How to do a Proforma and Commercial Invoices for import or export

proforma-invoice-export-importUsually, when the importer and the potential clients are surely satisfied with the quality of their products, the delivered samples, time of the package/delivered are tested and the price are acceptable. They will offer you a confirmed offer. This article gives extended information regarding our ex-products. Proforma invoices, comercial invoices and export documentations.

What will the exporter offer to their clients o customers?

They will offer the budgeted indicated the prices. The quality and the cost of the transport. What happened to the other factors? as the method of the payment, navialability of the goods, the sending instruction, the carges of the service, the sales conditions, description and delivery time. The price, time and cost of the transport is not the sufficiente knowledge on that the customer take an decision of the purchases. The samplify the things to the clients or customer, The exporter should offer an budget invoice format carefully completed.

Most of the exporter provide their customer with the partial information when they asked for the budgeted prices. This is the lacking of the detail and required information. From the part of the exporter is a important factor, by which they will not sale the products with the good quality and necessary compatitive.

However, if you are exporter o importer, is more important to understand how the exporter will success to provide the budget on the base of the formated invoices. Must have the capability to distinguish the budgeted price and the formated invoice and comercial invoice. The following definitions briefly, have it to help you understand their differences y proportionate what really have to include and consider the decision of the invoices.

BUDGETS

This is a work sheet for the calculation of the cost of the export of the goods and services at the determinated prices and condition. The Budget will present generally to the customer in the formal way through the formated invoices. The budgeted prices could be include all contents that exits in the typical invoices except:

1) The original country.

2) The title “ formated Invoices” generally not include in the budgets.

FORMATED INVOICES

This is the quote of the prepared prices in the form of the invoices. A formated invoices is different than the comercial invoices which use for the sale and its delivery before the comercial invoice. The content of the invoice is almost identical against the comercial invoice and it consider for the gerenal binding agreement, however the prices could be change before the final sale.

proforma-invoice-export-importFor the establishment of the lettter of credited (CC) or for the anticipated payment form the importer, banks prefers the formated invoice as a budgets price.

In some of the countries, in EEUU for example, the custom could accept the formated invoices (generate for the importer of the EEUU, no for the exporter). If the required comercial invoices is not available at the moment of the presentation of all the entrance documents( the entrance documents is a process of the presentation of the documents at the custom) the custom could utilized the formated invoices for the evaluation and examination of the merchandized. They required that the registered importer desposite the advance and produce the comercial invoice in between the period of the 120 days next to the date of the entrance of the merchandized.

If the comercial invoice was necessary to statistic effect, the importer would have to produce the comercial invoice in between the 50 days, next of the date on which custom clear the merchandized to the importer.

Proforma invoices are thoughtfully utilized in the international transactions, now they are consider as the binding agreement between the importer and exporter, Also could be required by the some countries, as the part of the their method of the importation licence. The banks and financial institutiones utilized proforma invoices for the open letter of credit and anticipated etc. Same as for the importers.

Samply understandable for its similarity with the comercial invoices, the formate of the proforma invoices supporte the exporters to include all the information that should be figure out in the comercial invoices.

When the company request to send the proforma invoice, should be in mind the following points:

