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Simon Arnold joins us from Unity Logistics – a UK based freight forwarding company specialising in shipping goods internationally to and from the UK, including importing and delivering goods directly to Amazon warehouses in the UK (or wherever required) on behalf of Amazon sellers.
Listen in to hear Simon share:
- What we mean when we talk about shipping and what a freight forwarder does (1:50)
- What Incoterms are and what each one means to you as a buyer (4:01)
- The importance of ensuring you’re receiving and comparing supplier quotes based on the same shipping terms (7:28)
- How to work out which terms might be best for you (9:52)
- How to know if you’re being quoted accurately (12:44)
- Why DDP shipping might not be best (14:31)
- Why it’s worth insuring your products during transit (22:14)
- How to work out what import charges and VAT you’ll pay – plus who pays and when (23:14)
- Why you need an EORI number (26:54)
- The different modes of transport you can choose for shipping your products (28:19)
- What you need to get an accurate quote from a freight forwarder (32:37)
- Using a freight forwarder versus asking your supplier to handle your shipping (36:14)
- What you need to be aware of if you’re planning on sending products into Amazon FBA (39:52)
- The top (quick!) things you need to know if this is your first shipment (47:40)
Shipping and importing your products - with Simon Arnold, Unity Logistics
Welcome to the, bring your product ideas to life podcast, practical advice, and inspiration to help you create and sell your own physical products. Here's your host Vicki Weinberg.
Vicki Weinberg (00:00:21):
Before we start, I'd just like to say that this week's interview with did have a few problems with background noise. I apologize for that. And I really hope it doesn't affect your enjoyment of the episode. Hi, say I get asked a lot of questions about shipping and I thought it was really about time that we spoke to an expert about this. So today I have Simon Arnold from Unity logistics. Aren't seeing all your and mine. If I'm honest shipping questions, unity logistics are UK based freight forwarding company, specializing in shipping goods internationally to inform the UK, including importing and delivering goods directly to Amazon warehouses in the UK or wherever required on behalf of sellers. So this is a great introduction to all things shipping.
Vicki Weinberg (00:01:04):
Even if you've been in business for a while, maybe you are already selling your own products. Maybe you've already managed a couple of shipments. I still think there's something to learn here. I certainly learned a few things from this conversation and I've definitely been doing this awhile. We cover a lot of ground, so it might be an idea to take some notes or perhaps you might need to listen to this episode more than once because it's quite detailed. And there's also a blog page for this episode, which you can get at blog.tinychipmunk.com. If you prefer to be able to go and refer to that as well. So I won't make you wait any longer. Here's Simon. So hi Simon. Thanks so much beam here.
Simon Arnold (00:01:42):
Vicki Weinberg (00:01:43):
Hi. So can you start by please telling us about yourself and your business?
Simon Arnold (00:01:47):
Yeah, so I own a small freight forwarding company called Unity Logistics. What we do is we basically help people to arrange shipments, so in, from wherever around the world, but we specialize really and, and shipments that are to, or from the UK and whatever people need. We, we look for solutions basically.
Vicki Weinberg (00:02:12):
Perfect. Thank you. I know I've invited you here today to talk about shipping, which is a massive subject. I know. And so we're going to keep this conversation really aimed at absolute beginners or people who are perhaps working on their first or maybe second shipment, or perhaps aren't even there yet. We'd like to
know a bit more about the process. So first of all, I guess it's be good if we can clarify. So what do we mean when we talk about shipping?
Simon Arnold (00:02:36):
I guess most people will come to this or to this point, if they're new and starting out, when they have an idea about what they want to sell, that they found, maybe they found a product that they want to sell and they, they found, they found someone that can buy the goods from, and then it's the next point in the chain. Okay. So now I found a supplier and now I found what products I want to buy and I can going to start finalizing things on that front. How am I actually going to get these goods to where I need them to go? And there's quite a lot of disquiet, lots of processes that actually take place within the international shipments. And I think this is where some people become a little bit confused and unstuck where there's not actually a lot of information out there, but a lot of people do then tend to rely on, on someone like ourselves, a freight forward to take care of it for them.
Vicki Weinberg (00:03:29):
Yeah. Thank you. And absolutely, there's definitely a lot that goes into it. And I thought the first thing we might talk about if that's okay, because I think it makes sense is that is the Inco terms and what that means and what they are. So I know that say, let's say you're sourcing from abroad. Generally you'll get quoted either ex works or fees on board by your supplier. That's certainly been my experience. Can you talk a little bit about the difference between these, these two terms for people who, you know, might have seen this on their quote for example, but don't actually understand what it means.
Simon Arnold (00:04:01):
Okay. Yeah. So very simply the, the Inco terms, it's an abbreviation international commercial terms and that, that basically sets out as a legal basis so that you, as the, presumably the buyer and your supplier, as the seller, you can distinguish very black and white, who was responsible for what aspects of the shipping process, whose, whose risk is it at which parts in the shipping process and who is also paying for which costs in the shipping process. If you, if you were to expand it out, EX works is like one end of the spectrum where the buyer is responsible for absolutely everything door to door, all the risks, all the costs, no exceptions fob
Vicki Weinberg (00:04:56):
That EX works. Does that, is that from the moment the goods leave the factory. So they leave the factory door.
Simon Arnold (00:05:02):
Yeah. So even the extent of, if, if you agreed the terms EX works with your supplier, even from the point that your supplier is loading those goods on to a collection vehicle, you as the buyer are responsible, should something happens to those goods at that point in time.
Vicki Weinberg (00:05:22):
Simon Arnold (00:05:22):
It's very unlike. Yeah, it's very likely, but that is strictly speaking. What, what the points at which you would become responsible fob Fob it would be somewhere, a little more in the middle where the, the seller, your supplier would be responsible for submitting the export customs clearance in China, presumably, or whatever country they're going to come in from. And they're also responsible for delivering the goods to the, the port of exports, which you would presumably have pretty agreed with them. And when we say port, in most cases, we, we possibly don't mean a physical port or instead, probably our bear house in the vicinity of that port, when maybe they all collate goods to consolidate, to ship them all off together before, before they'd reached the ports of exports.
