How to Ship from China? Find Best Solution for Your Business

Shipping products from China can be a complex but crucial concern for importers. Many importers are striving to find a better balance between shipping time and cost, as highlighted in this post about shipping time.

This post presents an overview of all the mainstream shipping solutions currently available on the market. In addition to the affordable but slow sea freight and costly air freight, there are other options to consider. The post also shares the latest and most effective industry shipping practices, particularly suitable for small businesses and e-commerce.

Whether you need to ship goods in small quantities of 20kg or large ones of thousands of kilograms, this post will be a valuable resource to help you select the best solution.

1. Who Assists You with Shipping Products?
2. Understand 5 Basic Incoterms
3. Courier for cargos below 500kg
4. Sea Freight for Cargos Over 2CBM
5. Air Freight for Cargos Above 500kg
6. Railway Freight for Full Container Load
7. Sea Freight Plus Courier for Ecommerce
8. Epackage for Dropshipping (less than 2kg)
9. Handling Customs Clearance in China

1. Who Assists You with Shipping Products?

There are only four main roles involved in the process of international shipping:

The Shipper is the supplier of your product, while the Consignee is you.

Shipping companies are those that own trucks, vessels, or aircraft and move products from point A to point B. All shipping solutions, except for courier, require the joint work of different shipping companies to finally deliver the product to your hands. Additionally, you will never need to directly deal with them.

The Freight forwarder plays an important role in the shipping process. Either you or your Chinese supplier needs to find a freight forwarder. They act as a broker coordinating with all shipping companies, from picking up cargos at suppliers to delivering them to you. Meanwhile, they also handle the import and export process.

There are tens of thousands of freight forwarders in the world, ranging from small home-based operations to large companies. Unfortunately, it can be difficult to determine which ones are trustworthy. Some may offer a low shipping price initially, only to later overcharge you or add extra fees once your cargo is ready for pick-up.

If you are unfamiliar with freight forwarders, it is advisable to ask your suppliers to recommend one, despite any additional costs they may charge for shipping. This is because, in the event that your cargo is lost or damaged, the supplier will be responsible for it since they selected the freight forwarder. This is especially important if you are new to importing from China.

If you prefer to work directly with a freight forwarder instead of going through your supplier, you can ask someone you trust to recommend a reliable one for you. You could also search for freight forwarders through Google or use platforms such as Freightos or Flexport. However, keep in mind that identifying the right freight forwarder may take some time.

Freightos is a user-friendly platform that allows you to input cargo information such as volume and weight, as well as the pick-up and delivery cities. From there, you will receive a list of freight forwarders with their quotes. It’s as easy as booking a flight ticket.

It’s worth noting that you will only be able to contact the forwarders after completing your online payment. The quote you see is only for delivery to the destination city, not your home address. You’ll need to communicate with the freight forwarder about the total cost.

My experiments with Freightos have shown that it’s only suitable for shipping by traditional sea freight or air freight to North America, the UK, Western Europe, and Australia. For other shipping methods or other countries, it’s better to find a freight forwarder elsewhere.

2. Understand 5 Basic Incoterms

Before shipping, it’s important to confirm the trade term (incoterm) for this order. Trade terms define the responsibilities between the buyer and seller regarding product delivery.

When asking the Chinese supplier about the product’s price, make sure to specify which trade term should be used. Otherwise, you may encounter unexpected additional costs. Here’s a brief rundown of the five most commonly used incoterms: ExW, FOB, CIF, DDU, and DDP.

ExW means that you will need to arrange for someone to pick up the cargo from the supplier’s warehouse. When using ExW terms, the supplier only quotes the product cost and does not offer any shipping or exporting services.

FOB stands for Free On Board. When using FOB terms, the supplier pays all costs to deliver the product to a seaport or airport in China and also pays the exporting costs. You are only responsible for finding a freight forwarder to pick up the cargo at the port. If you choose to ship by courier, such as FedEx or UPS, you would need to pay the supplier in ExW terms, as courier companies pick up cargo at the supplier’s warehouse instead of at a port. The courier shipping cost includes all expenses from the supplier to you.

CIF terms mean that the supplier will find a freight forwarder and pay all costs to deliver the goods from their warehouse in China to a seaport or airport in your country. You only need to find a freight forwarder to pick up the cargo at the port of your country, complete the import customs process, and then receive the delivery.

