Many importers still see the international movement of goods as too complicated or difficult to arrange or manage themselves, despite the sums involved and the potential savings achievable through effective negotiation and careful supplier management.

Every year, UK importers unnecessarily pay out millions of pounds on hidden costs and duties which, if properly checked beforehand, could have been reduced or even avoided.

Loading and unloading, haulage, containerisation, storage, ocean and air freight costs, and taxes and duties can all end up costing the buyer more than necessary.

For example, many companies new to importing simply negotiate a cost for buying the goods from the overseas manufacturer without thinking how they are going to be moved from the factory to the eventual UK delivery depot or point of sale.

When negotiating an international sales contract, though, as much attention should be paid to the terms of sale as to the sales price. The almost universally accepted international trade terms (INCOTERMS) set out categories ranging from ‘Ex Works' - where the seller packages the goods while the buyer arranges transport - through to ‘Delivered Duty Paid' where the seller pays for all transport right to the buyer's premises, including duty, taxes and customs clearance.

However, there are a further 11 categories in-between, each placing different responsibilities on the buyer and seller, and this is where extra costs can creep in if the responsibility for carriage costs has not been clearly agreed in advance.

Many importers leave it to the manufacturer who will supply the goods on a ‘cost and freight' basis -  covering transport costs to the buyer's country but not charges on arrival, taxes, duty, customs clearance, or final delivery.

Those manufacturers often simply use one shipping line which provides a cost that is then marked up and passed on to the importer. It's easy to see, then, how transport costs often end up being 20-30% higher than if the buyer arranged the transport themselves or used a forwarder.

Even if the importer uses a freight forwarder for the UK transport, they do not necessarily enjoy the full benefits if the overseas manufacturer's shipper or forwarder uses a different UK agent, with sizeable ‘handover costs' often charged.

Placing the entire responsibility with a reputable freight forwarder removes worry and allows the buyer to access the most cost-effective transport suppliers. Not only is the forwarder used to dealing with manufacturers globally, the fact that even smaller forwarders buy in bulk means significant economies of scale are achievable.

Additionally, hands-on account management by staff who can speak local languages means the process is constantly monitored. Rather than worrying when and whether their freight will arrive, the buyer can focus on the important aspects of their business, safe in the knowledge that their transport costs are as low as possible.

FCL UK

Tel: 0845 222 5555

tesse@fcluk.com

www.fcluk.com

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