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GOLD! Sharing my lifetime experience in export/import. Product sourcing specialist.

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Walter Hay

Walter Hay

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@Blackman, My UK franchisees never had any problems importing from Taiwan. I think there might be something other than the supposed freight issue involved in this situation.

I suggest you ask them to quote you for X quantity delivered via prepaid air courier.

If the response is negative, I am happy to help out privately should you care to provide details through a PM. You might need to locate an alternative supplier.

Walter
 

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Walter Hay

Walter Hay

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Today I received a question from a member, and I think his question is one that could stump a lot of members if their suppliers gave the option that his supplier offered.

This question is of extreme importance. Making the wrong decision could result in the total loss of a shipment. It is really only relevant to large shipments for which a Bill of Lading is issued.

Question:
So my finished product shipment is almost ready to be transferred to my freight forwarder, and the supplier asked if I wanted an "official Bill of Lading" or a "Telex Bill of Lading."

Do you think that a Telex Bill of Lading will be adequate for this?

Answer:
I would not accept a Telex Bill of Lading. Something as simple as poor English could lead to the shipment being released prematurely or to the wrong party.

BTW, although the term is still used, Telex has now been replaced by emails, and this greatly increases the risk.

Further explanation: A Bill of Lading (BL) is a document that is accepted by shipowners, port authorities, banks, and insurance companies, as proof that a shipment has been loaded on board a ship, or even a truck in some circumstances. It is not generally regarded as equivalent to a Waybill, although since 1992 in the UK what they call a Sea Waybill is acceptable as proof of ownership.

If you have a good freight forwarder, you needn't worry about such details. The only other technicality I would suggest that you remember is that a Bill of Lading, to be readily acceptable to your bank, should be a "Clean On Board" BL. A Clean On board Bill of Lading certifies that the cargo on board has no negative clause, notation or remarks on the quantity, quality or packaging of goods.

Walter
 

Blackman

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Dec 28, 2018
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Hi Walter,

A few quick questions about sea freight.

I've sent out inquiries to a number of UK based freight forwarding companies to get a few quotes and compare the prices.

1. My product comes in a carton with the dimensions being 98*57*83cm, 23KG - that is the 1 carton size, which contains 10 units of my product. I was thinking of ordering 3 cartons (30 units), but I'm not sure if this quantity is big enough to get best shipping prices to justify sea freight?

Would you advise going for a bigger quantity, as so far I've only received 1 quote for sea freight, but the total landed cost per unit (including the product cost, shipping and all the customs fees) works out only £10 cheaper per product compared to using an air courier.

However, I have to mention that the maximum amount I've imported using an air courier has been 10 units (1 carton). Now if I was to calculate the difference of importing 30 units using an air courier vs 30 units by sea freight, then I'm sure the difference would be a lot more significant.

2. Would you recommend letting a UK freight forward company handle the whole shipping process from my suppliers address in China all the way to my door in the UK?

I've read that FOB prices quoted by Chinese suppliers can work out cheaper, rather than importing under EXW terms, but I would rather keep things simple and let just one 1 company deal with everything to avoid any misunderstandings with customs, etc.

3. A choice of UK freight forwarding companies is pretty huge, so I would appreciate if you could recommend anyone in the UK that you have dealt with and know well?

Thanks for your help

Stephan
 
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Walter Hay

Walter Hay

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@Blackman
The volumetric weight per carton works out at just under 116kg, so for three cartons strapped or shrinkwrapped together the chargeable weight would be 348kg. If on a pallet that would add to the measurement and weight.

That chargeable weight could be regarded as borderline for economical sea freight, but in your situation I would be inclined you stick with the smaller order and use air couriers.

The two main reasons are:
  1. Simplicity. There are less complications, less paperwork, and somewhat fewer incidental charges. Your supplier will handle all the arrangements. Just make sure it is for a door to door service including customs clearance.
  2. Speed of delivery.
You are unlikely to be able to negotiate a better air courier rate in the UK, so see if your supplier can do better than they have already. Suppliers in China get massive discount off the schedule rates, and if they want your continued business they should share some of the discount with you.

