When new buyers ask me how to manage shipping and Customs issues, I usually tell them to find a freight forwarder in their country. But there are actually 4 options:
1. Do it all internally, for full control
I have only seen big groups follow this strategy. They book space directly with shipping lines, airlines, trucking companies… and they manage Customs declarations on both sides (the exporting and the importing countries).
I don’t think this is a viable option for SMEs.
2. Work with a freight forwarder in your country, for convenience
This is what most importers do, it seems. It is the most convenient option, provided the importer has direct access to an account manager.
Be careful who you work with. What often happens with large forwarders such as DHL is that the buyer doesn’t have access to an account manager. I heard their followup can be a disaster.
So what happens is this: SMEs try to work with a forwarder of the right size, who care about their business. But these small forwarders don’t always have their own office in China. They usually work with local agents, and add their margin on top of that agent’s fee. So this is not the cheapest option.
3. Work with a forwarder based in China, for speed
In a discussion with an employee of a local logistics company, I realized this is not a rare situation. It seems like many buyers have chosen this option.
The advantage is speed. There is no need for an account manager, based in the importing country, to ask questions to his agent in Shenzhen (for example) and to wait for a response.
But the problem of the extra profit (on top of the agent in the importing country) is still present.
4. Work with a forwarder on each side, for speed and savings
A fourth option is to be in direct contact with each party. For example, a New York importer will be in touch with a forwarder in NYC, another one in Shenzhen, and so on (depending on the provenance of the goods).
These agents are put in contact on a per project basis, and it generally works fine — they are used to collaborating this way.
This is probably the right choice for SMEs that want to keep costs down. Hey, for some buyers every dollar saved is worth fighting for!
And it allows for a higher degree of control, too. You can see who will be processing your shipments. As written here, this is pretty important.
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What option have you chosen, and how has it turned out? Feel free to comment and share your experiences!
I think DHL is suitable for international courier more than forwarder. Their charges are also higher than others. Work with a big and famous forwarder is better for new importer.
Thanks for your comment.
I have heard many small importers emphasize how important it is to work with a small forwarder who will take the time to explain the basics (and, generally, to hold their hands). Why do you think a big forwarder is a better choice?
I normally favor selecting a good forwarder in China with a decent agent network in the destination country. Speed is one thing. But this is in China that you face weird problems. And this is in China that you need to be able to talk to someone to help you solve them.
Example. Last year we have a container to be loaded on a ship right before Oct 1. After the week vacation, we learned that the container was still on the wharf. The ship left without it. Do not ask why, we will never know, although we all can imagine why.
Our local forwarder helped us to bring the container through custom again to select a part of the content for air freight, then clear it again to catch the next ship.
A painful process, but I cannot imagine the pain if we had had to deal with a European forwarder working with local Chinese agent !
Very interesting. I think you are right. Having a direct contact on the Chinese side is more important than on the destination side, precisely because of these weird situations.