Importing Manufacturing Machinery into Australia: The Ultimate Guide
October 28, 2022 Sea Freight, Uncategorized
A large majority of manufacturing machinery we use here in Australia is imported from other countries. Many local Australian businesses use their connections with suppliers all around the world, from Europe and Asia to the United States, to sustain their operations at home and abroad.
But in order to facilitate these imports, you need to have a good grasp of trade restrictions, transportation costs, shipment modes and the incoterms.
So if you’re seeking answers on importing manufacturing equipment from other countries into Australia, then you’re in the right place. Below, we’ll outline the key considerations and detailed procedures you need to know when it comes to importing machinery into Australia.
What You Need to Know – The Basics
These are the key basics you’ll need to be across if your business relies on imported manufacturing machinery.
What are your incoterms?
International operations require a language that’s well accepted and universally understandable. The incoterms (or the international commercial terms) are the key terms underpinning contracts between a buyer and a seller engaged in the international trade of goods. They define the costs and risks assignable to buyer and seller during international shipments.
It’s important that your contracts with your supplier don’t unfairly place too many costs and risks on you.
How will your cargo be shipped?
The item you import greatly influences the method of shipment to be employed. Below are the common modes of cargo shipment:
As the name implies, you’ll use the full capacity of the container in one shipment. The most obvious advantage is the exclusive use of the whole container (not shared with other suppliers). You can benefit from a cheaper flat rate compared to LCL, where the charge is on a per cubic meter basis.
LCL involves using only a portion of a container when importing goods. If you have smaller-sized shipments that don’t require an FCL, this may be a more cost-effective option for you.
- Out-of-Gauge (OOG) or Break Bulk
Your machinery or equipment will be shipped through OOG if it exceeds the capacity of a 40 FC six-sided container. This means that the dimensions of your shipment exceed an approximate length of 12.05 meters, a width of 2.33 meters, and a height of 2.59 meters.
What are the standard shipping timeframes?
To manage the shipment process more effectively, you need to have a profound understanding of shipping timeframes and factors that influence all activities before, during, and after your shipment.
Before the shipment
Make sure you have a checklist of all required documentation to avoid delays and extra costs during your shipment. Common importation documents include the Commercial Invoice, Packing List, Packing Declaration, Certificate of Origin and any applicable Declarations. Make sure the detail across these documents is consistent so that you don’t run into any trouble at customs.
During the shipment
Loading and transport
Once the items for shipment have been prepared, your goods will be loaded at the port of origin. The time this takes will solely depend on how efficient your seller is and getting the job done. It will also depend on the kinds of goods you’re buying and the location you’re importing from. If you’re shipping through LCL, your goods will typically be collected and transported on the same day. It will take sligtly longer for FCL.
After this, you’ll have to go through customs clearance. This means complying with importation document requirements imposed by customs authorities, which usually takes one whole day. This is why it’s important to prepare all necessary documents ahead to avoid delays in processing.
Be aware of in-yard cut-off times
Another thing to consider is the cut-off times in your ship’s wharf before sailing. If your shipment fails to arrive at the yard at the set cut-off time, it may take days or a week for it to depart.
Below are the usual cut-off times per type of shipment:
- LCL – 7 days before sailing
- FCL – 2 days before sailing
- Airfreight – 1 day before the flight
Freight Transit Times
Freight transit times are the shipment lead time from one port to another. Your freight forwarder will include the standard lead time in the shipping quote. What’s important here, however, is to be aware of everything that could delay the shipments. This is especially important during present times when shipping is still feeling the effects of the pandemic.
After the shipment
Once the shipment arrives at the port, it must be made available for the freight forwarder to pick up. Below are the typical lead times in offloading shipments:
- LCL – 3 to 6 days for goods availability
- FCL – 1 to 2 days for goods availability
- Airfreight – 1 day for goods availability
Your shipment and its documentation will undergo a thorough border inspection before it is released into Australia. The inspection process can finish as quickly as a day and as long as a week, depending on the inspecting officer for the day. To avoid delays, ensure all documentation is complete and accurate.
Delivery to Final Point
Once the shipment is ready for pickup, the forwarder collects the items and delivers them to the final delivery point.
What are the costs involved in importing goods?
The Australian government imposes duties and GST for all imported goods or equipment brought into the country. As a rule of thumb, below are the standard taxes in Australian importation:
- Duty – 5% of the FOB value
- GST – 10% of CIF
- Processing – 85 to 200 AUD based on FOB value
Check out our article on the hidden costs of shipment.
Your Questions Answered
What is the process of getting my cargo from an international supplier to my factory in Sydney? There are multiple steps. Here’s what you need to know.
