Steel pallet racking manufacturing has a mature industry chain in China. Each year, thousands of containers of pallet racking are exported to the Australian market. Yet in June 2018, the Australian pallet racking industry was shattered by policy changes. On 18 June, Australian Anti-Dumping Commission (ADC) decided to start a preliminary investigation No. 441 on steel pallet racking exported from China and Malaysia. Before the final conclusion and report of the investigation, interim dumping duty would be charged when described goods are imported from China or Malaysia to protect local manufacturers.
What is Anti-Dumping?
The Australian Government website provides a clear explanation of anti-dumping. Dumping occurs when goods exported to Australia are priced lower than their "normal value" which is usually the comparable price in the ordinary course of trade in the exporter's domestic market. Anti-dumping is the imposition of a measure by the Australian government, in the form of an additional duty on imports and/or a minimum export price, to remedy material injury to Australian manufacturers caused by dumping.
Why Anti-Dumping for pallet racking exported from China?
An anti-dumping protection is necessary because price of Steel Pallet Racking exported from China is much lower than the price from Australian local manufacturer or trading agency. Price of made-in-china pallet racking is under their “normal value”.
Why is racking from China so cheap?
There is no insurmountable technical barriers on producing pallet racking. However, due to an increasing demand, many new entrants entered the racking industry which causes competition especially on prices. As a result, prices are continuously suppressed.
Moreover, there is a well-developed supply chain of making and selling all types of rackings in China. The supply chain includes R&D, design & sales, material supplies, manufacturing, shipment and installation. In several provinces like Jiangsu, Zhejiang and Guangdong, there are big industrial parks built specially for racking and other logistics equipment. The mature supply chain makes it possible for manufacturers in China to incur the lowest production cost.
The Chinese government also is supportive of the export sector. Favorable policies and business environment allow made-in-china products to be increasingly competitive globally in terms of price, quality and service. Unfortunately, price is the easiest target when a country wants to protect its local manufacturing industry.
How anti-dumping duties are affecting dealers who used to import racking from China?
The Anti-Dumping Commission imposed a full-rate duty of 112.3% on any steel pallet racking imported from China, which makes importing pallet racking from China for sale almost impossible. It’s great news for Australian pallet racking manufacturers, but devasting news for dealers who used to import racking from China. The potential implication is causing upheavals in the industry.
How long will it last?
The anti-dumping duties to steel pallet racking exported from China and Malaysia was imposed on May 8th, 2019, and will be lasted for five years until the year 2024.
Which type of racking is included?
Steel Pallet racking (Tariff Classification 7308.90.00, Statistical code 58), or parts thereof, assembled or unassembled, of dimensions that can be adjusted as required (with or without locking tabs and/or slots, and/or bolted or clamped connections), including any of the following - beams, uprights (up to 12m) and brace (with or without nuts and bolts).
Beams include Step Beams used as part of the system that holds pallets.
Three Ways of Avoiding Anti-Dumping Duties
- Avoid the following sensitive elements when applying to the customs.
Description of Goods – Steel Pallet Racking or Pallet Racking or Warehouse Racking
HS Code – 7308.90
Function – Holding Pallets or Storing Pallets
The anti-dumping duties are mainly for pallet racking series which holds palletized goods. Those rackings include selective pallet racking, drive in racking, pallet flow racking, push back racking and pallet shuttle racking. Cantilever Racking for long items storage is excluded. Besides, shelvings like longspan shelving, boltless rivet shelving and RUT shelving are not included in the anti-dumping list.
- Don’t avoid! Offense is the best defense.
Anti-dumping duty is essentially a protection for local manufacturing and trading. It won’t last too long because the disadvantages will soon emerge. However, in order not to lose the market share during this particular period, it’s a wise idea for industrial dealers or traders to reconstruct their relationships with their Chinese suppliers, from simple buyer-seller relationship to partnership. Even more import costs can be reduced by bundling of interests which partly compensates for the loss caused by anti-dumping duties. In this way, we can sustain our businesses or even capture more market share, while waiting for fair trading policies to be re-established.
- Transshipment cargo of pallet racking from a third country.
Besides the above methods, we can also resort to transshipment from a third country. An ideal choice of a third country for transshipment includes Indonesia, Thailand, Vietnam, or Malaysia. All documents including certificate of origin (CO) will be issued by the third country. Unavoidably, transshipment leads to higher cost than purchasing directly from China. Yet, compared with the 112.3% anti-dumping duty, the increased cost from transshipment is acceptable.
As a company with global vision, INTOSTORAGE owns not only production centers in Jiangsu province, but also branch companies or partners in the aforementioned countries for transshipment. We can do DDP term and offer door-to-door service in order to help customers alleviate their concerns. If you are interested, feel free to email us at email@example.com or leave us a message in Contact Us.