As Britain prepares to leave the EU the importance of our trading relationship with China is set to become ever more crucial. What better time for our team to divulge some insider knowledge on the 7 things every shipper should consider when importing from China to the UK
In 2014, UK Imports from China were reportedly worth £38.3 billion, the 3rd largest source of imports behind Germany and the US. The number of UK companies sourcing products from the manufacturing powerhouse has increased significantly since the start of 2000. Only 1.8% of the UK’s total imports were sourced in China in 2000 and in 2014 the figure stands at 7%.
Table shows Growth in Imports from China 2000 to 2014.
UK Import Regulations: The Basics
When importing goods from China you will need to ask yourself the following questions
1. Have you declared your goods to customs?
This applies to all imports outside of the EU. This can be submitted to HMRC using Single Administration Document (SAD) via processing system called CHIEF (Customs handling of Import and Export Freight).
2. Have you paid the required VAT / duty?
The amount of duty payable is dependent on the types of goods and how they are classified under the UK Trade Tariff. The goods will not be released by customs until the duty and VAT has been paid.
3. Do you know your Commodity Codes?
It is important to find the right commodity code for your goods. This is a ten-digit number for imports from outside of the EU. Without declaring the commodity code on customs paperwork HMRC can impose fines and seize your goods when they arrive at customs, which may cause unnecessary delays in your supply chain.
4. Do your goods need an Import Licence?
Some goods may also require an import licence, typical licence goods include firearms, textile and food. For more information on import licences and to understand if your goods require one visit the gov.uk website.
5. Have you forecast for Seasonal Peaks?
Many of our customers exporting from China prepare months, if not years, in advance for Chinese New Year. Over 200 million people travel home for the celebrations, halting production and reduced manufacturing output is seen from the end of January through to the first half of March. In 2017 Chinese New Year falls on 28th January, put the date in your diary and plan your logistics accordingly!
Tuscor Lloyds Air Freight team have recently experienced space restrictions from China as a result of the new iPhone 7 launch in September 2016. As the famous iPhone factory is located on the outskirts of Shanghai, Air freight space from China has clearly been dominated by the tech giant. Reports from previous product launches confirm that Apple intentionally buy up all available holiday air freight space out of China.
6. Have you chosen the best mode of Transport?
Deciding on the best mode of transport for your imports from China can be a tricky decision. The main considerations for any logistics manager is the bottom line, the speed in which you can receive the goods and the reliability of the service.
To transport heavier, bulkier goods air freight is far more expensive than sea freight. But the voyage time by sea from China to the UK can take anything up to 35 days. To air freight goods from China may take just 3 days. For more information on whether sea freight or air freight is best for your business take a look at our article here.
7. Do you understand your Incoterms?
One of the big decisions to make when importing from China is agreeing pricing structures as many Chinese manufacturers will include the shipping element.
Incoterms are internationally accepted commercial terms defining the respective roles of the buyer and seller in the arrangement of transportation and other responsibilities and clarify when the ownership of the merchandise takes place. They are used in conjunction with a sales agreement or other method of transacting the sale.