Reader Question Regarding Air Freight, EXW, and Insurance

Hey Dave,

Thanks for writing the costs associated and EXW blog post. It helped me wrap my head around a recent order quote I got from a supplier.

I’m in the process of phasing up to ordering more from this supplier as I liked the samples and want to order more to get a few products up for sale to test my market.

To that end, I saw their terms on the order is EXW. The only challenge for me is that the DHL shipping quote is for USD 585. Am I being unreasonable to think that this shipping quote is high? For example, there are 2 different SKUs/products in the order, the cartons are: 1.) size 54.5*40*32.5, gross weight/carton: 13.3KG (5 cartons total) and 2.) carton size 61*54*32.5cm, gross weight/carton: 20.4KG (1, maybe 2 cartons total) – This would ship from Shenzhen, China to Montana, USA.

I’m thinking about talking to a freight forwarder, especially since from what I understand EXW doesn’t give me any insurance etc. so I need to get that anyways.

I’m learning as I go, but don’t want to super overpay for shipping if I can help it!

Thanks,
Mark

October 20, 2014

 

Hi Mark,

I don’t ship a lot of air, but assuming the quote for $585 is for 2 packages 13.3kg and 20.4kg, this quote seems reasonable. For just a couple small cartons, you’re unlikely to get a much better rate from a freight forwarder- in fact I suspect you would end up paying a lot more after a lot of surprise fees. On the other hand, if you were importing 100+ kilograms worth of products that you needed shipped via air, a freight forward can often arrange for a much lower rate than DHL/UPS/etc..

Insurance is available for nearly any mode of transfer and any payment terms. The only question becomes how much and who pays for it. As you mentioned, with EXW you will be responsible for insurance and almost all other transport costs.

Best of luck,
Dave

 


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