Shipping terminologies simplified

Many of us would choose to import goods and trade between international borders. The simplicity behind this reasoning would be its cost-effective nature; henceforth, why countries in Asia, specifically the Far Eastern regions such as China, prosper due to foreign trade.

Importing not only helps reduce costs, but may prove essential for buyers looking to source raw materials or goods; none of which are available in their own region. Through this mass economic-demand, China has become the global hub for international trade.

According to online statistics shown by the United States Trade Representative office, in 2016 the United States & China had approximately generated $648.2 billion through trade revenues. 


Although the numbers seem outstanding at first-glance, skepticism may tend to arise. Buyers who visit the Far East in search of wholesale suppliers are often confronted by the bitter truth; finding the right supplier is difficult, and costly. You would need to take at least a few months to get your research done right; not to mention, spend a few thousand dollars to accommodate your flight, food, lodging & other travel expenses.

In the end, most depart feeling only semi-fulfilled, as the dread sets in at the thought of repeating this entire ordeal. However, buyers using online wholesale marketplaces such as need not worry of external cost; such as travel expenses. They guarantee the ability the find verified suppliers, for you, all across the globe.

Once having found the perfect supplier, to match your specific needs, talks would turn to shipping methods. Shipping costs often contribute to a substantial percentage of the final product’s price. Therefore, it stands crucial that you select the correct shipping method for your trades. It is always important to remember that volume is key when importing or exporting in order to build your company’s presence, both online & offline.

You might also like: The benefits of B2B Dropshipping

Statistics have shown that international traders prefer to send their packages through one of four means;
  1. Regular Post for small items.
  2. Courier services which are perfect for small orders.
  3. Air-Freight for the quickest hand-over time.
  4. Sea-Freight for large quantities.

What method do Wholesalers prefer?

On average, wholesalers prefer to export via the Sea-Freight alternative; with evidence for this being shown because of its cost-effective bulk shipping method.

However, there are a few downsides to this preferred alternative. The most obvious being that it continues to be faced with one of the longest delivery times, depending on your final destination’s port.

A lesser known but equally important validation is the multiple hidden costs of Sea-Freight chartering;
These include, but are not limited to; unloading charges, inspection & clearance fees, docking and port fees, as well as storage fees, to just name a few.

Although, this may seem overwhelming at first; the Sea-Freight option continues to be the cheapest & most frequented alternative for large-scale bulk shipping.

An ideal solution to avoid missing any hidden calculations would be to simply use a freight forwarder; as most first-time importers do.

Freight forwarders rely on a simple principle, known as Door-to-Door Shipping.

In essence, you are given the complete cost & breakdown of what you’ll pay;
by bringing (x) amount of items from (y) destination, to your final delivery address in (z) country.

However, it is common knowledge that hiring a freight forwarder may prove to be most expensive method, as they bare all the roles & responsibilities of ensuring the shipment reaches as scheduled.

Understanding Importing: The Roles & Responsibilities

Alternatively, there are other options if you should choose to subject yourself or the supplier; to pay for or bear the assigned roles & responsibilities. Listed below are these options, discussed in detail.

Shipping Methodology & Terminology

Free on Board or Freight on Board

Free on board (FOB) is a trade term that indicates whether the seller or the buyer has liability for goods that are damaged or destroyed during shipment to the nearest port.

Once arrived safely, the buyer then bears all costs & fees associated with delivering the goods to their country / address.

EX Works

Ex-Works (EXW) is a trade term that indicates that the Supplier is only charging for the cost of the product, and nothing else. Therefore, all shipment & other fees associated with the delivery of goods to their country / address will be the Buyer’s responsibility.

Cost, Insurance & Freight

Cost, Insurance and Freight (CIF) is a trade term requiring the seller to arrange for the carriage of goods by sea, to a port of destination, and provide the buyer with the documents necessary to obtain the goods from the carrier.

Delivery from the destination port to the final address will be the buyer’s responsibility.

Cost, No Insurance & Freight

Cost, No Insurance and Freight (CNF) is a trade term similar to Cost, Insurance and Freight (CIF), with the only exception of the seller having no liability for goods that are damaged or destroyed during shipment to the nearest port.

Delivery from the destination port to the final address will be the buyer’s responsibility.

Understanding the importance of how to import can be the vital change needed to boost your profits, in a competitive market environment.

By utilizing secure payments and conducting all agreements on a legally reliable platform such as; you are ensured that all your information remains fully encrypted, and that your money is held safely in an escrow-account until verification of successful delivery and your satisfaction upon inspection.

Remember to always find verified suppliers & expand your business by looking at the international markets to source your goods.

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