For the DDU and DDP terms the supplier will find a freight forwarder and pay all the costs to deliver the goods to you. The only difference between these two terms is whether the supplier needs to pay the import duty. DDU and DDP are short for Delivered Duty Unpaid and Delivered Duty Paid.

The above provides a brief definition of trade terms. If you would like to understand how these incoterms are applied in real business, please check out my previous post for some real life case studies.

3. Courier for cargos below 500kg

For most e-commerce sellers and new importers, courier service is very frequently used. It is the easiest and fastest, but also the most expensive. Most Chinese suppliers refer to it as express shipping.

This service is only offered by big companies such as FedEx, DHL, UPS, and TNT, which have worldwide delivery networks. The entire process, from picking up the cargo at the supplier to delivering it to you, is handled by the same company. They help you handle the import and export process and charge the import duty to either you or your supplier in the end.

How much does courier service cost per kilogram?

The cost varies depending on the destination and the changing demand in the shipping market. Typically, it costs $6-7 per kilogram to ship from China to North America and Western Europe. Shipping to countries in Asia is cheaper, while other areas are more expensive.

The busiest seasons, such as the last month before Chinese New Year and Christmas, are the most expensive times of the year. In unusual situations such as the pandemic in 2020, prices almost doubled due to the drastic reduction in the number of flights stopping in China, coupled with the increased demand for importing goods from China, particularly personal protective products.

In addition, small parcels weighing less than 20kg cost much more than regular cargos, as the minimum charge is around $20, even for shipping a piece of paper.

Therefore, it is not surprising that the shipping cost for a single bottle sample can be $20. However, when shipping in large quantities, the average courier cost will still be around $1 per bottle.

How to ship products by courier?

Do not contact courier companies like FedEx directly because the official prices are very expensive. In most cases, Chinese suppliers will find a courier agency for you. These companies can get discounts of more than 40% off from courier companies due to their large shipping volume every day.

However, during the beginning stages of the pandemic, FedEx in China only gave most business accounts very little shipping volume, such as 100kg per day. Our company struggled to help our clients ship out of China during this time and recommended our clients contact their local FedEx to pick up cargos in China to avoid this volume limit.

When choosing to ship by courier, it is important to know about Dimensional Weight, as the shipping fee is not always charged by weight but also by size.

Let’s use a simple example to illustrate this point. Assume there are two shipments. One is a big empty box weighing only 10kg, with a volume of 1 cubic meter. The other shipment is the same size box, but full of products inside, with a total weight of 300kg.

For the first shipment, the courier company cannot charge a shipping fee of 10kg as shipping space in airplanes is pricey. Therefore, they will convert the shipment’s volume into dimensional weight and compare it with the real weight. The shipping fee will be based on the larger of the two.

Most international courier companies use a standard method to determine dimensional weight. They calculate the length, width, and height in centimeters, then divide the result by 5,000. For example, the dimensional weight of a 1 CBM empty box is 200kg, which means that the shipping cost is based on a weight of 200kg rather than 10kg.

To sum up, air courier shipping is not cost-effective for larger, low-value items like toilet paper and disposable tableware. This is due to the fact that the shipping fee alone often exceeds the cost of the products themselves.

In addition, air shipping is prohibited for products containing lithium batteries, liquids, or powders. However, if you need to ship them by air, certain courier agents in China are capable of doing so, although the cost will be at least 50% higher.

4. Sea Freight for Cargos Over 2CBM

Sea freight is the most common shipping method for traditional trading because it is the most cost-effective. Unlike couriers, the shipping and customs process of sea freight shipping is not operated by a single large company like FedEx.

Instead, you or the product supplier must find a freight forwarder, as described in section 1. A freight forwarder is responsible for tasks such as finding a truck to pick up cargos at the supplier’s warehouse, booking a container from a sea shipping company, finding a customs broker to complete the import and export process, and finding a truck to deliver from port to your warehouse. This is how sea freight works.

There are tens of thousands of individuals and small companies that provide this service. However, the quality of service is typically lower than that of a courier, and the website does not offer a tracking system to monitor the location of your cargo.

For sea freight, all products are transported using containers, which come in two sizes: 20″ and 40″. Their shipping volumes are 28CBM and 68CBM, respectively. If you have a large shipment over 20CBM, it is recommended that you ask the freight forwarder to book a container exclusively for your shipment, which is known as Full Container Load (FCL).

For smaller shipments, it’s better to ship by Less than Container Load (LCL), in which your freight forwarder will help you share a container with other individuals to lower your shipping costs.

