If you’re shipping cargo into and out of China, you need a freight forwarding and logistics partner that can get you the capacity you need, at the right price, while helping you avoid Customs delays and other issues that can slow down your supply chain. Many forwarders claim to have strong capabilities in China, but only a select few actually deliver on that promise. This article covers the top 5 things to look for when choosing a China freight forwarder.
1. Understanding of the China Customs Process
When researching China forwarders, the first thing shippers want to know about is the forwarder’s knowledge of China Customs. Duty payments are top of mind; they want to understand what they will be charged. Inexperienced shippers worry that they may select an incorrect HS code and, as a result, pay more than they should. China forwarders with a customs brokerage arm can ensure proper product classification and duty charges.
It helps if the forwarder also has experience in your industry. They can use this experience to select the right HS code and tell you the documents you must prepare to ensure a smooth import process. Forwarders focused on specific industries most likely will have in-house industry specialists who can act as advisors. Dimerco, for instance, has a strategic focus on semiconductor, electronics, aerospace, medical device and fashion/lifestyle verticals.
One of the first questions you want to ask a potential forwarding partner is about its experience in the market. The longer a forwarder has operated in China and advised on Customs issues, the more know-how they will have. Dimerco, for instance, is a licensed customs broker in China, enjoys the highest level of AEO status, and opened its first office in Mainland China in 1991
NOTE: We cover China Customs and other key topics in our eBook, Mastering China Logistics.
2. Reliable Capacity
Look for a forwarder with strong relationships with top China- and Asia-based air carriers like Air China, Cathay Pacific, China Airlines, Eva Air and Korean Air and ocean carriers like COSCO SHIPPING Lines, Evergreen, ONE, HMM, and Wan Hai. Forwarders with pre-booked space agreements with these carriers can ensure available capacity for ongoing and emergency freight.
Forwarders with strong capacity into and out of China are also the ones who will offer you the best rates. In the current international shipping market, it’s hard to predict rates week to week. But, as a rule, forwarders that manage the largest volume of freight into and out of China will leverage that volume to secure the best rates. These carrier discounts then get passed to you.
3. Local Knowledge
No freight forwarder has its own solution for every need that may arise during the shipping process. You might need emergency trucking services or cargo storage at a remote location in China. In those cases, success depends not just on WHAT you know, but WHO you know. A forwarder that has operated in China for many years will know what local partners can be relied upon to react quickly, without sacrificing service quality.
Bottom line: when choosing a China freight forwarder, you want a partner who knows how to get things done on the ground.
Forwarders who have earned that reputation have likely been in the market for many years and have forwarding offices and logistics operations throughout China. With more and more manufacturing being done in inland cities, it’s not enough to have logistics experience and connections in Shanghai, Shenzhen, Beijing and other large cities in Eastern China. In fact, some of the country’s fastest growing areas for logistics include inland cities like Xi’an, Chengdu and Hefei. A 3PL like Dimerco, with 79 company-owned forwarding offices throughout China, has built a network of logistics partners that you can leverage, when needed.
4. Owned Offices
Beware of freight forwarders who service China through agents. Those agents may be experienced, but communications and service consistency may suffer with an agent model. A forwarder that manages its own network of offices operates under customer-specific SOPs across all global offices, resulting in service-level consistency. Those owned offices also operate on a single system, so data is transmitted electronically and in real time. Monitoring shipment status may be more difficult when agents are involved since their systems are not integrated with other freight forwarding offices.
5. Bonded Warehouse Capabilities
Some freight forwarders offer broad 3PL capabilities that may include bonded warehouse services in China. This can be a huge advantage to companies that import goods to China and want to defer duty payments until products are purchased locally and shipped out to Chinese customers.
The bonded area can be used to provide safety stock for B2B businesses distributing to China-based customers. This greatly reduces order-to-delivery time and defers duty and tax payments. Duty and taxes are paid only as individual shipments leave the warehouse rather than all at once when shipments enter the country. Similar benefits can apply to B2C businesses located outside China. They can use China’s cross-border e-commerce policy to store inventory in a local bonded warehouse, and use China’s e-commerce platforms, such as jd.com, tmall.com, or others to sell online. Consumer orders are delivered fast and the B2C businesses benefit from China’s preferential policies on cross-border e-commerce tax payments.
Choosing a China Freight Forwarder
How do you choose a China freight forwarder?
Much can go wrong between pick-up and final delivery on shipments that travel across continents and then need to comply with complex rules and regulations in the local market. Now more than ever you need a trustworthy forwarding partner for China that can ship your goods safely and on time, and has the knowledge to advise you on global shipping strategies that can save you time and money.