One of the oldest established freight forwarders that I know in the UK is UK Shipping Agents | Freight Forwarder | Shipping Company - John Good You could ask their advice regarding the most economical option, and ask them to quote for Air Courier and Sea Freight.

Walter
 

Blackman

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Dec 28, 2018
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@Walter Hay

Thanks for the tips, Walter.

John Good was actually one of the freight forwarding companies that I have already sent out a quote to, so let's see what they say.

As for the order quantity, I did think that 30 units was a bit too small for sea freight, but unfortunately importing such quantity using air couriers leaves hardly any margin for profit. I don't arrange any shipping myself, all the prices are given by my supplier for a door-to-door delivery. Last time we used EMS, which was ok, but I'm looking into alternative shipping methods.

With regards to see freight, say if I was to go for a bigger quantity, am I right in thinking that the best way to do it is to get an FOB price for the product from the supplier and the name of the port, then get a quote from a UK freight forwarding company for a door-to-door delivery (port in China to my door in the UK, including all the customs clearance both in China and the UK)?

This must work out cheaper, rather than having the freight forwarding company collect the goods directly from my supplier's premises (EXW price) and then deal with transportation to the local port? Surely, it would be cheaper for my supplier to get the goods to the port?
 

Sam McLaren

PARKED
Sep 12, 2019
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Hi Walter,

Echoing everyone else's messages - thank you for your book and the effort that you make to answer everyone's questions. I will likely send you a PM to expand/add extra detail to these questions (and add a few more), but I would love to give back to the thread by contributing my questions and any successes/failures along the way.

Against your great advice, the product I am keen to source is custom designed and relatively bulky. The product type is classical - ours is just a different design which doesn't necessarily innovate in a significant way, but cosmetically will appeal to a niche market strongly. A similar product is already on the market and is in such high demand that customers pre-order it without a strict delivery date (i.e. which seems to be 2-3 months i.e. lead time and likely sea freight once the owner has enough to pay for their MOQ I'm assuming). The product (timber/MDF base) has to have a high quality finish (painted in one custom PMS colour throughout) and be accurate as it will be shipped flat packed and put together by the customer.

As it is a custom product, I'm currently at the stage where I am just researching whether or not it will be viable. Our competitor product has a high RRP, but the market is *easily* bearing it, we have improved the design, will offer much better service and on the surface the landed cost has the possibility of several multiples under RRP, meaning that we wouldn't have to rely on much sales volume to make it worthwhile. To start with, we would like to market test the one design with two different size options, and three colour options. We have the exact design specifications in CAD software.

Before I came across this thread, I reached out to several suppliers on Alibaba - most were very helpful and their quotes were competitive, however they seem like traders and I just didn't have the confidence they could produce the product to the quality I was after (lots of Yes's when I showed examples, but they lacked any evidence of a similar level of finish).

Since reading through the book in particular, I have changed my search terms and have started researching the sites listed in the book, which seem to have products much more in line with what we want. However these are my questions:

1. With my initial outreach emails, would you still ask for a product catalog and build some rapport, or would you open with our need for a custom product?

2. I understand the probability that the product may/will be copied (however as it's not truly innovative - just a different design, I'm hoping they are less likely to do that. For example like a toy car - there are millions of variations so the category is diluted enough and our "toy car" is basically just cosmetically different - but with our target market that difference is really important for purchasing). Therefore for suppliers to quote/make judgement on whether they can do it, I'm assuming I need to provide the design up front - in this case do you think that is OK - or is there any other work around?

3. I know there are probably pros/cons of each, but for a bespoke, high end product like ours, would you recommend a larger, more experienced manufacturer that has the record/expansive product list/product safety certifications or a smaller manufacturer? Although on first read a larger manufacturer may have the processes in place for high quality, I get nervous that we would get bumped for larger orders (i.e. for factories currently supplying department stores).

