Here are some important things to keep in mind when shipping goods to Australia.
Declare a schedule B number
The first thing a manufacturer or distributor needs to know about importing shipments into Australia from the United States is you must declare a schedule B number for your commodity.
A schedule B number, better known as a harmonized code, is necessary to categorize your commodity into a specific group of goods.
Once the 10 digit schedule B number is determined, if the value of your shipment is over $2,500, you would need to fill out a shippers letter of instructions, and include the schedule B number, in order for the freight forwarder to file for an Automated Export System (AES) number with the government.
The government keeps track of what is exported out of the USA into foreign lands. The AES filing with the government is mandatory for goods over $2500. The shippers’ letter of instructions form can be obtained through the freight forwarder.
Create an invoice
If you are shipping from the Great Britain to Australia you will not need a schedule B number, but you will need to create an invoice for the value of the goods you are shipping to Australia.
In fact, all shipments require an invoice. The invoice has to have the shipper and consignee name and address, with any notifying party on it, along with the description of goods, the quantity, and a value for customs.
The invoice is imperative, since it must be presented to Australian customs in order for them to clear the goods and determine what taxes needs to be paid at destination. Taxes, better known as duties, are determined by a percentage of the value of your goods and is part of the customs clearance process.
Establish payment terms
Payment terms are important when shipping. Do you have established credit with your consignee? If so you can afford them net 30 days payment terms, which means you will allow the consignee 30 days to pay for the goods.
If they are a new consignee, without established credit, you might want to ask for payment in advance or do a bank draft. A bank draft is a guarantee of payment and needs to be set up with an established bank.
A freight forwarder can help with this for a fee of usually EUR 30. Payment terms needs to be indicated on the invoice.
Pack for shipment
You will need to pack your shipment in sturdy cartons, and provide shipping labels on the outside of each carton, along with the shippers and consignees name and address. You need to mark each carton with a number to determine how many cartons you have.
At this point you can create a packing list describing the contents and the amount of cartons along with the net and gross weight. The packing list is important because it provides information regarding the contents of your shipment and the pieces and weight you are shipping.
However, it is not a mandatory document when shipping overseas.
Choose a freight forwarder
The final step is finding a good freight forwarder who can ship your freight overseas.
If your goods are less than 75 kilos you can send it by a courier like Federal Express, DHL or UPS. If your goods are over 75 kilos you can use one of the major forwarders like Fedex Trade Networks or UPS Supply Chain. They both have separate freight forwarding departments that handle shipments that are going to be shipped overseas for over 75 kilos.
There are two ways to ship overseas, either by airfreight or ocean. The determining factor is the urgency of the shipment.
Small shipments under 500 kilos can go by airfreight, but anything over 500 kilos would be cheaper to ship via ocean freight. However, keep in mind that an airfreight shipment transit time is approximately 4-5 days.
Ocean freight can take over 30 days depending on the port of loading. Ocean freight for the following ports, Melbourne, Brisbane, Sydney, Fremantle, Perth, or Adelaide, have transit times from the US East coast of 30-35 days, and from the West coast, 22-26 days. Transit times by ocean from Great Britain to any of these Australian ports takes approximately 26-30 days.
Once the invoice is created, payment terms are established, the shipment is packed and ready to go, you can either send it to the freight forwarder, or have the freight forwarder arrange the pick up at your facility. At this point you just need to call the forwarder and speak to an agent who will guide you on this.
The agent will ask you to provide an invoice and for you to fill out the shippers’ letter of instructions that will be provided by the agent. This form is required, not only for the schedule B number, but for the Incoterms of the shipment, whether you require insurance, and other pertinent details.
Incoterms are the terms of the freight charges of the shipment that is an agreement between the shipper and consignee. Some terms are collect, where all the freight charges are collect to the consignee.
A prepaid term could be DDU, which means it is prepaid to the shippers account, but duties unpaid. This is an agreement between the shipper and the consignee where the freight is prepaid by the shipper, including the destination charges, but the duties are paid by the consignee’s account. The destination charges are the customs clearance, handling and delivery charges to the consignee.
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Once the freight forwarder has the shipment they will arrange for it to get on board a flight or ocean liner and send it to Australia. They will track the shipment to assure it arrives at the destination and their agent will clear the goods and have it delivered to the consignee.
Once the shipment is delivered to the consignee, you can request a proof of delivery from the forwarding agent and the task of shipping to Australia will be complete.