Many importers in New Zealand are paying far too much in airport storage fees, simply by not knowing their options. Customs Broker Peter McRae of Platinum Freight Management in Auckland and Wellington identifies the potential savings and how to get them.
Many importers don’t know the processes their goods undergo during importing into New Zealand. They are too often unaware of the breakdown of fees and charges – and the opportunity to get a better deal. As a Customs Brokerage, we advise our clients to know the charges, and your opportunities to reduce them. In this case, our focus is on airport handling fees.
In comparing the two only airport handling agencies in New Zealand, Air New Zealand Cargo Handling and Menzies Aviation, Platinum Freight Management has identified a major difference in charges that result in some importers being grossly overcharged by more than three times the fees.
I urge my importing clients – and all other importers – to familiarise themselves with the fees and make informed financial decisions right the way through the importing process.
I’ll explain by way of example, but first, let’s understand the system:
When items are imported by air freight they arrive at the cargo terminal, depending on which airline brings the goods to New Zealand will determine which cargo terminal manages the freight. Commercial goods processed through the New Zealand Customs Service (NZCS) takes between 2 and 4 days to receive an owner importer code. During this wait, the cargo is charged documentation fees and storage fees based on the chargeable kilogram, 24 hours after arrival. After the cargo has been processed through the NZCS and the airline cargo terminal fees are paid, the goods are then delivered to the importer via a transport company.
So for the sake of comparison, let’s assume an importer has never imported before and imports by air freight $5,000 USD worth of clothing – or 300kg – into Auckland to fill an urgent customer order.
If the cargo arrives at Menzies Aviation, the airline terminal charges would be:
- Terminal fee $41.00*
- Loose handling fee $28.50*
- If the cargo is not picked up within 24 hours of arrival, then storage is $75 per day
- Total $144.50
(*subject to GST)
But, if that same cargo was to arrive at Air New Zealand Cargo Handling, the airline terminal charges would be:
- Cargo administration fee $36* (increasing to $37* in Jan 2019)
- Terminal security fee $15* (increasing to $15.60* in Jan 2019)
- Loose cargo handling fee $24* (increasing to $27* in Jan 2019)
- If the cargo is not picked up within 24 hours of arrival, then storage is a flat fee of $300* (increasing to $350 in Jan 2019)
- Total $375* (increasing to $429.60* in Jan 2019)
(*subject to GST)
Therefore, at present Air Menzies currently $230.50 cheaper, increasing to $285.10 cheaper after it’s opposition’s price rise in Jan 2019.
Remembering that this fee difference is for only one importation, for importers that bring in goods regularly by air freight, you can see how quickly the charges will stack up – and the potential savings simply by choosing the right carrier and subsequent handling service.
To opt for a cheaper option with every air cargo importation, importers would need to move their imports through the airlines which Menzies Aviation handles: Air Calin, Emirates, Fiji, Malaysian, Thai, Air Tahiti, Cathay, Hawaiian, Virgin AU, China Eastern, Philippine Airlines, Sichuan Airlines, Air Asia X, Tianjin, Hainan, Nauru, Samoan Airlines and Tasman Cargo.
Airline cargo terminal fees are just one piece of the puzzle when importing to New Zealand. Other considerations are customs clearance, import duty, import GST, delivery and sometimes Quarantine (MPI). Also first-time importers are stung on their first import, whereas regular importers are stung if they don’t pre-clear cargo prior to arrival.
Our advice is this: know your fees and know your options. Partner with your Customs Broker to choose the best value importing option to meet you schedule and your budget, in order to get the best financial outcomes for every import.
To contact Platinum Freight Management, phone 0800 166 716