4. In relation to above, would there be anything stopping a larger manufacturer sharing our design to such department store for them to produce and sell at a scale much higher than ours?

5. If a manufacturer looks to meet the criteria you have mentioned on one of the sourcing sites listed in your book, but they also have an Alibaba page - is there any difference on what site you would make contact through?

Thank you so much in advance for any assistance you could provide regarding the above.

Sam
 
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Walter Hay

Walter Hay

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@Walter Hay

Thanks for the tips, Walter.

John Good was actually one of the freight forwarding companies that I have already sent out a quote to, so let's see what they say.

1. As for the order quantity, I did think that 30 units was a bit too small for sea freight, but unfortunately importing such quantity using air couriers leaves hardly any margin for profit. I don't arrange any shipping myself, all the prices are given by my supplier for a door-to-door delivery. Last time we used EMS, which was ok, but I'm looking into alternative shipping methods.

2. With regards to see freight, say if I was to go for a bigger quantity, am I right in thinking that the best way to do it is to get an FOB price for the product from the supplier and the name of the port, then get a quote from a UK freight forwarding company for a door-to-door delivery (port in China to my door in the UK, including all the customs clearance both in China and the UK)?

3. This must work out cheaper, rather than having the freight forwarding company collect the goods directly from my supplier's premises (EXW price) and then deal with transportation to the local port? Surely, it would be cheaper for my supplier to get the goods to the port?
I have numbered your paragraphs and answered below:

1. As a rule of thumb, shipments over 250kg can be viable for shipment via air freight rather than air courier. The problem is that few providers of air freight will handle the whole process, so you would still need to use a freight forwarder. If you ask for an air freight quote, you must not accept a quote that provides only shipment to your nearest airport. Charges at the arrival port can be astronomical.

You could contact air cargo consolidators listed in Ch 3.10 of my book and ask them to quote. One is in the UK, but any of the others could handle it.

Any freight forwarders you contact could quote air freight through consolidation if you tell them you will accept some delay for the sake of economy.

2. That is an acceptable option which is often the method of choice, but not necessarily the lowest cost.

3. Even a freight forwarder based in the USA could well provide your lowest price. Any established forwarder will have reciprocal arrangements with forwarders and shippers in countries all over the world.

To sum up, I would say you should go to the trouble of getting quotes for the different options, and compare.

Walter
 
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Walter Hay

Walter Hay

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@ Sam McLaren,

First let me say that you were well advised to not deal with traders for your requirements. There are cases I know in which traders not only slowed the process, but although there was no language problem between them and the manufacturer there were serious problems with the traders' inability to communicate the buyer's requirements.

In answer to your questions:
1. Yes, I would still follow that procedure, because it helps build a relationship. Also, when you introduce the subject of your custom needs. it shows them that you have not chosen them at random.
2. I think you may be right that they might not bother using your design for other customers, although the risk still remains.
3. The bigger manufacturers are definitely more likely to be dealing with big buyers, and that can result in them shunting your orders aside to handle the big ones.
4. I think there is a high risk of that happening.
5. I would avoid Alibaba whenever possible. If you have not yet done so I suggest you look for relevant manufacturers in Malaysia or Indonesia. Those countries have substantial furniture manufacturing experience, but I would also look elsewhere. You should also consider the potential freight savings in having the products made locally.
Even local cabinetmakers would have the capability to handle the type of work you want done, and the materials are manufactured in many countries, such as the Nordic countries, USA, Australia, and New Zealand among others.

Walter
 
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Walter Hay

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LPPC

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Hello Walter,

I would appreciate your insight on this.

Currently, a shipment of 18 cubic meters is being produced for me in China. I made a gross mistake by not knowing that this electronic product needs a CE mark. I planned to have the shipment shipped via my forwarder until I found out that it needed a CE mark. I can no longer cancel production, otherwise I would have.

