How do parcels enter Malaysia from Hong Kong via air or sea? What kind of customs documents do you need to clear MY customs? Find out here!
August 5, 2020
With an estimated population size of 31.53 million and fairly developed infrastructure, Malaysia has always been one of the main economic pillars in Southeast Asia. Malaysia’s population is fairly tech-savvy, with internet penetration standing at 83 per cent (26.69 million internet users) and 19.90 million Malaysians who have made online purchases in 2019 according to the Digital 2020 report.1
For businesses based in Hong Kong or businesses that import into Malaysia from Hong Kong, the Klang Valley is of particular interest in Malaysia. The Klang Valley is a collection of urban areas which includes major urban centres like Klang, Kuala Lumpur, Petaling Jaya, and Shah Alam among others.
This means that the area includes West Malaysia’s main air and sea gateways: Kuala Lumpur International Airport (KUL) and Port Klang (MYPKG). In addition to well-developed infrastructure and having high eCommerce usage based on the MCMC’s (Malaysian Communications and Multimedia Commission) eCommerce Consumers Survey in 2018,2 the Klang Valley is a solid eCommerce expansion target for merchants based-in Hong Kong or who import from Hong Kong.
But for those looking to ship to Malaysia, there’s still the question of which fits your needs best: air freight or sea freight?
When Should You Use Air Freight or Sea Freight?
If delivery speed takes priority, then air freight’s speed is worth paying for. When not looking at other legs of the journey, a flight from Hong Kong to Malaysia will take around a day at most. Sea freight could take a few more days to a week depending on the schedule.
If you’re using air freight, you need to ensure that the profit you make on these shipments can justify this transport mode’s higher rates compared to sea freight.
Interestingly, there are cases when air freight can be cheaper than sea freight. To understand this, it helps to see 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 is usually charged by volumetric weight, with a minimum chargeable volume being 1 cubic metre (cbm).
Sea freight saves you money if your order is larger than 2 cbm. However, you don’t get those economies of scale for items that aren’t that big like small cartons that take up between 0.5 to 0.9 cbm since you’re 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 on your own. Logistics service providers like Janio can help advise you on whether air freight or sea freight is better suited to your current leg of the supply chain 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:
The weight and size of your shipment
The products being shipped
Air freight is fast, but can be limited in terms of what you’re allowed to transport. Bulky or oddly-sized items, or items deemed too dangerous to meet air freight’s restrictions on what can be shipped generally should use sea freight instead.
For instance, these products generally can’t be shipped via air freight: products containing gases, all things 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 and B2B Shipping from Hong Kong to Malaysia in 4 Steps
The logistics supply chain from Hong Kong to Malaysia can vary depending on your requirements and location. However, shipping from Hong Kong to Malaysia would usually be done with the following steps.
Hong Kong: First Mile Delivery
First mile delivery in international shipping is where your order leaves your origin address for your shipping partner’s local warehouse. The origin address can be a storefront, office, or warehouse belonging to you or your supplier. Before your goods leave the origin address, the products have to be packaged and labelled appropriately to facilitate smooth cross border shipping.
If you’re shipping with Janio, goods from areas near Hong Kong, like Shenzhen, may also be trucked to Hong Kong for export. Hong Kong has more business-friendly regulations and policies, which makes importing and exporting from here smoother and faster compared to exporting certain types of goods directly out of the mainland.
Your goods’ first mile delivery destination varies depending on the type of order you are shipping. If you are shipping a bulk order which is already containerised (e.g. Full Container Load) or palletized, they can be sent directly to Hong Kong International Airport (HKG) or the Port of Hong Kong (HKHKG).
If you are shipping loose parcels, on the other hand, they’ll need to be consolidated at your shipping partners’ warehouse. Here, they’ll be consolidated into pallets for air freight or consolidated together with other orders in a container if you were shipping an LCL (less-than-full container load) sea freight order.
While transporting your goods, your packages may go through bumpy rides from events like turbulence. Thus, having extra padding like bubble wrap or packing peanuts is recommended particularly for fragile items. This is to prevent your goods from bouncing around in the packaging or getting damaged during shipping. To learn more about the best practices in packaging your goods, we’ve covered this topic in a previous article.
When you’re ready to hand over your shipments to your logistics partner, you can choose to have it picked up from your address or drop off your shipment at your shipping partner’s drop-off point. Most shipping partners would have a cut-off time for submitting orders so that they can optimise their route.
B2C parcels will typically be consolidated at a transportation hub along with other packages with the same destination country prior to customs clearance. Otherwise, B2B shipments can be transported directly to the origin warehouse for customs clearance since they already make up a larger weight and volume compared to individual B2C shipments.