Vicki Weinberg (00:06:20):
Okay. That makes sense. And from that warehouse, the freight forwarder would be, would them be the one responsible for not necessarily accountable, but responsible for taking those goods and moving them to wherever they need to go? Is that how it works?
Simon Arnold (00:06:33):
Yeah, essentially. So it's with the fob shipments, how it typically works is we w we would instruct our, our agents in the, in the country that the goods are coming from and say, look, there's a shipment. Is it should be ready to go around this date. The buyer and seller have agreed the terms fob, and this ports, can you, can you get in touch with a supplier, just check the details, check with them when it's ready, and then tell them where they need to deliver the goods to, and by what dates, and then we will pick it up from there on if you like. So once the suppliers deliver the stuff to our agent's warehouse, then we'll oversee it from there on that's.
Simon Arnold (00:07:15):
That's generally how, how it works, put the that's, where the costs transfer and the risks transfer that over to the buyer should something happen. So those goods during transit,
Vicki Weinberg (00:07:29):
Thank you. And also as if you're, when you're the buyer of the products, I think it's also where people knowing that, depending on what terms your supply equates you on, they'll give you a different price as well. Because generally, if you ask EX work terms, they're slightly cheaper. It might not be March, but in general, the prices will differ not for the shipping, but for the product itself.
Simon Arnold (00:07:48):
The only thing I think that happens that I really is, if they can quote you a cheaper price, because they're not paying for any shipping costs, but rather than itemize it outwards, I think what they tend to do is they'll, they'll factor in a cost. If they give you like an fob price, they'll say, look, it's more expensive for the product, but
they're building in a cost into that for the cost that it's going to, that they will incur for submitting the, the customs clearance for delivering the goods to the port.
Vicki Weinberg (00:08:18):
Absolutely. I just wanted to make that clear for people, because if you're getting quite some multiple suppliers, you just want to be sure that all of them are quoting you on the same terms, because otherwise you're not really comparing, like, like for like, so I just wanted to highlight that for people. And are those the only terms available or are they the most, just the most common ones?
Simon Arnold (00:08:37):
The two of the most common ones, there are, there are other terms just this year, there's been a new batch released every 10 years. The international chamber of commerce will update them, but typically they only make minor changes. Those are two of the most common ones. The other one you come a lot of the time is DDP, which is the opposite. And two acts works is the complete opposite where now the seller of the gods is responsible for absolutely everything door to door. Instead, lots of people take this option initially because they think it's the easy option, but there are risks and drawbacks associated with that, that, but there are, there are other ones each with their own each with their own merits and risks, but the safer ones, I would say for new people starting out would be either the EX works or the fob.
Vicki Weinberg (00:09:32):
Thank you. And we'll come into DDP. We'll talk about that a little bit more in a moment, because I know that when we've spoken before this interview, you've mentioned that might not always be the best option for people, but when it comes to EX works and fob, do you have any thoughts on, you know, which might be best for someone starting out first shipment? Or is there not much in it?
Simon Arnold (00:09:54):
There's probably not much in it. It probably comes down to preference. So some suppliers will have a preference. So maybe they're happy. They're more happy to agree to one term than the other. They might have their own reasons that they don't wish to agree to a certain term, but there's, there's really not too much in, it makes no words towards certainly. I mean, we, we really just act on, on the instruction of what, what a buyer has agreed with SLA, but there's really not much in it. If it, if it's, if it's EX works, essentially you could go to a freight forwarder and say, look, can you just quote me all the costs door to door? And that's quite often what happens.
Simon Arnold (00:10:34):
And if it's fob, it's, we'll look at we've agreed, FOB, Shanghai, port terms, can you just quote me all the costs from Shanghai port to door in the UK or, or wherever.
Vicki Weinberg (00:10:46):
Thank you. And it looks like depending on which terms you choose different people are liable for different costs of example. If you use fob, the seller is liable for paying the export fees. So who pays the fees, the various fees. And when I think it's something that people need to know about
Simon Arnold (00:11:08):
Okay, well, ultimately as the buyer, you will be paying all of the fees. The dis the distinction is where those, how those fees are split. So if you imagine that, if you mentioned that a door to door shipment, hypothetically costs 500 pounds. So whether the seller arranges that, or the buyer of ranges that you imagine that give or take a little bit of fluctuation, you imagine that's like a true cost. If you agreed something in the middle, let's say fob, then maybe the, maybe the seller of the goods will incur 150 pounds. Maybe the buyer will then incur sort of 350 pounds from their side, from their freight forwarder, but the seller of the goods, is going, to charge that 150 pounds onto the buyer, they'll include it in their, in their costings.
Simon Arnold (00:12:00):
When they, when they quote an ex works price or an fob price they'll account they'll account for some of that cost. So you've got to, you've potentially got two different payments terms. And most, in most cases, the sellers will, will want payment up front before they release the goods. So when you pay for the goods, you then also pay for any aspects of the shipping price that they are covering. But we, as a company on the imports, we tend to charge our freight charges when the freight arrives or around the time the freight arrives into the ends of the country.
Vicki Weinberg (00:12:34):
Perfect. Thank you. So it looks like whatever, whatever terms you agree on, you're going to be paying roughly the same amount for the shipping. It just might, you know, is who you're paying it to, that will differ, but the amount should be roughly the same.
Simon Arnold (00:12:45):
Yeah. Yes, you should be. You should be. If people do, if people are doing things properly, then there should be a true cost. And there shouldn't be too much fluctuation in that price. But we do find sometimes, and they don't do things properly, and the challenge has become a bit distorted and it can look all of a sudden, like they're charging a much cheaper rate initially. Maybe it will work out more expensive in the, in the long run, or maybe they're doing something fraudulent.