I am now thinking about having my supplier take care of the shipment to my door, DDP to my door. This is because I do not want to run the risk that such a large shipment will not be accepted by customs and thus lose all the money. If I were to take care of the shipment with my own forwarder, I would do an FCL shipment. I have heard that there is a bigger risk of inspection with an FCL shipment compared to LCL. I have decided to put this product into circulation for the one time, with all the risks it brings.

My question is, if on the Alibaba contract it says DDP, then I guess I will be protected by Trade Assurance if I don't get the shipment or don't get it to my door? Or should/can I not rely on Trade Assurance even when it comes to such a thing?

My supplier charges 2 USD per KG and the shipment first goes to Germany and is delivered to me from there by UPS in the Netherlands. Is this reasonable or does it sound fishy? Anything I should be wary of?

Many thanks in advance!

edit:
I asked the supplier if it will be imported under my name or the name of the supplier. It is imported under my name. So I don't know if that will affect my question above.
 
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Blackman

New Contributor
Dec 28, 2018
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@Blackman You should check out this UK company. Search Freight Shipping Prices and Book Directly Online - TransportecaThey have excellent reviews and they handle a lot of LCL freight from China.

Walter
Thanks Walter, I will check them out.

There's also Shippo (https://www.shippo.co.uk/), not sure if you have heard of them, but it looks like they are just middlemen between freight forwarding companies and customers, or am I missing something?
 

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Walter Hay

Walter Hay

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Thanks Walter, I will check them out.

There's also Shippo (Shippo), not sure if you have heard of them, but it looks like they are just middlemen between freight forwarding companies and customers, or am I missing something?
Shippo is a US company with numerous branches worldwide. They have a good reputation and do a lot of LCL freight. Well worth contacting them.

Walter
 
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Walter Hay

Walter Hay

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Hello Walter, I would appreciate your insight on this.

Currently, a shipment of 18 cubic meters is being produced for me in China. I made a gross mistake by not knowing that this electronic product needs a CE mark. I planned to have the shipment shipped via my forwarder until I found out that it needed a CE mark. I can no longer cancel production, otherwise I would have.
You will have to ensure that you are adding the correct CE mark. There are various ways of attaching it to your product. If it is the same product that we have previously discussed, you could use a transparent PVC label. There is a risk that the absence of the CE mark could cause delays to clearance. I suggest it is probably better to employ an inspection service to attach the labels before loading in the container.

I am now thinking about having my supplier take care of the shipment to my door, DDP to my door. This is because I do not want to run the risk that such a large shipment will not be accepted by customs and thus lose all the money. If I were to take care of the shipment with my own forwarder, I would do an FCL shipment. I have heard that there is a bigger risk of inspection with an FCL shipment compared to LCL. I have decided to put this product into circulation for the one time, with all the risks it brings.

In fact FCL shipments will usually be processed more quickly by Customs, and transit time for FCL is faster than LCL. You are paying for empty space, but the total freight cost will most likely be less than you would pay to use LCL.

My question is, if on the Alibaba contract it says DDP, then I guess I will be protected by Trade Assurance if I don't get the shipment or don't get it to my door? Or should/can I not rely on Trade Assurance even when it comes to such a thing?

In theory you would be covered, but if the labels have not been attached and that causes delivery failure, Alibaba might see the absence of the labels as an escape excuse.

My supplier charges 2 USD per KG and the shipment first goes to Germany and is delivered to me from there by UPS in the Netherlands. Is this reasonable or does it sound fishy? Anything I should be wary of?

The rate does seem generous. If it is prepaid there should be no problem.

