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Category: Importing

Practical guidance for Australian importers on freight, suppliers, costs and compliance.

  • How to Never Pay Demurrage or Detention Again

    Demurrage and detention are the purest waste in importing. They buy you nothing, they are entirely predictable, and they are almost always the result of a sequencing failure rather than bad luck. Here is how they work and how to make sure your business never pays them.

    The difference between the two

    ChargeWhat it isWho charges it
    DemurrageCharged for leaving a container inside the terminal beyond the allowed free period after discharge.The shipping line, and in effect the terminal.
    DetentionCharged for keeping the container outside the terminal — at your premises — beyond the free period before returning it empty.The shipping line.
    StorageCharged by a depot or terminal for holding cargo or containers.The depot or terminal.
    Free periods vary by carrier and lane and are often shorter than importers assume.

    Why importers get caught

    • Clearance started after arrival. If the entry is lodged when the vessel berths rather than before, several free days are gone before anything can move.
    • Documents arrived late. A missing certificate of origin or an invoice that does not match the packing list stops the entry.
    • Biosecurity intervention nobody planned for. An inspection or fumigation adds days, and the clock keeps running.
    • No transport booked. Truck capacity and terminal slots are finite, particularly at the end of the week and before public holidays.
    • Nowhere to unload. A container arrives at a site with no forklift, no dock or no staff, and has to be re-delivered.
    • Public holidays and shutdowns. Free days are usually calendar days, not working days.

    The seven habits that keep it at zero

    Lodge the entry before arrival

    This is the single highest-value habit in importing. Where the forwarder also holds the customs work, it should be automatic. See customs clearance.

    Check documents at cargo-ready, not at arrival

    Ask for the invoice, packing list, draft bill of lading and origin certificate while the goods are still at origin. Errors are free to fix then.

    Raise biosecurity risk before shipment

    Timber packaging, used equipment and anything with plant or animal content should be assessed before booking, not after arrival.

    Book transport against the ETA, not the arrival

    Slots get booked out. Provisional bookings can be moved; missing capacity cannot be created.

    Confirm the unload plan in writing

    Who is on site, what equipment they have, and what the delivery window is.

    Watch the calendar

    Count your free days across weekends and public holidays. If the container lands on a Thursday before a long weekend, act accordingly.

    Have a fallback

    If your site cannot take the container in time, devanning at a depot and delivering loose or palletised is almost always cheaper than detention. See warehousing.

    If you are already accruing charges

    Act immediately rather than negotiating. Demurrage escalates in tiers, so day seven costs considerably more than day two. Get the container out of the terminal even if it means unpacking at a depot, then sort out the underlying problem. Carriers will occasionally waive charges where the delay was caused by a documented terminal or biosecurity issue, but only if you ask promptly and with evidence.

    If the container is already out and the problem is that you cannot get the empty back to the park, that has its own set of fixes: see container detention charges when you cannot return the empty.

    The honest summary

    If you are regularly paying demurrage or detention, the cause is almost never the shipping line. It is the sequence in which your shipments are being handled. That is fixable, and it is one of the first things we look at when we review a new client’s freight. Talk to us or call 1300 972 040.

  • FOB vs CIF: Why CIF Usually Costs Australian Importers More

    Almost every Australian importer has been offered a CIF price by an overseas supplier, and most have accepted it at least once. It looks simple: the supplier organises the freight, quotes you a landed-at-the-port number, and you have one less thing to manage. In practice, CIF is frequently the most expensive way to buy freight, and the reason is structural rather than dishonest.

    What CIF actually commits you to

    Under CIF the seller arranges and pays for carriage to the named destination port and provides minimum insurance cover. Risk in the goods, however, transfers to you when the goods are loaded on board at origin. So you carry the risk for the entire ocean voyage while somebody else chose the carrier, the routing and the insurance.

    Where the money goes

    When your supplier controls the freight, their forwarder appoints an agent in Australia. That agent is not paid by you and does not compete for your business, but it is the party that invoices you for destination charges: terminal handling, documentation, deconsolidation, agency fees, and sometimes charges with names you have never seen before. Because the origin rate was quoted competitively to win the supplier’s business, the margin is recovered at the end of the chain where nobody is shopping around.

    The result is a shipment where the visible number was low and the invisible number was not. Our guide to freight costs lists every charge that can appear.

