Known as the “world factory”, China has become one the most popular sourcing destinations for millions of business startups, shipping cost is important for the success of your business.
If you are running the logistics independently, shipping cost should be one of the key factors for you to consider. The more your business relies on the movement of goods, the more your business will benefit from cutting down your shipping cost. As such, it’s very imperative for you to analyze all the possible shipping costs and get the best shipping options for your business.
1). Plan for Product
Everything should be started with a plan. It goes the same with your shipping business when you import from China. An effective shipping plan should embody a clear understanding of the scope of business, quantities involved and the frequency of the shipments. This plan will help you negotiate with the freight forwarders.
Route planning is a key part of your plan. As we know, there may be multiple routes to ship your items to the final destination. What you have to do is to find the most cost-effective one to reduce cost. You can choose the best one, or direct transportation to make it efficient and time-saving. It’s known to all that the shortest distance between two points is a straight line. Plan your transportation route and optimize it to reduce delivery route and shipping costs. If possible, you are allowed to utilize a combination of ship and truck transport.
2). Choose the Right Shipping Provider
Quality shipping services will help you expand the international market without worrying about the high cost of international transportation. To find the right overseas shipping service provider, you have to take the time to review relevant shipping companies one by one. Given your shipping destinations, product material, order size, shipping lead time, tracking service, insurance, and the shipping price, you have to get relevant key data for further analysis.
Comparation is a good way to narrow down your options for the right shipping service provider. You can find the preferential price by comparing different suppliers. With so many shipping companies, you are allowed to review their freight rates and the different advantages they offer. Comparing their shipping services and their charges, you have to identify the right one for you. In fact, shipping price varies widely even for the same company. You can specify your shipping needs, and tell them to the shipping service providers, and get their quotes. This is very easy for you. And then compare them; you will finally get the most competitive one. If you still unable to get one, you can use the online shipping calculator to evaluate your shipping cost based on your needs. After deciding your shipping service partner, you can establish a business relationship with them and start your International business. Remember to develop a long-term and strategic relationship for a better rate. This will be significant in the long term.
3). Optimize Packing
Generally speaking, freight charges are based on the weight or volume of your products. If you find extra space on your package, you will finally pay for it if neglect the fact. Shipping extra packaging will not only cost you in terms of the packaging material, but also in terms of the loss of the cargo space. To save your cost, there is something you can do to optimize products’ packaging.
This goes to FCL (Full Container Load) and LCL (Less than Container Load) shipping. These two are the ones that can save your cost on the basis of the number of your products you sourced from your Chinese supplier. If your order amount is enough for a full container, you can use an entire container yourself. This is FCL. Normally, shipping FCL is cheaper than by volumetric unit and weight unit. To ship FCL, you’d better buy large quantities of products. This will make you the cost per unit much lower. FCL shipping costs, on average, will be 30 to 40% less than LCL shipping. However, if the amount of your order is not enough for a full container, you’d better choose LCL. Given the high rate of air freight, LCL is the ideal option for your business. To make the best use the container space, your items will share the container with others’ products if you shipping LCL. For this method, the cost may be much higher than you imagine, and you also have to pay some additional fees when you shipping overseas. However, it is the most cost-effective for a small number of shipping items. This shipping container space is highly depended on how much you are going to ship.
4). Choose the Right Container
For FCL, there are normally 4 types of containers for your options.
FCL 20 GP/ FCL 40 GP / FCL 40 HQ/ FCL 45 HQ.
Generally speaking, the container with 20 feet is designed to carry more weight than voluminous items. For instance, it is produced to fill minerals, metals, machinery, etc. These items are heavy products of small size.
The container with 40 feet is designed for voluminous items instead of the heavy ones. For example, it is to carry tires, clothes, furniture, etc. All these items are voluminous ones.
45HQ is not common, usually only used for special products (such as very bulky but light products). If you ship regular products, It’s recommended that you use 40HQ not 45HQ, because 45HQ requires extra-long container trailers, which either are not easy to find, or are expensive.
5). Get Freight Insurance
Freight insurance refers to the insurance on what is being shipped. If people already have freight insurance, they will be paid for the loss of their shipping items if there are any accidents happening during the transportation. However, it will be a great loss if you never buy relevant freight insurance. Remember to tell your shipping service provider about insurance requirements, and negotiate the best price with them.
6). Allow Shipping Buffer Time
Shipping lead time refers to how long it takes to get your products from the shipping port to the port of destination. This means that time matters your business and the shipping costs. This is because you have to place your order much earlier if you have long lead time. For instance, you planned to receive your items by April, but you have to book the shipping order several months prior. Generally, lead time includes:
A. The time your cargo sits in China port before being loaded (up to 1 week)
B. When the cargo is being shipped (15 to 30 days per different destinations)
C. The time your cargo sits in destination port before being cleared (up to 1 week)
D. Inland transportation from destination port to your premises
E. Possible administrative delays at both ports
F. Other possible delays
7). Ship on Off-peak Days
As we know, there is quite common for shipping delays when during the peak days of the year. During these days, there will be more congestion, more delays, and a higher shipping price. Shipping a day later or earlier will leave you measurable savings. If possible, you can try to avoid the peak times and holiday congestion.
8). No Unnecessary charges
Sometimes, you may get unnecessary charges either at POL or POD because of demurrage or detention caused by improper or timely documentation in many cases. If this is the case, you will be charged more than the normal process. What is more terrible is that these charges are very high; you may be forced to abandon your cargo and leave your items on the port when doing customs clearance. To avoid such charges, remember to carry out your shipping process properly, and follow the regulations and rules to streamline your business. This is what you can do to control your shipping costs.
9). Do not Classify Everything as Urgent
It’s very common for us to label everything related to your business as urgent as possible. As such, many business runners would like to require their shippers to deliver their items as early as possible without any consideration of the actual urgency of the shipping. Usually, they feel good if they get their goods as early as possible. However, rush shipping orders may incur a heavy shipping cost.