Sharing a causeway with Malaysia, having a strategic position as a trading hub, high average income per capita when compared to its Southeast Asian neighbours at USD 58,770 per year and amazing infrastructure has always made Singapore a fantastic target market and regional logistics hub for businesses in Malaysia.
But for Malaysian businesses looking to ship to Singapore for the first time, it’s important to take time to consider the pros and cons of air freight as a transport method.
When you need your order delivered quickly, such as shipping fast-moving consumer goods like health and beauty to customers, air freight’s speed trump’s sea freight. A flight from Malaysia’s Kuala Lumpur International Airport (KUL) to Singapore’s Changi Airport (SIN) takes slightly more than 1 hour.
On the other hand, sea freight is better if you’re looking for a less costly way to ship your goods from Malaysia to Singapore. In terms of cost per volume shipped, sea freight is the most economical and environmentally-friendly transportation method.
However, air freight can actually be cheaper than sea freight below a certain volume. To understand how this works, we need to see how rates are charged based on actual weight and volumetric weight.
Rates for air freight charged by the order’s volumetric weight (how much space it takes up) or its actual weight, whichever is higher. To calculate volumetric weight in kilograms, the following formula is used:
Length (cm) x Width (cm) x Height (cm) / 5000 = volumetric weight in kg’s
For less-than-container-load (LCL) shipments, sea freight tends to be charged by volumetric weight, with a minimum chargeable volume being 1 cubic metre (cbm). LCL Sea freight saves you money if your order is above 2 cbm.
However, you won’t get those economies of scale for smaller items like small cartons that take up between 0.5 to 0.9 cbm since you’re paying for unused space. This is where air freight can be more economical than sea freight.
When choosing between air freight and sea freight, consider the following:
Air freight is fast, but can be limited in terms of what you can ship. Bulky or oddly-sized items, will take up more space and result in additional costs.
Items which are too dangerous to meet air freight’s restrictions on what can be shipped generally should use sea freight instead. For example, products containing gases, flammable material, and toxic or corrosive items like batteries, magnetic substances like speakers, perishable items and more generally can’t be shipped via air freight.
Fortunately, you don’t need to work all of this out yourself. Logistics service providers like Janio can help advise you on whether air freight or sea freight is better suited to your current leg of the supply chain and also offer you both shipping modes for your orders. To find out more, reach out to us below:
B2C air freight shipments tend to face fewer hurdles as they are shipped to individuals compared to bulk shipping to businesses. These shipments are usually below the customs’ de minimis rate of the destination country and do not need extensive customs documentation and also are charged fewer import duties and taxes. The minimum documentation needed are usually commercial invoices and packing lists.
Bulk orders, on the other hand, face more regulation. The consignees of these orders are enterprises and businesses who need to be registered with local authorities. Your importing party also needs to have import licenses as well as other permits with relevant authorities at hand to clear destination customs clearance. These orders are subject to duties and taxes depending on their customs valuation and the type of goods shipped.
While the logistics supply chain from Malaysia to Singapore can vary depending on your requirements, shipping via air freight usually follows these steps:
This guide will cover how these steps apply to an air freight shipment being shipped from an address in the Klang Valley to Singapore.
The first mile stage in international shipping sees the shipment leaving the origin address to your logistics service provider’s warehouse, be it a distribution centre or transportation hub. The origin address is where your inventory is initially stored, such as your office, warehouse, or your supplier’s address. Depending on your arrangement with your logistics service provider, your shipment will be picked up by your shipping partner or dropped off at your partner’s designated location.
Packaging and labelling are paramount before your order even leaves your doors. Packages may sometimes go through bumpy rides like turbulence. Having extra padding for fragile items, like bubble wrap and packing peanuts, is recommended to prevent your products from bouncing around or getting deformed during shipping. To learn more about the best practices in packaging your goods, we’ve covered this topic in our packaging guide.
Labels should be visible and also remain legible and easily accessible by your shipping partner and customs officials after being transported to the destination airport. You can check out our guide on labelling your shipments which you can also find in our resources for B2C shipping to Southeast Asia.
