Why You Shouldn't Let Your Supplier Organise Your Shipping | WillshipTV

Summary

This video highlights the dangers of letting a supplier in China organize freight for imports to Australia. The presenter shares a real-life example of an importer who paid a seemingly low freight cost, only to face hidden charges and scams once the cargo arrived in Australia. The supplier's choice led to excessive port charges and delays, resulting in an additional $1,400 in costs. The video stresses the importance of using a local freight forwarder to avoid these issues, retain control over shipments, and avoid hidden fees, emphasizing transparency and cost efficiency for importers.

Takeaways

• 😀 Never let your supplier in China organize the freight, as there are often hidden costs that will catch you off guard.
• 😀 Suppliers may offer cheap freight rates, but these are often deceptive and come with hidden charges that significantly inflate the total cost.
• 😀 A real-life example shows that booking freight through the supplier led to unexpected port charges in Australia, totaling $1,400—much more than the original freight quote.
• 😀 Hidden costs, like port charges, customs clearance, and quarantine fees, are rarely disclosed upfront when suppliers handle the freight.
• 😀 The supplier and the company handling the shipment often have a kickback arrangement, where overcharging helps both parties profit at the expense of the buyer.
• 😀 Once the cargo is en route, the supplier may require the buyer to handle clearance and delivery, leading to additional unexpected costs.
• 😀 If the supplier organizes the freight, they hold control over the shipment, potentially leading to storage fees and additional costs in the case of disputes.
• 😀 When a supplier controls the shipment, they can hold it hostage and demand more money, leading to significant financial risk for the buyer.
• 😀 Organizing the freight through a local Australian freight forwarder ensures control, avoiding the risk of hidden fees or a shipment being held for ransom.
• 😀 Always purchase goods under FOB (Free on Board) or Ex Works terms to maintain transparency in costs and minimize unexpected financial burden.
• 😀 Choosing the right freight forwarder in Australia, who works for your best interests, ensures no hidden fees and avoids underhanded industry practices.

Q & A

Why shouldn't you let your supplier in China organize the freight?

You should not let your supplier organize the freight because they often hide extra costs that aren't disclosed upfront, leading to significant unexpected expenses when the goods arrive in Australia. This can result in paying far more than originally quoted.

What is the common misconception about freight costs from suppliers?

The common misconception is that the quoted freight costs from suppliers are a great deal, as they often appear much cheaper than other quotes. However, these low prices typically don't include hidden charges that only become apparent once the cargo arrives in Australia.

What is included in the quote from the Australian freight company?

The quote from the Australian freight company typically includes the freight from China to Australia, local port charges, customs and quarantine handling, and delivery to the final destination.

How much did the client pay the supplier for freight, and what was the actual cost after hidden charges?

The client initially paid the supplier $400 for freight. However, once hidden charges such as port fees, customs clearance, and delivery were factored in, the total cost exceeded $2,000, more than double the original quote.

What are the risks of letting a supplier handle freight and delivery?

The primary risks are hidden fees, lack of control over the shipment, and the possibility of the supplier holding the goods hostage if payment issues arise, leading to additional storage and handling fees.

What kind of charges are typically involved when a shipment arrives in Australia after being managed by a supplier?

The charges can include port handling fees, storage costs, customs clearance fees, and additional delivery charges, all of which can be inflated or undisclosed until the shipment arrives.

How does the supplier benefit from organizing the freight?

The supplier benefits by receiving kickbacks or rebates from the freight and consolidation companies they work with, which incentivizes them to quote low freight prices and pass on the inflated costs to the importer.

What happens if there’s a dispute over payment after the shipment departs China?

If there’s a dispute over payment, the supplier has the power to hold the shipment, forcing it into storage, and the importer is legally responsible for the storage costs. This situation can quickly escalate into a significant financial burden.

How does booking freight through an Australian freight company help mitigate risks?

Booking freight through an Australian company provides better control over the shipment. If issues arise with the supplier, the local freight company can intervene to avoid extra costs and ensure the shipment is released without unnecessary delays or charges.

Why is it important to buy goods on FOB or X Works terms from China?

Buying goods on FOB (Free on Board) or X Works terms ensures that the buyer has control over the freight and can avoid hidden charges. This also prevents the supplier from taking advantage of the situation by controlling the shipment and imposing unexpected fees.