If the supplier quotes me for the delivery of my import goods, will I incur more costs?

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If the supplier quotes me for the delivery of my import goods, will I incur more costs?

Posted by: Patricia Carrillo
Category: importación de productos

The INCOTERMS give us clarity on what are the expenses we are going to incur in an import process, however they do not guarantee that we will not pay for other factors.

In this article, we will share some aspects that you should consider in your import process and that may represent additional expenses that you may have to incur, so you have to be prepared to solve or prevent them.

This and other important tips can also be found in the article: “What I should know to buy abroad and import products into Mexico“.

What are the total import costs?

It is true that many foreign suppliers, with the intention of giving a greater benefit to their customers, try to solve the freight to the buyer’s door. And when we are an international buyer or inexperienced importer, it seems to be our best option.

However, I assure you that this is certainly a coin flip. Why? There are many factors in the process that we don’t know if the supplier, who is located in another country, is considering.

For instance:

Is he considering import taxes? What about air or port terminal or border warehouse maneuvers? Or are you only considering the cost of freight and import customs clearance?

As I have said in previous topics, the INCOTERM gives us absolute clarity of what the supplier is going to cover in expenses and the only INCOTERM that covers all the normal logistic expenses is the DDP. But this also does not guarantee that we will not have to pay anything else. In addition to logistics costs, it is also important to look at customs restrictions.

As an importing party, we must be prepared to comply with whatever customs require to allow the merchandise to clear quickly or extra and unbudgeted expenses will begin to arise.

For instance:

  • The buyer or importer must have their importer registry active.
  • If the merchandise falls under a tariff item that requires it to comply with a standard or permit, those permits must be in place.
  • That the merchandise must be labeled according to the rules, in short, that the merchandise must be labeled according to the rules.

Whatever customs requires according to the fraction of our product. And if we are not prepared with this, even if the logistics is paid by the supplier, it can generate storages in the terminal that surely the supplier does not have budgeted.

So even if the supplier sends the merchandise on DDP (All Duty Paid) terms, these never cover extra expenses because we as importers also have responsibilities to fulfill.

How does the supplier manage to ship goods on DDP terms?

It is very simple, they have their trusted Freight Forwarder in their country and this in turn, has its representative in the destination country.  And it is the Freight Forwarder located in the buyer’s country who quotes and is in charge of managing the services for the delivery of the goods in the buyer’s country. The bad thing is that he quotes losing sight of the characteristics of the buyer, that is to say, without knowing if he has what is necessary to comply with the customs requirements.

It is much better that as a buyer, you have your own freight forwarder to identify with you what needs to be solved before the merchandise arrives at the customs of entry to the country.

At Hier Logistic we can advise and guide you properly so you can choose what is most convenient for you and your project. Contact me today and you will receive the best advice.

Author: Patricia Carrillo
CEO Hier Logistic Group International Logistics Expert

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