| |
|
|
|
 |
|
|
|
|
|
Logistics
in China:
Supply Chain Strategies for Success |
If
you're doing business in China, or planning
to, if you're trading with Chinese joint venture
partners, or working with suppliers or distributors,
you've probably experienced some of the challenges
unique to this part of the world.
Blocked distribution channels. Undependable
infrastructure. Unfamiliar business culture
and practices. Maturing technology systems...
all challenges that can frustrate or foil improperly
planned trading strategies.
Despite these obstacles, there is abundant
opportunity. The future is bright for those
with the knowledge, forethought and global
logistics expertise to bridge the culture and
business gaps.
You are about to import your first shipment
from China. What are the first steps to take?
You are about to export your first shipment.
What do you do now?
Importing? Be
Specific
For those about to import
from China, there are several key steps when
finalizing the process. The best advice is
to consult with a qualified global logistics
provider that has proven trade and regulatory
expertise, who can provide efficient supply
chain and customer service solutions that can
help avoid costly pitfalls and unnecessary
delays.
- Incoterms
2000 - It's critically important
your supplier in China fully understands
Incoterms 2000. Don't assume. Ask and
specify. A misunderstanding on terms
will cause costly disagreements - who
is responsible for paying for what?
- Specify
your port - Never specify "FOB
any China port" on your order. China's
ports are locally controlled. Each
has varying fees and rate schedules.
Failing to properly specify your exact
port could mean another port will be
used, adding considerable expense.
- Know your
vendor - You must know your vendor
and the nature of his exporting license.
Be sure the vendor isn't using a "window
company" for its license, but holds
the license directly.
- Know the "quota
fee" - This is especially important
for garment importers. Specify that
the "quota fee" is included in your
final rates and the exporter provides
the "quota visa". Without the proper "quota
visa" the importer will not be able
to bring the goods into Canada without
delay and additional expense.
Exporting
to China
For
those about to export shipments from the West to
China, there are several critical factors to consider.
- Know your
buyer - Ensure your buyer in China
is licensed to import goods into the country.
If they are not, there will be delays and
additional expense.
- Specify port
of entry - Be sure your buyer specifies
which port or airport will be used for
entry. Each is controlled locally and the
location will have an impact on the cost
of getting the goods into the country.
- Importer's
registration - Because of the localized
regulatory nature of ports of entry, importers
are generally registered to deal with one
port or gateway. If your goods are destined
for the northern area of the country and
your importer is only licensed to use a
southern port, you'll be faced with inland
transfer and transportation costs.
Consult
with experts
Companies
without a physical presence in China need access
to experienced logistics experts, with knowledge
of current market and transportation conditions.
Without the right alliances and partnerships, delays
and bottlenecks can cripple your venture.
Effective coordination between all partners makes
it critically important to establish and maintain
personal relationships with key Chinese contacts.
One way to build these relationships is by participating
in formal trade missions to China, such as the upcoming
China Trade Mission 2001 organized by PBB Global
Logistics.
Integrated
Third Party Solutions
Like anywhere else in the business
world, there is a growing need for integration of
services and solutions. These kinds of solutions
include inventory management, warehousing and inland
transportation. A global logistics provider must
also have the ability to forecast and pinpoint future
trends that will affect your business. For instance,
they should be providing you with advice and recommendations
on payment terms, inland shipping routes and preferred
ports for your supply chain.
Inland
transportation is a constant challenge
With
a US$100-billion investment in infrastructure over
the past several years however, the situation is
improving. Of particular importance to traders are
improvements to shipping lanes to link the Western
areas of China to ports in the Southwest. Ports including
Tianjin and Qingdao are growing rapidly and becoming
major shipping hubs.
For this reason, your global logistics provider should
have service and consolidation capabilities in these
regions. For example, PBB Global Logistics has begun
regularly scheduled weekly ocean consolidation services
from China to North America. The service consists
of weekly consols from Tianjin, Shenzen and Qingdao,
to Vancouver, Toronto and Montreal. Clients use the
service to expedite shipments from Chinese centers
including Beijing, Hebei Province, Shanxi Province,
Shaanxi Province and Henan Province, through the
ports.
Untap
the Opportunity
For
the most part, China is a country of untapped opportunities.
But doing business successfully in this country is
contingent on many factors other than locating suppliers
and opening new plants and facilities.
Mastering the supply chain and executing a proven
China-specific logistics strategy is vitally important.
Consultations with a third party logistics professional
with experience and expertise in China is one of
the first steps to take towards developing these
strategies. |
|
|
|
|
|
|
