China Import – logistics from China
The logistics around the China import
The import of Chinese goods to Europe and especially to Germany has continued to increase over the past decade. The proportion of out China imported Goods increased from 2.6 to 6.7 percent of total imports during this period. These are primarily toys, clothing, shoes, but also numerous electronic products. With these quantities, the transport and the associated logistics must be well thought out. Not only small consumers, but also large companies can see enormous savings if you take the time to compare and especially to familiarize yourself with this topic.
Price differences in logistics
There are three ways in which goods manufactured in China can come to Germany. The land route proves to be unsuitable not only in terms of price, but also because of the routes, which is why this variant is only rarely offered. Another possibility is this Air freight from China. However, since only very few machines are suitable for transporting goods, the costs that arise per container in this way are not insignificant. In return, the customer receives his goods within a few days after dispatch. Already because of the capacity and the relatively low costs, the choice falls on the Sea freight from China. A container ship needs about five weeks from loading in China until the cargo arrives at the port in Germany. If this time is planned in advance, you can benefit from freight costs of approximately 1000 to 2000 euros per container. Both small and large shipments can be transported in this way. However, since it is not always necessary for a complete container to be filled, it is worth contacting one Parcel service or freight forwarders who are responsible for transporting the goods from China take care of them and also transport them after arrival in the home port. Even with this service, you can benefit from a price of 6 euros per kilogram with FedEx, for example. However, you only get the cheap tariffs if the order is placed with the express service in China is made. If the same company is commissioned in Germany, the costs are considerably higher. Further savings can be achieved if an agreement is reached with the dealer or manufacturing company, or if a company is commissioned that is also based in Germany. This is the only way to avoid arbitrarily added fees. Since the payment of the amount must be made quickly in order to receive the goods on time, it is difficult to counteract this. Without timely payment, the goods will not be declared, which leads to further problems, which in turn are associated with expenses. This circumstance is well known to the receiving agents.
Abbreviations and conventions for easier understanding
When it comes to the logistics of goods from China to Germany goes, only two abbreviations are of great importance. Only if you know these and their meaning can you take care of the purchase and organize the transport yourself. There is no way around the abbreviations FOB and CIF. FOB means free on board and means that the seller bears the costs of transport to the ship and loading it. CIF is spelled out Cost Insurance Freight and states that the costs for the freight and the insurance are borne by the seller up to the arrival at the port of destination. However, since these are offset against the value of the goods, European customers should generally opt for FOB. The loading takes place on the ship, which can be named to the seller. However, you have to take care of all the other details yourself. Ideally, contact is made early on with a forwarding agent in Germany that has a branch in the port of Hamburg or Bremen and manages customs clearance after arrival in Germany. They also take care of the customs number, which is now known as the EORI (Economic Operators’ Registration and Identification) number. These companies can use the documents that provide information about the content and value of the goods to state the upcoming customs duties. However, since it is not a matter of course that the goods are insured during transport, you should ask about this in advance for your own financial protection and possibly take out suitable transport insurance yourself.
Studies on logistics
The logistics between China and Germany is not only a challenge for the companies themselves, but also a subject on which studies can be conducted. The results are very revealing and provide information about the composition of the costs, among other things. Despite the long distance that the goods have to travel, the studies have shown that logistics only account for 15 percent of procurement costs. However, this share is not entirely spent on transport, only two thirds. The other third is spent on insurance, customs duties, storage and all management. Due to rising fuel prices, the share of transport in procurement costs is also increasing. Due to the uncertainty and the enormous effort associated with the logistics from the factory in China to the company in Germany, the question is repeatedly raised as to whether shopping in China is worthwhile at all. The study also showed that procurement in China is only profitable for small to medium-sized companies if the risks are ignored and only the financial side and the effort are considered. It was also found out that the majority of companies that import goods from China accept excessively high costs. These costs could be reduced by special customs procedures and logistics parks. In order to have an overview of the goods and what is on offer in China, many companies rely on a local buyer. They can also randomly check the quality of the goods produced and thus make a complaint at an early stage. However, not all companies that have employed a buyer make use of financial advantages. Small companies that do not employ a separate person for purchasing or organizing logistics lose track of things that should be looked at and compared more quickly. Even when employing a specialist, who is only employed sporadically depending on the frequency of imports, savings can still be made and, above all, problems can be avoided.
However, heavy and bulky goods in particular should be shipped in containers. Transports under a container rarely make sense. It is advisable to make an FOB arrangement with the supplier so that the entire shipment is organized by a German carrier. With CIF deliveries, it is not uncommon for the receiving agents in the port of Hamburg or Bremen to add imaginary fees that are difficult to ward off, since there is little time when the invoice is issued to pay the invoices on time so that customs can be cleared on time. When ordering the shipment, you should always remember to arrange for the insurance to be set up, as the forwarding agents usually do not do this automatically.
Incidentally, 30% of all container shipments worldwide currently come from China.