If you’re importing products from China, suppliers are not the only party you will deal with, you also need to negotiate with freight forwarders in order to get the best shipping quote.
We know that the shipping cost can play such an important part in your bottom line. Sometimes, a good product can become unprofitable product because the shipping cost is so high and eat away all the profit margin. And, it will make you lose money if the shipping cost is too expensive.
So, how to get the best shipping quote from freight forwarders? Today we are going to share with you 9 tips to help you get the best shipping quote.
Let’s dive right in!
1. Provide Complete And Accurate Shipment Information
When you send the quote request, please try to give them complete information for your shipment and as accurate as possible. What do they need? They need the basic information, such as your shipping methods, are you shipping via air or ocean? This sound so obvious but some people just forget to mention the information.
And secondly, your freight term, whether it is FOB based or Ex-work based? You know the original documentation fees and export clearance fees are completely different when you quote Ex-work based and FOB based.
Next is the pick up location, which city and what’s the zip code? They need to know exactly where these shipments can be picked up so they know the domestic portion of a trucking cost.
Then the discharge port, sometimes if you have a specific port you want your shipment to offload, you can tell them either is LA or New York so the quote can be completely different when it’s arriving at the west coast or east coast.
Another is the product name and harmonized code. If you don’t know the harmonized code but you need to give a very detail description of your product, so the freight forwarder can use this to try to use an HS code and give you the estimated tax and duty.
Last but not least, you need to give them complete and accurate shipment details, such as carton weight, dimension and the total number of cartons. This is the total weight and dimensions they will be base on to give you a complete quote. So the freight forwarder will not overcharge you with the accurate information you provided, because they’re also not underestimating what their shipping will be.
Most importantly, when you ask for a quote request, if you can give them the complete and accurate information, they will think and respect that you’re quoting like a pro instead of a rookie. So they won’t have to keep nagging you, what are these products? what about this city? where is going to be discharged? how many numbers of cartons? In this way, they’re wasting so much of time and they feel so tired of working with you, they will probably offer you the general quote.
Therefore, if you can provide them the shipment information as accurate as possible, they will give you a good quote as much as possible.
2. Send Quote Request To 3 Freight Forwarders
Every freight forwarder is different and they have their advantage and disadvantage. Some maybe work with the shipping company for a very long time and they have lots of shipments delivered every day, so they can get the most competitive rates; some maybe have full experience in documentation and customs clearance, so they can deliver your shipment smoothly and efficiency, save you time and money.
You need to find out yourself, so make sure you send your quote to 3 freight forwarders. The quote should be identical and one of the freight forwarders must be your Chinese supplier’s freight forwarder, the Chinese supplier’s quote is going to be cheap but you don’t necessarily need to use them. The purpose is you can compare these quotes together, thus you know how to negotiate with them.
3. Keep The Quote Criteria Consistent And Identical
When you’re asking for a quote from the 3 freight forwarders, make sure your quote criteria is consistent and identical. Sometimes when you’re talking to the suppliers, they may have changed the Exw-work based to FOB based. And sometimes the shipping quantity is changed from 10 cartons to 12 cartons or the carton dimensions are altered.
Disregard all those changes for now, you can always update your quote after you get the quote back from the 3 freight forwarders, apple to apple. In order to get the best shipping quote, you need the apple to apple quote, otherwise, there is no way for you to know how to negotiate with them.
4. Ask For The Breakdown Shipping Quote
The breakdown shipping quote has to breakdown the service fees, the shipping charges, the documentation fees, picks up fees, and delivery charges, etc. All these line categories are broken down so now you can compare apple to apple and line by line.
Because only with breakdown quote you can actually see the difference, you can actually find ways to negotiate with each one of the freight forwarders. Sometimes the freight forwarder will lump sum the entire quote, e.g. they may say that from China to the US my total freight quote is 3000 dollars. While another freight forwarder is breaking down quote line by line.
If one is lump sum, one is breakdown, there is no way for you to compare. So you must ask each freight forwarder to give you the details breakdown quote.
5. Negotiate With The Freight Forwarder
Oh yes, you can negotiate with the freight forwarder just like you can negotiate with the suppliers. A lot of times if you know how to negotiate, they will be able to either lower or match the quote you present to them.
But you have to do your homework, compare the 3 quotes apple to apple, line by line, what is driving the total to be different. If you can explain to them that, for instance, your pick up cost is much higher than the other freight forwarder, would you be able to match or lower your quote? so I would go with you.
That’s only if you like this freight forwarder, their communication is much better but their price is a little bit higher, therefore you’re spending time negotiating with them.
6. Consolidate Your Packages
Package consolidation means shipping products in as few and optimally-sized parcels as possible. For example, if you have a shipment from supplier A, the shipment cost to the U.S. is $1000, and if you have another shipment from supplier B, the shipment cost to the U.S. is $900. But if you can combine these shipments, the shipping cost will likely be $1500.
Of course, being able to do this requires you have a sourcing agent in China to help you with this. They can receive all your shipment together, and repack your package to optimize the sizes. So, if you have many products from different suppliers, try to consolidate them and send together once.
7. Be Strategic About The Location of Your FBA Center
Strategically choose the location of your fulfillment center (whether a third party company or your own warehouse). If your online store that’s headquartered in Los Angeles, and imports electronics from China, which arrive at the port of LA, may naturally look for a fulfillment center in the LA area. This, however, can costs higher than on the west coast.
Shipping cost from China to the west U.S. is the cheapest, next is to the mid U.S., the cost to the eastern U.S. is the most expensive. So when shipping from China to the U.S., compare the total cost from different FBA warehouses, then you know which one costs you least.
8. Don’t Pay For Insurance
When requesting a shipping quote, some of the shipping options may include insurance. For some products, insurance can be very high or can be disregarded.
We’ve shipped thousands of cartons and very few of the cartons are getting lost or stolen, so the likelihood of a package getting lost or stolen is pretty low. If your products are low-value items, you can ask to exclude the insurance cost to see the difference between the total cost. It might save you a little on shipping.
But if you’re sending high-value products, it’s necessary to get your shipping quote with insurance option.
9. Avoid The Peak Season
The freight shipping industry starts hitting peak season in September, kicks into high gear in October and winds down during the first week of November. Most of the peak season is a result of holiday inventory demand, however, some industries simply have high freight needs during the fall.
During the peak season, shipping costs can skyrocket and delivery time can get delays. So plan your shipment delivery at the right timing can help you avoid high costs and get your shipment smoothly on time. If you have the forecast for your products sales, you can prepare your shipment in advance and get them delivered before the peak season. For example, you can deliver your shipment before August, rather than in September.
So, when you’re asking for a shipping quote, remember to provide the shipment information as much accurate as possible and send to at least 3 freight forwarders for comparison. If the quote is not competitive, you know how to negotiate with them and get the best shipping quote.
Do you meet other questions when importing from China? Leave your comments below and share it with us, we will guide you through it.