Vicki Weinberg (00:13:09):
What would an example of, of that be and how come it can be? Is there something we can look out for?
Simon Arnold (00:13:15):
Yeah. So the key thing is for people to really do that diligence and get a, you get a feel from speaking to people, how sort of genuine and honest they are about doing business. I mean, this is, you're trying to do
diligence on people in say, China, it's very, it's very difficult other than speaking to them and getting a feel for the response. Do they answer your questions to the answer them thoroughly to your satisfaction or the sorts of skirting around things or they leave? Do you have a couple of question marks? Just a bit of a feeling that I'm not quite sure what the saying makes sense. It doesn't, some things doesn't tie up, but in most cases probably, probably because something, something doesn't, but DDP is one of these that it comes up all the time, but it, it can be a real trap for people because the S the, the seller can essentially hide what they're doing with the paperwork.
Simon Arnold (00:14:04):
And in doing that, they can under declare the value of goods, or they could miss the cloud them, or they could perhaps ship them in, in a way that they're not supposed to. Maybe they amalgamate your shipment with other people's shipments onto a single sets of documents, which they're not supposed to, which they're not supposed to do, or because you can't see what's going on, they could be taking huge shortcuts that save costs, but could come back as a risk to you later on.
Vicki Weinberg (00:14:31):
That's really interesting. Thank you. And I know that lots of people do including myself for the first shipment I ever did. I used DDP because I was just a little bit unsure about shipping. It seemed scary, and it seemed easier for someone to handle the whole process. But what I quickly realized is that in doing that, I had no control over the process because I couldn't track my ship. Then I didn't really know where it was. And I was just relying on the supplier telling me what has happened. And there were huge delays. And I had just to take their word for why there was a delay, but ultimately, I don't really know what actually happened. And as you say, you don't really know what's been declared at customs if you've paid the right amount of tax.
Vicki Weinberg (00:15:13):
And I'm assuming this all can come back on you at some point down the line.
Simon Arnold (00:15:16):
Yeah. Yeah. And that that's basically it. I mean, in the short term, most people will be fine. It's, it's very unlikely really that it would ever come back to you boards if it did, it's the cost of that, or the risks of that could be quite severe. So, I mean, HMRC concern up on your doorstep in four or five years time and request to see audit trails and documents. Okay. You've been importing as products. Let's see your paperwork, let's see your people at trail. Let's see your customs documents. Maybe you go back to your suppliers, even, even for recent shipments and then say, well, can I, can you send me the customs documents in more often, most cases, or more often than not. When people will ship on DDP terms, these customs documents never present themselves.
Simon Arnold (00:15:58):
They always find a reason to not give you them. But then customs have a right to say, well, brought this stuff
in. You can't prove that you've paid the tax on it. So we are going to charge you the tax on it. Now they could come back for it retrospectively, or maybe they sort of deemed that the, what you've paid for the products and the price that's been declared to customs are two different prices. So maybe they are, could also think that you've underpaid tax or that the Chinese have under declared it underpaid tax, but it might be you that they come to, to, to foot that bill,
Vicki Weinberg (00:16:27):
They don't really care. Who's underpaid or who hasn't paid. Ultimately, if you're, you know, if it's your product, your name's on it, it's going to be you. They come to for any money, they feel they're right.
Simon Arnold (00:16:38):
Yeah. That's basically it. But it's, it gets into a bit of a minefield and a bit of a gray area, because, because you can't see what has been declared on the customs documents. If you can't see what's been declared you don't, you've just got no idea what they've done. You don't know what information they've put on the custom entry, and you don't know how that might or might not look so customs if they were ever to, to check it through. But certainlyif they came to you and said, well, can you produce some kind of an audit trail or some kind of customs documents? And, and you said, no, I haven't, I haven't got any, they wouldn't take very kindly to it because you'reobliged to, as, as an importer, you're bringing stuff into the country. You're obliged to keep level of records for compliance. If sometimes what will happen is the goods will be declared against another importers details.
Simon Arnold (00:17:20):
In which case you could argue, well, maybe that would never come back to me, but you can't know that with certainty because something could in some way be tied back to you. I mean, if the stuff's been delivered to you, maybe it's been put through on another company's import registration number. Again, that's something that they wouldn't take kindly to. They D they don't take ignorance as an excuse for it. They expect you to know what's going on, and that it's been done properly. It's just that DDP one, really, if I think any other raincoats, then at least you get transparency over those customs documents and you see, and if you've got a query, you can ask, you can say, well, what does this mean? What does that mean? You'll you could do your own research on the information that's in there, and you can just come to an understanding or speak to someone or a freight forwarder, right?
Simon Arnold (00:18:03):
I'd be more than happy to answer questions about it. It's not the easiest topic. It's not the most interesting either. I know lots of people kind of just want to get on with doing what they're good at. I guess that's kind of where, where we come in. Cause we'd like that outsource logistics, where you've got a logistics question, you can ask us and we'll, we'll give you our advice or our opinion. And I don't, I don't, I wouldn't want people to feel too bogged down by it necessarily. It's not anything to be afraid of. It. It's just about being diligent. And if you can avoid some simple errors and mistakes that sometimes people make at the beginning, it should
make your life a lot easier. And in the long run.
Vicki Weinberg (00:18:37):
So as well as maybe perhaps using DDP shipping, or maybe not getting ahold of the customs documents, what are some of the other areas that you see people making when they're first starting out with them?
Simon Arnold (00:18:47):
There's another ring concern that there's a bit of a snag with the sea freight shipments, which is, is CFR or CIF. But essentially when they let the seller of the goods, ship them up to the UK ports only that sometimes catches people out because they could challenge you. They could charge you a very low price, but what they haven't told you is what charges you're going to be landed with when the stuff arrives into the UK. But by the time that they've got your goods into their control, you then have no, no wiggle room or argument with them over what costs will be charged when the freight does arrive into the, into the country. So there'd be, there'd be a UK agent who's assigned to take control of the goods once it arrives. And they could literally just sort of turn up to you and say, I've got your stuff.
