Tips of the Trade

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10 Tips for International Transportation

Check out 10 tips when dealing with international transportation.

1. Know your Product

Obtain or create a detailed description of your product. Determine what the best HTS number (import) or Schedule B Number (export) you will use to file your entries for import or export. If you are unsure, talk to your Customs broker. Research to find out what licenses or registrations are required if partner government agencies are involved, such as USDA, FDA, Fish & Wildlife. Note, it is the ultimate responsibility of the importer of record or exporter of record to comply with our government agencies.  You’ll want to talk to your freight forwarder or US Customs broker to avoid delays or penalties if you aren’t complying with regulations.  Furthermore, if you are an exporter, each destination country has its own rules and regulations. Most freight forwarders have counterparts in the destined port, so they should be able to gather those requirements for you, but do your homework too!  Ask your buyers what is required of you as the shipper. For a list of resources, click here.

2. Know your Shipper or Customer

Do you trust your shipper or customer?  How long have they been in business?  Who are some of their trade references?  Have you physically met them or visited them?  Does anything stand out?  Check out their website. Ask questions. Look for testimonials. Go with your gut. Always, go with your gut.

Another option is to utilize the U.S. Commercial Service who has boots on the ground around the world.  They can help you to verify or vet your vendor or client if you are unable to travel there in person. Scarbrough will do this for our clients on a number of scenarios. Don’t be afraid to ask your service provider what they can do to help.

3. Ensure the Real Transit Time

Transit time is not what it always seems.  Many times forwarders will give the transit time from port to port on the departure date and estimated arrival date based on what the carrier says.  It’s important to note the time it takes to pick up the shipments and take them to the origin port, load them, sail or fly, then unload them at destination and deliver.  The origin pick up and destination delivery can really add to the transit time of a shipment if the controller is not clear.  If the controller misses a cut off, then the shipment could lose up to an entire week based on which carrier is chosen.  Ensure your forwarder knows the shipment’s ready date well in advance so they can plan accordingly.

Folks can really get themselves stuck in a pickle if they aren’t careful, especially when shipping less than container load.  A less than container load shipment can take weeks, even months, depending on the destination consolidation terminal. An importer may not realize that their small shipment is simply waiting for other small shipments to fill a truck before it is destined their direction.  One alternative, especially for those folks in the Midwest USA, is to book on a direct consolidation to Kansas City, Chicago or St. Louis located in the heart of America.  Luckily, Scarbrough has a direct consolidation option from many ports in the world that can save clients up to 14 days and a significant cost savings, as well.

 

See the difference between shipping to the Coast vs. Heart of America.

4. Know the Routing

Ensure you have a routing that makes the best sense.  For example, if your final destination is Kansas City, make sure your paperwork and BOL don’t say destination: Los Angeles. It’s okay for the port of arrival to be LA, but you need to confirm the rest of the shipment is headed to your actual final destination.  Otherwise, you may be stuck with a hefty bill from a truck carrier.  If you are new to importing and you buy from Alibaba, be careful. We see this a lot in those cases.

Also, if you have hot freight, know that you have options.  You can always route your freight to the U.S. Coast, and if you are willing to pay, you can truck delivery it to your final destination, for example.  Of course, this works the other way around.  If you can be flexible, you can find different options for routings that may best suit your needs at the time.

5. Know your Incoterms

Incoterms are agreed upon between the seller and buyer in regards to when the risk and responsibility of the goods and transport are transferred. Incoterms are not binding and they are solely used as a guide.  When buying goods, we recommend EXW or F Terms.  When selling goods, we recommend C Terms.

Download an Incoterms® 2010 Chart of Responsibility Guide

6. Figure your Total Landed Cost

Make sure you’re including everything involved in transporting a product.  Here are just a couple to consider: service provider fees, accessorial charges that may be located in the fine print of a quote, peak season surcharges or general rates increases based on date of sailing, dimensional weight vs. actual weight, possible U.S Customs exams, and fuel surcharge which can change quickly, as well.

7. Ensure you’re Comparing Apples to Apples

We’ve seen it time and time again. A shipper may think he is getting a better price from forwarder A, but when it is all said and done, it ends up being more expensive than Forwarder B’s quote.  Think about the value of customer service, trust, reliability, and quality of communications.  And is $50.00 really going to make or break you if it means you will receive reliable service and know your quote will be honored?  Think about it next time you are quoting and make sure you’re truly looking at apples to apples.  If you need help with quote comparison, Scarbrough is happy to audit for you and ensure you are getting the best deal.

A perfect example is explained in this Inbound Logistics article:

“Fauad Shariff, CEO of New York freight forwarder technology company The CoLoadX Corporation, cites a situation where a large tobacco company’s finance department required that carrier selection for exporting a large shipment of cigarettes be made on price alone.

“The lower-cost carrier didn’t know how to handle, build, or stage the product and left it on the ramp in the rain,” he says. “The company spent $25,000 on replacement product, new packaging that was airlifted in, and labor—all to save $5,000 on the initial shipment.”

Factoring risk into the price discussion is also important when reviewing bids.

“How confident is the shipper that the provider can get them what they need, when they need it, and in the condition they need?” asks Vito Losurdo, vice president of global airfreight services at UPS.

Some modes carry more risk than others. “If you’re shipping expensive electronics from China, you can get them to the destination more quickly and handled with more care if you use air freight instead of the more commoditized ocean freight,” recommends Kaitlin Bates, associate at Insight Sourcing Group, a Georgia-based consulting firm.”

8. Plan Ahead

It’s mentioned time and time again.  Plan, plan, plan.  Find out when the actual ready date is. Plan based on that! Inform your U.S. Customs broker or freight forwarder as soon as possible.  Inform them of what, you ask?  Everything.  Support and answer their questions as soon as you can.  There is a reason we ask! Supply them with documents, pictures, detailed descriptions.  Let them know what your goal is. What is important to you? Transit or Cost? What is the final or last date the shipment should arrive at destination.  Does the pick up or destination have any special requirements?  Who are the contacts for each party involved? Scarbrough actually partners with our clients to make their job easier, so if you can plan ahead, we can take a lot of headache from you!  Think about your inventory options. Are you planning on housing a large expensive inventory or want to try for a just in time approach? Consider speaking to a supply chain specialist about your options before purchase orders are placed. Put planning and discussing to your advantage.

 

 

9. Use Technology 

Use technology to your advantage.  Use the online tracking tools available. If you don’t know how to use them, reach out to your service provider. They will be happy to show you, because it not only makes your job easier, but theirs too!  One of the benefits of being a Scarbrough client is the customized reporting options, dashboard capabilities and automated tracking available. Again, it is our job to make your job easier. We do this a number of ways from customized online portals to customized online presentations for vendors or executive members.  Just ask, and you shall receive.

Talk to your vendors, clients, and service providers about EDI and API Connectivity options. Acquiring or pushing data has never been easier.

10. Attend Training

One way to be better at your job, make better decisions, and know what you are talking about is to train yourself. There are a number of trainings available whether it be through your local economic development center, chamber, service provider, or online source, the information is out there.  Furthermore, zillions of publications, infographics, news blogs, and social sites include a vast amount of information.  Do yourself a favor and read it. One of Scarbrough’s internal goals is to create better people, better professionals.  We do this through training and we continue to recommend our clients and the trade community to do the same!  Our reputation is known for its experts on staff and we want to share our knowledge. We do that through free webinars, seminars, and videos on our YouTube Channel.  We suggest you subscribe and check out Scarbrough University.

If you would like to talk to a Supply Chain Specialist, contact us today!

 

 

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