Freight Plan Preparation equals No $urprise$
January 11, 2023

As China and Hong Kong prepare for shutdown to celebrate the Lunar New Year, GPI’s freight department would like to take this opportunity to review a few items to consider when shipping your goods in the upcoming year.   We hope this article will assist you with your freight planning this year and perhaps help avoid unexpected costs along the way.

Pallets
Pallets help keep your goods safe and damage free during transit, but they’re not always the best choice.  Here are some ways to navigate through your decision to palletize or not.

  1. Cost: Pallets add to the cost of shipping.  Pallets can cost between $ 27 USD and $ 33 USD each.  They also make the shipment larger taking up more space. While no one wants to spend more money, deciding whether to use pallets should be determined by the goods you are shipping and the size of your shipment.
  2. Is Your Shipment Right For Pallets:   GPI recommends pallets for any LCL (less than container-load) shipment, Kickstarter shipment or high-priced item shipment.  There may be a slightly higher cost, but your goods will be protected with less damage during transit.  LCL shipments in particular are opened and separated at the destination port.  A palletized shipment is less likely to have cartons go missing and spends less time at port than a loose carton shipment.  If your goods can fit into a full container on their own, pallets may not be the correct choice for you.  Full containers will not be opened until they reach your destination warehouse so the loss of cartons is less likely for these shipments.  Carton damage is less likely to occur in an FCL shipment because it’s packed tightly at the factory with padding added as necessary.
  3. Warehouse needs:  check with your warehouse when planning your shipping needs.  Some warehouses require deliveries to be on pallets and to be specific pallet dimensions.   Find out if your warehouse charges you for palletizing a loose carton delivery and what those costs are.

Warehouses
A full discussion with your warehouse is needed to determine if they can process your goods properly.  Even if you have a warehouse that you’ve used in the past, check in with them.  US warehouses have been maxing out on space lately.  Make sure your warehouse has the space to store the goods you’re shipping to them in advance.

Multiple Destinations
You may wish to split your order to ship to multiple destinations, especially if you have international distribution. Here are some things to consider when shipping to multiple destinations.

  1. Shipping Terms:  GPI offers your first or largest shipment to be FOB (Free On Board).  This means delivery to the port and China/Hong Kong origin fees are covered.   Additional shipments for that same PO will ship under EXWORKS terms.  This means you will be responsible for the delivery to port charges and origin port charges.  GPI will pay these charges in advance so as not to hold up your shipment, but you will be invoiced for these fees.
  2. International Distributors: Most international shipments will ship under EXWORKS terms unless they are the only shipment on the PO.  When setting up your international distributor, there are a few things to consider:
    1. The distributor warehouse must agree to be the Importer of Record and pay the local customs taxes.  To get goods into a foreign country, a business number and physical entity must be in that country to claim the goods.  If they cannot agree to be the IOR, your goods will likely be stuck in customs.
    2. Additional forms may be needed to get the shipment through customs. Customs Invoices, Packing Lists, and the Bill of Lading are provided for your shipments. Ask your distributor if their country requires specific shipping documents.  Some countries require additional paperwork such as a Certificate of Origin, Form A, Quarantine Declarations, etc.   Additional paperwork usually comes with an additional cost.
    3. Freight Forwarding:  GPI can ship the goods to international destinations for you as long as the distributor agrees to be the Importer, however, many distributors prefer to use their own forwarders.   Ask your distributor if they prefer to use their own forwarder and provide that information to GPI to arrange the shipment accordingly.
    4. Pallets:  As we discussed, some warehouses require goods to be delivered on pallets.  If pallets are required by your international warehouse, please know that GPI will charge you for those pallets, not the international entity.

Transit Times
Getting your goods to the warehouse on time these days can be a little tricky.  In the past 3 years, transit time from China port to the U.S. door has been taking around 60 days.  There are many reasons for delays and many moving parts. GPI has seen transit times getting better in the past few months.   That being said, be sure to add buffers to delivery dates, especially when promising your goods to retail establishments. Once your shipment is in motion, there’s no rushing it along. Ports and railyards will not move your container to the front of the line because a deadline is approaching.  GPI will provide you with the most accurate shipping schedule as possible, but an additional buffer to your timeline certainly can’t hurt in the event your container gets delayed.

We hope you find this information helpful when planning your next shipment. GPI is always here to help you through the shipping process, so please feel free to call or email Erin in our freight department with any questions or concerns you may have.  Here’s to smooth sailing in 2023!

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