Simon Arnold (00:19:30):
And this is how much it's going to be to release it. That's when people sometimes get stung, because yes, they've only paid a hundred pounds or 50 pounds or whatever, to get the stuff to the UK. Then the stuff arrives. And the UK agent says, okay, it's going to be 700 pounds to release it. And now you've overpaid because how'd, you have shipped it door to door. It might've been cheaper much cheaper than just, just what you've been charged on the UK charges. Yeah. So that's one that people, people sometimes get caught out with. And that's what I, as another reason why the EX works and the fob. So goods, because you, you have control over those costs. There's no, those costs are already predetermined. You know what they are, and there isn't an opportunity anywhere for anyone.
Simon Arnold (00:20:11):
So to hit you with extra fees or extra illegitimate fees
Vicki Weinberg (00:20:15):
In terms of extra fees, I mean, I assume there are, well, I know that are legitimate fees. You need to pay when your goods reached the UK., let's talk about shipping to the UK as an example. So what are those costs? What are the things that you would have to pay once your goods get off the boat or the plane and
arrive in the UK? And I know we can't talk about the actual costs, but what are the fees that people need to just be aware of?
Simon Arnold (00:20:37):
Depends. I mean, if you've got surprised that it's door to door or FOB, those costs are all sorts of included. But what we quite often do is bundle lots of small costs into, into one to keep it simple for people. But really
that is obviously made up of you break it's out. It was lots of small costs involved. It depends what level of detail you wants to go into it, really. But in essence, once the goods arrive, there's some handling costs of getting that container off the vessel. There's some documentation fees, there's some handling fees. If it's, if it's a group of shipment, there's a, there's a few more hundred aunties because a company has got to physically take your stuff out of a container, probably palletize it. And then there's a, like an onward delivery fee to wherever you want the goods to go.
Simon Arnold (00:21:20):
And an import customs clearance fee and whatever taxes that might need to be paid.
Vicki Weinberg (00:21:24):
Thank you. But if you are using a forwarder, it's maybe your goods, presumably you're going to get one cost that with all of these fees included.
Simon Arnold (00:21:32):
Yeah. That's generally how it, how it works. And then there's, there's a few main optional extras. So maybe, maybe people need a tail lift delivery, or maybe people want insurance on the shipments. So we would usually give one bundle then cost and then say, look, if you do want insurance, it's this much extra. If you do need a tail lift delivery, it's this much extra, and you can add those on as you need
Vicki Weinberg (00:21:55):
is insurance, something you recommend people take out, ?
Simon Arnold (00:21:58):
Oh, a hundred percent. If something happened and you don't have an insurance policy, what you'd be entitled to claim against what your losses were. It would be very little, but if you have the insurance, you could claim up to the full value of the, of the loss.
Vicki Weinberg (00:22:12):
And what does that insurance cover you for
Simon Arnold (00:22:15):
Insurance will cover for pretty much anything that could happen in transit. The main thing it doesn't cover is insufficient packaging. If the goods have just not been suitably packed at all, and that's the reason that they've become damaged and consequential loss, which is just loss caused by delay, because nobody has any control over what might happen with delays. So sorts of, lots of contracts in to say, yes, we've got to, we'll get from a, to B, this is the estimated transit time, but there are things that can affect that transit time during transit that we, we can't foresee. So yeah, there's no, yeah, that's not covered for that.
Vicki Weinberg (00:22:51):
So coming back to DDP, I think a lot of the reason people choose that is because as we said, you know, it's, it's a big topic. It can be a scary topic. Sometimes people don't want to learn about it, but it sounds like if you work for a freight forwarder, then all of the, you know, you'll get one price, everything will be included. But I guess the thing that wouldn't be, if you were to choose, say fob or EX works is import charges, VAT, things like that. So are those the only two additional costs you would face if you were, let's say you're shipping on fib terms and you've got a freight forwarder and you're paying them a door to door price. How would it work with the input charges and VAT?
Vicki Weinberg (00:23:31):
So who would pay that? And how, how could you even find out what those costs would be
Simon Arnold (00:23:36):
For the import taxes and the cost would be on the import taxes? So I think this is the big drawback of DDP, is that it, because it includes the import and that cost creates like a blurry, blurry figure. You don't really know what's in there, but it's much more straightforward if people can keep the import taxes as something that's very, very separate. So the shipping costs, so treat it as two costs. You're like, I've got a cost for my shipping and then I've got a costume. I import taxes. How, how do I know, or how can I calculate what my import taxes are going to be before the stuff arrives? Because obviously people need to know. And the starting point is to, to find out what the commodity code for your products are.
Simon Arnold (00:24:18):
And if you don't know where to start without the best places, your supplier, you just ask them, what is the what's is the commodity code for the goods and there'll be, it, it should be a 10 digit code. And then you can look at on the K commodity code database, and it will tell you what the VAT and duty tax rates are. And once you know that, then you can calculate very quickly, very roughly what the import VAT and duty will be on your goods. Very roughly it's a percentage of the cost of the shipping plus the value of your goods, the cost price.
Vicki Weinberg (00:24:49):
Perfect. Thank you. And in terms of getting that paid, so how does that work? So let's say you are, you're using fees on fees on board, and you've got a freight-forwarder. So you use an fib terms, you have a freight forwarder and you've paid them the shipping price who pays for those fees. And at what point do you pay them?
Simon Arnold (00:25:08):
Typically the import taxes should always be paid at the points of entry or when the, when the goods arrive into the country. That's when, when the data gets submitted through the customs software and it will generate, this is the exact amount of VAT and duty to pay. Okay. So yeah, the, the import VAT duty becomes liable when the goods arrive into the country. And then in most cases it will, it will be a freight forwarder or a
courier company. So if the cost of come with DHL or TNT, in most cases, it will be them that submit an import customs clearance on your behalf. And we'll also then bill you the taxes and they will then act generally as an intermediary between taking the money from you and then passing it along to HMRC.
