If you are a newbie planning to import from China to USA then there are some crucial aspects to get familiar with. China is quickly evolving into a manufacturing superpower center producing a massive proportion of consumer products in the world. For many global businesses, China has become the go-to source for buying products.
Import from China to USA is a complicated process and new businesses can collapse even before they enter the market. If done incorrectly the expected profit can vanish by long transit time, regulatory fees, fluctuating delivery costs, and unanticipated delays.
Guidelines for smooth import of products from China
Study the import rules & regulations
There are lots of rules depending on the product type you plan to import. It is because many Chinese manufacturers ignore the regulations associated with compliance. In some sectors, 5% of Chinese manufacturers fulfill the EU standards and regulations. Sensitive products subjected to strict regulations are generally imported from Asia. It includes food, toys, motors, motor parts, appliances, electronic parts, lighting, footwear, chemicals, footwear, hygiene products, cosmetics, construction materials, and more.
Generally, regulations apply to countries like the US, EU, Canada, Australia, etc. Check the list of prohibited imports in the USA. It is your responsibility as an importer to assure that the goods abide by your country’s rules and regulations. Importing unsafe goods that don’t fulfill health code needs or violate restrictions can end up costing importers significant penalties and fines. Such goods can be detained and probably destroyed.
Choose reliable Chinese manufacturer
The importer is solely liable for the chosen products to be imported from China. Any irregularities with compliance, regulations, and certifications will cause a serious legal issue for the importer, especially if the imported product used by the end customer in the USA causes injury. The importer can be sued for selling defective products.
If the manufacturer is unethical and issues the wrong certification, then there are high chances that your container can be held at customs. China has a bad rep, so it frequently happens. It will accompany logistical stress and extra costs. The port authorities may not release the goods and prohibit the entry of the container in your country.
Never trust any manufacturer in China blindly. It is essential to do due diligence and get to know the manufacturer. Have a reliable sourcing agent with technical skills accompany you because they can help in regular product inspection during the manufacturing process.
Sign firm sales contract with the Chinese manufacturer
Import from China to the USA needs you to perform comprehensive research on all the product certification needs. When you find a reliable manufacturer that complies with the USA regulations and standards draw a sales contract that defines everything in detail. It needs to include product specifications, return conditions, and compensation if the order delivered does not meet the terms of the sales agreement. It saves many issues in the future.
Draw documents with details of every feature. Ensure there is no space for subjective interpretation and accepted internationally even in diverse cultural contexts. For example, if you are writing about colors then specify the color and if t is about material then specify the texture, composition, and density. No characteristic of the product has to be left unstipulated.
The manufacturer can comply with product features in a way that is cost-effective for him but it can compromise the quality of the final product. Therefore it is advised to specify everything like –
- Weight & acceptable weight variations
- Printing materials
- Chemical treatments
- Other customizations
- Components technical characteristic
The more details the fewer shocks in the future and if it happens unexpectedly then you will not have to pay. Even specify the good preparation details for shipping like pallet type, lamination, cardboard quality, etc.
Before signing the sales contract choose a safe and competitive Incoterm. The Chinese manufacturers carry shipment under the Incoterm EXW because it is beneficial to them. It places the maximum obligation on buyers and the minimum on sellers. It is recommended to choose Incoterm FOB, where the buyer is liable for designating & booking freight.
The supplier must prepare the goods and load them on the ship at the port of origin. The Chinese manufacturers that work under FOB Incoterm are proof that they are reputable to offer high-quality products and services in comparison to the ones that work under EXW.
Choose international transport mode
After the sales agreement is signed and delivery dates scheduled then you need to arrange for the international transport. If you choose FOB Incoterm then it applies to only maritime transport. However, there are times when production is delayed and you may need to consider air transport. Change to FCA [Free carrier]. Air is practical only when low-volume goods including high-profit margins are to be imported.
Time is a conclusive factor for successful import from China to USA. It is recommended to plan transport from China at least 3 months in advance. The approximate transit time for every shipper is around 28 to 35 days. It can differ based on a port of connection and connection to a goods collection point.
You even need to remember recruiting a forwarder. Finally, consider custom timelines within which container will leave China and enter the US. The submitted documents must be complete and correct. If for some reason the goods need to pass inspection then there can be delays.
GRI [General Rate Increase] represents increases in the freight rates that the shippers apply at the start of every month. Generally, it reduces every week and increases again at the start of the subsequent month. GRI is influenced by supply and demand. For a direct cargo importer, GRI is tricky as it impacts already book cargo that is still to be loaded. It is better to discuss this with the freight forwarder.
Track cargo and prepare for the arrival
You will be notified 5 days before the container arrives at the port by the designated agent listed on the Bill of Lading. The importer on record will file entry documents with the port director and get the container released. Ensure that all the documents are to speed goods clearance through the US border customs.