  • The title of the documents should be headed clearly with the” Proforma Invoice”
  • Name, address, telephone number, y email address of the exporter
  • Sale to: Name, Address, Telephone number, Email address
  • Reference number of the Proforma Invoice
  • Published date: the date of the proform invoice is the date of the quoted received
  • Reference number of the consult client and order number, If it is available
  • Payment method and conditions (letter of Credit, pre-payment, T/T, Open Account)
  • Bank information of the exporter for the negotiation of the letter of credit and the detail of the code of the SWIFT for the account transfer
  • Estimated deliver date
  • If there is more than one product, the number of each and every product a part form the number 1
  • Type of the delivery and  entrance (partial batch o completed batch)
  • Indicate the tranship in it case
  • Quantity of each batch
  • Product complete description, include the  coordinated code (HS Code) if it available
  • Indicate clearly the money utilize: (USD, Euro, Yen, etc)
  • The unit price should be include
  • The unit price should be multiple by the budgeted quantity to include the total cost of all the products
  • Any services which additionally proportioned by the providers should be mention in detail and added till reach to the total.
  • Sale conditions. In the case delivery by sea port utilized ultimates INCOTERMS (FOB, CIF, CFR,DDU) Port o convient destiny
  • Identify the number of the units measures, weight, contents, platte, packet, etc
  • Original country of the products
  • The cost of the additional documents, inspection, legalization, etc charge to the importer and exporter
  • Validity: never sign the open compromise. Remember that the date of the validity is changeable
  • Should be sign for to be included
  • Acception column  with the signature, the title of the purchaser to incorported in PI or Presentation Letter

REMEMBER: The proforma invoices are formal offers of sales. When the purchasers are agree with all the term and conditiones of the proforma invoice, the results would be purchase order delivered by them, which is finally create the sale contract. Mean, the purchaser and the exporter are at agreement to have a formal sale contract. The order of the proforma and the purchase order should be order before the merchandized delivered to confirm if there is any discrepancy. In any case is there any discrepancy, the purchaser should be notified with the promptness to correct the errors.

COMERCIAL INVOICE:

Comercial invoice prepare when the sale in coming upto end. The comercial invoice is the final invoice of the exporter to the purchaser that confirmed the agreement. Could have the exact terms of the proforma invoice that offer in the first request or could be different proper final negotiation. The comercial invoices are also utilized for the custom right, the goods control and check and the recollection of the statistic. It is very important that the exporter consult with the purchaser, type of the information that must be include in the comerical invoice with the end of the passing thought the custom of the purchaser country.

Here are some key area to consider when deliver a comercial invoice.

  1. It must be sent in a comercial habitual form. The mejority of the countries require that each and every delivery represent their own comercial invoices.
  2. Should be send original copy although some countries accept fotocopies with the declaration of the foreigner providers, shipping agente, or importer verifing that could be treat as authentic copy.
  3. When one of the invoice is not available, in some countries accepts a profrom invoice with the accurrate information for the evaluation, examination of the merchandized and compile statistic.
  4. Some of the countries may be require special invoice of the custom department.

COMMON ERRORES  OF THE EXPORTER INVOICING :

Following are the some of the common errores of the exporter invoicing often are made by the exporter. Any of the following errores could cause retardation (delay), penalize, confiscation of the products by the custom staff.

  • Sab invoices, are less declared than the real value of the of the goods.
  • Description is not quantitative.
  • Various distints items are distributed in one group.
  • The provider does not show the invoice included discount at net price.
  • The omission of the bounes, commisiones, packaging and other additional holding right that contain in the market value.
  • Cost of the transport and assurance for any mishap (some of the countries do not include the cost of the transport and the assurance)
  • Lacking of the relevant information and could be possibility of blank lines.
  • Lacking of origin country.
  • Invoice not signed by the provider or agente of the provider.
  • Calculation error in numbers and figures.

Remember,  minimum, one invoice should always mostrate clearly the total value of the invoice, no taxable charged, add to reach at the final market value( if its taxable), and net value of the imported merchandized.

A Proforma Invoice should be prepared carefully, The expoter could be increase the possibilities of acceptation of the offer for the customer finally, increase the sale of the exporter and the benefits. A proforma invoice must be the first document that customer receive form the part of the exporter. There is a psicological order benefit that it´s  sample and easy for the customer o client to accept the budgeted offer.

Help your cliente to accept the offer and consiencely preparred the profrom invoice.

Cross Docking in Spain: Postal Mail and Courier Services

Cross Docking

What is Cross Docking?