Hong Kong Origin Customs Clearance and Freight
Once your orders are consolidated at your partner’s warehouse, they’ll head to your logistics service provider’s air cargo agent’s warehouse at either Hong Kong International Airport (HKG) or one of your logistics service provider’s warehouses at the Port of Hong Kong (HKHKG) depending on whether you’re shipping with sea or air freight.
At the port or airport, officers from the Hong Kong Customs and Excise Department will inspect your shipment and their respective customs documents to see if they can be cleared for export from Hong Kong. The documents that are usually needed for customs clearance at this stage are:
Bill of lading/ Airway Bill
You can check out the official list of documents to import and export from Hong Kong on the official Hong Kong Customs and Excise Department website.3
Unlike shipping from Southeast Asian countries, exporting from 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. More information on export permits from Hong Kong can also be found here.4
If you’re feeling unsure about which steps are needed to export your goods from China, you can always check with our customs clearance experts on 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 ship or uplifted onto a plane.
For merchants shipping B2C parcels, air freight is the faster option, especially if you’re testing Malaysia’s eCommerce market and need to ensure that your parcels reach your customers quickly. Shipments will take off from Hong Kong International Airport (HKG) and land at Malaysia’s KLIA – Kuala Lumpur International Airport (KUL).
Air freight is the preferred mode of transport for B2C eCommerce merchants thanks to its speed. However, in light of COVID-19, flights have been limited, causing the price for air freight to increase from the lack of cargo space. The flight limitations may also lead to delays in delivery speeds.
However, if you’re looking to ship in bulk, sea freight is the more economical option. As it can take a few days to a week longer, you’ll need to plan out your supply chain and take note of your inventory requirements.
Sea freight shipments enter West Malaysia via Port Klang (MYPKG). If you’re shipping with Janio, ports we serve include Kota Kinabalu Port (MYBKI) and Kuching Port (MYKCH). This is a great mode of transport if you’re planning to set up a local distribution centre in Malaysia, as large volumes can be brought into the country relatively inexpensively.
Shipments that are delivered via sea freight can be in full container load (FCL) or less than container load (LCL). Shipping with FCL means that you’re paying for an entire container to ship to Singapore, whereas LCL means you’re paying for part of the container, where the shipments are consolidated with other shippers’ shipments.
Customs Clearance in Malaysia
Once your item arrives in Malaysia’s airport or port, your shipment will be transported into a customs warehouse for clearance. This warehouse is where the customs officers will inspect your shipments and shipping documents and determine if they are allowed to enter Malaysia.
To clear customs for import into Malaysia, you or your shipping partner would generally need to provide the following documents:
Certificate of origin
Master airway bill or bill of lading
Receipt of payment of import duty and import-related taxes
Other relevant permits, licenses, and certificates
If you’re shipping parcels directly to customers, you 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.
If your item is below Malaysia’s de minimis rate of MYR 500, then there is no need to pay import duties and taxes to the customs office.
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. If you’d like a more detailed guide on dealing with customs clearance in Southeast Asia, you can check out our customs clearance resource.
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.5
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 and permit to export or import on Malaysia’s Customs website.6
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.7
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.
If you’re still unsure about the customs clearance process, check out our updated customs clearance guide for more information.
Distribution and Last Mile in Malaysia
Once your shipment has cleared customs, it will enter the distribution stage of the shipping journey. B2B shipments that don’t need to be broken up can be shipped directly from the airport or seaport.
However, B2C parcels need to be at a transport hub to sort them out before the last mile journey can begin. However, if the address is in East Malaysia such as Sabah or Sarawak, an additional domestic flight may be needed before your shipments, be they B2C or B2B, can be sorted and delivered if KLIA was used as a transit hub.
The last mile delivery stage is where your parcel will be sent from the destination warehouse to your consignee’s address. In Malaysia, this stage of the delivery is done via vans. During the last mile delivery stage, your logistics service provider will ensure that your shipment is received by your consignee.
Now that you know the general steps of shipping your items from Hong Kong to Malaysia, you’re in a better position to choose the right shipping partner who can cover the entire logistics supply chain from first mile to last mile. When choosing a logistics service provider, it helps to consider the cost, speed, delivery experience, and your whole supply chain before committing to a shipping solution.
To keep your supply chain smooth from Hong Kong to Malaysia, it helps to have a reliable shipping partner with local expertise that can deliver on time. That way eCommerce businesses can impress their customers with their hottest items in stock while wowing them with efficient delivery speeds or just ensuring that your supply chain remains smooth and efficient.
If you’d like to find out more about how we can solve your SEA e-commerce cross-border delivery needs, come and have a conversation with us.