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Digitally-savvy, fond of online shopping and good deals, Malaysia is a country that’s worth expanding to whether your Hong Kong-based business is online or not. According to the Digital 2020 report, 82 per cent of Malaysian internet users – or 19.90 million people – have shopped online before, with the value of the market for online goods standing at 3.68 billion in 2019.1
For time-sensitive shipments within your supply chain like eCommerce deliveries, using air freight is the way to go. But if this is your first time shipping from Hong Kong to Malaysia, or you’d like to know more about the steps involved, we cover all the eCommerce logistics steps from the first mile to the last and also origin and destination customs clearance here.
Air freight is the fastest mode of transport when compared to sea freight and trucking. Taking into account just the mid-mile portion (the actual flight or sailing) a flight can take around 1 day at most while sea freight can take a few days to a week to get from Hong Kong to Malaysia.
On the other hand, when you gain speed, you trade-off cost-savings particularly if you’re using express air freight.
However, there are times when air freight can be cheaper than sea freight. To find out how, we need to lay out how air freight rates are calculated.
For air freight, rates are charged to the order’s volumetric weight (how much space it takes up) or its actual weight depending on which is greater. For less-than-container-load shipments, sea freight tends to be charged by volumetric weight, with a minimum chargeable volume being 1 cubic metre (cbm).
Money can be saved through sea freight if your order is above 2 cbm. However, you won’t get those economies of scale for smaller items like cartons or boxes that take up between 0.5 to 0.9 cbm as you’ll be paying for unused space. This is where air freight can be more economical than sea 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 unique supply chain needs and also offer you both shipping modes for your orders. To find out more, reach out to us below:
When choosing between air freight and sea freight, consider the following:
Air freight is fast, but can be limited in terms of what you’re allowed to ship. Bulky or oddly-sized items, or items too dangerous to meet air freight’s restrictions on what can be shipped generally should use sea freight instead. For instance, items that are more than 1.6 metres in height may find it hard to be uplifted onto a plane.
For instance, these products generally can’t be shipped via air freight: products containing gases, flammable, toxic or corrosive items like batteries, magnetic substances like speakers, perishable items and more. If you’re shipping these, it makes more sense to use sea freight.
B2C air freight shipments 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. Commercial invoices and packing lists are usually what’s required at the very least.
Bulk orders, on the other hand, face more regulation. The consignees of these orders tend to be 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 your international shipping supply chain from Hong Kong to Malaysia 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 Hong Kong or Shenzhen to Malaysia.
In the first mile leg of this delivery, your shipment leaves the origin address to your logistics service provider’s warehouse. The origin address is where your items are 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. If you’re using Janio’s air freight from Hong Kong but are based in surrounding areas, your shipment will first be sent to our warehouse in Hong Kong.
Packaging and labelling make a difference whether your items gets damaged or not. Packages may sometimes go through bumpy rides like turbulence during flights. 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 be 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 Hong Kong International Airport. As B2B shipments are already consolidated, the shipment can be transported directly to the airport for customs clearance.
After consolidation at your shipping partner’s warehouse, your shipments will be sent to your shipping partner’s air cargo agent’s warehouse near Hong Kong International Airport (HKG) after they’ve been collected and consolidated. Here, your shipments will go through terminal handling.
Terminal handling processes normally include 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, they’ll be palletized at your shipping partner’s air cargo agent’s warehouse. Once all this is done, your order will be sent for customs clearance.
Hong Kong’s connectivity and frequency of flights with many countries around the world is what makes it a great regional hub. As of the time of writing for example, there are no direct flights from USA, Europe and other North Asian countries into Shenzhen in China, whereas these countries have flights to Hong Kong. Hong Kong’s trade-friendly terms and reduced restrictions also mean that it can process orders for customs clearance faster than other origins in mainland China.
When it comes to clearing Hong Kong customs, your shipment at the minimum needs to have the following documents ready:
You can find the official list of documents to import and export from Hong Kong on the official Hong Kong Customs and Excise Department website.2
Unlike shipping from Southeast Asian countries, exporting from China and Hong Kong requires you to have an export permit before you can ship your goods out. Additionally, if you’re shipping any restricted goods, you’ll need to apply for a special export permit for these goods before it can be exported.
