Home Forums Find the help you need Importing costs blow about by two thirds

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  • #1000389
    solly747
    Member
    • Total posts: 2

    Hey all,
    Firstly, this is my first post here, I just joined. I’m hoping this is the right plce to post this.
    Really hoping to get some help.
    So straight to the point.

    I purchased a CNC router machine from china, and we agreed on FOB terms. I appointed a freight forwarder to do all the work for me as I have no idea how to do this myself.
    He sends me a quote for $2,900 ex GST. That is to the destination port of Adelaide and for me to pickup from a warehouse.
    Now, a week before arrival he sends me an invoice of $4,975 inc GST.

    Now, I had questions, and when I asked him about the huge difference in price he said it was all the importation GST and the fact that the machine was quoted as 11.97cbm (aparently I initially gave the wrong dimiensions) when in fact it is 13.38cbm.

    I’m going to paste the quote in here, and upload the invoice so if someone has the time to have a look and tell me what the heck is going on, and what I can do about it.

    Also, I sent him this email on Friday for starters.

    “In your quote:
    USD $502.80 – Seafreight LCL Shipping | FOB Qingdao Port China to Adelaide Port Australia | based on USD $40.00/cbm for 10cbm and greater otherwise USD $60.00/cbm applies
    So this means you need to charge me $40/cbm as the freight is over 10cbm.
    $40 x 13.38 =USD $535.20. Rounded up to $760AUD
    You have charged me $1,300.50″

    Here comes the quote:

    Quotation | Seafreight LCL (Less than Container Load) Shipment | FOB Qingdao China to Adelaide Australia

    USD $502.80 – Seafreight LCL Shipping | FOB Qingdao Port China to Melbourne Port Australia | based on USD $40.00/cbm for 10cbm and greater otherwise USD $60.00/cbm applies | Weekly Sailings | Port to Port Transit Time of 28-30 days | Valid to a shipped on board date of 31 July 2020

    AUD $1,533.54 – Australian Port Wharfage (based on AUD $122.00/cbm)

    AUD $527.94 – Australian Terminal Handling (Based on AUD $42.00/cbm)

    AUD $47.50 – Sea Cargo Manifest Reporting

    AUD $135.00 – Customs Entry Preparation & Lodgment

    AUD $ N/A – Delivery from Port Adelaide CFS Warehouse | to be arranged by the importer unless a delivery service is required

    Approx. Total AUD $2,904.17

    if applicable 5% Customs Duty (based on the FOB Price of the Goods in AUD) payable to the Australian Border Force (Customs).
    10% Goods and Service Tax (GST) On Importation (based on the CIF Price Of The Goods in AUD including of any customs duty) payable to the Australian Border Force (Customs) | “GST On Importation” that is paid to the Australian Border Force (Customs) upon importation can be claim back from the ATO Australian Taxation Office through your BAS Business Activity Statement and does NOT form part of the landed cost of the goods.AUD $99.00 for Australian Customs Entry Processing Fee payable to the Australian Border Force (Customs) | where the Purchase Price of the Goods is AUD $10,000.00 or more the Australian Customs Entry Processing Fee will increase from $99.00 to $201.00)

    I was prepared for extra charges, but not $2,000 extra.

    Any help with this would be very much appreciated. Also if there is anything I can do at this point if we don’t reach an agreement.

    Thanks

    #1224185
    Raestorm
    Member
    • Total posts: 6

    Hi Solly747,

    [USER=117305]@robdash[/USER] has been fairly active recently, maybe he could chime in with some advice or try posting in the logistics thread.

    It’s not my field of expertise but from a quick look your invoice comes to $4,142.40 excluding all GST charges but that’s still a big jump on your original quote, I don’t know if you pasted the whole quote in for us but there’s three or so extra items on the invoice that don’t appear in the quote.

    You’re right that they have charged $60/cbm instead of $40/cbm, once they amend this it will bridge the gap. Don’t forget that the extra cbm’s will also increase the charges for Australian Port Wharfage ($122/cbm) and Australian Terminal Handling ($42/cbm).