Cross Docking is a logistics procedure where products from a seller are distributed directly to their customer with no handling or storage costs. It means that the seller can consolidate all the orders from a determined country in one parcel and send it to a cross docking center located in this country. When the shipment arrives, the orders will be distributed to the respective customers immediately, and the seller hasn’t storage or handling costs and a significant reduction in delivery time.

This method has two important advantages:

  • Price: The seller saves money, because international postal services are more expensive than domestic postal services. If the seller sends a lot of orders per month, the saving is considerable.
  • Quality of the shipments: If the seller send orders by international postal service, the parcel could be lost or not be delivered on time. This problem is easily solvable by using the Cross Docking method.

When  sellers use Cross Docking, they have two options:

  • The seller has the option to label the shipments before consolidating them into the parcel that will be sent to the Cross Docking Center. Choosing this option, the seller can print his own labels. The seller can opt between two methods:
    • By integration with the Courier/Post: Seller using a EDI (Electronic data interchange) may upload CSV files with the orders and download a CSV file with tracking numbers and PDF files with the labels. Seller also can download the tracking information. There are two types of Courier applications: Correos Express have a program that runs in Windows only. ASM and Seur have a application on the cloud.
    • Load his orders and print his shipping labels by Web Service.
  • The seller can send the orders without label. In the Cross Docking Center, the orders will be labelled and shipped. Here is an example of a shipping label for one of our clients, Home Health Spain:

       Correos Express                                           ASM                                             SeurCorreos ExpressIMG_5868IMG_5879

 

 

 

 

 

 

As for shipping, the seller may choose between two methods: Postal service or Courier Service, each one with its own advantages and disadvantages.

  • Postal Service is cheaper and slower than Courier Service. Tracking number will not be provided and the probability that your shipment might get lost is higher than sending the order via Courier Service. This option is recomended when the order has a low value and doesn’t matter if the transit time is a bit long. The transit time is between 3 to 5 working days. The percentage of delivery on time is 96,6%.
  • Courier Service is more expensive and faster than Postal Service. You can track your shipment and probability of loosing the parcel is minimum. This option is recommended when the order has a high value and/or a lower transit time is important. In Spain, we work with Correos Express, SEUR and ASM, with a percentage of delivery on time of 99%. The delivery time usually is 24-48 hours (working days).

Probably, you are thinking: Your information is useful, but…

Why not send the orders by Cross Border Shipping from my country?

If you send the orders by Cross Border Shipping from your country, probably you have three big disadvantages:

1. Cross Border prices are higher: Look at this comparison between prices of domestic postal service and intra-EU postal service (data from 2013). If you send a lot of orders per months, you would lose a lot of money.

