Do you need to send samples to China, or to get small orders out of China? Do you want to avoid headaches and high costs? My colleague Fabien wrote some advice that will probably be helpful.
1. Sending samples into mainlandChina
Sending samples or small packages into China is not cheap but you can save money by avoiding mistakes and multiple sendings. We have seen several small importers giving up their projects because they could not send their sample to China!!
There are mainly two options.
The first option is safe butexpensive — using international courier services such asDHL, UPS, FedEx or TNT. They have experience of delivery in China and cover most of the country. You can use theirworldwide tracking system.
The second option is using a government’spost office— for exampleUSPS, Canada post, Deutsch Post, Chronopost, etc. They tend to be cheaper but you should be aware of their downsides:
- They give their customersa tracking number which, unfortunately, is usually not “converted” once the package hits China. It means you can’t track your package all along the way.
- Chinese characters are a problem. When sending somethingto an English address in mainland China, it might not bereceived because the Chinese post office mightnot understand it and mightdiscard the whole package. Sincetracking is (usually) no longer working, you will never hear about your packageagain! The safest way is to write the address in Chinese characters somewhere in order to ensure it can be delivered to the destination.
One last piece of advice is to decrease thecommercial value you declare to the lowest reasonable amount. In some cases, if the real value is used for the customs clearance, China’s VAT (17%) and import duty (which depends on the product’s HS code) are much higher than the package value!
2. Sending small orders out of China
When yourequest samples from a new Chinese supplier, they can beshipped throughDHL/UPS/FedEx/TNT either at the supplier’ expense, or by usingyour company account. There are issues with both options:
- If the supplier pays for the sending, they will always add amarkup on the real costsincethey think you have no choice.
- If theyuse your account, you cannot be sure your supplier will not use it for futureshipments (without asking for your permission).
There is, however, a better and cheaper option — using a third party logistics provider. There are thousands of themin China and they are easy to find onAlibaba or Google (and some have probablysent you emails).
They reducecosts by consolidating your goods with many other customers and sending them at a discounted price throughDHL/UPS/FedEx/TNT.
How much cheaper can they get? Often in the 50% to 70% range (compared to above-mentioned companies’ full price). The lead time risesby 1-2 days on average.
However, we noticed thatmost logistics providers give a very good price at the beginning, and increase the price regularly (shipment by shipment). By the end they are prettyclose to the full price! This is a constant with Chinese logistics companies acrossall modes of transportations, as per our observations.
How to find agood provider thatcan be trusted? It can take time. We can give two pieces of advice:
- Usinga large company is usually better, even if the price is sightly higher, because some of themprovide official rates in function of the volume, weight, and destination.
- Asourcing agent can also take care of this directly. But then you need to trust that agent, which is another story.
How to control your logistics provider and ensure they keep doing a goodjob?
First, you need to understand the general rules courier companies for their quotations — they are based either on volume or on weight, and they need to get both pieces of information:
- The volume is in cubic centimeters (cm3). If your carton is deformed, the volume will be calculated by taking the longest dimensions, including the deformation.
- The weight isin kilograms (kg).
Then the logistics provider determinesthe highest of these 2 values: the volume/5000 and the weight. The result is compared to the price list and you get a quotation. For example, regular prices for shipments from China to the USA will be 6 to 7 USD per kg (or volume equivalent).
Another method to control the logistics provideris to use their online calculators— you can see anexample on parcelfromchina.com. (Note: this does not constitute advice to usethis company’s service — we don’t know them.)One benefit is the ability tochallenge your current provider if their price is higher.
What to do in case of doubt? If you suspect you are being gouged, don’t hesitate to ask for the volume and the weight of your package. Make sure to record these values on your side and to take photos of the packaging.
Generally speaking, when should you use courier services? It makes sense up to 100kg (andup to 300kg in many cases) since it offers the following advantages:
- It is door to door;
- Is it fast — 2 to 5 days, 10 days in the worst case;
- In the USA, no customs clearance and duty fees under $2,500.
Which international courier is better?
This is a very hard question and it depends on the destination. Here is what we have observed:
- DHL is often a bit more expensive, hassle free and more reliable (faster), but not very good for delivering in remote locations;
- Fedex is good if you are not in hurry, since delays often happen (by the way, don’t expect arefund for late delivery).
- UPS is“in between”.
PS: here are a few extra elements in response to a few emails we got.
A reader wrote “I have found that when I provide my acc-ount num-ber the shipper always seems to choose the fastest and therefore the most expensive service, regardless of my initial request.” This is a classic. Why would the supplier care about costs if you give them your acc-ount num-ber ?
Another reason for not providing your acc-ount num-ber is as follows. Sending with FedEx/DHL in economy mode FROM CHINA is much cheaper than sending with FedEx/DHL in economy WITH AN IMPORTER’S ACCOUNT.
Another reader asked about the reliability ofChinese third party logistics companies (3PL).
Most of them are fine (apart from the schemes we described in the article above). They allow an importer to save money, in exchange for a little extra delay (1-2 days). Reliability is generally not a problem, relative to some of the well-known international companies (we got quite a few problems withone of them).