China is the world’s largest manufacturer and exporter. Many foreign companies and individuals need to import goods from China, and it is often difficult to keep shipping costs low. Rising costs will squeeze profits, so how to reduce the cost of shipping goods from China is crucial.
Choosing the right shipping method from China is the key
In international trade, the mode of transportation directly determines the overall logistics cost. Common modes of transportation for shipping from China include sea, air, rail and international express, and different modes of transportation are suitable for different types of goods.
Sea freight from China
If the goods are large in volume and the timeliness requirement is not high, choosing sea freight or full container transportation is often the most cost-effective solution, and the cost is only 1/10 of air freight. LCL is suitable for small-volume exports and can be charged by cubic meter; full container (such as 20GP/40HQ) is suitable for large-volume exports, effectively allocating the unit price. In addition, reasonable arrangement of loading and stacking methods can also effectively improve the unit space utilization rate.
Taking Shipping from Shenzhen to Paris, France as an example, the sea freight for a 40-foot container is about US$3,200-5,000, while the air freight for the same volume may be as high as US$20,000-50,000. However, sea freight has a longer timeliness and is suitable for non-urgent goods such as furniture, building materials, textiles, etc.
Air freight from China
Air freight is suitable for high-value, time-sensitive goods, such as electronic products and precision instruments. In order to reduce air freight costs, you can try to combine multiple packages into a large air freight shipment to get a lower price per kilogram.
You can also reduce costs through a combination of “sea to land transport”: for example, shipping from Shanghai to Long Beach Port in the United States, and then transporting to Chicago by rail, the time is 10 days shorter than pure sea transport, and the cost is 60% lower than air transport. When a 3C company transported new mobile phone accessories, it adopted the “Yantian Port – Los Angeles Port + UPS Land Transport” plan, and the single-ticket freight was reduced from US$18,000 for air transport to US$6,500, while meeting the replenishment time requirements of Amazon FBA.
Rail transport from China
Rail transport has become a popular method between Europe and Asia in recent years. The price is between air and sea transport. It takes about 16-22 days from China to Europe, which is suitable for goods with a certain delivery cycle but not too slow. Especially when shipping to European countries, you can consider the China-Europe Express, which sometimes saves more than 40% of costs compared to air transport.
A German automaker imported engine parts from China and transported them via the China-Europe Express. The one-way cost was 15% higher than sea transport, but the time efficiency was increased by 50%, the inventory turnover rate increased by 2 times/year, and the overall cost decreased by 8%.
Optimize packaging and cargo size to reduce chargeable weight
During transportation, the cost is often not calculated based on “actual weight” alone, but based on volume weight or chargeable weight (Chargeable Weight), especially in air transportation and express delivery. Chargeable weight = maximum value (actual weight, volume weight), and the common volume weight calculation formula is: length × width × height (cm) / 6000.
Therefore, optimizing packaging design and reducing unnecessary space waste is one of the important strategies to reduce freight costs. Using high-strength and lightweight materials can minimize the packaging volume while ensuring the protection of goods. At the same time, avoiding the use of too large outer boxes to cause “bubbling goods” (that is, the volume is much larger than the actual weight) can effectively reduce “wasteful money”. Textile goods use vacuum compression bags, which can reduce the volume by 30%-50%
In addition, if multiple products are sent to the same consignee address, it is recommended to use intensive packaging or combined box processing, which can not only save packaging fees, but also reduce the logistics company’s fee standards calculated by number of pieces or volume.
For e-commerce sellers, it is recommended to regularly evaluate the packaging solutions for SKUs and work with the supply chain to standardize packing efficiency and packaging specifications, which will help significantly reduce transportation unit prices in long-term operations.
Choosing the Right Incoterms for Shipping
Incoterms are rules that clarify who is responsible for fees and duties at each stage of the shipping process, helping to manage costs effectively. Choosing the right Incoterms gives you more control over payments and responsibilities. There are a variety of options, and the best choice depends on your specific needs. See below for three common Incoterms.
FOB (Free on Board) is a good option for many imports from China. Under the FOB model, the supplier covers the export costs within China, but once the goods are shipped, the importer will cover all fees and logistics costs at the destination. This gives importers the flexibility to choose their own freight services, giving them more control over costs.
Freight Control under FOB Terms: Importers choose their own carriers and can compare quotes from multiple carriers. A German importer switched from FOB to self-booking, and the ocean freight cost dropped from the supplier’s quoted $3,800 per container to $2,900, saving $900 per container.
EXW (Ex Works) places more responsibility on the buyer. Under the EXW model, the supplier prepares the goods at their factory, and all shipping and costs thereafter are the responsibility of the importer.
