Which mode of transport is most economical for you?
Your two options when you are shipping from the USA are sea freight and air freight, and the choice between the two depends primarily on how fast you need to get your goods home, and of course which price you are willing to pay. Subsequently, the choice of the most economical transport solution will largely depend on where in the country your supplier resides, and the volume and weight of your goods.
Sea freight or air freight?
Distances within the US can be very great and local transportation is relatively expensive. Therefore, if you are taking your goods home by sea and your supplier resides mid-country, for example Denver, Colorado, the local transport to the nearest habor, Los Angeles, can easily become quite expensive due to the great domestic distances.
The substantial cost for the domestic transportation from Denver to Los Angeles makes it possible to ship your goods by air freight straight from Denver to the UK at the same or maybe at an even lower price. However, this will depend on the volume and weight of the specific goods.
For sea freight shipments you can choose to ship your goods as LCL (less container load), meaning that more importers share a container. As a rule of thumb, this makes sense when the volume of your goods is less than 15m3 (cubic metre). If you have more than 15m3, it will most likely be a better option to use a full container to take your goods home.
The weight limit for sea freight is much higher than for air freight, so the weight of your goods, in most cases, will be irrelevant for sea freight–unless of course you are importing some very heavy goods.
FOB or EXW when shipping from the USA?
There is no doubt that the US is a completely different magnitude than the UK, why inland or local transportation in the US is also significantly more expensive than in England. Therefore, the cost will vary significantly depending on whether you trade on EXW or FOB terms. However, for FOB shipments it is important to note that the warehouse where the goods must be submitted to may be located several hundred kilometers away from the port. In this case you will be responsible for the costs from the warehouse to the port of departure.
Due to these great distances, shipping from the USA is often done on EXW terms. This is a significant difference from China for instance, where the most commonly agreed shipping mode is FOB. This makes sense as all the factories have historically been built along the coast around the major Chinese ports. That said, it is possible to trade on FOB terms when shipping from the USA. However, you should be aware that far from all American suppliers offer to take responsibility for the local transportation costs.
If you trade on EXW terms, meaning that you are responsible for the entire shipping process from your suppliers door, then the costs for air freight will often be competitive with sea freight costs as long as your goods do not exceed 2m3 or 300kg. Are you, on the other hand, only responsible for the transportation of your goods to a respective habor or airport (FOB), your shipment should be less than 1m3 or 150kg in order for it be a sensible solution to take your goods home by air.
What are the time frames?
As the United States is a very large continent, the transit time will also vary depending on where in the country the goods are departing from. Sea freight from the east coast will probably take around 3-4 weeks, whereas you can expect a transit time of 4-6 weeks from the west coast.
For air freight you can count on 2-3 days for the most expensive services and 10-12 days for a more economical transport.
Moreover, air freight has two subcategories; ‘Standard air freight’, which means that your goods board a regular passenger airplane; and ‘Courier services’, which are dedicated cargo aircrafts that specialize in smaller package shipments. These services are always door-to-door and are operated by courier companies such as UPS, TNT, and FedEx.
For those who wish to make use of a courier service, it is important to know that there is a significant difference between the courier’s standard tariffs (available to everybody) and the negotiated rates available to large-scale customers. If you do not have a rate agreement with a courier, you can benefit from going through a forwarder, or search directly on Transporteca’s site where you can get the discount along with the same quick service without having your own rate agreement.
Before you start importing
When you as a company are looking to import from the USA, it is essential that you register for an EORI number. This usually takes 3 working days and is possible to do via gov.uk/eori. An EORI number is required for all companies to be able to import and export goods in and out of the EU.
Find more relevant information on import to the UK here.
It is important to note that some goods are restricted and require an import (and export) licence as well. Goods that fall into this category are: military goods, technology, plants and animal, artwork, chemicals and medicines.
Import duty & VAT when shipping from the USA
When you import goods from the United States or any other non-EU country, you are subject to the customs regulations, which require that your goods are declared when entering the UK, regardless of value. This also means that you have to pay duty on your imported goods. The amount depends on the classification of the goods under the UK trade Tariff.
We recommend that you, as an importer of new goods, contact The home of Revenue & Customs (HMRC), which is the the UK’s tax, payments and customs authority, and look into whether there are any restrictions or other challenges in the customs rules regarding the specific item you are looking to take home before ordering your first shipment. Typically, there will be no problems, but it may be a good idea to double check to avoid any unexpected costs.
For more information on import and trade tariffs please visit: gov.uk/trade-tariff and gov.uk/import-export.
Please note that customs will not release your goods until you have paid the required duty and VAT on your goods.
If the freight price is not disclosed separately, the UK customs authorities will most likely add an estimated value to the total customs calculation. If you are trading on CFR, CIF, or DAP terms so that your US supplier is responsible for the shipping costs, please remember that the freight is to be noted separately on the invoice, otherwise you could end up being charged for the import duty twice.
VAT on your imported goods should also be payed directly to HMRC and the calculation is based on the value of the goods, as stated on the commercial invoice + the transportation costs (+ a potential transport insurance).
For a more detailed read on valuation of goods, please click here.
As freight in and out of the European Union is not subject to VAT, no VAT has to be paid in regards to the freight when shipping from the USA.
It is important to note that prices in the US are normally quoted without VAT (sales tax). The specific tax depends on which state you are dealing with. A quick Google search can provide you with additional tax info for each state. If you import as a business, make sure that your supplier does not charge you tax–if this does happen, our experience is that it can be pretty difficult to get the amount refunded.
Below we have listed a couple of price examples of import from the USA. The examples consist of various transportation modes to give you an idea of which solution suits you the best. Please note that the prices are indicative, as these change with oil prices, exchange rates, and the general competitive situation in the given market.
From Los Angeles, CA to Brighton
1 pallet: 1.8 m3/300 kg, 37 days sea freight, door-door (EXW)
From New York, NY to London
1 pallet: 1.8 m3/300 kg, 26 days sea freight, port-door (FOB)
From Las Vegas, NV to Cambridge
2 packages: 0,40 m3/50 kg, 8 days courier, door-door (EXW)
From St. Louis, MO to Manchester
2 pallets: 1,9 m3/240 kg, 7 days air freight, port-door (FOB)
From Detroit, MI to Southampton
1 pallet: 1,4 m3/510 kg, 5 days air freight, door-door (EXW)
Freight forwarders liability
Regardless of where in the world you are importing your goods from, any forwarder has limited liability by international conventions that specify the following limitations of liability.
Sea freight: ca. GBP 1,8 per kg per package
Air freight: ca. GBP 18 per kg
Road transport: GBP 8,50 pr. kg
This means that in the unfortunate event that your goods are damaged or lost during transit, the forwarders will only be liable to compensate you in regards to the amounts above.
What are the insurance costs when shipping from the USA?
The insurance cost is based on the value of your goods + the transportation cost(s). All you have to do is fill in the value of your goods when you go through your booking on Transporteca.co.uk, then the system will automatically calculate the insurance price. If the total value does not exceed GBP 12.000 it will only cost you between GBP 25-90 to add insurance. If the total value is more than GBP 12.000 the insurance costs is calculated like this: 0.70% x value.