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Indonesia’s economy has frequently been billed as a rising star.
It’s home to one of the largest populations in the world coupled with great progress in reducing poverty to below 10 per cent.1 It also has a rising middle class that saw consumption growing at an annual rate of 5 per cent in 2019. In one case, the vitamin maker Blackmores saw its sales rise 72 per cent in the 2nd quarter of 2018 since shifting its focus to Indonesia from China.2
This means there’s plenty of action on the transportation front as well. Singapore being on the top 3 list of global ports for container throughput traffic provides shippers with plenty of advantages when shipping sea freight from Singapore to Indonesia. Sea freight within Southeast Asia is noteworthy as trade can flow quickly using what is generally considered the slowest transportation mode. This is due to Southeast Asia having most major international sea freight hubs reasonably close to one another.
But for businesses with inventory based in Singapore, it helps to run through the general steps and documents involved and when it makes sense to use sea freight.
The sea freight process generally follows these steps:
In this step, your shipping partner collects your order from your business address or your supplier. The way your sea freight order will be handled, charged, and containerised will differ depending on whether you’re shipping by Full-container-load (FCL) or Less-than-container-load (LCL). You can find the main differences between FCL and LCL below.
For FCL shipments, you pay a flat rate for the whole container that will transport your goods across the sea. While expensive upfront, it may be a cheaper option than shipping a particularly large LCL order in terms of cost per cubic metre (cbm).
LCL orders are generally charged by volume. Below a certain volume, LCL can still be cheaper than FCL on a per shipment basis if you don’t need a full container for each delivery.
LCL/ FCL Rates Rule of Thumb:
When your shipment has filled about half of a container, it usually makes sense to buy a whole container (FCL). This is around 10 cbm for a twenty-foot-equivalent (TEU) container. A TEU’s volume is usually between 23 to 25 cbm.
LCL shipments require more work from your freight forwarder since they need to consolidate multiple shippers’ shipments into a single container. This need for consolidation could also slow down loading times and make their sailing dates less flexible than FCL. FCL is cheaper in terms of price per cbm and usually faster as you are in control of the whole process. On the other hand, FCL requires you to have the order volume to justify using a whole container.
LCL shipments face more handling compared to FCL shipments. FCL shipments can be packed and sealed into a container at the origin address before being opened only after it arrives at the destination.
LCL shipments, on the other hand, need to first be consolidated into a container, get unpacked at the seaport to be assigned to a last-mile truck before finally arriving at the destination address. All this handling could increase the chances of items getting damaged or misplaced, but you can check with your shipping partner how they cover potential losses during transit.
Depending on the nature of your order, your freight partner will advise you on which of the two is best for your current order. Once the order is collected, your shipping partner will transport it to one of Singapore’s seaports.
Whether you need LCL or FCL for your upcoming shipment, Janio Asia’s got the right sea freight solution tailored to your freight forwarding needs. Chat with our supply chain consultants via the link below!
After collection, your goods need to be cleared for export by Singapore Customs at the seaport. Being one of the world’s major trade centres, Singapore has one of the world’s busiest ports and also has simple and streamlined import and export procedures. In Singapore, goods being exported are not subject to customs duties and Goods and Services Tax but all goods must be declared.3
To get your goods cleared for export, your shipment at the usually needs to have the following documents ready:
A UEN number and Customs Account are needed for both exporting from and importing into Singapore. A UEN is a standard identification number for businesses to interact with Singapore’s government agencies.4 The UEN can be obtained by registering with a UEN issuing agency, such as Singapore’s Accounting and Corporate Regulatory Authority (ACRA). Once you have your UEN, you can register for a Customs Account on Trade.net online portal.
You must obtain export permits if the goods are dutiable or subject to control. Goods that are exempted from needing an export permit can be found on Singapore’s Customs website. This permit can be applied for via Singapore’s Trade.net portal.5 The FOB value of your shipment must be declared in the export permit application.
