An import is paid for in at least three separate transactions, to three different parties, on three different dates: the goods to the supplier, the freight to a carrier or forwarder, and the duty and taxes to the revenue authority. Many importers track only the total. That total is the one number that cannot tell you anything, because every cause of a change is hidden inside it. Our guide to budgeting the total cost adds the three up; this one is about keeping them apart.
- The three payments have different recipients, timings and currencies.
- Only the goods payment is negotiable with the supplier.
- Freight moves for reasons unrelated to your order.
- Duty follows classification and value, not the price you negotiated.
- A single landed-cost figure cannot tell you which of the three moved.
Three payments, three different logics
Treating them as one line assumes they behave the same way. They do not, and the differences are what make each one manageable.
| Payment | Paid to | Driven by |
|---|---|---|
| Goods | The supplier | What you negotiated and the exchange rate |
| Freight and handling | Carrier, forwarder or agent | Route, space, season and volume |
| Duty and taxes | The revenue authority | Classification and declared value |
Only the first of the 3 responds to negotiating harder with your supplier. Pushing on the supplier because the landed cost rose is a common and entirely wasted conversation when the movement was in freight.
What each one is actually sensitive to
- Goods: unit price, order quantity, and the rate on the day you pay.
- Freight: how full the route is, the season, and whether your cargo shares a container.
- Duty: how the goods are classified and the value the declaration is built on.
- All three: how long the consignment sits anywhere between them.
Storage and demurrage sit awkwardly across the boundaries, which is why they are the costs most often missed in a budget and most often disputed afterwards. They belong with freight for tracking purposes, because that is where the decision that caused them was made.
How to set it up
- 1Give every consignment a reference and use it on all three payments.
- 2Record each payment against that reference rather than against the month.
- 3Keep the supplier invoice, the freight invoice and the customs entry in one file.
- 4Record the currency and rate for any of the three paid in foreign currency.
- 5Close the file only when all three have been paid and matched.
The reference is what makes the rest possible. Without a shared identifier, three payments to three parties on three dates are three unrelated transactions, and no report can reassemble them.
What the split lets you answer
Once the three are separate, ordinary questions become answerable from your own records rather than from memory.
- Whether a margin fell because of the supplier, the shipping line or the rate.
- Whether consolidating with another importer would actually have saved money.
- Whether a classification query is worth raising, and how much it is worth.
- What a realistic landed cost is for the next order of the same goods.
That last one is the compounding benefit. An importer who can quote a landed cost from evidence prices the next order confidently, and an importer working from a single blended total is estimating every time.
Frequently asked questions
My forwarder gives me one invoice for everything. Is that a problem?
Not if it itemises. Ask for the breakdown between freight, handling, storage and any duty advanced on your behalf, and record the components rather than the total.
Should I pay duty myself or let the agent advance it?
Either works. What matters for tracking is that the amount is identifiable as duty rather than absorbed into an agent fee, so ask for it separately on the invoice.
Does this change how I price my goods?
It changes what you know when you price them. The three components move independently, so a price built on last order total assumes a stability that does not exist.
SilkBridge helps importers in Kenya, Uganda and Tanzania pay Chinese suppliers in RMB — documented, reviewed in Nairobi, and tracked to payout.
Keep reading
Ready to pay your supplier?
See the day's rate and start a documented, tracked request — no account needed.
Start a payment request