Many thanks in advance!
edit:
I asked the supplier if it will be imported under my name or the name of the supplier. It is imported under my name. So I don't know if that will affect my question above. No, it should always be in your name.
Walter
 

Veloman

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Hi Walter,
I am trying to find out what a reasonable amount is for origin charges when importing from China. My manufacturer delivered to my FF's warehouse in Shenzen and quoted FOB to me. (it's sea freight, 1 pallet, 255kgs.)
My manufacturer says the my FF is billing them way too much at $344 USD.
When I get a quote on freightos.com for this freight by the same FF, it lists the origin charges at $64 USD.
Am I being conned by my manufacturer or FF? Thank you for your input!
Here's the breakdown:
rmbusd
customs clearance32044.8
VGM admin fee10014
document fee55077
CFS charges8011.2
handling charges38053.2
telex release fee55077
ams surcharges17524.5
customs documents fee30042
2455343.7
 
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Walter Hay

Walter Hay

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For a start, using Telex release is risky. Telex is not longer used, but when a release is sent to another agent, it is still called a telex release. The release instructions which are sent between agents are often extremely casual. This carelessness can result in loss of ownership of the cargo. There have been a number of cases reported in which the releasing agent has received an ambiguously worded message from a third country receiving agent and assumed it to be a release, when it was not.

I would never use a forwarder that uses Telex release.

What you report is strange behavior. Your manufacturer should not have delivered the goods to the forwarder without having received a quote from the forwarder, and passing on that quote to you. The forwarder should not have accepted the goods without having quoted you the full cost, including the inland charges.

It appears that you are using a Chinese freight forwarder, which is inadvisable. My opinion is that both supplier and forwarder are party to a scam.

Have you received any quotes apart from that exorbitant one now supplied too late by your manufacturer?

In a way typical of Chinese freight scammers, they now have you over a barrel. If you have already paid for the goods you will have no option but to pay the new charge. The worrying thing about that, is that a favorite method used by such scammers is to progressively come up with more charges. See Ch4.2 in my book.

If the amount you have paid for the goods is bearable, you might choose to cut your losses now and abandon the shipment. I am sorry that based on what you have written I can't advise any alternative.

Walter
 

Veloman

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For a start, using Telex release is risky. Telex is not longer used, but when a release is sent to another agent, it is still called a telex release. The release instructions which are sent between agents are often extremely casual. This carelessness can result in loss of ownership of the cargo. There have been a number of cases reported in which the releasing agent has received an ambiguously worded message from a third country receiving agent and assumed it to be a release, when it was not.

I would never use a forwarder that uses Telex release.

What you report is strange behavior. Your manufacturer should not have delivered the goods to the forwarder without having received a quote from the forwarder, and passing on that quote to you. The forwarder should not have accepted the goods without having quoted you the full cost, including the inland charges.

It appears that you are using a Chinese freight forwarder, which is inadvisable. My opinion is that both supplier and forwarder are party to a scam.

Have you received any quotes apart from that exorbitant one now supplied too late by your manufacturer?

In a way typical of Chinese freight scammers, they now have you over a barrel. If you have already paid for the goods you will have no option but to pay the new charge. The worrying thing about that, is that a favorite method used by such scammers is to progressively come up with more charges. See Ch4.2 in my book.

If the amount you have paid for the goods is bearable, you might choose to cut your losses now and abandon the shipment. I am sorry that based on what you have written I can't advise any alternative.

Walter
The FF I am using is ECU. I chose them because the had the cheapest price when I searched on freightos.com and because they have a warehouse an hour from where I can pick up.
The goods are currently at sea on their way.
My ff sent a pre advice which listed my charges of $300 (not including customs which should be 340 according to their fee table.
I have asked my vendor what their typical origin charges are with their ff. I plan to likely just reimburse my vendor the likely couple hundred dollars to keep them happy and not do business with this ECU ff again. They have been slow to get my goods to sea as well.
So do you think 343usd is abnormally high for origin charges?
 
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Walter Hay

Walter Hay

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There are some very unhappy customers of ECU. The complaints are mainly due to very slow shipping, sometimes as much as a month late. I don't think ECU are scammers, just sloppy and inconsiderate.

Unexpected problems can happen to anyone, but it seems that there are deficiencies in ECU's system. I think most likely they are holding cargo until they have consolidated sufficient volume to get a better price from the ship owners.

This could be the way they manage to quote a low price.

In answer to your question - definitely those charges are way too high.

Walter
 

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