If you’re trading internationally then the collection, storage and delivery of your products becomes vitally important.
With customers expecting rapid shipping – especially in markets like China where same day delivery is not unusual – you face a requirement to keep some inventory close to your market.
Getting your logistics right can give you a competitive advantage, and can help you build market share. Reliability and speedy delivery are key to building reputation and repeat custom and in a competitive market it may make all the difference to your position.
Many smaller firms choose to use a freight forwarder, who will in some cases also act as an agent. A good one will be able to advise on transport options, as well as matters such as the required documents and customs and transport regulations. Some of these service providers can offer things like delivery tracking or storage.
It’s worth considering using the experience of a specialist freight forwarder who is experienced in the market you are shipping to as it can smooth over any problems such as hold ups at customs. It can be a cost-effective solution as it prevents you having to deal with documentation yourself. Some will have good relations with local customs meaning your goods could be released more quickly.
Check that the service you use is making regular deliveries to the area you’re shipping to and make sure they are experienced in handling any specialist requirements you may have, such as hazardous materials handling.
Websites such as bifa.org can suggest freight forwarders you could approach.
Cover every angle
Make sure you’ve got complete agreement in place that covers every possible eventuality during the logistics process. It’s important to comprehend everything that’s required from you and everything that’s your supplier’s responsibility, otherwise you face being exposed to unnecessary risk.
Ensure there’s full clarity and a written contract between all parties in the chain when it comes to dividing responsibilities for delivery terms, especially getting goods through customs. Whilst you may get a cheaper service if you are prepared to handle some of the parts of the process (such as customer service during delivery), some areas may be more difficult for you to cover than others. It may be easier for a local partner to negotiate local customs holdups, for instance. Some jurisdictions will insist on particular terms of delivery from overseas, which may affect the division of responsibilities between you and you delivery service.
Incoterms are sets of international standards used to govern trade contracts by setting out what are the responsibilities of both buyer and seller. Check the one most relevant to your situation to find out what your responsibilities are – a lawyer can also advise. The Chamber of Commerce can support you to find the relevant Incoterms for your needs.
Other thing to consider
Obviously you need to determine how quickly goods need to be moved. That’s especially important for when goods are perishable or time-sensitive, such as seasonal goods for holidays. If goods are held up, make sure you also specify the turnaround time so that your flowers aren’t left wilting at customs. You also need to identify any specific requirements if you’re delivering items that are hazardous, flammable or otherwise need careful handling and storage.
Many countries have their own rules for goods in transit, especially potentially hazardous ones. These rules don’t just affect your destination country but also all of the ones it passes through en-route. Your goods will need to suit the local standards as well, so if they need to correspond to the market standards for electrical safety (for example), make sure this is documented and accompanies the shipment.
Remember too that you may need an export license to send some types of product out of the country – including some technologies, food and chemical materials. The gov.uk site has plenty of information on using the CHIEF computer system (‘Customs Handling of Import and Export Freight’) to electronically process declarations for goods both entering and leaving the UK or EU.
Modes of transportation
You’ll need to decide which modes of transport are most appropriate. You may need to specify the mode as part of your supplier agreement. It doesn’t just affect the speed of arrival but also creates legal and customs issues. You may need to use specialized containers for some modes of transport if you’re transporting things such as live animals or chemicals for example.
It’s obviously important to arrange adequate insurance for all stages of the journey but this won’t cover you for ‘predictable’ risks such as food rotting when travel delays occur. Also be aware of potential legal liabilities you may incur for things such as the actions of someone acting as your agent. It can depend on the terms of contract who is liable for loss or damage at any particular point. Under some contract terms, the seller may pay for shipping but the buyer bears the loss which occurs en route.
It’s important to establish who is responsible at any particular shipping stage as this will clarify things if you need to seek damages later. The picture is complicated by a complex supply chain, for instance if your carrier outsources to different sub-contractors in each market. Adding subcontractors into the mix can raise your costs.
It’s wise to track deliveries if it’s at all possible. This can help improve the efficiency of the supply chain by identifying areas of concern and problems as they unfold. Having visibility of where packages are can also appeal to your customers. Whilst tracking is already offered by some freight forwarders, the really advanced ones offer more in-depth solutions that overlap with stock control systems. It isn’t uncommon for radio frequency ID tags to be place on some valuable goods so their tracking can be automated.
If goods are passing through Europe, you need the Single Administrative Document (‘SAD’) document at the point they leave this political territory. Whilst goods can be moved around Europe without much interference from customs, it’s a good idea if they are accompanied by a SAD and also an invoice on their travels. Make sure you keep a copy of any documentation too!