As a business owner myself, I understand the need to keep costs as low as possible to remain competitive in your market and gain a healthy profit margin.
When looking at the logistics chain, many importers believe “shopping around” to get the best price is the best way to ensure costs on shipping remain as low as possible. Sure this will absolutely work on face value but may become a somewhat false economy!
If you have a trusted relationship with a freight provider but would like to assess to see if there are any areas in the process where money can be saved, here is 3 suggestions on where to start looking:
1. Documentation
In Australia, to clear goods through our borders it is not always necessary to have to have original documentation. If you pay for your goods before they leave the sellers factory, discuss with the seller and your freight agent to have electronic copies of the shipping documents. This can include: Bill of Lading, Commercial Invoices, Packing Lists, Packing Declarations and Certificate of Origin.
Very often we see (especially ex China), sellers using international couriers to send original documents to the buyers attracting a fee of sometimes up to USD75.00 per shipment.
2. Rate negotiation based on Volumes
Many shipping lines will reduce shipping rates based on commitment of volume on their services. If you are an importer shipping between 2 to 5 containers a week, speak to your freight agent to make sure they are negotiating the best freight deals on your behalf based on your volumes.
Your freight forwarder should be doing the shopping around not you, that is their role, make them work a little harder on your behalf. Loyalty will pay off!
3. Transit Times
Transit times can play a role on both the international and domestic leg of your goods being moved. With international sea freight, as an example, a 2 week transit from Shanghai to Brisbane is not the only option you have when shipping ex Shanghai. There are transit times up to 4 weeks that may see a saving of up to USD 300.00 per container. Work with your freight agent and communicate when cargo is needed (specific dates) so they can work on giving you options based on required dates, rather than say a direct option or a transhipment option.
When the goods arrive into Australia and need to be moved domestically, there are options between a direct drive service and an all day service. If you are in your warehouse from say 8 to 5 everyday of the week and the goods do not need to be there at any particular time, opt for an all day service. There may be a significant saving depending on volumes and distance of travel.
Again communication is key, question what the process currently is and if your business model allows for change work with your freight agent to make the changes and SAVE MONEY! Who knows you may save more than the seemingly “better” quote that you shopped around for.