    The other thing I would query with them is the AUD / USD exchange rate, they have calculated it on approx 0.6173, it hasn’t been that low since April?

    #1224186
    Dash Freight
    Participant
    • Total posts: 92

    Thank you [USER=102984]@Raestorm[/USER]

    Hi Solly

    Wow! If anything could go wrong with your import – it did!

    there is not one simple answer here. I note a few areas where charges have increased. You are looking at about $1700 difference in charges. here is where to look.
    1. 582.45 Import GST – Gov’t charge – not included in quote. Non negotiable
    2. 99.00 ACS Entry Fee Gov’t charge – not included in quote. Non negotiable
    3. 59.50 AQIS Fee Gov’t charge – not included in quote – ABF decided this needed approval by Quarantine as well as Customs. Non negotiable
    4. 45.00 Extra work by agent to lodge Quarantine entry,
    5. 85.00 attendance to Customs Clearance – this looks like extra work not allowed for in the quote – best to ask what that was for. If there was a physical exam by ABF then this is cheap.
    6. 127.98 CFS – at Origin Ask your Freight agent. As terms are FOB – why is this charge to you and not the shipper?
    7. 48.60 Telex release. Ask your agent, Why is this an addition?

    8. 1632.36 – wharfage as per quote – your shipment is 13.38 cbm – your supplier got the measurements wrong
    9. Sea freight – This appears to be quoted to Melbourne at USD40/cbm. Is that correct? or was the quote to Adelaide? This could be the reason.
    The volume is 11.5% greater than the 12 cbm.

    The other answer could be the sudden increase in charges by the shipping lines. Due to industrial disputes in Sydney, most of the shipping lines have slapped on a congestion surcharge, with almost immediate effect!. Even if your freight was in transit, it still gets hit with this extra charge. Prices start from USD13.50 per cbm

    SUMMARY
    1. remove the Government charges from the freight quote
    2. Your supplier gave the wrong measurements, and made you bear the cost of CFS in China – most unusual.
    3. You got unlucky that ABF deemed the shipment needed quarantine approval. This goes to the original description of the goods. Is it a second hand machine? That would attract AQIS attention.
    4. You should still ask the question of your Freight Forwarder, as the freight costs are about $1,000 more than you planned for.

    I hope that helps.

    Rob Dash E: rob@dashfreight.com.au M: 61 423 136 053 Quotes: https://tinyurl.com/yae7tbj6 S: live:rd2221
    #1224187
    solly747
    Member
    • Total posts: 2

    Hey Rob,
    Thank you very much for the reply. Firstly let me clear something up about the CFS charge. I agreed to pay the difference in $$$ for a dispute of the amount between my supplier and the freight forwarder. The suppplier contacted me and told me that my FF wanted to charge them unusual and ectra fees, and they were not going to pay them, hence not sending my machine.

    The machine is brand new.

    So over the weekend I emailed my FF and questioned the cbm amount. This morning he adjusted the invoice and deducted $400 or so, and I decided to just pay the invoice to get the clearance started and finally get my machine.

    As for the exchange rate, which he used 61c to the $$, when I asked him about it, he emailed me a form I had signed, clearly stating that they are allowed to charge me a premium rate.

    You live and learn. $4,500 for the machine, and $4,500 for the freight and fees and charges.

    No regrets on my purchase, even after all that. Next time I will know a little more, and be more careful.

    #1224188
    Dash Freight
    Participant
    • Total posts: 92

    He dropped $400! wow! Congratulations. Yes there are a few curious things happening there. I would suggest next time you consider EXW from that supplier, and remove some of the confusion. About exchange rates, its not uncommon to charge a rate that is 5% more expensive than the nominated exchange rate – some may even go to 10%. There is a cost in forex transactions and these guys move a lot of money so they have to get their costs right. I’m not sure it is all cost recovery, but it is common that they charge a premium CAF.

    Rob Dash E: rob@dashfreight.com.au M: 61 423 136 053 Quotes: https://tinyurl.com/yae7tbj6 S: live:rd2221
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