If your shipment is less than 2CBM, we do not recommend sea freight, as there are several hundred USD fixed costs for each shipment. When the shipping volume is small, the average cost per CBM will be quite expensive, making sea freight no longer cost-effective due to the extended shipping time.

How much does sea freight cost?

Calculating the cost of sea freight is slightly more complex than courier services. The process includes land shipping costs from the supplier to a seaport in China, exporting costs, sea shipping costs, importing costs, seaport costs in your country, and land shipping to your warehouse.

When requesting quotes from freight forwarders, they will likely provide a cost breakdown similar to this.

As you can probably tell, the cost of ocean freight is just a fraction of the total expenses. The majority of the costs come from the importing process and the land shipping to your address, which occur at the destination port.

When we consider the sea shipping aspect alone, let’s say we are transporting a 40″ 68CBM container from Chinese ports to the United States or Western Europe. The cost is usually around $3,000, but during busy seasons in the month preceding the Chinese New Year, it can rise to $5,000.

However, in 2021, this cost increased to $10,000 right before the Chinese New Year. In 2020, it was around $5,000, which was twice the normal price in previous years before the pandemic.

The cost of sea freight is influenced by various factors, but you only need to have a general idea of the total shipping cost from China to your location.

Shipping costs vary depending on the destination. To ship to areas near the west coast of the US, it costs about $100-$200/CBM, while areas adjacent to the east coast of the US cost around $200-$300/CBM. For the middle US, the cost is more than $300/CBM. In Western Europe, the cost falls between $200 and $300, while shipping to South America will cost more than $400/CBM.

Note: The prices mentioned above are for reference purposes only and pre-date the pandemic. Please refer to freightos.com for recent prices. Generally, sea freight is about 85% cheaper than air courier.

Shipping Time

As the cheapest and slowest shipping option, it takes a while for the goods to arrive at their destination. From a seaport in China until delivery to your doorstep, it can take several weeks.

5. Air Freight for Cargos Above 500kg

When comparing air freight with courier, both are shipped by air but differ in the level of service. Courier services are handled by a single company and take care of every step in the shipping and importing process. Air freight, on the other hand, requires you or your supplier to find a freight forwarder who will book shipping space from airlines, find custom brokers to handle import and export processes, and trucks to deliver from the airport to your warehouse. While these methods have similar flows, air freight requires more coordination and involvement from the shipper. And, as you noted, there are no large companies like “FedEx” for air freight.

Why is air freight better than courier? What is the shipping cost for air freight?

Air freight has a significant advantage over courier in terms of cost, with potential savings of 20% or more. However, it is important to consider air freight only for shipments weighing more than 500kg, as there is a fixed cost associated with every air freight shipment, similar to sea freight.

For cargoes weighing less than 500kg, courier is the better option due to its superior service, easier customs clearance, and faster delivery times.

Air freight also calculates weight differently than air courier, with the dimensional weight formula for air freight being length times width times height divided by 6,000, while for air courier this figure is 5,000. This means that for the same volume, air freight weight is about 20% smaller, making it approximately 34% cheaper to send big-sized but light-weighted products by air freight.

Just a heads up, the customs clearance process in the destination country may be a bit more involved than with a courier. You’ll need to provide the necessary compliance certifications required by customs, whereas courier companies can make it much simpler.

6. Railway Freight for Full Container Load

When shipping to European countries, sea freight takes 30-50 days to arrive, which can be quite lengthy. Air courier and air freight take just under a week, but the cost is 5-8 times more expensive than sea freight.

Here comes the railway freight, striking a good balance between shipping time and cost. The railway is particularly suitable for countries in Eastern Europe and Western Asia that are not near seaports.

While costing about twice as much as sea freight, railway freight cuts shipping time in half to 15-20 days. This adds value because faster shipping can help many people ease their cash flow pressure.

The biggest disadvantage of railway freight is the limited number of countries reachable along the China to Europe railway routes.

The demand for railway shipping is currently not very high. Many freight forwarders do not offer the option to share a container with other parties, which means that small importers may find it difficult to ship their products.

7. Sea Freight Plus Courier for Ecommerce

As shown in the table above, sea freight is the cheapest option but takes over a month and is only suitable for cargos over 2CBM. Air courier, on the other hand, is fast and suitable for cargos less than 500kg, but costs 5-8 times as much as sea freight. Railway shipping is a good balance between cost and time, but you must ship by full container load and cannot ship to the US.

