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Hi Walter!<br />
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I've placed my first order from a Chinese manufacturer. Learning as I go here. I agree'd to 30/70 DDU terms for product/shipment. I have completed the 30% transfer to get production started. Now they want additional funds to deliver it to my door. They are asking for Customs Bond, Import Duty, and Lift Truck payments and calling it DDP instead. Does this sound accurate? The total cost for the product with shipping was $2,500, which it seems should negate any customs bonds needed since it is not over $2,500.<br />
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We also agreed upon 30% payment to start production and 70% once the shipment arrives at the port. Now they are asking for the 70% payment prior to shipping. Is this common?<br />
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I am considering paying the fees just to create a mutual relationship. I am not sure if that is something they would deem beneficial in their culture though. Next time, I will be much clearer in my expectations and likely chalk this one up to a learning experience.<br />
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Thank you!
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</blockquote>Customs bonds are insurance policies, but as you rightly observe, they are not legal requirements for shipment values below $2,500. Nevertheless, I think that if you refuse you will delay shipment unnecessarily. If you get one, I recommend a continuing bond. Let me know if you need help to find a reasonable price.<br />
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If the original quote was DDU, what was the point of delivery specified? If it was the arrivals port, you might be stuck with the extra charges, except for the fact that if it is DDU warehouse at port, that <b>should</b> include Lift Truck charges as well as all port charges. In that case you will still also have to pay trucking to your door. If it was DDU at dock at your port, <b>all of those charges</b> will be added, and in fact such terms would amount to FOB port of destination, not DDU.<br />
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In the case of DDP, that must specify to your door otherwise there will be even more charges such as warehouse fees, truck hire etc. They can't expect duty paid in advance unless they they can tell you exactly what is the HS code and how much the duty is. When the shipment is cleared the rate of duty estimated by the carrier could be a lot less or a lot more than the actual rate levied by Customs, so they are taking a risk, or they are charging at a high duty rate, anticipating a lower real rate and then they will pay the lower rate. I doubt you would see a refund for the difference.<br />
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Payment being required prior to shipping is the norm, and that is what they must mean by payment "once the shipment arrives at the port." The question is: Which Port? I am guessing they mean port of loading.<br />
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You might like to play safe by having an inspection company inspect your shipment at time of loading into the container.They will email a report to you, and then you could make the payment. I am assuming LCL quantity, and that makes inspections a bit harder, because the inspection company can't witness the container being sealed unless your cargo is last to go into the container. At least you will know that the cargo has passed QC and has arrived at the port of loading or at the container depot. Without that, you are gambling that the shipment has even left the supplier's premises. It's possible they could inspect it at the supplier's premises and put a seal on the pallet wrapping. You would need to ask the inspection service. Unless it's at the port that would still be a gamble.<br />
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Should you choose to have an inspection, you might like to contact a Chinese inspection company that I can now recommend after good reports from Fastlane members, and no bad reports being found in my research. I have arranged a good deal for my book readers and to obtain that, email Samson at <a href="mailto:safeimport@topwininspection.com">safeimport@topwininspection.com</a>. Such an inspection as you need will cost you $197.<br />
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Walter</div>