Comparative of prices: Domestic services vs intra-EU service
1 2 3 4 5 6 7 8 9
Domestic Postal Service (Per Unit) (EUR) <20 gr Intra-EU Postal Service (Per Unit) (EUR) <20 gr Increase % Shipping Cost to Spain by GLS (1000 orders, 20 gr/order, 20kg) Courier Service Total Cost (1000 orders) (Domestic) Total Cost (1000 orders Cross Docking + Spanish Domestic Postal Service) Total Cost (1000 orders Cross Docking + Domestic Courier Service) Unit Cost Cross Docking + Postal Service Unit Cost Cross Docking + Courier Service
EU (28 countries) 0,55 0,87 58,18%
Belgium 0,77 1,03 33,77% 40,52 2300 410,52 2340,52 0,41 2,34
Bulgaria 0,43 0,92 113,95% 69,96 2300 439,96 2369,96 0,44 2,37
Czech Republic 0,38 0,77 102,63% 40,52 2300 410,52 2340,52 0,41 2,34
Denmark 1,07 1,68 57,01% 40,52 2300 410,52 2340,52 0,41 2,34
Germany 0,58 0,75 29,31% 33,23 2300 403,23 2333,23 0,40 2,33
Estonia 0,45 1 122,22% 69,96 2300 439,96 2369,96 0,44 2,37
Ireland 0,6 0,9 50,00% 69,96 2300 439,96 2369,96 0,44 2,37
Greece 0,72 0,78 8,33% 227,52 2300 597,52 2527,52 0,60 2,53
Spain 0,37 0,75 102,70% 2300
France 0,63 0,8 26,98% 33,23 2300 403,23 2333,23 0,40 2,33
Croatia 0,41 1 143,90% 69,96 2300 439,96 2369,96 0,44 2,37
Italy 0,7 0,85 21,43% 40,52 2300 410,52 2340,52 0,41 2,34
Cyprus 0,34 0,51 50,00% 227,52 2300 597,52 2527,52 0,60 2,53
Latvia 0,5 0,78 56,00% 69,96 2300 439,96 2369,96 0,44 2,37
Lithuania 0,45 0,71 57,78% 69,96 2300 439,96 2369,96 0,44 2,37
Luxembourg 0,6 0,85 41,67% 40,52 2300 410,52 2340,52 0,41 2,34
Hungary 0,47 0,88 87,23% 43,04 2300 413,04 2343,04 0,41 2,34
Malta 0,26 227,52 2300
Netherlands 0,54 0,9 66,67% 40,52 2300 410,52 2340,52 0,41 2,34
Austria 0,62 0,7 12,90% 40,52 2300 410,52 2340,52 0,41 2,34
Poland 0,56 1,24 121,43% 43,04 2300 413,04 2343,04 0,41 2,34
Portugal 0,5 0,7 40,00% 25,68 2300 395,68 2325,68 0,40 2,33
Romania 0,36 0,48 33,33% 2300
Slovenia 0,29 0,6 106,90% 43,04 2300 413,04 2343,04 0,41 2,34
Slovakia 0,65 1 53,85% 43,04 2300 413,04 2343,04 0,41 2,34
Finland 0,85 0,85 0,00% 69,96 2300 439,96 2369,96 0,44 2,37
Sweden 0,55 1,11 101,82% 69,96 2300 439,96 2369,96 0,44 2,37
United Kingdom 0,73 1,04 42,47% 43,04 2300 413,04 2343,04 0,41 2,34
Iceland 0,74 1,08 45,95% 250,17 2300 620,17 2550,17 0,62 2,55
Switzerland 0,81 1,14 40,74% 43,04 2300 413,04 2343,04 0,41 2,34
Former Yugoslav Republic of Macedonia, the 0,26 0,58 123,08% 250,17 2300 620,17 2550,17 0,62 2,55
Serbia 0,19 0,41 115,79% 69,96 2300 439,96 2369,96 0,44 2,37

Column 1. Domestic Postal Service ( Per Unit) (EUR) <20 gr: Postal Service price for each country (Domestic).

Column 2. Intra-EU Postal Service (Per Unit) (EUR) <20 gr: Postal Service price for each country (Intra-EU).

Column 3. Increase %: Increase in the price if you use Domestic Postal Service or Intra-EU Postal Service.

Column 4. Shipping Cost to Spain by GLS (1000 orders, 20 gr/order, 20kg): Price for shipping from the countries listed in the left column to Spain using GLS, 1000 orders, 20 gr per order, 20 kg in total.

Column 5. Courier Service Total Cost (1000 orders) (Domestic)Sixth column: Total cost of ship inside of Spain to the customer 1000 orders (2,3 € per order * 1000 orders)

Column 6. Total Cost (1000 orders Cross Docking + Spanish Domestic Postal Service): Total cost if you send to Spanish Cross Docking Center from your country (left column) and from here, distribute to the customers by Domestic Postal Service. For example, the cost of shipping Belgium-Spain by GLS is 40,52 €. That is, 40,52 € + (1000 orders * 0,37 €) (the cost of Spanish Domestic Postal Service) = 410,52 €.