If you want to check out the documents needed for exporting directly out of China, you can check the Ministry of Commerce Republic of China’s website to find out more on how to apply for the export permit.3 We’ve provided a site with an English translation in our references as well.4 More information on export permits from Hong Kong can also be found here.5
To check if your goods fall under the restricted goods category, you can look up China’s Customs website.6
It’s also important to note that dangerous goods like those carrying chemicals require Material Safety Data Sheets as well to adhere to safety regulations when it comes to air freight.
If you’re ever unsure about what kind of steps you need to take to export your goods from China, you can always check with our customs clearance experts if you’re unsure of which documents to apply for and how to declare your goods.
After checking these documents and clearing your shipments for export, your shipments can be loaded onto a vessel.
After getting cleared for export, your order is uplifted onto a plane and leaves Hong Kong, bound for Malaysia. The mid-mile leg of the journey (i.e. the flight itself) will take around a day at most from Hong Kong to Malaysia.
Once the flight carrying your shipment arrives at Malaysia, it will be unloaded at the destination airport for customs clearance. In West Malaysia the main airport would be Kuala Lumpur International Airport (KUL).
To clear your goods for import into Malaysia, you’ll generally need the following documents:
Parcels that are shipped directly to customers won’t need as many documents as listed above. The airway bill, packing list, commercial invoice and certificate of origin (if needed) are usually sufficient for clearance into Malaysia.
Furthermore, if your B2C order is shipped via air freight into Malaysia and has its customs valuation below Malaysia’s de minimis rate of MYR500, it won’t be charged additional duties and taxes.
The de minimis rate refers to a value threshold where fewer or no duties and taxes are charged if the shipment’s customs value is below that point. This only applies to goods that are delivered via air freight. In Malaysia, the customs valuation is calculated using the Cost, Insurance and Freight (CIF) method, which includes the cost of the goods themselves as well as freight and insurance costs.
On the other hand, if your goods exceed the de minimis threshold, higher import duties and taxes like income tax will be levied on your shipment. You would have to pay sales and service tax (SST) of between 5 – 10%, and the import duties and income tax depend on the product category as declared by the harmonised systems code (HS code) which could go up to around 25 per cent. You may find out the percentage of your import duties, and taxes you need to pay through Royal Malaysian Customs Official HS Code finder.7
If you are shipping in bulk, such as entire pallets, your importing party in Malaysia must first register with the Companies Commission of Malaysia for a license to import goods. Some items also need a license regardless, including batik sarong, electric domestic equipment, pharmaceutical products, and more. You may check out the list of items that require a license to export or import on Malaysia’s Customs website.8
Once registered, a company must then apply for an import license from the Ministry of International Trade and Industry (MITI). Malaysia uses a privatized single digital window for all import and export regulations called Dagang Net.9
The customs import declaration is also part of the customs clearance process but will usually be applied for by your customs clearance agent, like Janio. Janio also offers customs clearance expertise when it comes to air freight to and throughout Southeast Asia.
If you’re still unsure about the customs clearance process, check out our updated customs clearance guide for more information.
Once your shipment has been cleared for import, it will enter the distribution stage. If the consignee’s address is in West Malaysia, your B2B shipments can be delivered directly to its destination. B2C parcels on the other hand, need to be sorted at your logistics service provider’s warehouse first before the last mile journey can begin.
If the address is in East Malaysia, an additional domestic flight will be needed first.
The last mile delivery stage is where your parcel will be sent to your consignee’s address. In Malaysia, this stage of the delivery is done via vans or trucks. During the last mile delivery stage, your logistics service provider will ensure that your shipment is received by your consignee via multiple delivery attempts. The number of attempts is based on the agreement you have with your shipping partner.
Air freight works best for time-sensitive shipments that can cover the shipping rates. Air freight works even better when you have logistics service providers who can advise you on how to best utilise it in your supply chain.
Contact us below to find out more about how Janio can help you or if you’d like an air freight quotation to ship to and throughout Southeast Asia.
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