CIF (Cost, Insurance and Freight) shifts more responsibility to the supplier, who manages shipping and insurance until the goods arrive at the port of destination. While convenient, CIF limits the importer’s ability to negotiate shipping costs because the supplier handles that part of the process.
| Incoterm | Supplier’s Responsibility | Buyer’s Responsibility | Best For |
|---|---|---|---|
| FOB (Free on Board) | Supplier covers export fees in China and delivers goods to the port. | Buyer pays for ocean freight, insurance (if needed), and all costs at the destination port. | Buyers who want control over freight choices and shipping costs. |
| EXW (Ex Works) | Supplier makes goods available at their facility. | Buyer handles all costs from the supplier’s location, including transport, export, and destination fees. | Buyers who want full control over the entire shipping process. |
| CIF (Cost, Insurance, and Freight) | Supplier covers transport and insurance until the goods reach the destination port. | Buyer pays for unloading, customs clearance, and any additional costs after the goods arrive. | Buyers who prefer suppliers to manage shipping but need to handle customs and local delivery. |
Learn more: What are the Trade Terms for Shipping? Introduction to 11 Trade Terms
Choose a professional Chinese freight forwarding company
Choosing an international freight forwarding company with rich experience and transparent quotations can not only obtain high-quality transportation resources, but also enjoy a variety of value-added services in daily operations.
After long-term cooperation with a freight forwarder, the freight forwarder will have a better understanding of the characteristics of your goods, destination habits, tariff changes, etc., and can help you optimize the plan in multiple links such as customs declaration, packing, customs clearance, etc., and reduce additional costs and delay risks. For example, avoid demurrage and storage fees at the destination port, or avoid certain high tax numbers in advance.
In addition, freight forwarding companies often have temporary promotional policies and container resource information of shipping companies, through which they can obtain more competitive time period freight rates, especially in the off-season or policy adjustment period.
Between domestic freight forwarding companies and Chinese freight forwarding companies, you can consider choosing Chinese freight forwarding companies, because the goods are transported from China and need Chinese freight forwarding companies to handle the goods.
Understand the tariffs and policies of the importing country
In addition to the transportation cost itself, the tariffs, value-added tax (VAT), compliance certification, etc. of the destination country will also affect the final total logistics cost. Many companies have incurred high additional taxes or fines due to improper declaration and incorrect classification of goods, increasing unnecessary expenses.
It is recommended to understand the import requirements of the target country before shipment, confirm the HS code (customs code) of the goods, and calculate the applicable tax rate range. You can consult the freight forwarding company or directly visit the WCO/destination country customs official website to obtain information.
In addition, if the value of the goods is high, you can find out in advance whether you can apply for preferential tariffs under the FTA (Free Trade Agreement). For example, the zero tariff policy signed by China and ASEAN, Switzerland, Chile and other countries can bring cost savings ranging from 5% to 15%.
Take advantage of the FTA benefits: Under the China-ASEAN Free Trade Agreement, tariffs on textiles can be reduced to 0%. A Thai importer reduced the tariff on clothing imported from China from 8% to 0 with the FORM E certificate of origin, saving $12,000 in tariffs per invoice.
Accurate classification of HS codes: Correct classification can reduce tariffs. A machinery importer classified “CNC lathe parts” from 8485 to 8459, reducing the tariff from 9.8% to 4.2%. The annual import volume was $3 million, saving $168,000 in tariffs.
Tariff deferral policy: EU importers can apply for VAT deferral, temporarily not having to pay VAT, and relieving financial pressure. After deferring VAT, Italian importers reduced their annual capital utilization costs by 15,000 euros.
Arrange the delivery time reasonably to avoid peaks and surcharges
The prices in the transportation industry have obvious “peak and off-season” fluctuation characteristics. The traditional peak seasons of each year, such as the eve of “Double Eleven”, the Christmas shopping season (September-December) and before the Spring Festival (January-February), are all stages when international logistics prices are high. Tight ship space and full air cargo holds will push up costs.
Therefore, if the product is not urgent, it is recommended to prepare and ship in the off-season. For example, in the off-season of transportation such as November-April, you can often get lower freight rates; at the same time, it is also easier to obtain sufficient space and reduce the risk of delays. A Canadian toy merchant stocked up before the peak season of sea transportation in January 2025, and the freight per container was US$3,500 lower than the peak season, saving a total of US$17,500 for 5 containers
In addition, be careful to avoid some situations that are prone to surcharges, such as: peak season surcharge (PSS), port congestion surcharge, peak season fuel surcharge, etc. These hidden costs are often included in the quotation, resulting in higher final costs.
For customers who ship in large quantities, they can also negotiate with the freight forwarder to lock in prices or agree on long-term prices. Even in the peak season, they can operate at a stable price to avoid profit fluctuations caused by temporary increases.
Conclusion:
The cost control of transporting goods from China is not achieved by a single means, but requires overall optimization of the entire chain, including transportation methods, cargo packaging, customs declaration compliance, logistics partnerships, and shipping timing.
For small businesses and cross-border e-commerce sellers, it is recommended to cooperate with experienced logistics service providers and establish standardized shipping processes to reduce the time cost and manual intervention of each shipment. For bulk exporters, they can achieve continuous optimization of logistics costs while ensuring service quality by establishing exclusive logistics channels and integrating resources.
The lower the logistics cost, the better. The key is the balance between cost and delivery efficiency. On the premise of meeting customer needs, improving shipping efficiency and reducing rework and delays are the fundamentals of building long-term profitability.