1. Choose a reliable supplier
First, identify the right supplier of your machinery and agree on the price and the incoterms upfront. There are multiple factors you’ll need to consider when assessing who is the right supplier for you. This not only includes price, but also reliability, reputation and whether they’ll require you to purchase a minimum order quantity (MOQ) of goods. You can read more about finding the right international supplier or partner here.
2. Determine whether your item is new or used
Australia has one of the strictest quarantine and cleanliness requirements in the world. The Department of Agriculture, Water and the Environment (DAWE) has implemented cleanliness requirements to ensure that machinery in Australia is free from biosecurity risk material. New machinery is prone to contamination due to poor loading or field testing before the shipment.
Used equipment will require an import permit, and needs to be decontaminated or cleaned before shipping to Australia.
3. Determine your item’s dimensions
The dimensions of your equipment will dictate the mode of shipment required from the manufacturer. Depending on its size, weight, and dimensions, possible shipping options would be through FCL, LCL, breakbulk, RORO, or air freight.
4. Partner with a reliable freight forwarder
The shipping process is complicated, with a lot of moving parts. It’s important to ensure the process is being overseen by experts in the shipping and logistics process. Engage the services of a freight forwarder and discuss with them all the shipping options available for your product. The forwarder should take the time to collaborate with you, and liaise with the relevant customs authorities so that all processing for your shipments is smooth.
Make sure that you always share the following details with your freight forwarder:
- Weight and dimensions of your cargo
- How your cargo will be packed
- Pick up address and delivery address
5. Finalise your shipping option
Select the best shipping option based on your budget and shipping timeframe. Your forwarder can help you choose this.
6. Cover your shipment with insurance
It’s important to protect your bottom line in case you incur any losses or damages that may arise while in transit. Consider covering your high-value shipments with a marine insurance policy. It’s better to have a backup plan for when the unexpected strikes.
7. Pay and ship
Pay for the cargo and proceed with the shipments. See to it that you already accomplished a Customs Clearance Authority Form from your forwarder.
8. Pay for duties and GST
Upon the arrival of the shipment, you’ll need to pay the applicable duties and GST. If there are free trade agreements that apply to your shipment, you can use them to your advantage. Many agreements provide for zero duties. Your forwarder will know all about this.
9. Arrange for final delivery point
Once cleared of customs obligations, coordinate for delivery to the final address. Like the loading process, LCL and air shipments can be offloaded within the day depending on the cargo. Check out our article on delivery options to learn more.
How is the shipment priced? On size or weight?
The price of the whole shipment is contingent on the mode of shipment, which also depends on the equipment’s weight and dimensions. The basis for choosing the mode of shipment is as follows:
- For an FCL shipment, the price is usually a flat rate on a per-container basis, except for cases where the weight exceeds a certain weight threshold.
- For a breakbulk shipment, the price is per cbm (cubic metre). You can calculate this by multiplying the length, width, and height of your shipment.
- For an LCL shipment, the price is per cbm based on weight-based volume or gross volume, whichever is higher.
- Weight-based volume = Actual weight / 1000
- Gross Volume = (L x W x H) / 1000
- For an airfreight shipment, the price is per chargeable weight (gross weight or dimensional weight, whichever is higher).
How are imported food factory machines taxed in Australia? By size or weight?
The duties and taxes are computed based on your cargo’s commercial value.
You’ll need to pay duty and GST standard rates, which includes:
- Duty – 5% of the FOB value
- GST – 10% of the CIF (Cost, Insurance, and Freight) plus Duty value
- Customs import declaration processing fee
We’ve put together a table to help you understand the import processing charge you’ll have to pay per shipment.
|Type of Shipment||Value of Shipment||Import Processing Charge Per Shipment|
|Sea Freight||$10,000 or less$10,000 or more||A$99.00A$201.00|
|Air Freight||$10,000 or less$10,000 or more||A$88.00A$190.00|
How long is the entire shipping period?
The total shipping lead time greatly depends on the country of origin and the specific delivery address in Australia. It also depends on the assigned shipping lines and whether it is a direct shipment or transshipment (unloaded to another ship to complete a destination).
You can get some general understanding through the below chart. Be aware, however, that since the pandemic timelines have considerably changed.
What if the machine is used?
Australia strictly implements the policy of accepting only machines free from biosecurity materials. If the machine is used, secure an import permit first before shipping out. If the machinery does not pass the required cleanliness standard, DAWE can mandate further cleaning at an approved site. This will be at the importer’s expense.
Any more questions?
Our team of freight forwarders and customs brokers here at ICE are on standby and ready to help. We’ve had decades of combined experience helping the manufacturing industry import complex and awkward pieces of manufacturing machinery from various countries around the world.
Get in touch with our friendly team today so we can start discussing your next shipment. You can ring us on 1300 227 461 or request a quote.Request A Quote
or call us on 1300 227 461
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