R2I Shipping FAQ

As our May 2010 move from Alameda (USA) to Kochi (India) was our first experience in transferring personal effects across continents, we were teeming with concerns and questions. Below are some of our inquiries and the responses we received:

1. What is Transfer of Residence (TR)? Can expatriates (US citizens) qualify for TR? 


TR is a concession offered to people transferring residence to India after staying abroad for at least two years and who has not availed this option in the previous three years. This consideration allows for the import of personal and household goods either free of duty or at a discounted duty.

Being an expatriate does not bar one from being eligible for TR. But as requirements vary, it is best to check with the shipping company. US citizens with valid PIO card or OCI are eligible for TR. Otherwise a residence permit is required.

2. Can you explain how customs duty works when shipping under TR?


When shipping under TR, most electronic items and appliances are dutiable at a concessional rate of 15.3% while others are dutiable at 35.7%. Six items exempted from duty are – VCR, washing machine, cooking range, PC, laptop, and refrigerators under 300 liters.

3. How early should the shipping company be contacted and are there timelines for shipping under TR?

It is best to give the shipping as much lead time as possible. Containers are handled by trucking companies with permits to enter port/terminal and during peak time there is shortage of containers. Upwards of two months should work for the most part. Shipping via TR cannot be done prior to 45 days from the departure date.

4. What are some ballpark estimates for FCL shipment and insurance?


40’ containers average $10K for all-inclusive charges (customs + applicable union charges) and 20’ containers hover around $6.5K. Click to know more about Shipping Options.

For total loss only option, insurance costs 2.5% of declared value compared to 3.5% of valued inventory for all-risk. Click to know more about Insurance Options.

5. Is the negotiated rate with the shipping company the sum total of all my shipping expenses? If not, what other charges will I be on the hook for?

Customs Duty and Terminal Handling Charges (Port Dues) are the major charges in addition to the quoted rate. The shipping company can usually provide a good estimate in this regard – around $300 or so is average. Alas! If your destination is to Kerala, notorious union charges lurk (Nokkukooli – remuneration for looking on while the shipment is unloaded - a shameful custom to say the least). Horror stories with charges upward of Rs 20K are common and usually there is no easy way out. The other unknown is demurrage/detention charges that can bite if you are tardy with providing documentation at the destination port – the shipping company is charged for container delays and they pass it on to the customer.

6. Identify the official documents involved in the transaction?
  • Signed Contract: states the shipping company’s offer along with all the inclusions, exclusions, and other terms and conditions.
  • Bill of Lading: the official terms of the contract between the shipping company and you.
  • Household Goods Descriptive Inventory: the official record of the items shipped. Anything not in this list is not officially shipped. The document is required for customs clearance as well as for insurance purposes.
  • Miscellaneous and Optional items: Passport is a requirement for customs clearance. Valued Inventory is required for all-risk insurance. An insurance certificate is provided as the official contract when you purchase insurance.
7. Will the container come to my house for my shipment?
 
The container does come to the customer’s residence in a flat bed truck for FCL shipments. Permits may be required depending on the location and local rules. Should there be insufficient space to park the container, loading from the customer’s place is done onto a regular moving truck and container loading happens at the shipping company’s warehouse. For LCL shipments, the packing and palletizing happens at the customer’s house, but container loading happens at the shipping company’s warehouse.

Containers are handled by trucking companies with permits to enter port/terminal. Container rental rates are by the hour and so shipping companies focus on reducing the time - the first two hours of waiting at the premise is usually offered “free” while the rest is charged at an average of $75 per hour. There may be some leeway here and it would depend on your negotiation skills. An alternative to avoid time pressure is to avail of the ‘drop and pick’ option whereby the container is dropped off and picked up at a later scheduled time, for an additional fee.

8. Is my closest destination port the best alternative for shipping and for customs clearance?


Proximity is absolutely not a factor in choosing destination ports. At times it might make more sense to ship to the port the shipping company recommends – they might have a healthy relationship with customs officials at certain ports – since the customer is already paying for door-to-door service, and if the shipping company’s officials are responsible for clearing customs, it is largely insignificant as to which destination port the shipment arrives.

Additionally, there are Inland Container Depots (ICDs) which allows for customs clearance. Shipping companies will transport the shipment from the port to such ICDs for certain destinations – New Delhi, Bangalore, etc. Depending on your location, it can work to your advantage.

9. How secure is my shipment once it leaves my house?


Shipping companies generally employ bolt seals, which are considered very secure and approved by Indian authorities. For FCL shipments, once the container leaves the customer’s residence, it is unopened until it arrives at the destination port. The vulnerability is from that point on - the best bet is for you to be physically present along-side your shipment from that point on. Unfortunately, in a lot of cases, this is not possible and so security is compromised.

10. Do I need to be present in person to clear the shipment through customs?


The customer’s physical presence is not mandatory to clear the shipment – an agent of the shipping company can be authorized using a power of attorney.

11. What items are restricted/not allowed in a shipment?

Pressurized items are not allowed. Left Hand Drive vehicles are not allowed. Only a single one-liter bottle of liquor/wine is permitted – anything more is dutiable at 222.4% - other miscellaneous charges also apply. Other obvious exclusions include narcotic drugs, obscene stuff, silencers for firearms, exotic wild life products, etc. Weapons and ammunition require a possession license.

12. Are we allowed the option of packing part of our belongings with the shipping company doing the rest? Is there a process for packing? Are there any size restrictions/recommendations?

The following options are at the disposal of the customer:
  • Let the shipping company professionally pack the entire lot (most expensive),
  • Self-pack everything (this severely limits insurance options as all-risk insurance does not allow for this), and
  • Do partial packing – pack all items except breakables and furniture. Professional packing and loading (origin services) for a full-load 20’ container average around $2K. Choosing this option reduces the charges by around one-third.
For self-packing, there are no restrictions w.r.t size. Some rules of thumb apply:
  • Maximum 50lb per box (for easier loading at the origin),
  • Smaller boxes for heavier items, 
  • Superior quality package cartons handle transportation stress better (quality wise Home Depot cartons are at the rear end of the scale, while those from moving supply shops fare way better),
  • Original packaging is unsurpassed and if purchasing new items for the kitchen/dining rooms, it is best to ship them as purchased, and
  • The shipping company may also be able to help with acquiring cartons for a nominal cost. Also, plastic cartons, check-in baggage, etc. are all permissible in place of cartons.
13. How are acoustic pianos handled? Does it make sense to ship a piano purchased in the US for use in India, considering humidity factors?

Some shipping companies have negotiated rates with piano movers, which can be competitive. Otherwise, it is best to arrange this part on your own – ie, let a piano moving company crate and load the piano on the container – the service can be pretty expensive running upwards of $300.

Regarding humidity factors and recommendation, the best bet is to verify with the dealer from whom the piano was purchased. On a personal note, for the Kawai K15 piano we shipped, the verdict was that it was designed to work in Asia as well. The dealer however did recommend and provide silica gel to be placed inside the piano.

Related Posts:
  1. R2I - Deciding on What to Take.
  2. R2I Shipment - Choosing from Insurance Options and Our Experience.
  3. R2I Shipping Options.
  4. R2I Shipping FAQ.
  5. R2I Shipping Experience.

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