After a successful purchase of a vehicle at an auction, Akebono issues an invoice to the customer.If the client wants to use his previously paid deposit, it will be deducted from the total amount of the invoice. The client has 5 days to pay for the purchase. The total amount of the invoice consists of the following:
- CAR PRICE 車両代金
- AUCTION FEE 落札料金
- TRANSPORTATION FROM AUCTION TO YARD 陸送料金 ("rikuso ryoukin")
- CAR INSPECTION IN JAPAN 検査 ("Kensa")
- SHIPPING CHARGES 船積み料 ("Funazumi ryokin"), which includes following:
- a) Yard storage fee;
- b) Photos;
- c) Radiation check;
- d) Custom clearance for car in Japan;
- e) Loading of car (so called Stevedoring)
- f) Fixing of car on the vessel (so called Lassing)
- FREIGHT 運賃 ("Unchin")
- DHL FEE
- AGENT COMMISSION
CAR PRICE is the actual price for which car was sold in the auction. Once it is paid by purchaser, auction transfer this amount to the car owner.
Bidding for car in the auction is free of charge. Auction charge seller for putting the car up for auction. If the car was sold auction charges the purchased company “Auction fee” and the seller “Closing fee”.
As we already discussed the amount of auction fee differs depending on:
- Purchase method (in the auction site, remotely, automatic bidding)
- Auction corner (white corner, recycle corner and etc)
- Which system is used for the purchase (AUCNET, I-AUC, AUTOSERVER and etc)
- Purchase type (bidding, negotiations, one price);
- Auction type (conventional auction or tender auction)
The average auction fee is 8,000 JPY to 15,000 JPY
From the auction, the car is usually delivered to a customs broker's yard in Japan. Such yards are located near ports.
Some companies use their own car carriers , others use outsoursing. Following is the list of biggest transportation companies in Japan:
Kokusai rikusou yugengaisha
Transportation cost depends on the company and the destination from auction to the yard near the port.
Some average samples of transportation cost:
CAA GIFU AUCTION- NAGOYA PORT- 6,500 JPY +10%
JU AICHI AUCTION- NAGOYA PORT- 4,000 JPY +10%
USS TOKYO- YOKOHAMA PORT- 6,800 JPY +10%
In case the vehicle was purchased at a remote auction, combined ferry and land transportation may apply.
I some cases higher than usuall transportation costs could be applied.
CAR INSPECTION IN JAPAN 検査 ("Kensa")
Car inspection in Japan is done depending on the requirements of the destination country. Some countries require inspections, some not require.
For instance, in order to ship vehicle to Uganda it shall pass the EAA (East Africa Automobile Vehicle Inspection Service) and the inspection certificate shall be provided along with other export documents.
Inspector checks: 1) vehicle parts and configurations function as they were manufactured, 2) vehicle is in clean condition and washed, so the vehicle number and engine number be clearly seen,3) the refrigerant gas removed and other requirements.
Following are examples of the inspection services and countries for which the inspection is required:
EAA- Tanzania, Uganda
JEVIC- Kenya, Uganda, Zambia
QISJ- Kenya, Tanzania
BEREAU VERITAS- Sri Lanka, Mauritius
JAAI- Sri Lanka, Mauritius, Tanzania, Bangladesh
MAF- New Zealand
Thus, before exporting a car to any country, it is necessary to find out whether an inspection is required and which organization should carry it out. Vehicle inspection can be ordered separately or through a customs broker.
The average inspection cost cold be from 12,000 jpy up to 30,000 jpy depending on the country of the destination, inspection organization and the inspection type. One should take into the consideration that some repairing cost can be applied in case the car doesn’t pass the inspection and some additional works should be done.
SHIPPING CHARGES 船積み料 ("Funazumi ryokin")
a) Yard storage fee;
Yard storage fee depend on the customs broker the exporter is using. Usually, 30 days of storage are already included in the customs broker services. If car is not shipped after 30 days, the average storage fee for car is 350 jpy per day. One should know, that if exporter keeps the car in the yard and then decided to use other broker’s services or re-sell the car in the auction, that exporter has to pay penalty called “Naika henpin” in amount of 3,500 jpy per unit and pay the storage fee from the first day of using yard.
Some customs brokers charge exporters for photos, some provide set of photos, but charge fee for additional photos of the car if requested by the exporter. The average cost of one set is 1,500 jpy
c) Radiation check
On March 11, 2011, after a strong earthquake and tsunami, there was an accident and tragedy at the Fukushima-1 nuclear power plant. The number of exports of used cars from Japan fell sharply. Many countries governments timely restricted the import from Japan during that time.
