Case Studies
Our case studies cover some of the products our Asia Import Platform customers have developed in recent years.
Do you order small volumes from many different suppliers? You might be wasting thousands of dollars on exorbitant LCL shipping fees.
In this article, I explain how much you can save by combining your shipments in one single container – and the 4 step process for doing so:
This article is heavy on ocean freight terminology, so I strongly suggest that you read these two articles first:
When it comes to sea freight, there are two types of shipments:
One container with goods for one importer. This is the cheapest option, counted on a per unit basis.
‘Mixed’ containers carrying goods for several importers.
LCL can be 2 to 3 times more expensive, per shipped unit, compared to FCL. This can be explained by the fact that the administrative cost (which makes up a big part of the total shipping cost) is as high for an LCL shipment as an FCL container.
Hence, you can save quite a bit of money if you combine several individual LCL shipments into one single FCL shipment.
Let’s assume that you are shipping 4 LCL shipments:
# | Terms | Volume | Estimated cost (To Los Angeles) |
1 | FOB Shenzhen | 4 cbm | $710 |
2 | FOB Shanghai | 2 cbm | $460 |
3 | FOB Qingdao | 7 cbm | $1265 |
4 | FOB Xiamen | 5 cbm | $830 |
Total | 18 cbm | $3265 |
By comparison, an FCL 20’’ container, from Shenzhen to Los Angeles, cost around $1500.
By coordinating these 4 shipments, you could therefore save as much as $1765. This further reduces the customs value, which lowers your total import tax bill.
Now, I’ll explain how that works.
Your cargo cannot leave the country without export clearance documentation. There are two ways you can obtain these documents:
FOB stands for Free on Board (Export documents and shipping to the port), while FCA stands for Free Carrier (Export documents, no shipping).
Each supplier will provide export clearance documents.
The suppliers will not provide the export clearance documents. Instead, this is managed by the freight forwarder.
The second option can be complicated, as the export documentation shall normally be issued by the supplier. This is not always easy when it comes to lithium batteries, and other hazardous goods.
All shipments must be forwarded to the same port of loading. You can do this in two different ways:
This means that each supplier book transportation to the port of loading, for example Shenzhen. The FOB charges vary, depending on how far the goods must be transported.
When you ask for a ‘regular’ FOB quote, the supplier quotes based on the closest port.
Hence, you need to instruct the supplier to:
a. Provide an FOB quote that includes transportation to a specific city
b. Make sure that they declare that port as the port of loading
FCA includes the issuing of export clearance papers, by the supplier, but the cargo is not transported from the factory to the port of loading.
Instead, the freight forwarder picks up the goods at each factory, and brings each shipment to their port warehouse.
This is the most effective method, if you ask me.
This also allows you to make sure that the goods are properly insured, when transported from the factory to the port of loading.
Manufacturers have a tendency to delay orders. Sometimes for weeks.
If one supplier delays production, all other shipments will be delayed.
While it’s impossible to predict exactly when the production is finished, you need to sync your orders to avoid long term delays.
As such, products with longer lead times must go into production, several weeks before those with shorter production run times.
You should also have at least a 2 week buffer for potential delays.
Once all shipments arrive in the port of loading, the forwarder can load the goods in the same FCL container.
The forwarder must also issue the bill of lading, commercial invoice and packing list.
This is based on the export clearance documents issued by each supplier, or by the forwarder itself.
This can take a few days extra when involving many different suppliers.
Co-founder of Asiaimportal (HK) Limited and based in Hong Kong. He has been quoted in and contributed to Bloomberg, SCMP, Alibaba Insights, Globalsources.com, China Chief Executive, Quartz Magazine and more.
hi, i’m shipping different products from the same province. would they automatically be consolidated?
Hi Fredrik,
Thank you very much for sharing the information. Do you know how to process various chemicals from multiple suppliers? Do you have any good forwarder? Thank you.
Hi
I have purchased multiple items at ex factory price
1. Fans 2 : Zhongshan, Guangdong
2. Shower doors # 6 and vanity7 with 6 mirrors and 2 bathroom cabinets : Foshan City Guangdong
3. HOme theater screens # 2 screens and home theater seats # 16 : Guangzhou, Guangdong
4. Copper hoods Hood# 2 , large copper mural 6 x5 feet, 4 hood insert vents : Zhangzhou, Fujian
I would like forwarder to pick them up, do all export paper work, load and ship it to me, and deliver it to me in america, could you suggest some good forwarder?
Thanks.
Hi Ketan,
You can try Flexport.com or Freightos.com
hi, i’m shipping different products from the same province. would they automatically be consolidated?
No, I would not make that assumption. You need to instruct your freight forwarder to ship the cargo in the same container.
Hi Fredrik,
Here is freightos reply:
Can I search for multiple origins or multiple destinations?
Shipping from Multiple Origins
If you have goods at two different factories in the same geographical area (ie, in the same city), we recommend that the factory that has the smaller of the two shipments delivers the goods to the second factory. The receiving factory can then combine them into one shipment.
Note: Additional charges will apply, since the goods are palletized together and because two separate customs clearances will be performed and thus charged to your account after pick-up.
Therefore they do not combine shipping from different suppliers. I have asked DHL if they can do it.
Thank you for sharing this
Hi Fredrik,
Thanks for sharing this helpful knowledge!
Regards
Hello,
Do you also help ship mix items FCL to Dubai – UAE?
What are your service charges?
Regards,
Yusuf – Dubai
Hi Yusuf,
Yes, I don’t see why the UAE would be different in that regard.
I suggest you check out Freightos.com.