    What changes on FOB

    Under FOB, your supplier delivers the goods on board the vessel and their responsibility ends. You appoint the forwarder. That single change gives you four things:

    • Visibility. Every charge from the ship’s rail to your door is quoted to you in advance.
    • Leverage. Your forwarder competes for your ongoing business, not your supplier’s.
    • Control of clearance. Your broker prepares the entry, which means classification and free trade agreement claims are handled by someone accountable to you.
    • Better sequencing. Because the same party holds the freight and the customs work, the entry can be lodged pre-arrival, protecting your free storage days.

    How to make the switch

    It is a purchasing conversation, not a freight one. Ask your supplier for an FOB price alongside their CIF price. The difference is what they are charging you for the freight portion. Then ask us to quote the same shipment from FOB, and compare total landed cost rather than headline rates.

    Most suppliers are entirely comfortable with FOB — it is less work for them. Occasionally a supplier resists, which is usually a signal that the freight margin matters to their pricing.

    When CIF is genuinely fine

    CIF can make sense for very small one-off shipments where the administrative simplicity outweighs the cost, or where you have negotiated a total delivered price you are happy with and have verified there are no additional destination charges. The test is simple: ask, in writing, “will I receive any invoice from anyone other than you?”

    And a word on DDP

    DDP looks even easier because duty and GST are included. But you remain the importer in substance, and you are relying on a declaration made on your behalf that you never see. If a classification or valuation is wrong, the exposure lands with you, potentially years later. If a supplier insists on DDP, ask for a copy of the import declaration.

    Read Incoterms explained for the full comparison, or send us your supplier’s quote and we will tell you exactly what you are buying.

  • Importing to Australia for the First Time: The 8 Steps That Matter

    If you are importing into Australia for the first time, the single most useful thing you can do is understand the sequence. Most first-time importers get the order wrong: they find a supplier, agree a price, place an order, and then start asking about freight. By that point most of the decisions that determine your landed cost have already been made for you.

    1. Work out what the goods actually are, in tariff terms

    Before anything else, establish how your goods will be classified in the Australian Harmonized Tariff. Classification determines your duty rate, whether a free trade agreement concession is available, and whether other agencies have an interest. Two products that look identical on a website can sit in different tariff lines with different rates.

    This is not a guessing exercise. Send us the product description, photographs, materials and the supplier’s specification, and we will confirm the likely classification and rate before you commit. Our guide to import duty and GST explains how the numbers work.

    2. Check permits and biosecurity before you buy

    Australia’s biosecurity regime catches far more than food and plants. Timber packaging, used machinery, anything with plant or animal material, and goods with soil residue all attract conditions. Some goods need permits from other agencies. Discovering this on arrival is the expensive way to learn it.

    3. Agree the right Incoterm — this is where money is won and lost

    Your supplier will probably offer CIF, because it lets them control the freight and their agent recover margin at the Australian end through destination charges you have no visibility of. Ask for an FOB price instead. On FOB you appoint your own forwarder, you see every charge, and you can compare quotes properly. See Incoterms explained.

    4. Choose your mode on total cost, not freight cost

    Sea freight is cheaper per kilogram. Air freight is cheaper when being late costs you more than flying. For a first shipment, there is a strong case for sending a small quantity by air freight to check quality before committing to a container. A sample that arrives in four days is worth more than one that arrives in six weeks.

    5. Decide between LCL and FCL with actual numbers

    Below roughly 12 to 15 cubic metres, LCL is usually cheaper. Above that, a 20ft container is often cheaper in total and faster because it skips consolidation handling. Ask for both prices — see FCL shipping.

    6. Get the documents right the first time

    The commercial invoice, packing list and bill of lading must agree with each other on descriptions, quantities, values and country of origin. Inconsistency between documents is the most common cause of clearance delays we see. If you are claiming a free trade agreement rate, the origin document must be valid and held before the declaration is lodged.

    7. Plan arrival week before the vessel sails

    Demurrage and detention clocks start on arrival, not on your convenience. Before the ship berths you should know that the entry is lodged, transport is booked, and you have somewhere and someone to unload it. This one habit eliminates the most avoidable cost in importing.

    8. Insure it

    Carrier liability under international conventions is limited by weight, not value. On an uninsured loss you will recover a fraction of what the goods are worth. Marine cargo insurance is one of the cheapest risk reductions available to an importer.

    The short version

    • Classify the goods and confirm the duty rate before you order.
    • Check permits and biosecurity early.
    • Buy FOB, not CIF.
    • Compare sea against air, and LCL against FCL, on total landed cost.
    • Make every document agree with every other document.
    • Have clearance lodged and transport booked before arrival.
    • Insure the cargo.

    If you would like this walked through for your specific product, send us the details or call 1300 972 040. Pre-purchase advice is free, and it is the point at which it is worth the most.