The Importance of Good Logistics – Part 1

Logistics is an important aspect of our businesses – it ensures goods get transported to the recipients in a timely manner, and in good condition. We usually think of recipients as end customers or distributors, but this also applies to our business entities as well – as a recipient of raw materials and components, we have to ensure they get shipped to the manufacturing site without hiccups so as to ensure that production can keep up with orders, and a healthy inventory supply is maintained. This issue is often compounded by the fact that manufacturing plants do not necessarily be situated in the same country as our businesses – which somewhat adds a little uncertainty into that equation.
Today, we shall go a little into the basic pointers of good logistics, and how these can help us to save precious time and effort in ways which might not be obvious!

Paperwork – the Basics

When we think logistics, we think of paperwork. The essential ones are the commercial invoice and the packing list – which give the Customs officers an idea of what you are bringing across the border. Is there anything else? Well, depending on the goods you are shipping, you may require additional documents like: specific licenses, brochures, import & export permits, and such.

For example, certain classes of lasers, such as industrial or medical lasers (and systems containing them) are controlled items in many countries – which require you to make a declaration with the Customs office – and sometimes pay a deposit or bond – before you can ship them into the country. Also, Customs officers may not be well-versed in high technology science or engineering systems – especially with unfamiliar names. Attaching a brochure or some other marketing materials will be helpful for them to understand what the product is.

If there are insufficient supporting documents, the Customs officers have the right not release the goods. In some cases, they may even ask to open the crate / packaging for inspection, which will result in more time delay. Do also take note that application for special licenses and permits can take days, or even weeks to process, so it will be great to prepare them well in advance to ensure that the goods can be cleared by Customs in a timely manner.

If you are unsure of how to do this, you can speak to your shipping agent – and that is what we will talk about in the next point.

 

Get to Know a Reliable Shipping Agent

A shipping agent helps you handle the transport of your goods from the point of pick-up to the destination. The agent will arrange with you the schedule for picking up or delivering the goods, and will advise you on what documents to prepare, what is the lead time like. Chances are they will be able to help you process certain paperwork applications (for a fee of course). They will be your point of contact for the shipment, and will work closely with you to ensure that the goods get transported smoothly and in time.

When you are starting out, it is always good to look for a couple of shipping agents – and try them out. In the process, you will find out which one is the most reliable and have the best service. Build trust with your shipping agent over time – and they might go out of their way to help you when there is a problem.

But should you choose a big agency or a small agency? More on that in the next point.

 

Big and Small – They Have Their Own Merits

Working with big and small shipping agencies have their advantages and disadvantages. A big shipping agency has the advantage of a wider global network and a good reputation. They will be more willing to handle high-value shipments (and provide higher value insurance coverage) as compared to small shipping agencies. Small shipping agencies, on the other hand, may provide slightly better shipping rates, and could be more flexible in handling customer requests.

It therefore depends on the nature of your shipment – but I will recommend keeping on hand one of each for different scenarios.

 

Get Insurance Coverage

I have kept this for last – but I cannot emphasise this enough – please get insurance coverage for your shipment! This is especially the case for high value goods. The cost of insurance coverage is small compared to the peace of mind you get – as well as the financial compensation should any unfortunate event occur, such as shipment loss in transit, or damage due to shipping (poor handling by shipping agents, airport ground crew).

While loss in transit is something beyond our control, we can minimise damage due to shipping with some considerations to the shipment packaging. We will look at this in greater detail in another post!