their websites and check if the services they offer align with your needs. Request quotations from several shipping agents to compare, as not all agents have the same knowledge or consulting level. Gathering multiple quotes will give you a better understanding of market rates and services.

Final Thought

The logistics industry is complex, and I understand that some DTC brands may find it challenging to grasp the concepts of how it works. It's important to invest time in learning and reading to become familiar with this industry. Remember, I'm here to support you in the long run.

While I can't cover everything in one blog, I aim to provide valuable insights. If one topic requires more explanation, I'll delve into it in subsequent blogs. In fact, I've decided to compile my knowledge into an e-book, and here is one of my very first e-books for you to explore.

I hope the information I share proves helpful. If it does, please provide feedback. I look forward to connecting with you in the next blogs!

Have a nice weekend!