For its part, Japan, in order to resume exports to other countries, introduced mandatory testing of the radiation level before exporting cars and the level of the permissible radiation dose was not higher than 0.3 μZ / hour.
Ten years have passed since that tragedy. Problems with radioactive cars have subsided, and over the past three years, based on my personal experience with exporting cars, I only came across one car that turned out to be radioactive and did not pass radiation control on the Japanese side.
All exported cars, before entering the territory of any Japanese port, undergo a mandatory procedure for measuring the level of radiation. Without these measurements, it is impossible to export a car from Japan, while the threshold for passing the control remains the same - no higher than 0.3 μZ / hour.
The measurements are carried out by the Japanese organization ANCC (ALL NIPPON CHECKERS CORPORATION). https://www.ancc.or.jp/english/index.htm The cost of measuring the radiation level of one car is now 1,500 yen + 10% of this amount.
d) Custom clearance for car in Japan;
Each car passes customs clearance twice:1) in the country of departure and 2) in the country of destination. In Japan customs clearance for car is conducted by certified customs brokers 通関業者 ("tsukan gyousha"). They physically inspect vehicle, check the export certificate and fill the necessary information. Car passes the customs clearance two days prior shipping. The result of customs clearance work is document called ED (Export Declaration). This document is only for in Japan use (for tax refund) and not required for customer.
Customs brokers services cost averages from 12,000 to 15,000 jpy
D) Stevedoring and Lassing
Loading of car to ship which is called stevedoring and fixing the car on the ship which is called lassing are conducted by the port workers. These charges are usually added to the freight cost.
FREIGHT 運賃 ("Unchin")
Freight- carrying a car from the country of origin to the country of the destination. There are two types of freight. Freight Prepaid and Freight Collect.
Freight prepaid means, that the exporter arranges shipping and pays the shipping company.
Freight collect means, that customer directly agrees with the shipping company and pays the freight cost to the shipping company in the country of the destination.
The agreement on the freight type is done when the contract between customer and the exporter is signed. Agreements are regulated by INCOTERMS.
Incoterms- widely-used terms of sale, are a set of internationally recognized rules which define the responsibilities of sellers and buyers. Incoterms specify who is responsible for paying for and managing the shipment, insurance, documentation, customs clearance, and other logistical activities.
Three of the terms from the Incoterms are related to today’s discussion, that are FOB, C&F and CIF
FOB- FREIGHT ON BOARD or FREE ON BOARD. It means that the exporter is responsible for the car, its safety and bears all costs until it is loaded onto the ship.
C&F- COST AND FREIGHT. Means that the sender is responsible for the car, its safety and bears all costs to the port of destination.
CIF- COST, INSUARANCE AND FREIGHT. Insurance is added to C&F
Thus, in case of C&F and CIF exporter pays the freight. Exporter request the freight quotation from the shipping company. Shipping company provides the quotation per the cubic meters (size) of the car.
Following is the example of the freight quotation from Nagoya, Japan to Southampton, UK
③SOUTHAMPTON, UK向けの運賃 >> >> [運賃] >> >> POL:YOKOHAMA,NAGOYA >> >> OF:USD ＄70/M3 ＋ BAF ＄15/M3 >> >> VALID DATE:2021/10/1～2021/10/31
Let us calculate the freight of Toyota Estima Hybrid AHR20W.
1)First from the catalogs, we have to find the dimensions of the car.
Body size of Toyota Estima Hybrid is 4820 x 1810 x 1760
2) Second, we have to find out the M3 (cubic meters). In catalogs dimensions are provided in millimeters so we have to convert millimeters to meters and then find out the M3 size
4,820 X1,810X1,760=15,4 M3
3) The base rate is 70 M3 means: 70 USD X 15,4 M3= $1, 078 USD
4) BAF – Banker adjustment factor refers to the Fuel that is used to operate ships. The ship operator is responsible for the payment of these bunkers to the bunker.
$15 USD X 15,4 M3= $231 USD
5) Thus, the total freight would be 1,078+231=$1,309 USD
Please note that the freight collect price differs from the freight prepaid.
Shipping freight quotations to major destinations:
Shipping companies list and their schedule:
After shipping of car, exporter depending on the country of the destination have to send some original documents like export certificate, Bill of Lading, certificate of origin, certificate of inspection or other documents. So, the DHL price should be calculated.
Agent commission is actual profit of the exporter. The determination of the agent's commission is influenced by such conditions as the country of destination, the cost of the car, the terms of payment, the average cost of similar services on the market.
For a simplified calculation of all expenses that a buyer must pay for a car, exporters make calculators or tables with the amounts of all expenses from a particular auctions.
@ Akebono Co.,Ltd
Used cars from Japan