At a trade fair last year, I began speaking with an importer. She was fairly new to the game and her most recent international shipment had been nothing short of a nightmare.
It had all the elements of a good horror story—intrigue, suspense, the sheer unbelievable followed by a pretty scary ending. Let’s just say she’d hit the trifecta and experienced all three importer pitfalls in one shipment.
Not only did the final invoice blow out of control (cost), her goods where three months late (delay) and when they finally did arrive they were damaged (damage).
See I told you, a total nightmare!
The international freight industry is a complicated beast, but taking the time to sit down, learn about it and create a well thought out contingency plan can make all the difference.
First time importers, especially, will benefit from my free checklist. It will help you identify the main players and all the different factors that can impact on a shipment.
If you’re already an importer or just thinking about dipping your toe in, I’m going to give you a few tips on how you can avoid the stress of this woman’s situation.
The first in the trilogy of importer evil is cost.
When you’re just beginning to establish relationships with new suppliers and freight forwarders ask for a minimum of two quotes, preferably three, from each company.
At the very least you require FOB and CIP quotes (which most Chinese suppliers still refer to as CIF). If you’re not sure what these terms mean take some time to swat up on your Incoterms. Without an understanding of them you’ll probably find yourself lost and quite possibly ripped off!
Once your quotes are in, sit down and compare them all. Work out which Incoterm to use for both the supplier and then freight forwarder. Now you’re ready to begin negotiating terms.
Don’t be afraid to ask questions to ensure your final invoice will closely match the quotes you’ve received.
The best way to slay the delayed shipment beast is to give yourself plenty of wriggle room.
Make sure you’ve ordered with at least 2-4 weeks grace time to account for anything unexpected, which would otherwise leave you in a sticky spot.
You’d be surprised at how many importers I still see ordering their Christmas stock from overseas suppliers in October! It’s a recipe for disappointment and excessive cost.
Not only does the price of shipping increase towards the end of the year, but queues get longer. Depots are packed to the seams, causing inevitable delays and a lot of stress.
Insurance is the most common way to avoid this pitfall, but it doesn’t help when you need your goods and don’t have time to wait for a replacement.
Don’t you wish you could avoid the demon of damage all together? Maybe you can…
Have a conversation with your freight forwarder before your goods are picked up from the supplier. Investigate how they will be packed and placed into their container.
[TIP: Shrink-wrapping merchandise packed onto a pallet is a good way to protect them while they brave the wild seas allowing them to arrive at the warehouse damage free.]
If you take this basic advice you should be able to avoid the three common nightmare situations that plague importers.
About our Ausmumpreneur Expert :
Tania is the Director of Ensis Global Freight, a freight forwarding business based in Melbourne, Australia. Tania has been helping small business owners to ship all around the world. Tania set up the business to ensure that she had the flexibility to raise her 2 young daughters. It became apparent early on in the business growth stage that what clients needed was not just a delivery service but also advice and information on how to import and export. Drawing on years of experience working as a law lecturer and tutor in the business faculty of Swinburne University in Melbourne, Tania decided to add to the business and branch out into education and training. Tania ran her first workshop for new importers early last year. It was a big success. Connect with Tania on www.facebook.com/ensisglobal