Simon Arnold (00:25:52):
Yeah. W we like to try and keep it as simple for, for people as possible. There are lots of different ways in which you can pay HMRC, but in most cases, a fleet forward or a Courier company, just, just kind of take care of it for you.
Vicki Weinberg (00:26:06):
Okay. That's good. Thank you. Cause I think something that might people might be wondering is, you know, do I need to do lots of paperwork and that kind of thing. So it's good to know that the freight forwarder will take care of all of that for you. She, of course, that you'll need to give them all the quiet information.
Simon Arnold (00:26:20):
Yeah. That that's basically it. I mean, all we, all we really need is essentially what we should get is instructions from people on what data to submit to customs. But really most of that data we will take from the standard paperwork that's produced with the shipment. You get a commercial invoice from your supplier, you get a packet list, maybe there's a transport document, like an airway bill or a bill of lading. And generally all the information we need should, should be included on there. But if there's any bits that we're missing, we'll, we'll generally prompt people and say, Oh, we're just missing this piece of information. And that piece, can you just confirm for us, we can submit that to customs.
Vicki Weinberg (00:26:56):
Perfect thank you. One of the piece information I'm assuming, well, I know that you need, because my very first shipment, I didn't have, this was in the EORI number. And I didn't know that I didn't have it until my kids actually arrived in the UK. So that was a bit of an issue. So could you talk a little bit about what that is? Why you need it and how to get one?
Simon Arnold (00:27:14):
Yeah. So the easiest way to think of it is just a bit like your it's like your customs ID number, it assigns a numerical number to identify you as a trader, as an importer so that you, that you you're authorized to import and export goods to, and from the EU that will change when Brexit comes in. So it will be UK specifically exports and imports to the UK specifically, but that's essentially all it is is just a customs ID number. But without it, you cannot import or export goods because the custom system just won't recognize you. It doesn't know who you are, but the process for applying one is very straightforward. It's just, if you just Googled Gulf EORI location, it's just an online, an online form.
Simon Arnold (00:27:56):
I think they said it takes about 10 minutes to complete. And then maybe a couple of days generally to, to allocate you a number. And then that number is yours, yours forever. So it's just a case of filing it away somewhere. And if you can, as you can get it included on any sort of documentation that goes with the shipment, that's also very helpful. If someone is coming to do a customs declaration, they've got, they've got that information to hand. They don't need to, they don't need to ask you for it.
Vicki Weinberg (00:28:21):
Perfect. Thank you. And I will link to the, the website where you apply for that in the show notes for this episode and in the blog post as well. So if you're listening and you're realizing you need one, you can very quickly find that and do it. So we've spoken a lot about the different shipping terms and sort of how payments and how it all works. Let's talk a little bit if that's okay about the different shipping methods. So the different modes of transport you can use to ship your products and what the main differences are between them got air. You've got rail, you've got, see a few different options. And I just wondered, what was your thoughts on the main differences and things you need to consider?
Simon Arnold (00:28:59):
Well, you've got the choice between air and sea if you bring it stuff in from China. And typically sea as slower and cheaper air is quicker and more expensive. Rail was designed to be something in the middle or was advertised, has been something in the middle where the transit time is kind of in between air and sea. And the cost is somewhere in between errands. See, personally, generally, as a company, we don't offer any rail services. We just found it didn't really give people much value for money, that the costs were quite a lot more than C, but the transit times were getting up to the same as C anyway. So why pay so much more for something that's only a bit quicker and it's had some other problems as well, and it will have more problems come Brexit with customs and how they're going to get around that because the rail terminates in mainland Jordan, and then it's, how do we get that stuff from there to the UK after Brexit?
Simon Arnold (00:29:52):
So I'll not talk about rail too much, but, but sea freight is, is, is really the, the way to go. I think for people certainly long-term, if you can find a way of managing your stock levels with the, with the lead times that sci offers, I'd say the quickest, the quickest, we could get something dotted all by sea. It's about 42 days, but that can, depending on which port it's coming out of in China, that can go up to sorts of 55 60. And at the moment we are seeing lots of problems generally and delays even more than ever before. Probably. So these transit times are actually only gets in slower and the prices are increasing at the moment as well, unfortunately, due to quite a lot of problems, but the main one sorts over, over demand and under supply is essentially what's driving that at the moment.
Simon Arnold (00:30:41):
And it's the, exactly the same with air. It was always, typically we could probably get your stuff towards, at all within seven to 10 days, but now it might be more like two, two or three weeks. It just depends on what
space is available at the time. And this is just a particularly bad time of year where we've got, we've got the Christmas rush. We don't have the passenger aircraft that we are accustomed to have been where we would put most of the cargo onto passenger aircraft. So without that we've seen the prices go up to levels that we've just not really seen before and even more so because of the time of year, another option pileated with her. But we, we tend to distinguish it by calling it courier.
Simon Arnold (00:31:23):
And when we talk about courier, we're just referring to someone like TNT or DHL or FedEx. Now they will offer quicker services where maybe sort of three, four, five, or 10 days, they could get the stuff door to door. Typically they're more expensive and they're really geared up for very small assignments. So a few boxes, not that much weight, sorts of 50 kilograms, total 800 kilograms will be, but it's just very difficult for us to keep on top of it at the moment as to what's really the best option andand are how much things will really cost because the prices have been changing change and across all modes of transport so quickly.
