Import Basics: Arranging the import logistics
Having found a product to import and negotiated a cost with the supplier, it is time to get the product delivered to you. Here are a few points to keep in mind that will help avoid any surprises along the way!
Incoterms
Firstly, you will need to understand incoterms. Incoterms stand for International Commercial Terms – a shorthand used in sales contracts to specify which party, between the buyer or seller, pays for and/or takes the risk for each segment of the journey your goods take from the seller’s warehouse to your premises.
To better understand incoterms please see our Incoterms guide.
Using Incoterms in a sales contract is not a legal requirement, but it is a preferred standard in international trade.
Packing
Consider is packing material. If the product is fragile, you need to ensure that it is packed in such a way that it will not break. This can make the shipment heavier which will impact the freight costs.
Freight options
Will you be using sea freight and air freight? There are pros and cons to both and the best option for your import logistics depends on your budget, the allowable timeframe and the nature of your shipment.
The benefit of sea freight is that it is generally cheaper than air freight and you can more easily move larger volumes. The con is that it takes much longer to arrive. The pro of air freight is of course that it arrives faster, but the negative is that it is much more expensive.
For cross border transactions, road freight is the go to means of carriage and requires a cross border permit.
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Shipment prep
To make things easier for you we have compiled a checklist to tick off all the things you need before importing goods. Some of the things to make sure of are:
Get your import export license.
SARS requires your or your business to have an import export license under any of the following conditions:
- You import or export goods more than 3 times in a year.
- You import or export goods to the value of R150,000 in a year.
- You pay or accept payment for imports and exports via a South African bank account.
- You import any amount of goods for re-sale.
Click here to get your import export license now.
Find out if you can get a preferential duty rate with a certificate of origin
Find out if you can benefit from a preferential (reduced) import duty rate. Preferential rates are listed in the tariff book according to duty tax grouping (origin). These rates may only be claimed if the import is accompanied with a certificate or declaration of origin.
If your tariff code shows a preferential rate in the column relevant to its origin, you can ask your supplier to provide a certificate of origin.
Calculate you import tax
Use our import duty directory to establish the general and additional import duty rates that apply to your goods.
Use our import duty and VAT calculator to determine the amount if import tax that will be levied on your import.
Import duties are part of the cost of introducing goods to the local market and are therefore non-refundable. If you are a VAT registered entity, import VAT can be factored into your VAT returns.
Regulations
You need to keep in mind that there might be certain restrictions or regulations governing your shipment.
It is vital that you make sure of this before you import the product. This might include special labelling or, if the product is of plant or animal origin, quarantine requirements.
You will also need to find out if there is any additional paperwork or permits required to clear your goods at Customs. If this all sounds a bit overwhelming you can contact us on 021 827 6200 or email us at info@tradelogistics.co.za for assistance.http://+27218276200
Find more help with your import logistics, original resources, leading-edge training, and assistance with customs licenses on Trade Logistics.
