Guest post by Maciej Brzozowski, representative of Port of Hamburg
One of the megatrends in the economy of the last few years is outsourcing and concentrating on key competencies of the companies while leaving less relevant matters to the proven business partners. It concerns not only the producers considering the “make or buy” problem but also trading and service companies. Even the army uses outside companies for facility security services. In the case of import from China, the thing you can easily hand over to China is the organization of shipment to the country because who would be better at it if not the company operating in a region that’s called the world’s factory?
China Logistics – let the professionals do it
Besides, most would want the delivery (i.e. the point where the importer takes over the responsibility for the goods) to be close enough to take actual control over it. No one wants to pursue claims for cargo damaged somewhere in the world, either from the supplier or the insurer who may not even have a European branch. On the other hand, there are some arguments in favor of taking over the organization of shipping. Maybe they’re worth considering?
But firstly, some points against that matter are often being brought up. First, “I’m not an expert in shipping, so I won’t handle it.” Well, it’s hard to neglect its validity. Secondly, “My Chinese seller has better prices.” It may be so, but if you’re unfamiliar with the freight market, how are you supposed to know it? Finally, “A freight forwarder is an additional broker and an unnecessary cost because everything would be taken care of by my Chinese business partner, without burdening my limited budget.” This point is worth noting, but first things first.
When thinking about taking over the shipping organization, I don’t mean a situation where you arrange and supervise everything yourself. Quite the contrary, I mean a situation in which you hire a professional to do this task, and that is a local forwarding agent. Naturally, you can do everything yourself, especially if you already have some experience and like challenges. But what if your plans are verified by reality? It’s always better when someone knows the procedures and has contacts (the forwarder usually has partners in many countries in the world, especially in China) and reacts to unexpected events; then everything is going to be fine, and the outcome is predictable. So the freight forwarder it is.
Work with US and EU-based forwarding companies
“But they’re a broker, and hiring one costs, often a lot of money!” However, here I’ve got some very good news: on a freight market, the client is in charge, and a shipper’s fee is quite low, usually about a few dozen USD. In return, the charterer (the party concluding an agreement, usually a cargo owner) gets free advice concerning transport possibilities and sometimes – technology and certainly obtains a transport optimization (also minimizing costs) through the whole supply chain. The shipper just simply knows the market and is able to offer the cheapest carrier at the moment and the cheapest good solution. In which port should our cargo be landing?
Use a road freight or road-rail freight? What kind of customs clearance to choose, and where? Do you prefer a local clearance or maybe a fiscal clearance in Hamburg? For someone who deals with container transport on a daily basis, these and other similar questions are easy to answer.
Naturally, a crucial advantage of taking care of shipment by yourself and cooperation with a forwarding agent is a good flow of information. As a charterer, you are a part of the agreement, which gives you not only access to a container’s current status but also the ability to change some of the earlier dispositions (e.g. a change of route and port of landing in order to quicken the arrival of cargo – in a situation of booking made by the Chinese partner, all changes must be reported by them, while the receiver’s instructions, even written down in a bill of lading, won’t be executed because the receiver is not a party of the agreement).
There are also some other advantages to cooperating with a forwarder. As a professional, they can foresee and counteract transport risks. They will take care of all the formalities and ensure that the record-keeping is being held professionally. They will provide supervision in critical moments (e.g. points of switching the carrier) and use their own financial resources in order to make the clearance easier, faster, etc.
Pick a solid logistic partner for your China import
In conclusion, it’s good to have a business partner organizing the shipping on the spot because it definitely makes communication and reacting to emergencies much easier. Plus, there are more and more logistics companies in the market that understand the characteristics of shipping and actively offer their services in the field. Choosing this kind of solution is worth considering, especially since it eliminates the necessity of active engagement in the organization of transport and enjoying the relief of knowing that in case of an emergency, there is a professional who’s going to take care of everything for you.
About the author:
Maciej Brzozowski has been a representative of the Port of Hamburg Marketing in Poland since 2002 and is responsible for representing the interests of the Port of Hamburg and the member companies of the Port of Hamburg Marketing Association. Besides that, he has over ten years of experience in the shipping field thanks to working as a merchant fleet officer (1990-1994) and then in the agency representing the shipowner CMA-CGM (1986-2002). He graduated from the Gdynia Maritime University and the University of Gdansk.