Column 7. Total Cost (1000 orders Cross Docking + Domestic Courier Service): Total cost if you send to Spanish Cross Docking Center from your country (left column) and from here, distribute to the customers by Domestic Courier Service. For example, the cost of shipping Belgium-Spain by GLS is 40,52 €. That is,  40,52 € + (1000 orders * 2,3 €) (the cost of Spanish Domestic Courier Service) = 2340,52 €.

Column 8. Unit Cost Cross Docking + Postal Service: Unitary price per order (Using Spanish Domestic Postal Service): Seventh column / 1000 orders. For example, Belgium-Spain is 0,41 €/per order (410,52 € / 1000 orders).

Column 9. Unit Cost Cross Docking + Courier Service: Unitary price per order (Using Spanish Domestic Courier Service): Eighth column / 1000 orders. For example, Belgium-Spain is 2,34 €/per order (2340,52 € / 1000 orders).

Sellers usually consolidate 2 times per week, 8 times per month. The total cost would be the price in the table multiplied by 8.

2. Slower delivery time for crossborder shipments: If you send your orders only by Postal Service, the transit time is higher than if you send the parcel by Courier to the country where Cross Docking Center is located and from here, you use Domestic Postal Service.

3. The probability of loss increases with international shipping: It is more probable that your order will not arrive to the addresses if you send by Intra-EU Postal Service, because transit time is increased and the packet passes through more places.

Apart from what we have mentioned above, Cross Docking used with Courier Services also offers a wide range of advantages for the client.

– Delivery time is still smaller than in the case of using Postal Service, because the delivery time is 24-48 hours.
– The probability that a shipment may get lost is lower, as we will have a tracking number.
– Depending on the Courier we use, we can have additional advantages. Correos Express and Seur send an email to the client to coordinate delivery of the parcel. In the case of ASM, the Courier has its own app, so customers can track their order.

As you can see, the most economical shipping way is through the use of Cross Docking, with the additional advantages of considerably reducing the transit time  and also reduce the likelihood of loss.

In conclusion, Cross Docking may reduce your shipping cost and increase the satisfaction of your customers. The orders arrive sooner and the probability of loss decreases. In addition, you can choose print your own shipping labels or the Cross Docking Center may do it for you. You can also choose between a more economic option like Postal Service if the delivery time doesn’t matter and the value of the products is low, or you can choose Courier Service, more expensive but faster and safe.

Cross Docking is a really good solution for all types of sellers, but in particular for the online sellers, that sell in Ebay, Amazon, Etsy, etc.

Do you use Cross Docking or another alternative type of logistics? Tell us your experience!

Air Freight and Courier Service into Spain – Strategies for Reducing Costs and Avoidable Key Issues

american_cargo_ops

  This article explains what’re the method of Air Freight and Courier to import goods from countries around the world (such as China, Taiwan and the United States) within the European Union by the airport of Spain.

  The method of Air Freight is one of the most popular methods of import of goods from countries outside the European Union within the Community. New importers in this field often do not understand the difference between “Courier” and “Air Freight“. In this post we look over those concerns and explain why it is a good idea to send your goods by air rather than sea. Key issues you could avoid sending cargo by air and some strategies to reduce costs by using courier or air-freight.

Difference between Courier service and Air Freight

Before getting into the more complication of choosing between air and sea, or between messaging and cargo: It is important, we look at the difference between the “Courier Service” and “Air Freight“.

How do they differ from each another?

Courier, also known as “express” is basically a “door to door” where the courier company send their goods from point A (normally suppliers or consolidators from the address of the origin country) to point B (The address of the destination country).

They manage all the necessary processes to successfully deliver goods from A to B, ie, pickup and delivery, customs procedures at origin and destination, payment of taxes and duties (They will bill these charges apart from the shipping price itself), etc.

Popular Courier companies are: DHL, FedEx, UPS and TNT.

On the other hand, the Air Freight service is from “airport to airport” unlike the courier service is  “door to door”.

