What is logistics? You may well ask; and how does it affect me?
Simply, logistics is the art of getting what is needed where it needs to be. But, for those not experienced in this sector, it can be anything but simple!
The challenges a business faces in achieving this can stretch even the most experienced managers. Once a supply chain becomes ‘International’, getting the logistics absolutely right is vital to success. Yet, many SME companies do not have the necessary logistics management expertise in house.
If this sounds familiar to you, your next thought may be: What can I do to overcome this quickly, and ideally without adding to my overheads?
Let’s look at the story of James…
Once upon a time, James, started marketing his range of electrical testing equipment overseas by attending an exhibition at the NEC Birmingham. He was very excited when he got his first order, from a Chinese company who had visited the stand and he set about assembling the stock.
He had agreed an exhibition discount price of £5000 for 10 pieces and while this meant he would only break even on the deal, he went ahead and ordered the parts needed to make up the order. A month later they were ready.
James contacted his Chinese customer to advise their order was ready and requested they send payment and shipping instructions. The customer replied a week later saying this was excellent news and when they received it in Shanghai they would make payment.
What did James do next?
a. James arranged shipment with the transport company he uses for UK Distribution which they sent freight charges collect, expecting the customer in China to pay the bill on arrival.
On arrival at Shanghai Airport the shipment was held by Chinese Customs as the customer did not have the necessary import licence ready and they also refused to pay the freight collect charges. The shipment accrued £500 of Customs and airline storage charges in Shanghai before being flown back to the UK.
The shipment arrived back at Heathrow but no one told James and it remained uncleared for a week accruing Airline storage charges of £200. The shipping back from Shanghai cost another £800
The total round trip had cost £2,200 and he had £5,000 of unsold goods back on his inventory!
Or, may we suggest a more satisfactory tale…
b. James was recommended to export experts, Freedom Logistics
Freedom Logistics arranged for their partner office in Shanghai to contact the customer and check that they were genuine and had the necessary import licence in place.
Freedom advised James on Incoterms and suggested that he send a pro-forma invoice to the customer adding on freight & insurance up to arrival Shanghai and specifying the currency and that payment was required in advance of shipment giving details of the bank account including IBAN where he wanted to receive payment.
The payment from China was received in just a few days and the shipment arranged by Freedom proceeded at once. Both James and his customer were kept fully advised of the schedule and were delighted when it was delivered without delay.
The customer now orders regularly from James and accounts for more than 10% of his turnover.
To find out how we could give you Freedom from your Logistics to support your international trade plans and their 100% satisfaction guarantee call them on Freephone 0800 0124369 or visit them at www.freedomlogisticsuk.co.uk
Freedom – Making Export Simpler.