I plan to engage in entrepot trade, but I'm not very clear about what expenses will be incurred. I would like to ask you all, what specific expenses are there in entrepot trade? I hope you can explain in detail so that I can have an idea and make a budget in advance. Also, will these expenses vary significantly under different circumstances?
I'm interested in Malaysia's entrepot trade and want to know where the goods are transshipped from and to. The best answer is that the common sources of goods are Asian countries such as China and India, and the destinations are mainly in Europe, the United States, and the Middle East. Chinese products take advantage of Malaysia's geographical and policy advantages. There is a large demand in the European and American markets, and the demand for building materials, etc. in the Middle East is growing. Malaysia realizes entrepot trade through its ports and logistics network.
A staff member of a trading company asked whether, when the company purchases goods from Country A, transports them to Country B and then resells them to Country C, this situation of entrepot trade counts as an export figure and whether it has an impact on the company's export performance statistics. The best answer is that entrepot trade does not count as a regular export figure. Export refers to the sale of domestically produced goods abroad. The goods in entrepot trade are not produced domestically and are generally not included in the export statistics. However, some regions may have different considerations from the perspectives of trade services, etc. The company can also set its own rules for performance statistics.
Our company engaged in export trade has encountered an anti-dumping investigation and is asking about how to avoid it through entrepot trade. The best answer points out that one can choose a suitable entrepot country, find a professional agent like Zhongshitong, optimize the supply chain layout, and at the same time pay attention to key points such as document handling, warehouse management, and trade relations. Through these methods, one can effectively avoid anti-dumping and help expand overseas markets.
Said that when coming into contact with entrepot trade business, there were doubts about the name for customs declaration, and wanted to know whether it was declared in the name of the shipper, the consignee or other names, hoping for an explanation with examples. The best answer pointed out that the name for customs declaration depends on the trade contract agreement and business process. It is commonly in the name of the entrepot trader. For example, if Zhongshitong, as an entrepot trader, purchases goods from Country A and resells them to Country B, it will declare the goods in its own name; it may also be determined according to the negotiation between the shipper and the consignee, etc. Making it clear in advance can avoid disputes.
I want to understand what the form of entrepot trade is, its actual operation process and the differences from the general form of trade. The best answer states that the form of entrepot trade is that the sale of goods is transacted through a third country. The process is that the goods from the producing country are transported to the third country, undergo simple handling there, and then are sold to the consuming country. Compared with general trade, it involves three parties and at least two transports, and can take advantage of the advantages of the third country to reduce costs and avoid barriers.
Our company is involved in entrepot trade and is unclear about bill of lading issuance. We want to understand the process, key points, and differences from general trade bill of lading issuance. The best answer indicates that it can be issued by a freight forwarder or NVOCC. The process involves the shipper providing information, the freight forwarder creating a draft for confirmation before issuance. Key points include accurate consignee/shipper information and cargo description. The difference from general trade bills lies in confidentiality and flexibility.
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Professional consultant answers
Robert ChenYears of service：6Customer Rating：5.0
Customer service consultantConsult
The common expenses in entrepot trade mainly include the following categories. First is the cargo transportation cost, including the sea freight, air freight, etc. from the port of departure to the transit port and from the transit port to the port of destination. Its level is affected by factors such as the transportation distance, the weight and volume of the goods, and the mode of transportation.
Second is the warehousing cost, which is incurred when the goods stay at the transit port and is related to the storage time, the type of warehouse, and the space occupied by the goods.
Third is the document processing cost, which is used to prepare and process various documents required for entrepot trade, such as bills of lading, packing lists, etc.
In addition, there is the customs clearance cost, which needs to be paid when the goods are cleared at the transit port and varies depending on the type and value of the goods as well as the policies of the transit port. Moreover, there may be an agency fee. If you entrust an agency company like Zhongshitong to operate, corresponding service fees will be incurred.
In short, the expenses vary significantly under different trade scenarios and need to be considered comprehensively.
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
In addition to what was mentioned above, there may also be terminal handling charges, which are the expenses incurred for loading, unloading, and handling goods at the port. The charging standards vary in different ports. Also, if the goods need special packaging or reinforcement, packaging costs will be incurred.
Amanda YangYears of service：3Customer Rating：5.0
Cost control consultantConsult
Insurance costs cannot be ignored. To ensure the safety of cargo transportation, purchasing cargo insurance is a common practice, and the cost is determined based on factors such as the value of the goods and the risks of the transportation route. Sometimes, inspection and quarantine fees may also be involved, especially for some special commodities.
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
If entrepot trade financing is involved, financing costs such as loan interest will be incurred. There may also be exchange losses caused by exchange rate fluctuations, which are also potential "expenses".
Sarah ZhangYears of service：8Customer Rating：5.0
Document expertConsult
Security fees at the transit port may also exist to ensure the safety of the goods during transit. In addition, some ports may charge congestion fees, especially in busy ports during congested periods.
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
Document amendment fees may also occur. If there are errors in the document information during the entrepot trade process and need to be modified, payment may be required. There may also be weighing and measuring fees for the goods during transit.
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
If the goods need value-added services such as sorting and labeling at the transit port, corresponding service fees will be incurred. In addition, there are communication costs. Communicating and coordinating business with various parties at the transit port will incur certain expenses.
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
Sometimes there will be demurrage charges. If the goods exceed the specified free storage time at the transit port, the port may charge. In addition, bunker adjustment factor (BAF) is also common. Fluctuations in oil prices during transportation will cause changes in this cost.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
There may be fees for handling the certificate of origin, which is crucial for some entrepot trades enjoying tariff preferences. There are also LCL (less than container load) fees during transportation if LCL transportation is involved.
Michelle ChenYears of service：3Customer Rating：5.0
Business coordination consultantConsult
Bank handling fees cannot be ignored. When conducting trade settlements, the bank will charge certain handling fees. And the handling fee standards vary for different settlement methods.