Cross Border

Forgetting About Import Duty Can Be A Costly Mistake

By 9th January 2017 No Comments
Cross Border Shipping

Many of us make mistakes when it comes to freight shipping; OK, they may just be small errors but with time and continuity, they soon add up to a tidy sum that impacts negatively upon the bottom line.

Let’s take a look at some of the most commonly made errors when it comes to freight shipping:

Putting an incorrect address on the paperwork

This may be a simple human error but in terms of trouble, it can create a lot. Your shipment may even end up at the wrong destination and you will then need to track it. If a deadline was included, this may be missed and your reputation messed up. With this in mind, always double check your Bill of Lading and get someone in the office to second it; often a new pair of eyes will spot something that you will not.

Showing the wrong weight or class of freight

Did you really get your shipment weighed in or did you take the easy route and guess? If you are prone to doing this and your shipment is then re-weighed correctly, additional fees will follow. Lots of little fees soon add up to big ones. The same thing can occur with freight classes; lower class means lower price and for this very reason, we often steer towards the lowest rating possible. If you do get this wrong then fees will be added to your account to cover the reclassification; the overall result is usually a much higher bill than if you had got it right first time.

Poor packaging

So many times shipments are badly packaged and then suffer damage. As the customer, it is up to you to pack and protect your items correctly as if it turns out damage is due to insufficient or incorrect packaging, you won’t be able to make a claim. Always take the time to pack professionally and if necessary get an expert to advise you.

Signing but not checking

We can all be guilty of this at some time; goods arrive, we don’t inspect them but sign for them. If you do this and do not add any type of note to the documentation, the carrier will rightly believe that the delivery was fine and that any damage occurred after you had accepted the consignment. If you see outward signs of breakage or spoilage on the outside of the pack, always put a note on the delivery receipt to say so; this way, if the goods inside are ruined, you should be able to claim.

Using the same carrier time after time

You may have a great working relationship with your present carrier but are you absolutely sure that your loyalty to them is not costing you money? Think about how long you have been with them; have your demands changed? Is your company now larger or smaller? Are they really providing you with all that you need in terms of cost efficiency and effectiveness? Some companies get over this particular hitch by using a third party enabler who networks with a range of carriers, putting your business with the one that best serves your needs at the time. If this does not appeal, at least review your carrier arrangement annually and take the time to look at quotes and services from other freight shippers.

Not estimating your total landed costs

Quite often customers get caught up in the cost of the shipping and forget about customs duty and taxes. It is imperative to avoid unexpected charges that you take the time to calculate import duty accurately. This can be done with a good online duty & tax calculator and will make sure there are no nasty surprises ahead and avoid delays in shipment deliveries.

Focusing on price above professionalism

Many customers focus on reducing their freight costs but do not look at the bigger picture; the service that will be provided. Little mistakes can and do add up and research shows that your costs can escalate by as much as 20% due to inefficiencies and bad management. If your Buying Department concentrates solely on the freight rate, their full appreciation of the costs may be misleading.

Here are just a couple of examples:

• Due to an error on behalf of the freight carrier, a load arrives at the Distribution Centre on a Saturday when it should have arrived a day earlier. Staff are unable to attend to it so it is left with the freight carrier to deal with it and they do nothing. The shipper is hit with late delivery fines from their client, truck layover costs, additional warehousing charges and re-delivery fees. A very expensive mistake.

• In example two, the freight carrier realized in good time that the load was going to hit on a Saturday and relayed this fact to the Distribution Centre who accepted it and unloaded it upon arrival. The only slight expense was due to the driver having to wait around a little hence the costs attributed to this mistake were more or less avoided.

The major difference between these two examples it the carriers; the first in totally inactive and not geared up to deal with incidentals; the second is on the ball and extremely proactive, saving the shipper hundreds of pounds in additional charges.

However, it is human nature that these sort of costs are not always documented so they can easily happen again. Freight costs end up escalating and eventually impact upon your bottom line. The problem is, if your accounts department do not actively document these charges, you can end up using the same shoddy freight carrier, again and again, eventually losing thousands of pounds due to their lazy and totally inactive way of dealing with problems. Your Buying Department needs to change the way they calculate freight costs when they select freight carriers. You need to work alongside genuinely professional partners and not just a carrier who focuses on only the basics.
By assigning a monetary value to the provision of excellent service and problem-solving proactive communication, you can estimate the real financial cost of your shipping. Aiming solely for the lowest freight rate can actually increase your shipping costs.

It is often the little things that matter; by you getting everything right first time from your side and ensuring that you partner with the most professional and reputable freight carrier, costly mistakes in freight shipping can be avoided.