After checking these documents and clearing your shipment for export, your shipment can be loaded onto a vessel.
After your shipment is cleared for export from Singapore, it will be loaded onto an Indonesia-bound vessel.
Using sea freight from Singapore has a number of advantages. As a port that processed 37.5 million TEU containers in 2019 alone, Singapore’s port benefits from huge economies of scale. This hub has great connectedness to other lanes and is cheaper and faster than regional competition.
Singapore has unrivalled two-way access to main trade lanes to China, the USA, Europe and the rest of Asia. Its strategic position as a hub or exchange port means it has unrivalled access to feeder lanes like Singapore to Jakarta, Indonesia.
Calling back to the article’s opening, sea freight between Southeast Asian countries can at times be a competitive alternative to air freight. With major sea ports in SEA being clustered in a relatively small geographical area, sea freight shipments between these countries aren’t that slow. In the case of Singapore to Indonesia ocean freight delivery timings can range between 5 to 8 days, compared to air freight’s 2 to 3 days, for a fraction of air freight’s cost.
Want to find out how to incorporate more sea freight into your SG-ID supply chains? Reach out to our supply chain consultants below to find out more!
If your shipment is heading to Jakarta, Indonesia, it will be unloaded at one of the main ports such as the Port of Tanjong Priok. Your shipment will then be inspected by Indonesian customs for import clearance.
To get import clearance in Indonesia, your shipment will need the following documents:
The commercial invoice will need to be signed by the manufacturer or supplier as true and correct. As for the bill of lading, you’ll need three endorsed originals and four non-negotiable copies.
Your shipment also needs the customs import declaration, import permit and customs identification number (Nomor Identitas Kepabeanan, NIK) and importer identification number (Angka Pengenal Import, API) of the importing party.
In Indonesia, there are three types of import licenses. API-U is the general import license used for importing finished goods. API-P is the producer import license used for bringing raw or unfinished products into the country. There is also a third importer license called API-T, which is limited to a specific industry and do not permit you to import goods not related to that sector of the business. If you’re also interested in Indonesia’s customs clearance for B2C shipments, check out our updated customs clearance guide.
Once your goods have been cleared for import, the last mile leg depends on whether you’re shipping LCL or FCL and which part of Indonesia your destination is.
If your shipment is LCL, the container your order is in will be unpacked to distribute the different shipments to their respective destinations. Your shipment will then be shipped for the last mile leg either as loose cartons or as pallets depending on how they were initially packed. If your shipment is FCL, your shipment doesn’t need to be unpacked and transported directly to the last mile address.
Depending on where your destination in Indonesia is, you may need either an additional flight or sea shipment to an airport or port closer to the order’s destination. Either way, the final leg of the delivery will be done via vans or trucks depending on whether it’s a full container or separate pallets being delivered.
Sea freight is the most common method of transporting goods, carrying 90 per cent of goods worldwide while also being cost-efficient and comparatively environmentally friendly.6 Sea freight shouldn’t be used for every type of shipment, but it can work well depending on what you need in terms of:
While not as fast as air freight, sea freight works best when cost savings are more important than shipping speed. Sea freight is also great for a wider range of goods that may be too costly to ship via air freight like bulky or oddly-sized items, or too dangerous to meet air freight’s tight restrictions on what can be shipped.
For instance, these products generally can’t be shipped via air freight: products containing gases, all things flammable, toxic or corrosive items like batteries, magnetic substances like speakers, perishable items and more.
Sea freight between Southeast Asian nations has the added benefit of only being slightly slower than air freight while costing much less. In Southeast Asia, sea freight shipments to some destinations take only 1 or 2 extra days more than air freight. This is great news for eCommerce merchants during the current COVID pandemic, if you’re currently working with Janio for air freight, switching to sea freight involves the exact same steps. You simply need to tell us that you’d like your parcel shipped by sea freight and we’ll take care of the rest.
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If you’d like to find out more about how we can solve your SEA e-commerce cross-border delivery needs, come and have a conversation with us.
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