FCL, full container load, which means your goods loading into a full container. You buy large quantity, and the ocean freight cost per unit will be less. It’s from CY (container yard) to CY. We organize all ocean freight traffic on a multi-carrier principle by using several carriers to optimize cost and time of transportation process.
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LCL, less than container load, which means your goods and other importers’ goods consolidating together from the same loading port to the same destination port. You buy the just right quantity suitable for your specific target market. It’s from CFS (container freight station) to CFS. LCL allows you to plan your inventory levels so you can order and ship through ocean freight only the amounts you need, reducing your total supply chain and inventory costs.
These are four common terms of trade (aka incoterms) when buying and shipping from China to US. A product price is always quoted according to an Incoterm. Basically how much of the shipping you pay the supplier to handle. Based on the incoterm you select, you can let the supplier handle the goods transportation to:
EXW: no further place but the factory/manufacturer, which is EXW FOB: a nearby port in China, which is FOB CIF: a nearby port in your country, which is CIF (including maritime insurance) DAP/DDU: all the way to your facility not including tariff and taxes
Most suppliers will quote EXW or FOB price at the beginning, and are flexible in providing different price based on different term upon your request. Commonly, you can find the term states clearly in the Proforma Invoice or Quote Sheet provided by the seller. If not, advise the seller to add into the papers to avoid any further confusion even dispute.
Freight Cost Calculation
The general ocean freight rate includes the base rate and surcharges, excluding customs clearance and port charges at both sides, duty & taxes may occur, and other miscellaneous charges that occurred at both port of origin and destination. The additional charges excluded are:
Origin and Destination country customs related fee (i.e. Duty/Tax)
Origin and Destination port/terminal handling fee (i.e. THC)
Origin and Destination agent service fee （i.e. D/O）
The dominant factors of base charge is determined by the types of shipping that you choose. The factors are as following:
FCL rates: By the loading port, the destination port, the container type/weight/quantity. LCL rates: By the loading port, the destination port, the volume, the weight, the volume/weight ratio.
If you choose port-to-port delivery, the base rate and the surcharges on the port of origin is usually covered. If you choose to door-to-door delivery, you are responsible for the additional surcharges at the destination, which includes terminal fees, handling charges, customs clearance/inspection, duty and tax (if applicable), ground logistics delivered to your address, storage, insurance, etc.
Finally, please be reminded that the international shipping rate is like the stock market price which is changing constantly. Make sure you note the expiration date of the quote that you received from your freight forwarder.
China Sourcelink is a leading supply chain solution provider that has base both in United States and China. We offer premium services in contract manufacturing, rapid prototyping, product design, product sourcing, quality control, and freight forwarding services for US companies that is planning to outsource manufacturing to China.
We are able to provide complete and tailor-made supply chain solutions for a wide range of industries, such as electronics and computers, hardware and tools, automotive, lighting equipment, building and construction material, machinery, textile and apparel, toys and consumer goods, packaging and more.