WHAT ARE YOUR FREIGHT OPTIONS? Air Freight Sea Freight Direct - - PowerPoint PPT Presentation

Air Freight

 Direct Service  Transhipment Service  Courier Service

Sea Freight  Full Container Load (FCL)

• Direct
• Transhipment

 Less Than Container Load (LCL)

WHAT ARE YOUR FREIGHT OPTIONS?

 Value of your goods

• I-pads vs. Plasticware

 Stock Cycles

• How quickly are they selling?

 Size of your Shipment

• Under 50 – 100 kgs?

 Timing

• I need this in a hurry.

When to Use Air Freight

Shanghai to Sydney Direct Carriers Flying Time of 11 hours

Direct Services

Shanghai to Hongkong 2hrs 30mins Hongkong to Sydney 9hrs 20mins = 11hours 50mins ???

Shanghai to Sydney Via Hong Kong [Cathay Pacific]

TRANSHIPMENT SERVICE

 Direct Flights

• Hongkong

9-10hours

• Shanghai

10-11hours

• Beijing

12-14hours  Transhipment

• 2-3 days
• Can be longer in Peak Season with backlogs

Air Freight Transit Times

 Guaranteed to arrive when loaded  Quickest possible transit time  More expensive freight cost  Cheaper than direct service  Slower transit time  Possibility of getting stuck in transhipment port [especially during peak season]

Direct Service Transhipment Service

Direct Versus Transhipment

 Inland Freight  Export Customs  Documentation  X-ray/Security Screening  Airport Terminal Fees  Air Freight  Fuel Surcharge  Security Surcharge  Airport Terminal Fees  Breakbulk Charges  Documentation  Air Cargo Automation  Customs Clearance  Delivery  Fuel Surcharge

FREIGHT COSTS

OVERSEAS CHARGES LOCAL CHARGES

• General Purpose Containers (GP)

Approximate Internal Specifications: 20ft: 5900mm x 2350 x 2390 33Cbm/21.5T 40ft: 12030mm x 2350 x 2390 67Cbm/19.8T 40ft High Cube 12030mm x 2350 x 2390 77Cbm/19.5T

CONTAINERS

• Open Top Containers (OT)

Approximate Internal Specifications: 20ft: 5900mm x 2350 x 2345 33Cbm/21.5T 40ft: 12030mm x 2350 x 2345 66Cbm/19.8T

• Flat Rack Containers (FR)

Approximate Internal Specifications: 20ft: 6040mm x 2230 x 2230 / 20.7T 40ft: 12050mm x 2230 x 2230 / 20.7T

CONTAINERS

• Tank Containers

Approximate Internal Specifications: 20ft: 24,000litres/19.8T

IF IT’S TOO BIG FOR A CONTAINER!!!

NOT A PROBLEM

Roll On/ Roll Off Vessel Break Bulk Vessel

• Direct Sailings to East Coast Australia
• Feeder Vessel to Main Port

CHINA PORTS

 Fastest possible transit time  Guaranteed to arrive when loaded  Usually more expensive

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 Less Handling – Less Risk  Container transferred from one vessel to another  Sometimes, your only

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 Potential for delays during Peak Season  Longer transit time  Cheaper price ?

DIRECT VERSUS TRANSHIPMENT

DIRECT SERVICE TRANSHIPMENT SERVICE

 Direct Services

• Hong Kong / Shekou / Nansha

10-12 days

• Shanghai / Ningbo / Xiamen

14-16 days  Transhipment Services

• Huangpu / Shantou

Via Shekou 14-16 days

• Tianjin / Dalian

Via Busan 24-28 days

• Hong Kong/ Shanghai

Via Singapore 20-25 days

SEA FREIGHT TRANSIT TIMES

Day 1 Vessel arrives & starts unloading. Day 2 Vessel sails. Day 3 Containers become available. Days 3-5 Free time to pick up containers Day 6 Storage commences. Day 13 Container demurrage commences. Note: Weekends are included in the “days” above.

