Clothes Shipping Costs From China in 2021
Know How to Minimize Them
The shipping costs from China to the USA component of this figure is, in itself, quite a significant number. In fact, depending on the order volume and shipping method, the shipping cost can exceed the cost of the clothing. In the overall effort to keep the retail selling prices of clothes down, shipping costs, therefore, play a significant role.
The total shipping cost is made up of several components.
- Transport from the factory to the designated air or seaport in China
- Chinese export documentation fees
- Chinese airport/seaport handling charges
- Freight carrier charges
- Insurance and finance charges, where applicable
- US airport/seaport handling charges
- Transport from the US point of entry to the customer
Import duties and tariffs are not considered as these are mandated by the authorities and cannot be controlled by the importer.
There are several ways to ship goods from China to the US. The shipping method will depend on the volume and weight of the goods as well as the urgency of the order. Although air freight and sea freight are the only available modes of transport, each of them comes in several different flavors.
The goods are shipped on the next available flight. This is the quickest option but, as with almost anything procured at short notice, it is also the highest-cost option. Airfreight is usually used when customers want their goods delivered sooner. Demand for space is, therefore, far higher in the short term. The laws of supply and demand apply, driving prices higher.
Goods are combined with other shipments and shipped as a single larger consignment. Shippers can negotiate better rates with the carrier as the carrier can achieve a higher capacity utilization and revenue. This is a slower option as it takes some time to aggregate a shipment for a particular sector. On flight sectors with a lot of cargo traffic, the delay may be only a day or two. On quieter sectors, however, the delay may run to several days. In such cases, consideration should be given to the deferred option.
The goods are shipped on a low priority basis. Shipping is postponed until a carrier has space available or space can be booked several days in advance. Air carriers offer substantially better rates for space that is available shortly before departure or for cargo space that is booked well in advance. This is the cheapest option for airfreight but also, usually, the slowest.
Full Container Load (FCL)
The goods are loaded into an exclusive container for a single customer. With this option, the goods can be packed at the factory and the container sealed in controlled circumstances. The customer, or a representative, may witness the sealing if they so chose.
The seal is sometimes broken by the authorities at the destination port in order to carry out inspections. This is done in controlled circumstances, though, and is not considered a risk. Often, the seal is broken at the customer’s premises.
It is the quickest sea freight option as there is a single point of supply, a single delivery point, and only one set of documents. All the processes, therefore, run just that little quicker.
Less than Container Load (LCL)
When the volume is insufficient to fill an entire container, they are combined with other shipments until the volume is sufficient for a full container.
Goods are usually packed into custom-made crates. This provides some protection for fragile items and also eliminates the risk of goods getting mixed up and incorrectly delivered.
This method may cause delays depending on how long it takes to fill up a container. The consolidated shipment has to be coordinated at the departure point. Multiple sets of documents have to be checked. Any errors in one set of documents will result in the delay of the entire container. On arrival, the shipment has to be broken up again and distributed to the various consignees.
Generally, these additional logistics requirements make it a slower and more expensive option than FCL. It is not commonly offered on routes with lower cargo traffic as it may take too long to accumulate enough cargo to fill a container. Such long delays are not beneficial to anyone in the entire shipping process.
Minimizing Shipping Cost
When seeking to keep shipping costs as low as possible, several things need to be considered.
Weight and Volume of Goods
Surprisingly, airfreight is not always the most expensive shipping method. At lower weights, typically under 500kg, it is the cheapest option. Bear in mind that airfreight is measured by volumetric weight. This means that freight is deemed to have a standard minimum weight based on its volume. Large lightweight items tend to be charged at a higher weight than the actual.
There is a substantial difference in shipping time between airfreight and sea freight. Airfreight is usually 2 to 3 days while shipping takes around 30 to 40 days.
For seasonal items, the customer has to weigh up the additional cost of faster shipping methods against the possible losses arising from getting the clothes into the shops soon enough before the start of the new season.
Incoterms define when the risks and responsibilities transfer between the seller and the buyer. The sooner the risk and responsibility transfer to the seller, the more control the seller has over the cost elements of the entire shipping process.
This is not so simple, though. There are a few other commercial aspects to be considered when deciding on Incoterms.
Supply and Demand
As with anything, shipping demand is constantly variable. It has peaks and troughs over a month, season, or year. Choosing the right date can make a very big difference to the shipping cost.