UAE has increasingly shown possibilities in becoming the global logistics hub and has made impressive growth in the logistics sector. This has made UAE a center point for trading and logistics between Europe and Far East countries.
Owing to this fact, the process of shipping from China to the UAE has become one of the most popular services required by several businesses today. However, many of them drop the idea due to the complexities, costs, and compliance involved – a freight forwarder like ERA Freight can help.
In this regard, let us read more about the cost of shipping from China to the UAE and how we can reduce the cost in detail.
5 Effective Ways to Reduce Container Shipping Costs from China
FCL container shipping costs are high and continue to increase when imported from China, significantly affected by COVID-19, However, Importers always expect their cargo to be delivered at an affordable price.so How can we reduce the cost of shipping from China to the UAE?
Here are 5 tips that might be helpful:
Carefully select shipping conditions.
Incoterms is the first topic of international trade. Clarify responsibilities, costs, and risks associated with shipping and delivery.
The most popular Incoterms is FOB. Under FOB terms, FOB’s Chinese supplier pays export fees in China. You only pay the forwarder for sea freight from port to port. You need to find a local import agent at your destination to handle the import process, such as customs, paperwork, door delivery, tax affairs, etc.
The best way to Import your goods is Door-to-Door (DDP) Service, this way all the steps from Chinese supplier up to delivery at your doorstep will be handled by your forwarder or seller, you might think this would make it an expensive way but later we will show you that it’s not supposed to be that way.
Choosing a Reliable Freight Carrier is Mandatory
Freight carriers come in a variety of shapes and sizes. How to choose a freight carrier in China? Dealing with world-renowned companies has many advantages, including strong strength, high-quality service, and standard operation. However, if you run a small business, getting discounts and customized services from them cannot be easy.
Instead of choosing a well-known carrier, contract with a small or medium-sized carrier with cheaper shipping prices and more flexible service. For example, goods exported to the UAE must be handed over from China to a company focused on the Middle East.
Familiarize yourself with the sea shipping route
You need to understand the shipping routes. There are three different routes for sea shipping from China to the world the Pacific Ocean, Atlantic Ocean, and the Indian Ocean.
And under three routes, hundreds and thousands of ports can be supplied at different container shipping prices.
For example, the price difference between a base port from China to Europe and a small base port is at least $ 200- $ 400.
Make a freight plan first and load the container in time
It is essential to understand the operational process of the carrier. It would help if you had a clear container loading plan and clearly instructed the carrier. Timely communication is an excellent way to save unnecessary costs and ship goods on time.
You need to book the container and deliver the goods on time. We do not recommend ordering items 1-2 days before the shipping date and then informing the carrier to book urgently.
Experienced importers understand the operation, but usually not. He reserves the space in advance and delivers or collects the cargo by arrangement with the carrier.
Both have high storage costs, so it is not suitable for goods to be delivered too early or too late. In the meantime, it may increase the risk of customs inspection.
Maximize the shipping capacity of a container
Before shipping, basic calculations of product packaging are required. The specific method is to get your China supplier to design the packaging according to the container volume and the order quantity.
Another tip is to consolidate the shipments, i.e., instead of shipping separately. It is reasonable for you to put various orders from different locations into one whole container and ship them together. this is one of the methods used in Door-to-Door (DDP) services which help reduce the costs and offer better service to customers.
Import duties from China to the UAE
Import tariff rates in the United Arab Emirates range from 0% to 5% for most products, with an average tariff rate of 4.61%. Some unique products have higher taxes. B. 50% for spirits and 100% for cigarettes.
The method of assessing import duties or customs duties is CIF. H. Costs, insurance premiums, fares. This means that the amount of import duties on goods is calculated based on the cost of goods and tools, insurance premiums, and freight charges.
Are you aware that since January 1, 2003, UAE has joined the Gulf Cooperation Council Customs Union to harmonize tariffs on goods entering Saudi Arabia, Kuwait, Qatar, Bahrain, Oman, and the United Arab Emirates? GCC.
For example, if you are importing from China into the UAE destined to the markets of the S.A, You must pay the customs duty when the goods enter the UAE market. No additional tariff has to be paid once the goods are transferred from the UAE to S.A.
Examples of customs duty rates in the UAE
- Consumer electronics products: 0%
- Kitchen utensils: 5%
- Textiles and accessories: 5%
The Value-added Tax was first enforced in the UAE on January 1, 2018. This indirect tax levied on most goods imported into the UAE is ultimately charged to the end buyer. Companies need to collect VAT on behalf of the government. Currently, the VAT rate is 5%.
Companies with taxable supplies and imports over 375,000 dirhams per year are required to register with VAT.
Registration is optional for companies that supply and import AED 187,500 to AED 375,000 annually and is not required if the import value is less than AED 187,500 annually.
The excise tax was first enforced in the UAE in 2017 to reduce the consumption of unhealthy and harmful commodities and raise the health awareness of its citizens. Excise tax targets a few specific products that harm human health or the environment.
Here are some examples of levied excise goods:
- 50% charges on carbonated drinks
- 100% charges on tobacco products
- 100% charges on energy drinks
- 100% charges on electronic
All these taxes and costs are present in shipping from China to the UAE.
Why Choose Door-to-Door (DDP) service to Reduce the Cost of shipping from China to the UAE?
For both Airfreight service and Sea freight from China to the Philippines, we also offer Door-to-Door service, In this method, we arrange with the supplier and get the goods directly from the Seller and handle the process up to the customer’s doorstep in the destination country.
Our Door-to-Door (DDP) Service provides inland transportation, customs process in both origin and destination, and also freight and makes it hassle-free for Importers especially the ones that do not want to get involved with customs and its process.
How does Door-to-Door service work?
In the DDP method, usually, the freight forwarders consolidate goods from many customers and send them all together, the goods are gathered in the forwarder’s warehouse and then sent to the port and also customs process, and as of this usually, the goods are consolidated need to have the same nature, they can be normal, DGR, battery included, etc.
The goods are sent and released from customs under the forwarder’s name, therefore, shipment tracking, especially with the Sea method, can be a bit troublesome and forwarders offer their own tracking number updated by their agent.
What are the advantages and disadvantages of the Door-to-Door (DDP) method?
DDP has more advantages than disadvantages, as we mentioned before, trouble-free shipping without the worry of inland transportation and customs headaches is very convenient for Importers, but like all methods, it also has its own disadvantages for Importers.
As we mentioned forwarders consolidate goods from many customers, therefore this method can have a longer transit time in both Air and Sea methods, but because of its popularity, the difference is not much and it’s worth the wait.
Many believe because all the steps are covered in this method then it should be much more expensive, but the truth is, even though it might sound expensive, when you compare it with other methods it can even be cheaper ?, you might ask why here is the answer.
Again the point is in the consolidation of the goods, in this way the total weight and volume are much bigger than each customer’s original weight, and as you know the bigger and heavier the goods, the less the price, so each customer pays less for each kg/CBM of their goods and when you add inland transportation and customs cost, I can assure you that sometimes the final price is even better than normal Airfreight or LCL Sea freight.
Door-to-Door (DDP) service is our specialty in ERA, we offer easy, reliable, and affordable shipping services to importers that need to ship from China. contact us now for your free quote.
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