F.C.L. CONTAINER TIMELINE

Day 1 Vessel arrives & starts unloading. Day 2 Vessel sails. Day 3 Containers become available. Days 3-4 Containers are picked up and unpacked. Day 5 L.C.L. Cargo becomes available at depot. Days 5-7 Free Time to pick up shipment Day 8 Storage commences. Note: Weekends are not included in “Free Time”

L.C.L. CARGO TIMELINE

Freight charges are paid based on size of container –

• Per 20 Ft Container
• Per 40 Ft Container
• Per 20 Ft High Cube

Container L.C.L Cargo is charged per –

• Cubic Meter
• 1,000 Kgs

Whatever is the greater.

Freight Calculations

F .C.L Cargo L.C.L Cargo

Freight Costs

• Inland Freight
• Export Customs
• Documentation
• Bill of Landing Fee
• Terminal Handling

Charge

• Ocean Freight
• Bunker Surcharge
• Port Charge
• Terminal Handling Charge
• Sea Cargo Automation
• Delivery Order Fee
• Terminal Security Fee
• Customs Clearance
• Delivery

Overseas Charges Local Charges

• Overloading container is illegal & extremely dangerous.
• Average guide for container + goods is 23.5 tonnes
• R.T.A sits outside gate at Port Botany to check trucks
• R.T.A works off axle weights.
• Important that load is evenly distributed in the

container.

Overloading Containers

Maximum Weight Of Product

• Max. Road Weight
• Cont. Tare weight

Max Product Load 20 Ft Container 23,500 Kgs 2,200 Kgs 21,300 Kgs 40 Ft Container 23,500 Kgs 3,800 Kgs 19,700 Kgs 40 Ft High Cube 23,500 Kgs 4.000 Kgs 19,500 Kgs 20 Ft Reefer 23,500 Kgs 3,000 Kgs 20,500 Kgs 40 Ft. Reefer 23,500 Kgs 4,200 Kgs 19,300 Kgs

Weight Distribution In Container

 Incorrect load distribution.  Load not evenly distributed.

 Correct load distribution  Load evenly distributed

Weight Distribution In Container

WAREHOUSING AND LOGISTICS

Start your own warehouse. Rent space in existing warehouse. Outsource to 3PL company. Just-in-time Delivery Model

OPTIONS FOR NEW IMPORTER

 Master of your own destiny.  Handle goods way you want to.  Extra care – minimise damage  Provide most flexible service to your end-customer.  Tied to a lease.  Additional costs – forklifts, pallet hire, labour, etc.  Higher insurance premiums  OH&S / Workcover compliance

YOUR OWN WAREHOUSE

PROs CONs

• All the “PROs” of your own

warehouse

• Possible sharing of costs –

forklift, labour, etc.

• Potential to take over more

space as business grows.

• Some of the “CONs” of your
• wn warehouse
• Difficulty in finding right

situation

• Conflict with resources

RENT SPACE

PROs CONs

• Most cost-effective for start-

up operation.

• No lease or equipment costs.
• No OH&S/Workcover

compliance issues.

• Piggyback on existing

distribution services.

• Lose control of your cargo
• Less flexibility in servicing

your customers

• Increased risk of damage or

loss

• Increased risk of error?

3rd PARTY LOGISTICS PROVIDER

PROs CONs

• No warehouse, labour, or

equipment costs.

• Less handling = less cost in

your supply chain.

• Most cost-effective model.
• Least flexible model.
• No stock on hand for

emergencies.

• Need accurate usage forecasts

from your customers.

Just-In-Time (Cross Docking)

PROs CONs

DISTRIBUTION

Cost Speed High Low Air Truck Rail Sea Fast Slow

• Air
• Truck
• Rail
• Ship
• 5-6 hours
• 4-5 days
• 8-10 days
• 12-14 days

TRANSIT TIMES TO PERTH

PROs CONs

 Can be very expensive compared to international air freight.  Less options, less competitors.  Mainly serviced by narrow-body aircraft.  Only used in emergencies or for high-value cargo  Rates charged on “per kg” basis  Beware volume/weight ratio.

