- What is a freight forwarder?
- What is customs duty?
- Do I need a customs broker?
- How to find a freight forwarder
- How much does it cost to hire a freight forwarder
- Are freight forwarding companies reliable?
- Related reading
Importing goods into Australia can be a complex process.
For new businesses setting up in Australia and wanting to bring their products into the country, or even existing businesses wanting to improve efficiencies, we’ve done the research and put together this practical guide.
What is a freight forwarder?
A freight forwarder acts as your agent and organises the shipment of your imported goods from origin to destination, across international borders, including logistics and transportation.
A freight forwarder books the carrier companies, whether they be road, sea, rail, or air and importantly, ensuring the contracted shipping terms meet the responsibilities of the seller and buyer for the shipment of goods.
They will also advise your business of all costs involved with the shipment – freight, insurance, port charges, terminal handling and if any special documents are required such as biosecurity, product safety, or agriculture.
Why might you need one?
A freight forwarder can not only save your business time and money, but they can also relieve the worry of shipping goods across borders.
The process is complex and if you are not familiar with it, mistakes such as incorrect paperwork or unpaid duties or taxes, can delay clearance and transportation, and cause unnecessary freight costs or more taxes – burdens your business doesn’t need.
Freight forwarders can also advise if you require additional conditions such as quarantine, handling of dangerous goods or other approvals your business may need.
Moving freight across continents requires knowledge of the process and familiarity of the terms they use. A freight forwarder with all their experience can also help your business find solutions to any problems or delays that may occur with your shipment.
What is customs duty?
Goods imported into Australia are classified under the Customs Tariff and may be subject to customs duty. Customs import entry procedures are based on self-assessment by importers, including self-assessment of the correct classification of goods.
It is the Department of Home Affairs who regulate customs duty in Australia. Their website has links to the exchange rates to use when calculating customs duty, and other taxes and duties that may be applicable to the type of goods you will be importing.
Read our blog – GST, Customs Duty & Importing Business Goods to Australia FAQ – this 2019 updated version includes a customs duty calculator to give you an estimate of the duty you may be required to pay.
Do I need a customs broker?
It may be beneficial to use a customs broker, especially if your business will be importing a significant number of products into Australia or frequent shipments.
A customs broker can relieve some of the paperwork pressure associated with bringing the goods across the border. They prepare all the documentation and clear all customs entry on your ship’s arrival at the port of entry.
Tasks such as calculating the duties, taxes and fees your business is required to pay regarding the shipment, as well as organising customs bonds, certification of goods, duty drawbacks, and the final despatch for delivery to your destination.
It is not a requirement to use a customs broker, however, they can make the whole process easier and quicker, especially for businesses who are unfamiliar with the process.
How to find a freight forwarder
You can ask your Australian accountant – the International Accounting Solutions team would be happy to recommend several freight forwarders who work with our clients – or you can search the associations representing the freight forwarding industry:
The International Forwarders And Customs Brokers Association of Australia (IFCBAA) is Australia’s leading peak national body. They represent members interests in international trade logistics and supply chain management service provision.
The International Federation of Freight Forwarders Associations (FIATA) is the largest non-governmental organisation in the field of transportation and has been around since 1926. You can search their member directory to find a freight forwarder.
What to look for
Before searching for a freight forwarder, we recommend you estimate the quantities and frequencies of shipments your business will be doing, as well as the type of transport you will need. These decisions will make it easier to compare freight forwarding costs and services.
How much does it cost to hire a freight forwarder
As with most things, the cost for freight forwarder charges is a factor that needs to be considered.
Ensure your freight forwarders pricing structure includes everything your shipment/s will need.
Some freight forwarders calculate freight rates such as a flat fee with no percentage of the dollar value or tiered shipping. Some will charge just by weight, but the volume needs to be considered as well – if your goods are generally light in weight but large, you will be charged more because of the volume.
If you will be using the freight forwarder for frequent shipments, perhaps negotiating a better deal or setting up a contract will help reduce your costs.
However, price is not the only consideration, there are other factors that make a proficient freight forwarder such as –
Will you need consolidating services?
If your business will need the freight forwarder to assemble smaller shipments into one larger one, consolidating services can help lower shipping costs and improve the security of your cargo.
Ensure that your freight forwarder provides you with a full breakdown of all costs associated with your shipment/s.
These freight and related costs will be built into the final price you charge your customers, so it is important to know of all costs otherwise they can quickly erode your profits.
Are freight forwarding companies reliable?
Importing and shipping delays can cost your business. Ensure the freight forwarder has efficient and transparent systems in place to get the goods through each checkpoint, through to your warehouse, so you can track the shipments along the way.
Moving freight across borders is complex involving a lot of paperwork and points of contact, a smooth process will minimise delays and extra costs to your business.
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How can we help?
We know there is a lot involved in importing products into Australia. If we can be of any assistance to set your business up to be efficient and cost-effective for importing goods in Australia, we are just a click or a phone call away!