11 Jun
The Complete Guide to Importing Goods from Abroad: Easy, Legal, and Hassle-Free
Importing goods is not merely a business transaction; it also fosters stronger international collaborations. Each country, including Indonesia, has specific import regulations and procedures that all citizens must adhere to.
If you plan to import goods for the first time, it's advisable to understand the following import procedures. Based on information from the Indonesian Information Portal website, see the full article below.
1. Determine Price and Trading System
The first and most crucial step is agreeing on the price with your overseas supplier. Import activities involve terms like FOB, CFR, CIF, DDP, and FAS, which determine the agreement and when the supplier's responsibility and cost obligations end.
Examples:
- FOB (Free on Board): The supplier is only responsible until the goods are loaded onto the vessel. Shipping costs, insurance, and others are paid after the vessel arrives, as per the agreed-upon agreement.
- CFR (Cost and Freight): The supplier delivers the goods after passing the ship's side at the port, having obtained export clearance. This means the seller's responsibility ends once the goods are loaded onto the ship.
- CIF (Cost, Insurance and Freight): Similar to CFR, but requires the seller to pay insurance before the ship departs from the loading port.
- DDP (Delivered Duty Paid): The supplier is responsible for all costs until the goods reach the specified destination, with all customs formalities completed by the supplier. Additionally, the seller must understand import laws and permits.
- FAS (Free Alongside Ship): The supplier is responsible for costs until the goods are alongside the ship at the loading port.
Understanding these terms is crucial to knowing who bears the costs and risks at each stage of shipping, under the condition that export permits have been obtained.
2. Determine Shipping Method and Cost
After determining the price and delivery terms from the overseas supplier, you need to calculate additional costs to get the goods to your address.
For this, the forwarder needs accurate data such as trade terms, weight, and size of the goods. The supplier must provide this information.
If using Ex Works (goods picked up from the supplier's location), you must inform the forwarder of the complete address and conditions of the pickup location. Even the details of the difficulty and ease of picking up the goods at the location.
3. Use a Freight Forwarder
When importing goods, it's essential to choose an experienced freight forwarder to assist with shipping, documentation, and customs clearance.
Freight forwarders like Hyper Mega Shipping handle all logistics needs, from negotiating rates and insurance to delivery to your address. Importantly, they ensure timely and cost-effective delivery.
4. Choose the Most Advantageous Shipping Method
To reduce shipping costs, you need to choose the most suitable shipping method.
Three shipping method options:
- Sea (Ocean Freight): Recommended for large, bulk goods, or those that don't require urgent delivery.
- Air (Air Freight): Recommended for small goods or those needed urgently.
- Land (Truck/Rail): Usually combined with sea or air for intercity distribution.
5. Insure Your Goods
It's advisable to insure imported goods from overseas. In export-import, it's crucial for both parties to understand their respective responsibilities; overseas suppliers often consider their responsibility fulfilled after the goods are shipped, while you bear the risk before the goods arrive.
Cargo insurance protects goods during sea transport from risks such as fire, explosion, sinking, bad weather, and other damages specified in the sales agreement or Letter of Credit.
6. Understand Customs Regulations
Before importing, ensure that the goods you are purchasing are not restricted or prohibited from entering Indonesia. Some goods may require specific documents or handling from the country of origin. To ensure this, you can consult with Customs or a trusted freight forwarder.
7. Determine the Payment Method
After receiving confirmation of the price, type of trade terms from the supplier, and total shipping costs until the goods arrive at your address (including import duties and taxes), you can then make payment to the overseas supplier. This payment can be made using several available methods such as: Bank Transfer, Credit Card, Collection Draft, Letter of Credit (L/C), Open Account.
8. Arrange Goods Shipment
After making the payment, immediately arrange the shipment. If the goods price does not include shipping costs, you need to contact the freight forwarder and provide supplier details (Address, contact, invoice, packing list, etc.). The forwarder will coordinate with their overseas partners to pick up and ship the goods.
9. Complete the Documents
After the goods are shipped, you will be provided with important documents for customs and shipping purposes, including: Commercial Invoice, Bill of Lading (B/L) or Airway Bill (AWB), Certificate of Origin (COO). These documents must be prepared and are usually sent by the supplier or forwarder.
10. Manage Import Permits
Before the goods arrive in Indonesia, you must arrange for import permits and calculate import duties. This can be done independently or through a freight forwarder. If using door-to-door service, this process is usually handled by the forwarder.
Read also: Consumer Confidence Index Trends Influence Exports and Imports in Indonesia
11. Pay Import Duties and Taxes
All imported goods must undergo Customs inspection and are subject to import duties, PPh 22, VAT, and other taxes.
12. Release Goods from Customs Area
Once all customs matters are completed, immediately transport the goods from the port to the destination address.
13. Receive Goods & Insurance Claims
When the goods arrive, immediately check the quantity and physical condition. If there is damage or shortage, note it clearly, document it (photos/documents), and report it to the forwarder and insurance company. Do not dispose of the packaging or damaged goods before checking with the insurance company.
Easier Goods Import with HMS
Hyper Mega Shipping provides reliable logistics solutions for your import and export needs. With years of international experience, HMS provides complete and professional logistics services. Contact us now for special offers!
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