DOMESTIC AIR FREIGHT

 Most common form of domestic contribution.  Good balance between price, speed, and flexibility.  Plenty of operators and competition  Rates charged on “per kg” basis  Weight/volume ratio either 1cbm : 333kgs or 1cbm per 250kgs  Pallet rates can be obtained for regular business on mainline routes e.g. Sydney / Melbourne.

TRUCKING

 Mainly used for long haul.  More cost effective than trucking  Suitable for large loads i.e. rail containers  Container rates based on weight ---- heavy containers cost more.  Have to get container to rail yard at origin.  Have to collect container from rail yard at destination.

RAIL

 Only suitable for full-container loads  Only viable for long haul e.g. Sydney – Fremantle  Cheapest way to ship goods to western Australia  Still have to deliver container to terminal.  Still have to pick up container on arrival  Container rates charged same as international shipping i.e. per 20ft/40ft/40ft high cube.

COASTAL SHIPPING

INSURANCE

 Should I take out marine insurance for my cargo? YES  Should I let my supplier take out marine insurance on my behalf? NO  Are marine insurance premiums cheaper in Australia? Usually, YES  Will I have less problems if I insure from Australia? YES

INSURANCE

AUSTRALIAN INSURANCE CUSTOMS AND QUARANTINE

1. Is the commodity prohibited from importation into Australia? 2. Are there any restrictions from importation into Australia? 3. Do I need an Import Permit for the commodity? 4. Are there any Australian Quarantine restrictions or prohibitions? 5. Do I need any special permissions from Australian quarantine? 6. Does my commodity need any special treatment/s prior to import? 7. Do I have packing that requires treatment prior to import? 8. Do I have all the required documentation / paperwork? 9. Is the documentation/paperwork accurate? 10. If FCL container: does the combined weight comply with the relevant state transport requirements? 11. What is the Duty rate? 12. Are there any Duty concessions available?

BASIC QUESTIONS PRE-IMPORT

 Wooden packaging utilized in in FCL/LCL consignments should be treated using any of the options available for wooden packing.  Such consignments must be accompanied by an acceptable Treatment Certificate. The acceptable methods of treatment are:

• Fumigation
• Heat Treatment
• Permanent Immunisation Treatment

 Treatment Certificates are not required for:

• New Processed panel product
• Timer treated and marked in compliance with IPSM 15

TREATMENT REQUIREMENTS FOR SEA CARGO

 What happens if my goods are not accompanied by a packing declaration? A: If a valid packing declaration does not accompany a sea consignment, the consignment will be directed to AQIS for an inspection to verify whether or not wood packing and/or and straw are present.  What happens if timber packing is not treated when they arrive in Australia? A: If a valid treatment certificate does not accompany a sea consignment, the consignment will be directed for treatment, destruction, or re-export of the packing material from Australia.

Questions and Answers

• USA
• Brunei
• Cambodia
• Indonesia
• Laos
• Malaysia
• Chile
• Myanmar
• New Zealand
• Philippines
• Singapore
• Thailand
• Vietnam

FREE TRADE COUNTRIES

• The importer/owner of the goods must hold a valid

certificate or origin, or a copy, when entering goods to Customs

• A valid certificate of origin is required for each

shipment

• Only approved bodies will be able to issue a

Certificate of Origin

• USA do not require Certificate of Origin, but

importer will need to present evidence of compliance.

CERTIFICATE OF ORIGIN

The main areas related to Broker/Importer activities are:

• The shift from desktop auditing to barrier compliance
• Undervaluation of Customs values
• Misclassification and misuse of Tarriff Concessions
• Misuse of Free Trade Agreements
• Incorrect Tax Payments (GST)
• Misuse of SAC
• High volume refund and drawback claims
• Focus on Motor Vehicle imports
• Focus on textile, clothing, and footwear importers

Post transaction audit action (after clearance) may result from barrier audit detection. Customs will look further when issues detected at a barrier audit.

BROKER/IMPORTER ACTIVITIES