Vicki Weinberg (00:32:01):
Okay. Yeah. So for context, we are in case anyone's listening to this way in the future, we are recording us on the 4th of November, 2020. So not only is the run up to Christmas, but the UK is going into another lock down and yeah, there were very few passenger flights in and out. So the lead up to Christmas is always a busy time for freight. Anyway, Germany, you do see that it goes up, but yeah, this year in particular, it's very different. Okay. So thank you for that. That is really useful. So let's say you're listening and you, you know, you've got an idea of what shipping method you want to use. You know, what terms you've got from your supplier? Is there anything else you need to know to get an accurate quote from a freight forwarder? So if you go to your freight forwarder, say, can you please quote me to send these products by see, this is where they're going from.
Vicki Weinberg (00:32:46):
This is where they're going to, what else would afford to need to know
Simon Arnold (00:32:50):
The more information that we, that we can be provided with the better, the more accurate, the information that we get, the more accurate the quote we can give. It's just the case of having a bit of patients at the moment that if we gave you a quote for something like an air freight today, maybe next week, the price might have changed. But generally we will always look to honor the price where possible, but really if we, if we know where the stuff's picking up from where it's delivering to, and we know how many boxes there are, or how many packages and their weights and dimensions, that's really all we need. It does help us though with people, give us a bit more information. Like this is what my product is. This is the value of it. This is the commodity code, because then we could give you a bit more information, really. So we could say, well, based on that, your insurance would be this much, your import taxes will be about this much.
Simon Arnold (00:33:36):
We could keep that sort of separate for you. And we might be able to sort of give you a point to and say, ah, just with you mentioning that type of product, it would be worth checking a couple of extra things. First, the main thing we're looking for is are there any restrictions? It can affect the price, but also we don't want to give you a quote. There's no use to you. So maybe someone tells us they've got 20 boxes to ship, and these are the weights and dimensions and we give them a price. And we say, we presume it's general cargo that it's unrestricted. Maybe it's okay. I like the price. Can we, can we go ahead? And then we learn that the goods are something that contains batteries, or maybe it's something that might be a liquid that's considered restricted in China, or maybe something might be even considered as hazardous goods.
Simon Arnold (00:34:23):
We then have to start the process again and say, okay, we need to check. If we can ship these goods, what surcharges they may be for shipping that product. So it's better if we can get all that information at the very beginning, just as much information as, as people have got, really some people are sometimes a bit skeptical about telling us what, what they're shipping. They don't want us to know. They want us to keep the cards a bit closer to the chest, which is, is, is fine in most cases. But we're really just wanting to know, is there anything else we need to consider while we're sort of getting into some costs together? Sometimes we might need extra bits of documents from the, your supplier. And so in some cases I would even say, look, before we even start on this process, let's get our agents talk to your supplier to make sure they've got the documents.
Simon Arnold (00:35:07):
They need to ship these goods and that our agent can ship these goods to the UK for us before we start costing anything. Because otherwise it's, it's just a waste of time. And you go so far down the road only to find that actually all this work that we've done, it's all fallen through because yes, maybe yes, our agent can ship these goods, but maybe your supplier hasn't got the documentation that they need to be able to properly export these goods from China. And sometimes people get caught out by that where our agent will say, okay, yeah, we ship these goods. Please provide X, Y, and Z documents. And then the supplier says, I can't provide that. Or they do provide something, but maybe the documents and valid, maybe it's out of date.
Simon Arnold (00:35:49):
Maybe they don't have a license or something that they need just things to iron out at the start of the process. So you just know exactly, exactly what you're dealing with from otherwise. Yeah. We would quote, no problem, but it's, it's, it's a proviso quote. It said we presume we have to presume. We don't know for sure. And if at any of our presumptions are wrong, then yeah.
Vicki Weinberg (00:36:09):
Cause it sounds like the more information you can provide up front, then, you know, the less likely the chances you being disappointed along the line. Yeah. Thank you. I mean, you've given us so much useful
information so I can definitely see the benefits of using a freight forwarder like yourself rather than arranging or shipping another way. Yeah. I do know that there are lots of people who do in leave it to their supplier. For example, to arrange the shipping. That's something that's seems to be fairly common. I mean, you convince me that that's not a good idea, but what would, is there anything further you want to say to that point around
why it's best to work with a freight forwarder rather than letting your, your contacts in China, sort of arrange all the shipping for you.
Simon Arnold (00:36:48):
If you've got a good supplier and they're doing things properly, there's no reason why you shouldn't use them to ship the goods. Put, I do think it's always going to be beneficial to just have someone probably in the same country as you, that you could speak to. You can just pick up the phone and speak to them. If you're, if you've got a query, you're unsure of anything, particularly not so much with the shipping, but with the customs side of things, what happens? What happens if there's a problem with the, with UK customs, the goods arrive, they get flagged for some reason or another. There's something holding up that process. Or maybe it's something that's quite innocuous. Maybe it's a random spot check or something. You now have to go back to your supplier. Who's in China to ask them to help resolve it.
Simon Arnold (00:37:30):
Or you don't have, you don't have a contact in the UK necessarily that you can go to. And maybe there's an agent that's been assigned to handle your shipment when it arrives, but they don't know you. You don't know them. There's no trust. There's no history. And maybe they don't really have the time to answer your questions because it's not really their job to, to talk you through that. It's like a value added service, almost that a lot of freight forwarders will pride themselves on, but not all. And you just don't really want to be in a position where you don't have anywhere to go. I mean, even if it's just that UK customs side of things is handy just to have someone I think who can help you through, you know, if you've got a problem or even if you've got a problem with a shipment that they've had nothing to do with, if you've got some relationship with some freight forwarder, that's in the UK and you've got some, at least somewhere, you can go literally just to speak.
Simon Arnold (00:38:21):
So, and in the worst scenarios where there may, maybe there are problems with customs and then not so easy to resolve, it can cost people quite a lot of money. A lot of time probably is a given, but you don't want to be getting fines or essentially penalized for, for something non-compliance. And the big one that can rack up on people is, is the storage charges. If my other stuff store kind of, there's a problem. That's been resolved with some goods that have been imported into the country. One of those goods are set and unable to be released or moved. Someone's going to be clocking on extra costs somewhere. And typically they're quite expensive and they're designed to be so that it really prompts people to keep the freight moving and analysis as quickly and as sufficiently as, as they can.
