Common Mistakes and Pitfalls – Shippers’ Most Common Mistakes

Logistics delivery involves many links, a long chain, and complex regulations. For shippers, it’s easy to fall into these traps, leading to skyrocketing costs, delayed delivery, and even cargo loss. The following summarizes some of the most common mistakes shippers make and provides practical avoidance guidelines.

Mistake 1: Comparing Only Price Without Considering Service and Terms

Mistake: When choosing a logistics provider, the sole criterion is the lowest price.

Potential Risks:

Hidden Fees: Low prices can conceal numerous additional charges (such as fuel surcharges, remote location surcharges, storage fees, and address change fees), resulting in a final bill far exceeding the quoted price.

Poor Service Quality: Low prices can mean unstable networks, uncertain delivery times, demanding operations, slow response times, and even a lack of legitimacy, increasing the risk of the company absconding with funds.

Difficulty in Claims: When cargo is damaged or missing, the claims process can be cumbersome, with numerous back-and-forths and delays, and even the inability to obtain compensation.

Pitfall Avoidance Guide:

Comprehensive Assessment: Consider factors such as price, service stability, company reputation, and compensation terms.

Request a Complete Quote: Ask the freight forwarder for an all-in rate that includes all potential costs, and confirm in writing which costs are excluded.

Read the Terms and Conditions: Understand the specific terms regarding insurance, claims, and liability exemptions.

Mistake 2: Ignoring the Accuracy of Product Names and HS Codes

Mistake: Filling in product names arbitrarily, such as “gifts,” “parts,” or “samples,” or borrowing someone else’s HS code to save trouble.

Potential Risks:

Customs Detention: Ambiguous product names can lead to strict customs inspections, or even direct detention for inspection, resulting in high demurrage, port detention, and inspection fees.

Penalties for Misdeclaration: The HS code is related to the export tax rebate rate and the importing country’s tariff rate. Misdeclaration can result in a failed tax refund, hefty fines, and even legal risks.

Transportation Risks: Concealing dangerous goods, batteries, etc. as ordinary cargo can lead to serious safety incidents, substantial claims, and even blacklisting.

Avoidance Guide:

Truthful Declaration: Provide a clear, accurate, and detailed product name, preferably in both Chinese and English.

Code Verification: Confirm the correct HS code with a seasoned customs broker or freight forwarder to ensure it matches the product name, materials, and intended use.

Proactive Declaration: Products containing batteries, liquids, powders, etc. must be proactively declared to ensure legal transportation.

Mistake 3: Overpackaging or Improper Packaging

Mistakes: Using oversized boxes or excessive filling (increasing volume and weight); or using damaged, damp, or flimsy packaging (such as old cardboard) to save money.

Potential Risks:

Surge in Freight Costs: Overpackaging can multiply the volume and weight of bulky goods, especially when using air or express shipping, resulting in drastically higher freight costs.

High cargo damage rate: Improper packaging fails to effectively protect goods, making them prone to breakage, moisture, and deformation during multiple transfers and loading/unloading, leading to frequent claims disputes.

Avoidance Guide:

Reasonable Packaging Design: Choose boxes of appropriate dimensions and use appropriate internal filler (such as bubble wrap and foam corners).

Reinforced Packaging: For heavy and fragile items, use high-strength cartons with strapping. Use stretch film for moisture-proof goods.

Simulation Test: Perform a simple drop test on packaged goods to verify their protective properties.

Misconception 4: Confusing “Billable Weight” with “Actual Weight”

Misconception: Assuming freight charges are calculated solely based on the actual weight of the goods as measured on the scale.

Potential Risks:

Cost Misjudgment: Lightweight goods (such as down jackets and furniture) are charged based on volumetric weight. The final freight charge can be several times the actual weight charge, eroding profits.

Avoidance Guide:

Learn to Calculate: Calculate the volumetric weight yourself before shipping.

Formula: Length (cm) × Width (cm) × Height (cm) / Conversion Factor (6000 or 5000 is commonly used for air freight/express delivery).

Proactively provide data: Provide the freight forwarder with the outer box dimensions and actual weight so they can provide an accurate billing weight and quote.

Optimize dimensions: Reduce the volume of cargo through compression, disassembly, and proper placement.

Mistake 5: Not purchasing insurance or blindly trusting the freight forwarder’s “exemption clauses”

Wrong approach: Believing that a freight forwarder’s promise of “guaranteed customs clearance” or “guaranteed delivery” is sufficient, or taking a chance to save a little on insurance.

Potential Risks:

Loss is at your own risk: According to international conventions such as the Warsaw Convention, the carrier’s liability for compensation is strictly capped (e.g., approximately $20 per kilogram for air freight). In the event of a total loss of cargo, minimal compensation is available.

No access to claims: Many risks (such as war, riots, and confiscation) are covered by the carrier’s exemption clauses, meaning they will not compensate for any problems.

Pitfall Avoidance Guide:

Assessing Risk: For high-value, fragile, and new shipments, purchasing freight insurance is highly recommended.

Understanding the Insurance Terms: Understand the policy’s start and end dates, coverage, and deductibles.

Self-Insuring: For large shipments, consider purchasing an annual policy directly from the insurance company for lower rates.

Mistake 6: Underestimating the Complexity of Customs Clearance and the Importance of Consignee Information

Mistake: Assuming that international customs clearance is the responsibility of the freight forwarder or client, providing incomplete or inaccurate consignee information (e.g., missing a phone number or tax ID number).

Potential Risks:

Customs Clearance Delays: Incomplete information can cause shipments to be held up at customs, resulting in high detention fees, which are ultimately borne by the shipper or recipient.

Cargo Return or Destruction: If customs clearance is delayed for an extended period, shipments may be returned (with extremely high freight costs) or destroyed by customs.

Pitfall Avoidance Guide:

Understand the Destination Country’s Requirements: Understand the destination country’s customs clearance policies in advance and whether any special certifications (e.g., CE, FCC) are required.

Provide complete information: Provide accurate and complete consignee information, including company name, contact person, phone number, email address, address, and tax ID number (very important!).

Prepare customs clearance documents: Properly prepare customs clearance documents such as commercial invoices, packing lists, and certificates of origin, ensuring consistency of information.

Summary: Shipper’s Golden Checklist
[ ] Verify: Are the product name, HS code, quantity, and value accurate?

[ ] Measure: Have the actual weight and volumetric weight of the goods been calculated? Is the packaging optimized?

[ ] Confirm: Does the quote include all costs? Are the shipping terms and conditions clear?

[ ] Assess: Is insurance required for the goods?

[ ] Check: Is the consignee information (especially phone number and tax ID number) complete and accurate?

[ ] Prepare: Are customs clearance documents complete and in compliance with regulations?

Forewarned is forearmed. By spending a few extra minutes checking and communicating before shipping, you can effectively avoid these common misunderstandings and make your cargo transportation smoother, more cost-effective and worry-free.

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