For many businesses, Indonesia is land of opportunity. With a healthy GDP growth rate, hovering slightly above 5 per cent since 2016 outside of COVID-19’s effects,1 Indonesia’s market is an attractive one. To top it off, Indonesia’s government has made great progress in increasing the standard of living and reducing poverty to below 10 per cent,2 which means that the middle class is growing and there’s more spending power for goods shipped from overseas.
Since Indonesians are generally more price sensitive, Chinese goods would fare well in this market. This also means plenty of action on the logistics front too. Since certain areas in China, like Shenzhen, share ocean borders with Southeast Asia, it makes sense to ship via sea freight from China to Indonesia.
To tap into Indonesia’s market, it helps to know how sea freight works so that you can plan your China-Indonesia supply chain.
How does Sea Freight from China to Indonesia Work?
The sea freight process generally follows these steps:
Collection – Your hired shipping company collects the goods from a specified collection point, be it your shipping partner’s drop-off point, your supplier’s address or your warehouse in China.
Origin Customs – Your goods are transported to an international port in China and cleared for export by Chinese Customs.
Loading – If your goods are Less-than-Container-Load (LCL), your shipment will be consolidated in a container with other businesses’ shipments. If they’re Full-Container-Load (FCL) your shipment has the whole container for itself. One of China’s busiest ports and the closest one to Southeast Asia is the Port Shenzhen (CNSZN).
Mid-mile – The ship leaves for Indonesia.
Destination Customs – Once the ship reaches Indonesia, they will be processed by Indonesia’s Directorate General of Customs and Excise. While there are 7 major international ports in Indonesia, the busiest port is Tanjung Priok (IDTPP), which processes more than 50% of Indonesia’s shipments.
Unpacking (LCL) – LCL goods will be unpacked from the container first and then loaded onto vans or trucks to prepare for the last mile delivery.
Last-mile delivery – After unpacking, or if your goods are FCL, the shipment will be transported to your destination.
Collection in China
Your shipping partner will collect your shipments from a specified collection point. Depending on the arrangements made with your shipping partner, this could be a specified drop off point, or your origin address such as your own warehouse or supplier’s warehouse.
Depending on whether you’re shipping by Full-container-load (FCL) or Less-than-container-load (LCL), the way your sea freight order will be handled, charged, and containerised will differ.
To determine which of the two is a better arrangement for your order, you can keep these factors in mind, or discuss with your trusted freight forwarder to figure out which works best for your shipments.
Should I ship by LCL or FCL?
Using an FCL arrangement means you’re paying a flat rate for the entire container to transport your goods across the sea. While expensive upfront, the FCL arrangement may be a more cost effective 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 threshold, LCL can be cheaper than FCL in terms of cost per cubic metre if you don’t need a full container for your goods.
As a rule of thumb, when your shipment has filled about half of a container, it’s more economical 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.
Flexibility and Speed:
LCL shipments require more planning from your freight forwarder to consolidate the order with multiple shippers’ shipments. This need to consolidate and organise could also slow down loading times and make their sailing dates less flexible than FCL.
FCL is usually faster and the sailing dates are more flexible because you are in control of the whole container.
FCL shipments can be packed and sealed into a container at the origin and only be opened after it arrives at the destination.
LCL shipments, on the other hand, go through more handling compared to FCL shipments. It needs to first be consolidated into a container and get unpacked at the destination 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.
A sea freight shipping partner like Janio will advise you on which of the two is best for your shipping needs. Once the order is collected, your shipping partner will transport it to one of China’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!
Origin Customs Clearance
After your shipments have been collected, they need to be cleared for export by China’s Customs at the international port closest to your origin address, such as Port of Shenzhen for those shipping out of Shenzhen.
To get your goods cleared for export, your shipment usually needs to have the following documents ready:
Bill of lading
Unlike shipping from Southeast Asian countries, exporting from China 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. 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
To check if your goods fall under the restricted goods category, you can look up China’s Customs website.5
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.
Loading and Mid-mile
The mid-mile stage begins after your shipment is cleared for export from China.
When shipping to Southeast Asia, there are two options to choose from for your mid-mile: either shipping sea freight directly from the Port of Shenzhen (CHSZN), or go through cross-border trucking to the Port of Hong Kong (HKHKG) before shipping via sea freight.