Vicki Weinberg (00:39:05):
I thank you. That was really reassuring. Okay. So I'm really conscious of your time. So we've got just a few final questions and I've left this one till near the end, because I know it won't apply to everyone, but many listeners are thinking of selling on Amazon and specifically Amazon FBA. So I just wondered given your experience, is there anything you think people need to be aware of if they're planning on shipping from let's say China. Cause if you use that example so far, if ship cheap shipping products from China into an Amazon FBA warehouse, is there anything that we need to be aware of
Simon Arnold (00:39:39):
Delivery time, as in it's something I would consider as an, as an extra that unless people tell us the goods of deliverance, Amazon, we probably won't consider it on the quote. But if people can say you look, these goods that go into Amazon, then there are those extra costs associated with that. The main thing is because we have to deliver in accordance with Amazon requirements and it takes more time. This is just a bit more work involved. There's two ways, two main ways people deliver good stammers. And one is what Amazon refers to is SPD is a small parcel delivery, but that's very straightforward. As long as you've got your Amazon labels on the box and you could just stick a freight label on it or ups freight label. And it goes, ups will take care of that.
Simon Arnold (00:40:19):
But with the larger shipments maybe, or generally it becomes more cost-effective to palletize those goods and deliver them in by what Amazon called LTL, which is a, it's like a pallet delivery, less than truckload, but those have to be pre-booked with Amazon. Amazon will allocate a time slot for that delivery. The pallets have to be built to certain Amazon specifications requirements are not these where the there's these extra bits of restrictions. There's basically extra bits of cost involved in, in making sure that we can adhere to those, to those requirements for Amazon so that we can still reveal your goods. In what we're finding at the moment is Amazon can quite quickly change and move the goalposts on people where they say, okay, you can't deliver in from this day onwards now, or these products can't be delivered now, or this product can be delivered, but you're going to, we're going to restrict the number of units you can deliver.
Simon Arnold (00:41:11):
A lot of people are coming up against this 200, 200 unit cap at the minute. So what they're having to do is split the goods at some point, during transit, where they say, well, look, I've ordered a thousand units already bought, I can only send 200 units to Amazon. And unfortunately there's extra, there's extra costs in doing that as well. Because if we, if we now have to deliver to two locations and maybe there's different instructions for each delivery, we want to palletize these goods. But those we don't, and these are go in there. These are go in there. It's extra work, extra costs. But as long as I mean, the main thing is that we no matter what the restriction is, we can, we can work around it. It's not getting the stuff delivered is never really a problem.
Simon Arnold (00:41:54):
It's just what costs are involved and how you decide is the best way forward for you. So some people have gone down the route of, well, I'll just find my own warehouse or my own fulfillment center, or I'll just have everything delivered to my home address. And then I will drip feed stuff, my stove to Amazon, or I'll get to work as an independent warehouse to, to drip feed stuff to Amazon and do it that way. Instead. It's just really hard to know with Amazon sometimes what they're going to, what they're going to throw at people. And with Christmas coming up, they'll have to have a date whereby people can't deliver anything into them. I presume, although I'm not sure what date that might be.
Vicki Weinberg (00:42:27):
Yeah. I don't think they've yet. Now it's the cutoff, but yes, there will be definitely be a cutoff. I mean, advice I would give as well is that if you're looking to ship to Amazon, it's a good idea to set your Amazon shipping planner with Amazon. Do you let them know what's coming before you, if possible, before your shipment even leaves the supplier. So if there is an issue where you want to deliver a thousand, do they only, they're only gonna accept 200. You actually know that. Cause I've seen the mistake before where things are perhaps on the way to the, to the UK and someone's thinking, okay, they're going to come to my house. And then I'm going to sh you know, if they're going to go from my house out to Amazon, for example, not realizing that Amazon are only going to accept so many and you're going to be stuck with a lot of stock for, you know, the foreseeable future potentially
Simon Arnold (00:43:11):
Because quite a lot of the time when we, when we quote for delivery standards and people don't know at that point, which Amazon instance are, they need to deliver goods to, but them, we also appreciate that maybe they've not created the shipping plan yet, but I guess once they do, they will then know at least what Amazon can take and, and plan around that accordingly.
Vicki Weinberg (00:43:29):
Yeah. So it sounds like the best thing to do is be to sets up your Amazon shipping plan and then to let your freight forwarder know everything that you, you know, to give them all the information upfront so they can quote you as accurately as possible. And that they've got an idea of, you know, what's going where,
Simon Arnold (00:43:45):
Yeah. As long as we know, I mean, people we've got some shipments that are coming in at the moment and people have basically said, well, depending on how much stock I sell jewelry and shipment of this, of these goods, I don't, I don't know where I'm going to be in 30 days time, I don't know where I'm going to be in 40 days time. So I don't know how much stuff I even wants to deliver to Amazon. We've said to them, basically, as long as you let us know, before the stuff arrives into the UK, we can instruct the warehouse what needs to be done with those goods. So we can w we can leave it quite late, really to decide what exactly we're doing. The only, the only drawback to that is you don't know what the exact final cost will be because there's no
final plan in place.
Simon Arnold (00:44:24):
And so very late,
Vicki Weinberg (00:44:25):
That's it. And that's, you know, that's really reassuring tonight. Cause I had no idea that a freight forwarder could be so flexible. And yeah, I was thinking that you would need to know before your goods even left the supplier. So that's really good to know that you've got those, you know, the days that good to be in transit to actually make a final decision on how many are going where, so that's. Yeah. So thank you for that. I think people find that really valuable.
