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How to Read a Shipping Quotation

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Regardless of your experience in international freight forwarding, logistic quotations can seem like they have a lot of line items, and at times, are difficult to understand. This guide will walk you through each line item that might be found on an international shipping location when importing into the United States.

Our guide highlights the mandatory charges and what modes of transport they might be associated.

Difference between Mandatory & Non-Mandatory

A mandatory charge is considered a cost that one must pay to send your goods from one point to another successfully. An example of this would be the freight fee. Unless shipping is not being charged to you, in which case you would not see a quotation, the freight rate is listed on every shipping quotation.

When a charge is not mandatory, it is not listed on every quotation. These additional fees are offered if the customer either requests something special or if their logistics plan does not require unique add-ons.

The 4 Common Shipping Methods When Shipping to America

  1. Air Express. This method is fast but often expensive. As you can see from the lack of line items, it is also the easiest form of shipping goods from China to America.

    There is a benefit to using a freight forwarder when shipping via express, as opposed contacting the shipper directly, such as DHL or UPS. Most importers opt to use a local freight forwarder to take advantage of their lower rates. If you take Guided Imports as an example, our express accounts are set up in China, and not America. We ship an incredibly high volume of goods via express, which allows us to offer rates at the lowest pricing tier.

  2. Air Cargo. This method is also fast, however not as fast as express. Air cargo requires additional documents for both exporting and importing. This method used for larger shipments that would otherwise be too expensive for express. 

    In terms of air shipments, cargo will usually be the less expensive option but requires additional work for your freight forwarder. You look at the difference in an express and cargo quotation; you will see more line items which identify the added work needed on a cargo quotation.

  3. Ocean LCL. If you plan on shipping via ocean carrier, but you don't have enough goods to fill a full container, less than container load (LCL) is the only option. LCL works by relying on your freight forwarders network to consolidate your products in a container with other customers goods. Think of it like your products are car-pooling, or ocean-pooling with other products all headed to the same port.

    The requirements will be primarily the same as FCL; the most significant difference is, your products are not the only products in the container.

  4.  Ocean FCL. Ocean FCL. When shipping by container, a quality freight forwarder means everything. Forwarders need to have a strong network at the destination country, but more importantly, should they be experts locally within China or the country where the goods are exporting from.

    The process of ocean shipping may seem complex, but we can assure you, it is now. Any competent forwarder will perform all the heavy lifting on your behalf, and make a seemingly complex process simple for their customers. Ocean shipping can have a lot of line items in a quotation; because of this, it is best to take your time and understand what each fee means. By doing this, you can become more confident in the shipping process and a more informed buyer.

Understanding Shipping Fees

Our guide below was created to help ensure our clients, and customers of other forwarders understand the individual line items found on a shipping quotation. 

 

  Description Mandatory Shipping Method
      Air Express Air Cargo Ocean LCL Ocean FCL
Freight Charges            
Freight Fee The freight rate charged by the carrier/shipping line to transport the cargo from one location to another. ✔️ ✔️ ✔️ ✔️
Export Charges            
Pick Up Charges (EXW) The fee to pick up cargo from the factory to send to another location (usually, to the warehouse close to the port).   ✔️ ✔️ ✔️ ✔️
Doc Fee (EXW) The fee charged by the carrier/shipping line for the Bill of Lading.     ✔️ ✔️ ✔️
Customs Clearance Fee (EXW) This charge covers the process to prepare and submit Customs Entry documentation for export.     ✔️ ✔️ ✔️
Export License Fee (EXW) The fee to purchase an export license if the seller/supplier doesn't have one.     ✔️ ✔️ ✔️
Destination Charges            
      Air Express Air Cargo
Ocean LCL
Ocean FCL
CFS Charge The fee paid to the container freight station (CFS) for consolidating, or de-consolidating shipments to multiple shipping locations.     ✔️ ✔️ ✔️
AMS Charge The fee charged for declaring the cargo information through US AMS filing.     ✔️ ✔️
Messenger Fee This charge covers the processing of paperwork between freight forwarders, customs brokers, and ports or airlines   ✔️ ✔️ ✔️
EDI This Electronic Data Interchange (EDI) charge that covers the costs of sending forms to customs, ports, and other government agencies.   ✔️    
ISF Fee This charge covers the processing of filing the ISF document with the US CBP.     ✔️ ✔️
Customs Entry Fee This charge covers the processing of the customs entry documents for customs clearance.   ✔️ ✔️ ✔️
Warehouse Fee The fee paid to the final warehouse before the delivery schedule/appointment.     ✔️ ✔️ ✔️
Chasis Split Fee The fee charged by carrier/shipping line to pick up a chassis before picking the container.     ✔️ ✔️ ✔️
Chassis Fee This fee is imposed if the container is traveling via truck.     ✔️ ✔️ ✔️
Pier Pass The charge imposed by Terminal Providers to the truckers.     ✔️ ✔️ ✔️
Clean Truck This is the fee imposed by some ports in the US as part of the Clean Air Action Plan in an effort to reduce air pollution.     ✔️ ✔️ ✔️
Customs Charges            
      Air Express Air Cargo Ocean LCL Ocean FCL
Duties & Taxes The taxes and fees paid to the United States Customs and Border Patrol. ✔️ ✔️ ✔️ ✔️
Customs Exam Fee The fee paid by the importer if a shipment/container has been chosen to undergo a customs exam.   ✔️ ✔️ ✔️ ✔️
Additional Charges            
Pallet Fee The fee charged for palletizing the cartons, either at the origin or at the destination port.     ✔️ ✔️  
Delivery Fee The trucking fee to deliver cargo from the warehouse to the final destination.     ✔️ ✔️ ✔️
Appointment Fee This charge covers the process to prepare and submit an Appointment request to an Amazon FBA warehouse.     ✔️ ✔️ ✔️
Liftgate Fee If the delivery destination doesn't have a loading dock, a liftgate will be needed to unload the cargo.     ✔️ ✔️ ✔️
Residential Fee The additional cost charged by the trucker to deliver the cargo to a residential area.     ✔️ ✔️ ✔️
Forklift The fee charged by the trucker to rent a forklift truck.     ✔️ ✔️ ✔️
Delivery Order / Handling Charge The fee charged by the freight forwader to process the shipment.   ✔️ ✔️ ✔️
Port Congestion Fee This surcharge is dependent on the port, both on the origin and destination. It's an additional fee incurred by the shipping lines when calling at congested ports.   ✔️ ✔️ ✔️
Terminal Charge All air shipments are charged with this fee for handling the cargo. This can be charged on either or both origin and destination airport.   ✔️    

 

The shipping service your competitors don't want you to know about.

Is Your Quotation Confusing?

We hope not! Though shipping may seem complicated, for new importers it is only so due to the seemingly unfamiliar terms and processes. If you found this guide useful, we invite you to save it and refer back to it in the future.

If you still have additional questions, please don't hesitate to reach out to us and we'll be more than happy to walk you through our quotation and shipping process. Whenever you're ready to ship products from Asia to North America, Europe, or Australia, you can always fill out a quotation request form, and we'll help plan your logistics process for you!

 

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