CISF - What is it?

irishhombre123

Hi All,

New to importing and thought i had done my research well, until i got presented with this CISF fee on the Bill of Landing document. (not agreed yet)

Cant find any info on how its calculated, seems to be a blank cheque fee.

Anyone any idea how to work out what it will be?

My goods are agreed on a CIF (LCL) basis with the manufacturer, but considering changing to FOB and getting my own freight company to manage it for this and future loads.

Any help or advice would be greatly appreciated.

Kind Regards
IH

TheWonderLlama

Seems like a new fee made up by shippers.

Beware of China Import Service Fee

Some freight forwarders have been asked by importers whether the China Import Service Fee is legal. This fee arises because the shipper may ask for a form of ‘remuneration’ from the freight forwarder at the point of origin before they will give them the traffic. When this happens, the importer ends up paying the freight costs and an additional service fee. While this is not illegal, it does appear to go outside the terms of sale which have been agreed between exporter and importer, and buyers should try to find out why it is happening and if it can be avoided.

RUDOLF289

TheWonderLlama wrote: »

Seems like a new fee made up by shippers.

It is not a new fee. I have posted a number of times in the last 10 years or so about the China Import Service Fee.

The issue arises on shipments were the incoterms agreed (CIF - which is incorrect in itself) leave the supplier to arrange the shipping. Often the supplier "includes the freight charge" in his quotation or offers "free shipping".

The supplier is able to do that because he gets a very low cost from the forwarder or consolidator in China to send his shipment. These forwarders or consolidators understand the game and they simply charge the freight rate to the consignee under the guise of this so-called China Import Service Fee. The game is that all shipments leave China only if the supplier has been paid in full. In other words you are fully committed and nowhere to go when the shipment lands in Dublin. The importer has zero leverage at that point and has no option but to pay up.

If you do your research a number of things come to light.

1. If you ask your supplier for an FOB price for the goods, there is little or no difference - if any difference at all.
2. By asking what the CISF fee will be plus the other arrival charges for your shipment, they either try to fob you off like "they are normal port costs, check with your agent at destination". Or if they tell you what the "arrival charges" are, the cost usually are higher than what you could negotiate here locally with an Irish based forwarder or consolidator including the transport cost plus arrival charges.

The challenge for the Irish importer is that often he is not familiar with the process and unwittingly walks into this trap. My advice is always twofold.

- check with your supplier and confirm what the charges will be on arrival in Ireland that you as the importer will have to pay. Do NOT, repeat, NOT allow the shipment to leave the factory unless you know the costs you will pay on arrival.
- ask your supplier for an FOB price, get the details of the shipment (nr of pieces, weight and dimensions) and ask Irish forwarders to quote you from FOB to Ireland (say Dublin) including the freight and arrival charges.

You then are able to make an informed decision and select the option most advantageous to you.

Hope this helps people to avoid the CISF trap.

Cheers,
Rudolf289

irishhombre123

RUDOLF289 wrote: »

It is not a new fee. I have posted a number of times in the last 10 years or so about the China Import Service Fee.

The issue arises on shipments were the incoterms agreed (CIF - which is incorrect in itself) leave the supplier to arrange the shipping. Often the supplier "includes the freight charge" in his quotation or offers "free shipping".

The supplier is able to do that because he gets a very low cost from the forwarder or consolidator in China to send his shipment. These forwarders or consolidators understand the game and they simply charge the freight rate to the consignee under the guise of this so-called China Import Service Fee. The game is that all shipments leave China only if the supplier has been paid in full. In other words you are fully committed and nowhere to go when the shipment lands in Dublin. The importer has zero leverage at that point and has no option but to pay up.

If you do your research a number of things come to light.

1. If you ask your supplier for an FOB price for the goods, there is little or no difference - if any difference at all.
2. By asking what the CISF fee will be plus the other arrival charges for your shipment, they either try to fob you off like "they are normal port costs, check with your agent at destination". Or if they tell you what the "arrival charges" are, the cost usually are higher than what you could negotiate here locally with an Irish based forwarder or consolidator including the transport cost plus arrival charges.

The challenge for the Irish importer is that often he is not familiar with the process and unwittingly walks into this trap. My advice is always twofold.

- check with your supplier and confirm what the charges will be on arrival in Ireland that you as the importer will have to pay. Do NOT, repeat, NOT allow the shipment to leave the factory unless you know the costs you will pay on arrival.
- ask your supplier for an FOB price, get the details of the shipment (nr of pieces, weight and dimensions) and ask Irish forwarders to quote you from FOB to Ireland (say Dublin) including the freight and arrival charges.

You then are able to make an informed decision and select the option most advantageous to you.

Hope this helps people to avoid the CISF trap.

Cheers,
Rudolf289

Thanks Rudy,

Very helpful advise.

I know we have spoke about it on another thread, but for the purpose of helping others in the future that land on this thread.....my manufacturer said they checked with the forwarder and they confirmed there would be no CISF fee on arrival.

Can this confirmation be trusted?

If not, can i use their confirmation of "no fee" under Alibaba's Trade Assurance system to get a refund on the fee if it does get charged when it arrives?

CISF really does feel like an extortion fee, no mention of it from manufacturers during the process and the buyer gets caught out with no option.....why is this even allowed in the EU.

I only noticed it because they slipped it in on the BL document.

Again, thanks for you help and advice Rudy.

Kind Regards
IH

RUDOLF289

irishhombre123 wrote: »

Thanks Rudy,

Very helpful advise.

I know we have spoke about it on another thread, but for the purpose of helping others in the future that land on this thread.....my manufacturer said they checked with the forwarder and they confirmed there would be no CISF fee on arrival.

Can this confirmation be trusted?

If not, can i use their confirmation of "no fee" under Alibaba's Trade Assurance system to get a refund on the fee if it does get charged when it arrives?

CISF really does feel like an extortion fee, no mention of it from manufacturers during the process and the buyer gets caught out with no option.....why is this even allowed in the EU.

I only noticed it because they slipped it in on the BL document.

Again, thanks for you help and advice Rudy.

Kind Regards
IH

I am not sure, I have seen different terms being used for the China Import Service Fee. I would recommend that you ask the supplier to confirm what the charges will be that you have to pay on arrival. They should be able to get that information from their forwarder / consolidator in China.

I would also ask for pricing based on FOB and source transport costs through local Irish forwarders. That way you will have a clear picture of what your landed cost will be in both cases, i.e. supplier arranging the shipping and you arranging the shipping.

As to whether Alibaba Assurance Protection covers the charges payable on arrival in Ireland, I have no idea. I think the assurance only applies to the product you buy, not the shipping costs (or in your case the charges payable on arrival). Not sure where you could go to check this out.

Bear in mind, the Chinese forwarder or consolidator dictates to their agent at destination what level of charges they HAVE TO (!) collect as part of these charges payable on arrival are claimed and remitted back to the forwarder or consolidator at origin to cover the freight charges that the shipper has not paid. We have a saying where I come from; "If it doesn't come out of the length, it has to come out of the width" In this case the shipper is the length and you will be the width ......

As I said before, do not allow the goods to be shipped until you know exactly what all the charges are, including the charges on arrival.

Cheers,
Rudolf289