By Li Zhang
A deftly executed and skillfully manufactured order can delay at the China port if your logistics and booking are not in order. In the promotional product industry, this can mean what was a great order is now a delayed order. A delayed order, many times equals a failed order.
This is Part II to the last post on the standard price term of FOB China port.
Which China port
Be mindful of the port you were quoted. Your quote is FOB China, but what port? Take note if it was an obscure port and be sure to inform your domestic freight forwarder. Experienced importers may take it for granted that it was one of the main ports, ie Shanghai or Shenzhen.
The departure area can affect:
• Timing: It may take longer for the truck to get there from the factory.
• Departure: Although the truck arrives on time, there may be very few vessels from that port on a given week.
• Price: A smaller area may have a higher price. If you’re combining shipments, ie putting another load in the same container from a different supplier, you may find it’s harder with this particular location. Combining shipments, albeit not highly common in the promotional product industry, is common in others (hardware, material, furniture).
Freight forwarder’s China office
The sooner your supplier makes contact with your freight forwarder, the better. This allows the supplier to start working out any possible obstacles in catching the sailing date.
The sailing date is the day the vessel leaves the port. Ships ahoy!
The closing date is the date the merchandise or the container has to be at the port and clear, in order to hit the sailing date.
If you don’t hit the closing date in a timely manner, then you won’t hit that sailing date. If you miss your sailing date, your goods could tentatively sit there, in the shipyard for 7 to 10 days.
Missing your dates, ie the timing control going south is a reason that promotional product orders fail.
Possible shenanigans with pricing
Here is a possible scenario with FOB that can happen; especially when dealing with a new vendor.
1. Your supplier gives you an FOB China price.
2. You book your freight forwarder locally and the order starts.
3. When your supplier contacts the local China contact office of your freight forwarder (I explained all this in last post)….
…the supplier realizes that the local charges (trucking, document, clearance) your freight forwarder’s local China contact office gave, are more than they quoted for.
4. Thus, the supplier may have a tiff with either the freight forwarder or with you over the fact.
Their tiff with the freight forwarder may cloud efficiency in hitting the confirmed dates (see above).
The supplier may try to bring this tiff to your doorstep and say that you have a high-priced freight forwarder and they need to add $500 to the balance.
You decide which way to go, just remember, it’s possible. Therefore, once your supplier gives you a quote, remind them that you are using your freight forwarder (which is stating the obvious), and that you expect this price to stand.
Importer Security Filing
Last but not least, it’s uber important that the importer security filing is completed and filed. It has to be filed 24 hours prior to the goods are loaded, but I wouldn’t recommend doing this at the last minute.
Here’s a good resource on this critical logistical document for the United States of America.
Also, here is the template of the document: ISF