The benefits that you’ll reap from Hong Kong’s status as a free-trade economy means that you’ll unlock more lanes to ship to, such as to Europe, UK, and the USA. Additionally, the customs clearance process in Hong Kong for shipments going to Southeast Asia is faster than customs clearance from China to Southeast Asia.
Indonesia has extensive connectivity through sea freight with its 17,000 islands. Its geographic size is comparable to the United States, giving you many options in terms of where to ship to Indonesia. While the Port of Tanjung Priok is the busiest port in Indonesia, other noteworthy ports include the Port of Tanjung Perak (IDTPE), Port of Kuala Tanjung (IDKTJ), Port of Makassar or Soekarno-Hatta (IDMAK), Port of Bitung (IDBIT), and Port of Sorong (IDSOQ). The Indonesian government is also working to develop a maritime highway across 24 strategic ports in Indonesia.6
Shipping into Southeast Asian (SEA) countries via sea freight from China can be a better alternative to air freight in certain cases. Major sea ports in SEA aren’t thar far off from cities like Shenzhen, China due to them sharing ocean borders with each other. For the China-Indonesia lane, air freight at its fastest takes between 1 to 3 days for end-to-end delivery. While sea freight is slower with mid-mile delivery timings ranging between 5 to 8 days, it’s only a fraction of air freight’s cost for larger orders.
Considering the high competition for air cargo space due to grounded flights in light of COVID-19, sea freight is a competitive alternative for shippers looking to bring their goods outside of China to Southeast Asian markets.
Want to find out how to incorporate more sea freight into your CN-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 a port like the Port of Tanjung Priok (IDTPP). For other destinations, the notable ports in Indonesia include the Port of Tanjung Perak (IDTPE), Port of Kuala Tanjung (IDKTJ), Port of Makassar or Soekarno-Hatta (IDMAK), Port of Bitung (IDBIT), and Port of Sorong (IDSOQ).
Your shipment will then be inspected by Indonesian customs for clearance.
To get import clearance in Indonesia, your shipment will need the following documents:
Bill of lading
Certificate of insurance
Customs import declaration
Customs identification number (Nomor Identitas Kepabeanan, NIK)
Importer Identification Number (Angka Pengenal Import, API)
Your manufacturer or supplier needs to sign the commercial invoice 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.
There are three types of import licenses in Indonesia. API-U is the general import license used for finished goods. API-P is the producer import license used for bringing in raw or unfinished goods into the country. There is also a third importer license called API-T, which is limited to a specific industry and does not permit you to import goods not related to that sector of business.
Check out our updated customs clearance guide if you’re also interested in Indonesia’s customs clearance for B2C shipments. The guide also gives a comprehensive coverage of tackling customs clearance in a dynamic region like Southeast Asia.
Once your goods have been cleared for import, the last mile depends on whether you’re shipping LCL or FCL and which part of Indonesia your destination is.
Last-mile in Indonesia
If your shipment is FCL, it’ll be transported directly to your consignee’s address. Then, you’ll unpack your goods there before a haulier comes back to pick up the container.
However, if your shipment is LCL, your order will be unpacked from the container first before it can be distributed to its destination. For the last mile leg, your shipments will be transported as either loose cartons or as pallets depending on how they were initially packed.
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 consignee. Either way, the final leg of the delivery will be done via vans or trucks.
When Should You Use Sea Freight?
Sea freight is the most common method of transporting goods, carrying 90 per cent of goods worldwide.7 This mode of transport has the added benefit of being cost-efficient and comparatively environmentally friendly. However, sea freight’s effectiveness as a mode of transport depends on what you need in terms of:
The weight and size of your shipment
The products being shipped
Sea freight works best when businesses are looking to save more rather than prioritise shipping speed. This mode of transport 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.
For instance, these products generally can’t be shipped via air freight: flammable products, products containing gases, 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 less. In Southeast Asia, some lanes take only 1 or 2 extra days more than air freight in its mid-mile journey.
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 just need to tell your trusted shipping partner like Janio that you’d like your parcel shipped by sea freight and we’ll take care of the rest.
If you’d like to find out more about how we can solve your SEA eCommerce cross-border delivery needs, come and have a conversation with us.