This means that the carrier is responsible for the goods after they have been cleared customs duties at the airport of origin and the deliver those goods to the destination airport. A ‘forwarding‘ agent is required to clear the goods at the office of destination and takes good to the delivery address.

Let use an example to understand better.

Suppose you want to buy a particular commodity in China and sent to Spain for sale.

If we select Courier service, the goods will pick by the carrier in China, would be responsible for clearing the goods from the Chinese Customs and all customs formalities at the port of EU. Finally, the use of the courier service is from input point sends the goods to the destination in Spain.

If we go for Air Freight, the goods will collect by the carrier at the airport in China till the EU airport, this will end up his role. Here where “Forwarder” takes place his role, who will take care of customs clearance and send the goods from the destiny port to the destination address (final destination).

Many large courier companies such as DHL and FedEx, as well as passenger airlines provide “Air Freight” services. Most passenger airlines have space to accommodate commercial cargo and this explains roughly 10% of their income.

When it could be better option to send goods by Air?

The decision to deliver their goods using a service or through air cargo shipping is a function of three key factors, known by, the volume of goods, weight of goods and the value of their merchandise. Use Air freight is usually a good idea in the following cases:

– To send goods samples.

– For high-value goods

– Low volume products (not too heavy), for example, tablets, watches, phones, importing clothes etc.

– When goods are sensitive with the passage of time, perishables or urgently needed (air shipping usually takes less period than sea).

So the most frequent question arises here is, what volume of merchandise is better to ship by sea rather than by air? This depends on a number of factors such as the rate of “Air Freight” for the week (the rate changes every week) and the actual weight of the goods.

However, once the mark of 1 CBM crosses you can start seeing LCL sea shipping as a viable option.

Courier and Air Freight: Calculations

We often meet importers, including experienced importers that are usually confuse about how to calculate the costs of Courier service and Air Freight. When Forwarder use kilograms base, usually refers to the cost per kg of “chargeable weight“.

The “chargeable weight” refers to the higher value of two, the actual weight of the goods or its volumetric weight. Volumetric weight (also known as “dimensional weight“) is calculate by multiplying the dimensions of the packaging of the goods (for example, the dimensions of the box) and dividing by the “size factor“.

At this point there is a great confusion, as importers often ask the weight of the goods to the supplier and on the base on that weight make the price calculation, So it’ll be the big surprise that actually shipping was more expensive, as the importer, he is charging the price on the highest of the above mention two weight. The Forwarder will charge on the volumetric weight, which is not the actual weight of the goods.

Further more, the formula for calculating the volumetric weight for shipments “Courier” is different from “Air Freight“, as the “dimensional factor” for the Courier usuario this factor is 5000, whereas for the Air Freight is higher and its 6000 or more.

This is where most of the importers can fail even the experienced importers when trying to decide between Courier and Air Freight as they use the same weight to compare the two options.

Let us illustrate these explanations with an example:

Product: Android Tablets

Quantity: 500Pcs

No. of cartons: 10 Carton

Dimensions (cm): 80 x 50 x 40

Total current weight of 10 cartons: 200kg

Volumetric weight (Courier): ((80x50x40) / 5000) * 10 = 320kg

Volumetric weight (Air Freight): ((80x50x40) / 6.000) * 10 = 267Kg

Here you can clearly see that the dimensional weight exceeds the actual weight, so the Courier / Forwarder invoice is base on that rather than the actual weight.

In this case, would more economical to ship by Air Freight rather than Courier, but there are more factors to consider, such as additional charges for customs processing.

Important concern: The current courier companies use advanced laser scanning machines to calculate the volume of the boxes. This means that even a small bump in cartons can lead to a significant difference in volume. We must ensure that the packaging will in optimal conditions to ensure, it will not increase our cost.

Also, if the boxes have some sort of lump, depending on the nature of the products and packaging, you can also jeopardize the safety of goods in transit and therefore, this should be one of the points in your list of Control quality for pre-shipment inspection of goods.