Simon Arnold (00:44:47):
Yeah. As long as people appreciate that, if we don't, if we don't know the exact plan, we don't know the exact cost, you know, we say then, yeah. It's, it's not a problem. The delivery is always very flexible. It's just with the Amazon stuff. If there's anything go into Amazon, if it needs to be labeled or if it needs to be palletized, we just need to know before that stuff comes out of the container what's happening. Otherwise it's just not as straightforward to, to get what you want actioned with these warehouses. What they'll do is they'll typically we take all the boxes out of a container and they'll pelletize them by default so that they can store them, move them and ship them easily. But they might not necessarily be to Amazon specification if you then said, okay, well, could you now undo that work and redo some work?
Simon Arnold (00:45:30):
And the answer might actually even be, no, they say, well, now we've got an issue of liability where we don't want to deconstruct these pallets. They'll have to deliver them somewhere as they are, or maybe on the custom side, it can become just a little bit more complex where we've told the custom system that it's just kind of one consignment and it's all going to go to one place. And then we start saying, well, actually, we're going to send some here. Some there, these warehouses are under quite strict regulation where, because the stuff's been important to trim outside to the European union. It's not like they don't really act like a general warehouse where you could chop and change because the they've now got customs controls.
Simon Arnold (00:46:10):
They have to abide by those. They have to be quite strict with who they release stuff to how they release stuff. If they've sort of considered everything to be one consignment, when it comes in to then say, well, actually I want to send some here. Some there, some there, they might say, actually, this is this isn't straightforward. Now it's a bit of a mess because we now have to start on doing customs, customs procedures that are sort of now set. And so the key is really is just as long as we know, before that stuffs here in the country, it's really not a problem after that. We can, we can sort it, but it's just a bit of a problem.
Vicki Weinberg (00:46:42):
That's good to know. Thank you. So I'm aware that we've gone way over time and I do want to be respectful of that, but have you got time for just one final question? Would that be okay? Yeah. Thank you. Okay. So we've, you've, you know, you've covered such a lot. You've been really generous of what you've shared about us is that, is there anything else you'd want people to know if they are planning their for, let's say their first shipment roundabout. Now, is there anything we haven't talked about that you think people should just be aware of?
Simon Arnold (00:47:10):
No, I think, I think those are the main things I want to try and keep it as simple as possible for people really. So if people are applying for the EORI number, that's just something ticked off the list that they don't need to worry about. And they can apply for that. Anytime. I think approach, I think approach or UK freight-forwarder and at least we weigh up the shipping costs from both sides. If you're asking supplier to ship the goods, they're only going to be a point in a Chinese freight forwarder and that Chinese freight forwarder will then dictate. So UK freight forwarder probably to help bring the whole shipping together on less the goods, move him by a courier company like a DHL. In that case, they take care of the whole thing door to door, really, I think just way off from both sides.
Simon Arnold (00:47:51):
If you can find a UK freight forwarder that you could talk to and ask, ask some questions, if you've got any, because people always do, they have loads initially, then at least they will be able to point you in the right direction or help you potentially avoid some mistakes that you might make for your specific situation. I think the other thing would be just to, it's a huge plus of people can just check, check what the find out the commodity code, if they're gods. And if they're not sure that there is help available so that they can ascertain the right code, but then they can, they can also see, look as a, is there anything else that I might need to be aware of for imports in this product? Most things don't know is, is there something else that I might need to get this stuff into the UK, through UK customs?
Simon Arnold (00:48:34):
And also of course you, then you've got at least a bit more transparency over the import tax costs because you can just, you can see clearly by educating yourself a little bit on these things, you consume spot the suppliers that are perhaps a bit more scrupulous, because if they let's say they quote you a DDP price and they say, look, it's 500 pounds. We all of a sudden you could think, well, hang on, I'm paying 3000 pound for this stuff. And if I'm paying 20% VAT on that, the input of the ATL loan should be 600 pounds. So something's not right. And it just raise a flag straight away that you could then pick them up on or follow it through. And you say, well, okay, well, why, why are they quoting 500 pounds?
Simon Arnold (00:49:16):
What's what's not right here.
Vicki Weinberg (00:49:17):
That's really helpful. Thank you. And yeah, I think a lot of what you've shared today will really help people to be a bit just a bit more informed when starting out. And I assume you're open to questions. If, if off the back of this people wants to contact you to find out a bit more, whether it's for a quote or whether to just, you know, more general questions about their shipping.
Simon Arnold (00:49:36):
Of course, of course. Yeah. Anytime any questions or five and three people can come directly. I, I really don't mind. I just hope it has been helpful. Cause there's, there's so much ground to cover and you can go into so much depth on each of them. I don't want to overwhelm people. I mean, really it's if people get the basics, right, the rest should fall into place and it should be quite straightforward if you've got a good supplier. And if you've got a good freight forwarder, the shipping aspect, you can largely forgets about what you should still be. You should still be at least aware of what's going on and have some transparency over what's going on. And then really like if the role of any problems you supply your freight forward to just point you in the right direction, really, and help you help you through this, then all of our interest too.
Vicki Weinberg (00:50:22):
Well, thank you. And I think, I hope, and I think we've struck the right level of, you know, providing enough information without making it too overwhelming. And I will include your contact details in the show notes for this episodes. People can easily get in touch if they do have any questions about anything we've spoken about or even anything we haven't spoken about. So thank you so much. I think that's been, it's been a really valuable episode, but I've learned some things. I mean, I've been doing this for a while, but I've still learned some things from you today. Something that's really, really beneficial and, and yeah, I hope it's, I think it's really, really, really useful episode. Oh, I hope so. Thank you. I hope you enjoyed that conversation with Simon and myself and that you now felt a little bit clear about, about shipping all the different options available to you, what the different terms mean and what you can do to ensure that your shipment goes really smoothly.
Vicki Weinberg (00:51:11):
I would love as always know what you think. You can send me an email@example.com. And if you've got some time, I would really appreciate it. If you could rate and review this podcast episode. So thank you so much and speak to you next week.