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What Should You Consider When Shipping From China?
Tuesday, 15 May 2018 at 10:53
As an importer, there are many considerations when sourcing goods from China. When it comes to shipping, you want your cargo delivery safe, on time, with competitive freight cost.
Choosing the best delivery option is completely dependent on your unique circumstance, but the content below will give you some helpful ideas about what you should consider when getting your goods back home.
Shipping Method: by Post, Courier, Air or Sea?
As with most businesses, cost can’t be the only consideration but it is usually a primary and determining factor. After all, we are all in this and making each decision to help our customers and ourselves save or make money.
Different logistics methods can make a vast difference both in transit time and freight charges. Therefore we always need to determine which method will be the most cost effective one.
1. Regular Post
This means normal, regular China Post (or Hong Kong Post) which can take up to 2~5 weeks to arrive. If you can wait, this is the cheapest option for small shipments, like samples and parcels. You may track and trace online, but the information can not be updated in time.
We don’t recommend this way at most times.
Plus: Pretty economical.
Pitfalls: Unsafe. Lost packages are hard to find.
Transportation with a courier company will be the most suitable method for most people starting out. Courier company, widely used in China is DHL, UPS, and FedEx. TNT is popular in Europe, but it’s not so popular like the others in China.
With courier service, you get fast delivery times and an online tracking facility. Most courier shipments take just 2~5 business days to arrive in anywhere around the globe.
- Courier to America, South America, Southeast Asia and Africa, suggest FedEx
- Courier to Southeast Asia, Europe, Australia and New Zealand, suggest DHL
- Courier to America, suggest UPS
Pluses: Get seamless delivery. All you have to do is sign for the package when it arrives. In most cases delivery is quick and reliable. When there’s a problem, there is a tracking number that can help resolve the matter.
Pitfall: The price is much higher than postal service.
3. Air freight
If the weight of sourced products is too large for couriers, example 500kg, air shipment might be the best bet. With air freight, costs will be significantly lower than with courier companies.
This way is for not so heavy cargo, and there are tight deadlines or a tighter control on the security. Transit time varies based on the schedule of airlines, but in general range between 2~10 days which is not bad.
While extra work is involved when the goods arrive at the destination airport. You have to handle documentation and customs clearance on your own (unlike with courier companies), which for many newbies may seem impractical. Of course, you can always outsource these tasks to a customs broker or a trucking company at an additional cost.
4. Sea Freight
Transport by ocean can take a very long time but can carry a massive amount of goods, which drives down the costs. The diversity of cargo that can be shipped is also a major benefit to this mode. That’s why it’s popular and widely used mode in logistics.
Despite the lengthy delivery time, if you plan ahead, and have enough time to wait, sea freight will be your top choice. Depending on where you’re located, it will be in the vicinity of 3~60 days.
Just like with air freight, you’ll have to take care of the documentation, customs clearance and delivery of goods from the port to your warehouse or facility. But if you choose door to door services, which is popular to USA/Canada/Europe/Australia, all you have to do is pay the freight charges and wait for your cargo sent to your specified address.
Pluses: Can be economical, particularly, if you’re prepared to handle the logistics of clearing the goods through Customs yourself. Also, the best way to handle large bulky purchases.
A quick summary
Each come with unique benefits and it’s often a combination of these shipping methods to get the Chinese sourced goods to your business. There should be some deliberation over the time frame you need your products, the security of your shipment, and usually the biggest factor, the cost.
Shipping rates will make up a substantial percentage of your total product landed cost, so it’s important to keep them as low as possible at all times. But sometimes, time is more crucial than money.
It’s all about balance. Choose the right way after considering all the actual situations. You’ll have to decide which factors are the most important for you and your business to declare a winner. Of course, whether ocean or air shipping is right for you could very easily change from shipment to shipment.
Shipping Management: by yourself or by an agent?
Letting the supplier manage the shipping is common among inexperienced importers. It’s very simple and all you need to do is to tell the supplier that you want them to ship the cargo as CIF “Port of destination” or DAP “Your facility address” and they’ll do the rest.
The downside is that you’ll probably end up paying a bit more than really needed. In fact, there are better options for saving money & time.
1. Do it all internally, for full control
We have only seen big groups follow this strategy. They book space directly with shipping lines, airlines, trucking companies and they manage Customs Declarations on both sides (the exporting and the importing countries).
If you choose this option, you need to make your own order follow up, you need to check with the carriers yourself to receive the proper info that is crucial for you. If a problem occurs, you need to deal with it in order to avoid paying extra charges.
Your time is the most valuable. When you work directly with a carrier, you cannot save that time, unless there’s a specialized department with professional crews in your company.
This is not really a viable option for small and medium enterprises.
2. Work with a freight forwarder in your country, for convenience.
This is some importers do, and it is the most convenient option.
So what happens is this: small and medium companies try to work with a freight forwarder of the right size, who care about their business. But most of the forwarders don’t always have their own office in China. They usually work with local agents, and add their margin on top of that agent’s fee.
This is not a cheap option, and not so efficient.
3. Work with a freight forwarder based in China, for speed.
More and more importers have chosen this option.
The advantage is speed. Thr forwarder can keep close touch with your supplier, and keep you informed everything. When trouble happens, your local partner will solve that asap.
4. Work with a forwarder on each side, for speed and savings.
A fourth option is to be in direct contact with each party. For example, a Dubai importer will be in touch with a forwarder in Dubai, and one in China.
This is probably the right choice for SMEs transport from China. For some buyers, every dollar saved is worth fighting for. And it allows for a higher degree of control, too.
A quick summary.
Whether your supplier and you manage the transportation, you should always need to source the logistics solution from a third party.
No matter your forwarding agent is located in your country or in China, when you find the right partner, just stick to it. Check our post about freight forwarder to find more.
As a decision maker, you may already be at the point where these options mixed with your goals become more automatic. The more information and experience you gain, the easier these decisions become.
We suggest considering the above two issues and get the answers before any movement in international trade. The answers will help you make your supply chain management more smoothly and efficiently.
CFC here helps our customers gain more control over their supply chain solutions, become more cost effective and increase efficiencies. Let us know if you have any questions about shipping from China, and hope we can work together to find the right logistics just for YOU.