A technically difficult area of international trade is logistics, the physical movement of the goods in question. There is are so many options and so many requirements that two common errors are made:
1. Handle it yourself.
2. Decide it is too difficult.
Sure you can just book the freight yourself on a carrier, and line up a truck to fetch and take it to the docks. Sounds easy, but beyond the docks, the routing and care of the goods will usually have such esoteric details which need to be addressed that you'll inevitably run into problems, at which point you are on your own.
On the other hand, people might hear the horror stories and decide to just ignore exporting. This is the flip side of the first mistake, because it ignores the experience of countless small exporters who are managing logistics just fine.
How so?
The tactic is to hire 3PL companies (third party logistics) AKA non-vessel operating common carriers (NVOCC) to handle most, if not all, of the routing and paperwork required for exporting.
"But isn't that expensive?" If you are going to be in business, you must free yourself from ever asking this question. Whether something is expensive is none of you business, it is entirely the concern of the buyer, not you.
The "expense" in question is buried in your price (you give nothing away in business), it is listed in your minimum order quote detail, and the buyer will consider that specific cost item in your overall cost. If you get an order with those costs built in, then it is not too expensive. If the buyer balks at the component cost of logistics in your offer, then let the buyer find a cheaper alternative. "Expensive" or "too expensive" ought never enter your mind in business. There is the price, and then there is the alternative. Nothing is ever "expensive" in business, or life for that matter.
The 3PL providers are usually somewhat specialized, so it might take some doing to find one ready, willing and able to help you. You can help tremendously by showing the 3PL provider you intend to have a one-size-fits-all MOQ FOB US$ export offer. This does a couple of things -
A. It signals you will not exhaust your company working up quotes on every speculative inquiry you get.
B. It signals you will not exhaust the 3PL provider working up quotes on every speculative inquiry you get.
C. It shows your shipment will be so constrained in options that when something goes wrong, and always something goes wrong, it will be well within the 3PL skillset to sort it out.
This is an under-appreciated concern. The 3PL folk are pros, and they want your shipment delivered in good order on time. If they book 1000 transactions, they will range on a continuum from a dozen disasters to varying degrees of trouble to a dozen perfect problem-free shipments. They'll endure the inevitable random problems because it all balances out. They have no desire to recruit problems in the form of undisciplined newbies. They'll consider disciplined newbies.
And it is not just the rules, regs, labels, paperwork that they manage for you, it is also the creative area of moving goods. My favorite 3PL solution was on behalf of Japanese shippers to German customers of an electronics component that was too time sensitive to ship ocean freight, yet too heavy to ship air, just borderline cost/benefit both ways. The 3PL experts went to work and found if they could ship surface Nagoya to Anchorage, then air freight from Anchorage to Frankfurt (over the pole) they could deliver the goods within an acceptable freight cost range. Only experts could figure that one out.
When Hong Kong liberated the wine market a 3PL company spotted a problem and an opportunity and jumped right in. The company is called Crown Wine Cellars LTD (who also handles wine transport) and addressed the problem of wine being abused after hitting the docks. And here is another area where the 3PL companies are invaluable: they have the experience of countless transaction before yours, and they can tell you what to look for. By handling wine, but not being in the wine business, you can find their advice frank, comprehensive and unbiased. I visited with Gregory De 'Eb, principal of Crown Wine Cellars, at their amazing wine cellars in Hong Kong and found his marketing advice entirely reliable. And why not? If one triumphs in the Hong Kong wine market, more business for Crown Wine Cellars.
Don't worry about logistics, let the experts handle it and the customers cover the cost.
Feel free to forward this by email to three of your friends.
1. Handle it yourself.
2. Decide it is too difficult.
Sure you can just book the freight yourself on a carrier, and line up a truck to fetch and take it to the docks. Sounds easy, but beyond the docks, the routing and care of the goods will usually have such esoteric details which need to be addressed that you'll inevitably run into problems, at which point you are on your own.
On the other hand, people might hear the horror stories and decide to just ignore exporting. This is the flip side of the first mistake, because it ignores the experience of countless small exporters who are managing logistics just fine.
How so?
The tactic is to hire 3PL companies (third party logistics) AKA non-vessel operating common carriers (NVOCC) to handle most, if not all, of the routing and paperwork required for exporting.
"But isn't that expensive?" If you are going to be in business, you must free yourself from ever asking this question. Whether something is expensive is none of you business, it is entirely the concern of the buyer, not you.
The "expense" in question is buried in your price (you give nothing away in business), it is listed in your minimum order quote detail, and the buyer will consider that specific cost item in your overall cost. If you get an order with those costs built in, then it is not too expensive. If the buyer balks at the component cost of logistics in your offer, then let the buyer find a cheaper alternative. "Expensive" or "too expensive" ought never enter your mind in business. There is the price, and then there is the alternative. Nothing is ever "expensive" in business, or life for that matter.
The 3PL providers are usually somewhat specialized, so it might take some doing to find one ready, willing and able to help you. You can help tremendously by showing the 3PL provider you intend to have a one-size-fits-all MOQ FOB US$ export offer. This does a couple of things -
A. It signals you will not exhaust your company working up quotes on every speculative inquiry you get.
B. It signals you will not exhaust the 3PL provider working up quotes on every speculative inquiry you get.
C. It shows your shipment will be so constrained in options that when something goes wrong, and always something goes wrong, it will be well within the 3PL skillset to sort it out.
This is an under-appreciated concern. The 3PL folk are pros, and they want your shipment delivered in good order on time. If they book 1000 transactions, they will range on a continuum from a dozen disasters to varying degrees of trouble to a dozen perfect problem-free shipments. They'll endure the inevitable random problems because it all balances out. They have no desire to recruit problems in the form of undisciplined newbies. They'll consider disciplined newbies.
And it is not just the rules, regs, labels, paperwork that they manage for you, it is also the creative area of moving goods. My favorite 3PL solution was on behalf of Japanese shippers to German customers of an electronics component that was too time sensitive to ship ocean freight, yet too heavy to ship air, just borderline cost/benefit both ways. The 3PL experts went to work and found if they could ship surface Nagoya to Anchorage, then air freight from Anchorage to Frankfurt (over the pole) they could deliver the goods within an acceptable freight cost range. Only experts could figure that one out.
When Hong Kong liberated the wine market a 3PL company spotted a problem and an opportunity and jumped right in. The company is called Crown Wine Cellars LTD (who also handles wine transport) and addressed the problem of wine being abused after hitting the docks. And here is another area where the 3PL companies are invaluable: they have the experience of countless transaction before yours, and they can tell you what to look for. By handling wine, but not being in the wine business, you can find their advice frank, comprehensive and unbiased. I visited with Gregory De 'Eb, principal of Crown Wine Cellars, at their amazing wine cellars in Hong Kong and found his marketing advice entirely reliable. And why not? If one triumphs in the Hong Kong wine market, more business for Crown Wine Cellars.
Don't worry about logistics, let the experts handle it and the customers cover the cost.
Feel free to forward this by email to three of your friends.
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