During the international transportation, shipping insurance can prevent the loss of or damage to the goods to a certain extent. The shipping insurance cost is usually calculated according to the value of the goods and the mode of transportation, and the cost of insurance increases with the value of the goods and the mode of transportation.
Shipping insurance cost calculation formula
- CFR=FOB+Freight
- CIF=(FOB+Freight)/[1-Insurance rate*(1+Insurance markup rate)
- CIF = CFR / [1 – insurance rate * (1 + insurance markup rate)
- You can derive the formula for calculating the cost of transportation insurance:
- Premium = CIF * insurance markup rate * insurance rate
Shipping insurance cost
If CFR is known, then the formula to derive the transportation insurance cost is:
Premium = CIF * insurance markup rate * insurance rate= CFR/[1-insurance premium rate*(1+insurance markup rate)] *insurance markup rate*insurance premium rate
If the FOB is known, then the formula to derive the transportation insurance cost is:
Premium = CFR/[1-insurance rate*(1+insurance markup rate)] *insurance markup rate*insurance rate= (FOB + freight) / [1 – insurance premium rate * (1 + insurance markup rate)] * insurance markup rate * insurance premium rate.
The formula used to calculate the transportation insurance cost in actual operation
- Premium = invoice value * 1.1 * insurance rate
- Customs declaration filling, calculation of taxes is not simpler:
- CIF price = CFR price * 1.003
Shipping insurance cost
Shipping insurance cost actual case
Insurance premiums for imported goods should be calculated in accordance with the actual costs paid. If the insurance premium for imported goods can not be determined or did not actually occur, the Customs should be in accordance with the “price of goods + freight,” the total amount of both multiplied by three thousandths of the calculation of premiums, the customs system in accordance with the rate * CFR price calculation of insurance premiums.
The formula for calculating the premium for the actual insurance is 110% (or 120% or even 130%) of the invoice amount.
The insurance premium calculated by the customs system may be lower than the actual cost incurred, resulting in under taxation.
For example, if the transaction method is CFR, the insurance premium of the enterprise is CFR price * 110% * premium rate (may be three thousandths, may be lower than three thousandths), and the insurance premium calculated by the system is CFR price * premium rate (three thousandths).
Of course, the actual premium rate of the enterprise insured may be lower than 3 per thousand.
Shanghai Xiongda International Logistics has maintained long-term partnership with ZIM, EMC, CMA, MAERSK, COSCO,Matson and so on, with no intermediate links which has fair and transparent prices .
Xiongda specialize in freight shipping to USA, and can provide sea shipping and air freight from China to USA.