If your shipment is a B2C parcel, it has to be consolidated on a pallet at your shipping partner’s warehouse together with other packages heading to the same destination country before it can be sent for terminal handling and customs clearance at KLIA. As B2B shipments are already consolidated, the shipment can be transported directly to the airport for customs clearance.
If your origin address is in East Malaysia, your shipment may need a connecting flight from Singapore.
After your shipments have been collected, they need to be cleared for export by Malaysia’s Customs at KLIA.
Terminal handling includes weighing and inspection of the cargo, tallying up your shipment’s items with the commercial invoice and packing list and checking that all required customs documents are in order. If your items haven’t been palletized yet, it’ll be palletized at the air cargo agent’s warehouse before being sent for customs clearance.
To get your goods cleared for export, your shipment usually needs to have the following documents ready:
You or your shipping provider must first register with the Companies Commission of Malaysia to export goods which require a license. Some of these items include certain plants, wood, minerals, and more. You may check out the list of items that require a license to export on Malaysia’s Customs website.1
Your goods also need to be classified and declared to Malaysian Customs prior to export. Like most Customs Offices, Malaysia uses the Harmonised Systems Tariff Code to classify your goods. You can look up the classification of your goods using the HSS Explorer.2 Depending on what you’re shipping, your order may be charged duties and taxes.
For a quick overview of Malaysia’s export procedures, you can find it on their official website (Malay language)3
While knowing all of this is helpful to getting your exports ready, you can check with our customs clearance experts if you’re unsure of which documents to apply for and how to declare your goods.
After getting cleared for export, your order is uplifted onto a plane and leaves Malaysia, bound for Singapore. The mid-mile leg of the journey (the flight itself) will take slightly more than an hour at most.
After landing in Changi Airport, your shipment and its customs documents will be inspected by Singapore Customs officers. Depending on the customs valuation of the shipment and what is being shipped, the types of documents you need to prepare for your order to be cleared for import into Singapore can differ.
In Singapore, customs values imports using the CIF method, which means that the customs value of the order includes the cost of the goods and the cost of insurance and freight of the shipment. Singapore has a de minimis value of SGD 400, which in Singapore means that orders shipped below this value are eligible for GST relief.4
If you are shipping non-controlled or restricted goods into Singapore below SGD 400, the following documents are required.
Do note that intoxicating liquors and tobacco are not eligible for GST relief. You can check out our resources to view Singapore’s list of restricted and controlled goods.
With Singapore’s generous de minimis value, most orders don’t go through too much hassle being imported for eCommerce purposes. Note that the de minimis value ruling only applies to imports via air freight and not for imports via cross-border trucking or sea freight.
If you’re importing volumes above SGD 400, more documents in addition to the above will be required:
For bulk imports, the importing party must first register for a UEN with the Accounting and Corporate Regulatory Authority (ACRA) in Singapore and activate its customs account prior to importing into Singapore.5 Then, you’ll need to apply for an Inter-Bank GIRO with Singapore Customs so that you can pay for the relevant import duties, taxes and other fees to Singapore Customs directly.
Once your UEN and Inter-Bank GIRO are set up, the company will need to apply for a customs import permit via TradeNet. This can be done by the importing party or through a declaring agent or freight forwarder. To see different types of import permits or cases where import permits aren’t needed, you can check out Singapore Customs’s official website.6
When your goods have cleared customs, it enters the last mile delivery stage. How this is handled depends on whether your order is a parcel or a larger container or pallet.
If your shipment was a loose parcel, the pallet it was consolidated with needs to be unpacked at a sorting hub. The parcel will then be distributed to a van which will carry out the last mile delivery to your consignee.
If your shipment is in a large container or pallet which can be shipped directly to your consignee, it can be delivered straight to the consignee’s address without any additional steps in between after customs clearance.
Air freight works best when speed is the most important factor and it works even better when you have logistics service providers who can tell you when and where air freight is best used in your supply chain. Contact us below to find out more about how we can help you or if you’d like an air freight quotation to ship to and throughout Southeast Asia.
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