A few years ago, some innovative freight forwarders combined sea freight and courier services. They helped numerous clients share a full container to ship to the west coast of the US, and utilized local courier companies like UPS to deliver the cargos from the port to the final addresses in the US. The best part is that even small cargos around 50-100kg can be shipped, which was not possible with ordinary sea freight LCL (Less than Container Load).

The total cost of shipping, is approximately $2 per kilogram. This amounts to roughly twice the cost of ordinary sea freight. However, the shipping time from a Chinese port to the final destination in the US is only around 20 days, which represents a 20-50% reduction when compared to the time frame for ordinary sea freight.

Another option is to combine air freight and local courier companies, which reduces the cost by approximately 20% when compared to air couriers. The only trade-off is that this method is slightly slower, taking just several days longer.

This solution is not limited to the US. It also applies to countries like the UK and Germany that have Amazon fulfillment centers. It is designed specifically for Amazon sellers who want to ship a small quantity to an Amazon warehouse and need an affordable shipping solution that is faster than sea freight.

Looking for more shipping options to Europe? Some freight forwarders offer railway freight combined with a courier service.

For e-commerce sellers, especially Amazon FBA sellers, this is a popular and cost-effective shipping solution for small shipments. To choose this option, it’s best to consult a freight forwarder based in China that specializes in shipping to Amazon.

8. Epackage for Dropshipping (less than 2kg)

In previous sections, we covered solutions for shipping packages over 20kg each time.

However, dropshipping sellers often find air courier services too expensive for packages weighing less than 1kg. Even shipping a single piece of paper can cost around $20. Instead, dropshipping sellers prefer to ask their suppliers to ship the products directly from China to the customer.

In this case, Epackage is the perfect solution.

How does Epackage work?

The most popular Chinese Epackage service providers are China Post and Yanwen. They use air freight to ship countless parcels from China to the destination country, and then utilize local postal services to complete the final delivery.

Advantages of Epackage

Epackage offers a great advantage in terms of minimum shipment weight, which can start from just 20 grams. The shipping fee is charged by the gram, making it an ideal choice for sending small items, such as gadgets and fashion jewelry, for dropshipping sellers on platforms like Wish and Aliexpress.

Shortcomings of Epackage

Like most budget-friendly solutions, there are some drawbacks to using Epackage. This shipping method is slow and less reliable compared to air courier services. It typically takes between 10-20 days for delivery, and there is a chance of packages getting lost in transit.

Costs of Epackage

To determine the cost of Epackage, it’s best to check the website of a reputable company like Yanwen. After entering the departure and destination countries and the estimated weight of each parcel, you’ll receive a list of quotes for Epackage solutions provided by various companies. One of the top providers is EUB, which stands for China Post Epackage, and its pricing can serve as a reference.

How to Ship with Epackage?

Most Chinese suppliers offering dropshipping services have connections with Epackage companies. However, if you intend to order products in large quantities from manufacturers or wholesale suppliers without dropshipping fulfillment service, it’s best to find a fulfillment center in China or contact our company for assistance. This is because Epackage companies only provide shipping services and don’t handle fulfillment.

9. Handling Customs Clearance in China

The final, critical step is customs clearance. You must know what documents or certificates are required throughout the process.

For the export customs clearance in China, several documents are necessary for all

• product types:
• Contract
• Commercial invoice
• Packing list
• Bill of lading
• Certificate of origin

Additional certificates may be required depending on different customs supervision requirements on products. However, for the export process, you need not worry too much because usually, the supplier will assist you with it.

For the import customs clearance in your country, there are also some standards or documents according to customs requirements in your country. But five documents are needed, just the same as the export process, including commercial invoice, contract, packing list, bill of lading, and certificate of origin. However, some other certificates may vary according to countries or products. You can consult the freight forwarder who can help you with logistics.

Apart from the certificates, you need to pay customs duties. But the standard differs according to countries or products. For example, if you import shoes from China to America, you need to pay customs duties, MPF(merchandise processing fee), and HMF(harbor maintenance fee).

You can consult freight forwarders or your customs broker for documents required and product duty rates.

Wrapping Up

I hope you found this post helpful and feel more confident about your decision. Do you have any questions about today’s topic? Please leave a comment below.

Our company, a leading sourcing company in China, helps our clients find the best manufacturers, ensure the quality of products, and arrange the shipment to their doorsteps, making the entire sourcing process easier and safer. If you’d like to source products from China, feel free to contact us.