Courier vs. Air Freight – Which could be best option to choose?

So, how do you decide between Courier and Air Freight? As with marine cargo, there is a fixed cost of processing at each customs fees carrier, and domestic road transport, hence the use of messaging is usually recommended when it comes to smaller packages and samples .

Continue with the above example, let’s say we’re importing goods from China to Spain and quoted price is € 5 / kg for the carrier and € 4.5 / kg of air cargo, so their costs would be:

Door to door transport company: € 5 x 320kg = € 1600

Air Freight 267Kg x = 4,5 € = 1200 €

There is a reason why importers are confusing to compare these figures. Assume that we have bought products based on EXW, in this case, the total cost of Air Freight would have to pay would be for:

– Freight / National transport from the factory to the airport.

– Customs clearance and costs forwarder in China and in Spain.

– Freight / Airport Spain entrance to the final destination domestic transport.

Let’s assume that these costs are € 300 in China and 450 € in Spain, which makes a total of € 750. So now our options are:

Courier: € 5 x 320kg = € 1600

Air Freight 267Kg = 4.5 € x = € 1,200 + € 750 = € 1,950

In the above scenario, Courier is clearly the best option. In addition, another important consideration is that the Courier is almost always the fastest option unless you have chosen one of those super slow courier services that tend to be cheaper and the package is on the world tour for 7-10 days before arrival to your destination.

Therefore, the key question is, At what point the Air Freight is cheaper than the Courier? From our experience of sending more than 1000 shipments from Courier service and Air Freight from third countries to the EU in recent years, it seems that in most cases, around 400-500Kg dutiable weights. The  “total cost” the Air Freight is becoming cheaper than using Courier.

For weight below the mark 500Kg, use Courier is also simpler than the Air Freight option, plus you will not have to worry about any procedure, which means you can use that time to focus on other matters of your business.

Key points to consider when it comes to sending goods by air:

  1. Damage in transit:

When sending goods by air, it is very important to follow strict guidelines in terms of packaging and also inform the provider about such guidelines to be met when we made a shipment, to prevent damage of the goods. Care should be taken as how the packaging should be use to protect the product and the quality of the cardboard boxes. We get inform by many cases where goods were in perfect condition when they left the factory and came with a thousand of damages to the warehouse of the importer.

  • Damaged goods: Why is this happening?

Courier companies handle thousands of deliveries every day, and especially when a product comes from a far country usually passing from or staying at different destination. Not all packages carefully treat, although posted by the big stickers ‘Handle with care‘. Cases included: they throw packages or may be stacked putting heavier packages above the packages or often shuffled during the journey, carriers may be fall down boxes while lifting up or getting out of transport and even we have got cases. Many boxes have trampled.

In packaging, especially cardboard quality used is one area where suppliers try to cut down to his reduce costs. Therefore, we must be vigilant and demand quality and packing according to the goods we will send our supplier.

  1. Surprises, which could cost expensive

For some reason I’m still trying to understand, in the supplier’s factories and very specifically in China, often miscalculate the correct volume and weight of the goods, especially before they have produced the goods. This is a constant subject of struggle for us, especially when working with new factories.

  • An unpleasant surprise

You might think that a factory produces a standard product and delivers frequently. Perfectly dominates the calculation of volumetric weight, but often there is a difference in the “volumetric weight” information from the factory to the customer and the measurement of the courier company. This usually leads to an expensive surprise when the importer receives the bill for the Courier Company or forwarder.

  1. FOB and Exwork

To obtain an estimate of B2B websites, Supplier often quote the FOB value. However, importers often end up receiving their merchandise by Courier or collecting goods from several importers and receiving all of them from one platform.

This means that, normally, suppliers include in base of Exwork the rate of customs charges, but now it is no longer necessary to do this. Many importers in these cases end up overpaying for logistics.

For all this, it is important to search and decide the logistics plan before. If you’re thinking about consolidating the goods or use a courier service, it is best to use a quote of EXM rather than FOB.

