How to breakdown the cost to ship a container from China to USA?

how much does it cost to ship a container from china to usa

Foreword

This article will analyze the costs involved in importing container containers from China ports to US ports, discuss the freight items involved under different trade terms, and present a clear and reasonable cost component, thus to provide reference and help for your decision-making. For your convenience, please pay attention to the following points:

  1. The transportation method discussed here is FCL from China’s main ports (i.e. Shanghai Port) to major US ports (i.e. LOS ANGELS Port).
  2. The cost analysis is based on direct importers in the United States.
  3. The data used is based on Maersk line.
  4. The sea freight, local fee, etc. in the article are for reference only, and may be subject to change in the actual business due to the varying policies of shipping companies and the terminal operators.

1. Overview of import freight costs from China port to Us port for importers under different INCOTERMS terms

In the international trade, the main roles of INCOTERMS terms are:

1) To stipulate the sharing of the risk of the goods by the buyer and the seller, i.e. when and where the seller should deliver the goods to the buyer in a sale. Before the seller delivers the goods to the buyer, the risk of loss or damage to the goods is borne by the seller. After the seller’s delivery at the designated place, the risk of the goods is transferred to the buyer.

2) To stipulate the sharing of costs of the goods by the buyer and the seller, i.e. what expenses are included in the sale price and are borne by the seller, and what other expenses are not included in the selling price and are borne by the buyer.

As can be seen from the above, the costs involved in different INCOTERMS conditions are different, and must be described separately. In the shipping container business, the INCOTERMS terms involved mainly include the following:

1) EXW
The full name of this clause is EX WORKS. Under this clause, the logistics transportation costs that the importer needs to undertake include the following:

  • Transportation costs from Chinese factories to Chinese ports
  • China’s export customs clearance fees
  • Shipping company departure port fee
  • Sea freight
  • Insurance
  • Shipping company charge and terminal fee at the port of destination
  • Destination port clearance fee
  • Transportation costs from the port of destination to the door

2) FOB
Under this clause, the logistics transportation costs that the importer needs to undertake include the following

  • Sea freight
  • Insurance
  • Shipping company charge and terminal fee at the port of destination
  • Destination port clearance fee
  • Transportation costs from the port of destination to the door

3) CFR
Under this clause, the logistics transportation costs that importers need to undertake include the following:

  • Insurance
  • Shipping company charge and terminal fee at the port of destination
  • Destination port clearance fee
  • Transportation costs from the port of destination to the door

4) CIF
Under this clause, the logistics transportation costs that importers need to undertake include the following:

  • Shipping company charge and terminal fee at the port of destination
  • Destination port clearance fee
  • Transportation costs from the port of destination to the door

5) DDU
Under this clause, the importer does not have to bear any logistics transportation costs.

6) DDP
Under this clause, the importer does not have to bear any logistics transportation costs.
As shown above, the importer bears different logistics costs under different terms: EXW>FOB>CFR>CIF>DDU=DPP

For example: Under the EXW clause, the importer is responsible for all logistics costs. In the case of DDP, the importer doesn’t have to do nothing but wait at home for cargo arrival.

But business is business, and the cost must be well understood. If the importer can clearly know the cost composition and approximate range of a container from China to the US port, it will be of great help to the bargaining and cost control when they purchase goods. If there is an advantage in the cost of DDP quotes provided by Chinese suppliers, why not? Conversely, if the importer has the right logistics channel (that is, a good international freight forwarding company), the logistics cost can be controlled by terms that are relatively favorable to him.

2. Example illustration of the cost transporting a container from a China port to a US port.

As we all know, the following three terms are commonly used in international trade: FOB, CFR, and CIF.

For the convenience of description and word saving, it’s assumed that you are purchasing baby card from the factory located in Xincang, Pinghu City, Zhejiang Province, and transported from the Shanghai port to the port of LOS ANGELS in the United States. We now calculate the freight that you as the importer should bear under the terms of the three different INCOTERMS. We take a 40HQ container as an example, and the cargo value is around 24000.00USD. And other costs are assumed as below:

  • Sea freight from Shanghai to Los Angeles (Maersk): 2000USD
  • Insurance is roughly the value of goods *1.1 * 0.001 (insurance rate) = 26.4USD
  • Destination port shipping company fee: 65USD(commonly only DO fee)
  • Customs clearance broker agent fee: 200USD
  • Destination port to door fee: 500USD

1) Under FOB terms

In this case, the FOB clause should be FOB SHANGHAI. According to the above, you will bear the following fees (taxes such as tariffs are not included):

  • Sea Freight: From Shanghai to Los Angeles
  • Insurance costs: insurance for goods
  • Shipping company and terminal fees at the port of destination: fees for the port of Los Angeles
  • Customs clearance fee: the fee for customs clearance
  • Transportation cost from the port of destination to the door: Toll fee from port to warehouse

The cost you should bear is 2000+26.4+65+200+500=2791.4USD

2) Under the terms of CNF

According to the above, you will bear the following fees (taxes such as tariffs are not included)

  • Insurance costs: insurance for goods
  • Shipping company and terminal fees at the port of destination: fees for the port of Los Angeles
  • Customs clearance fee: the fee for customs clearance
  • Transportation cost from the port of destination to the door: Toll fee from port to warehouse

The cost you should bear is 26.4+65+200+500=791.4USD

3) Under the terms of CIF

According to the above, you will bear the following fees (taxes such as tariffs are not included)

  • Ship company and terminal fees at the port of destination: fees at the port of Los Angeles
  • Customs clearance fee: the fee for customs clearance
  • Transportation cost from the port of destination to the door: Toll fee from port to warehouse

The shipping cost you should bear is 65+200+500=765.00USD

In conclusion, under the FOB clause, the importer bears the most logistics and transportation costs, while the importer bears the least logistics costs under the CIF clause. Conversely, under the FOB clause, the unit price of the goods should be the lowest, and the unit price of the goods under the CIF clause should be the highest.

3. Summary of logistics costs of container transportation from China to USA.

If you want to answer how much it costs to ship a container from China to USA, you must be aware of several conditions:

1) What Intercom terms to be used? Under different terms, the importer’s logistics costs are different.

2) In international container transportation, the biggest factor is the sea freight. Sea freight charges will be significantly affected by fluctuations in the peak season and off-season. In the off-season, it may take only 1200.00USD for a 40HQ from Shanghai to Los Angeles. However, in the second half of 2018, when the trade war was in full swing, the freight rate of one container to Los Angeles soared to over 2,000 USD.

3) how much does it cost to ship a container from China to USA? This question is not precise enough. Because China and the United States are too big, there are many ports. At least the port of departure and the port of destination should be specified, as well as the type of container (20GP, 40GP, 40HQ, etc.). In this way, it is more accurate to estimate the total cost.

4) When calculating the total cost, there must be room for it. Because these sub-items, especially sea freight, often change dramatically.

Finally, the more precise question is how much does it cost to ship a 40hq container from Shanghai China to Los Angeles USA until June 30, 2019?

If asking this way, you will get a more accurate answer.

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