Asia importers into the UK, please do read this (this also applies if you import from the US, just to a lesser degree)
If you import from Asia by ocean freight
(full container/FCL) you will probably be in one of three camps.
Camp 1. You have 1000+ containers per annum and
negotiated a fixed rate deal (probably in December 2014) to cover January-June
2015 - or possibly January-December 2015 (year round rate). You may deal with a
forwarder or could have done a deal direct with a shipping line.
Camp 2. You import over 500 containers per annum but you agreed a short term
rate (say quarterly) or possibly a monthly rate agreement. You deal directly
with a forwarder and they update the rates when they expire.
Camp 3. You import anything from 50-500 containers per annum and you rely on
your freight forwarder to keep the rates competitive, letting you know when the
rates change or possibly, you just an understanding that they will be fair.
If you’re in Camp 1, you may now be regretting your decision to go for a fixed
rate deal, which in previous years, worked out pretty well in a volatile market.
Why? It gave you peace of mind and you knew where you stood. Sometimes the
market rates were lower than your rate and sometimes they were higher (for
example leading up to Chinese New Year, or in Peak Season (Aug-Nov) but overall
it was competitive and low maintenance. However, rates have fallen and become
very fluid and fixed rate deals are expensive.
If you’re in Camp 2, you’re probably thinking this is a good place to be, you
have rate certainty but you’re not locked in for too long and if the market
falls (and you have access to solid market information) you can re-negotiate to
reflect that, although this can be time consuming and gathering market
information to aid your negotiation can also be tedious and sometimes frustrating
in a fast-changing market.
If you’re in Camp 3, well, you may not really understand the freight market,
Customs procedures, freight terminology or how markets like Asia work (and why
would you want to!) and your company is often very operational, having multiple
responsibilities, working to satisfy your customers, and getting that order shipped.
Many businesses are like that, flat-structured, very operational and having little
time to reflect on whether they’re doing it the right way and not having the
expertise either. These customers are the most likely to have no formal rate
agreement against which they can check their freight costs/invoices or have
little knowledge of the freight market
and how, from Asia in particular, rates can vary wildly from week to week,
never mind month to month!
So what does that mean? Well it means that you could
be paying hundreds of dollars more for a container than necessary, which when
the pound is so weak against the USD, makes even more of a difference to your
landed cost. (The pound reached a 5 year low against the USD this month).
We specialize in supporting the customers who
sit in Camp 3 and use our influence, buying power and market knowledge to not
only achieve much better freight rates (our average cost saving is 30%), we
also raise their profile as a customer, ensuring that they receive the sort of
service normally reserved for larger corporate clients.
We also have Customs
expertise and help customers classify their goods much more accurately, often creating
cost savings in import duty and putting in place a proper Customs compliance process for them as well.
As an example, we recovered
£ 26,000 of import duty from HMRC for one of our large customers who import from the US (Middleby UK) and this related to an apparently minor
difference of 0.5% in duty – but these small variances can often make a big difference to landed costs.
And, best of all, we offer free consultations for customers and once engaged, work on a shared savings model, so we effectively provide
our service for no cost, leaving the customer with a significant net saving, then able to use that money to invest in product development, sales or another
area requiring
investment. All the savings are measured accurately per shipment
and supported by detailed monthly reports.
Please do take a look at our website, our blog and the highly complimentary testimonials
from our customers, and I should add that many customers have been on board
with us since start up in 2010, so we’re clearly adding value year on year.
Most customers say that they couldn’t really envisage going back to the way
they ‘managed’ their freight and logistics before which really makes us feel
valued, and also, a vital part of their business. A great feeling.
Kind Regards
Andy Cliff
Director