  1. Risk of Steal of goods

There is always a small risk of theft by choosing Air Courier as the goods pass through several hands. This is something that applies to LCL ships. Our experience over the years has been that this risk is quite small in China for example, and we see more cases of robbery in the “developing countries” in the destination port, unlike developed countries.

  1. Changes in the prices

Many importers ask us transport cost (rates) for a shipping that will be effective in future. We have to make it clear, in such cases; the rate is only valid for the current week. This is because the rates are updated weekly, mainly due to “Fuel” that is linked to oil prices.

Therefore, you should always get a new rate for the shipment once their products are ready to be sent and along this should to reconfirm the volume of goods. This will also help you avoid surprises cost and can often be good news if rates decline in that period.

Smart strategies to reduce costs when importing by air:

Sometimes making small changes in products and packaging can significantly reduce transportation costs.

  1. Fully Utilize carton space

Leave empty space in cardboard boxes (or containers) it is almost a crime when it treats as international trade. Leave space in LCL shipments may not pose a big impact on the margin, but shipments Courier air; this can get to eat your margin.

To avoid this, you should make sure to give specific instructions for packaging to your suppliers and make sure no space will be wasted.

Aside from the benefits in terms of cost to do this, this also helps minimize damage during transport as cardboard boxes with space are often damaged because they usually put heavy boxes on them during the transit to the warehouse.

  1. Package Design

The design of the product packing is also very important. Some big brands such as Apple, usually design packing for their products larger than the product itself, with the free space inside, with an attractive and creative design. However, more the packaging is heavier than more the space will be use and the higher the logistic costs, so it is important that the product packaging is as tight as possible so that the cost of transporting will not absorb your profit margin.

  1. Product design

The above concept can also be applied to product design, although this might not always be feasible for smaller importers. Be creative with things like the type of charger used or the size of an accessory, all these can help to reduce the size of the package, which will result in greater savings in logistics costs.

  1. Types of Courier Services

When using messaging services there are plenty of services that many importers are not aware of that can help reduce costs significantly. We are not referring to the choice of transport companies, as each one has their prices, services and different routes.

Courier companies offer big discounts with large volumes (Economic of scale), therefore, it can be more expensive to go directly to the carrier.

We Spainbox for example, to have agreements with different transport companies with different services, pricing and routes, we can offer a more personalized and economical service with various value added services: such as the fastest delivery and more economic price.

  1. Price bands

Price fixing in the transportation industry is often on the base of the price band. This mean, if you have provided a estimated price for a shipment of 200 kg of 5 € / kg and are about to make 4 shipments per month, if you could make only one shipment per month of 800 kg you would have access to a lower price.

You will find that this subject repeats everywhere when it’s international trade, recommend, try to increase the volume to reduce your “per unit cost“.

In conclusion…

Choosing the right shuttle in the right situation is not easy and has details that sometimes even the most experienced importers know or have in mind. Therefore, keep in mind that, when in doubt, it is best to consult the professionals like us who can advise you better and with greater depth about your particular case regards different products and shipments, which require different solutions. In short, keep in mind, make small changes to the product and packaging, pre-planning and understanding the numbers and calculations can obtain significant savings in logistics costs, which ultimately will increase your margins.

Of course, if you have any questions concerning the international carriage or you want to consult us about your particular case, don’t hesitate to contact us, we always there for you.

10 most frequent errors when exporting from Spain

10 most frequent errors when exporting overseas

10 most frequent errors when exporting overseasExport has been boosting the Spanish economy. It has achieved an year-on-year increase of more than 8% within the first months of 2013. Due to the decrease of the internal demand, several Spanish Small Business are starting to expand their business offshore, either selling its products or services. Nevertheless, expanding to foreign countries is a complex process and a huge amount of companies fail in their attempt because they undervalue certain relevant aspects of internationalization.
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