Who looks after your products in China? A successful logistics management case study

September 1, 2021
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When we say the word logistics, things seem very straightforward – you ship goods from one place to another and the freight forwarder handles everything, right? Well… not exactly, and especially not when it comes to logistics in China. This is how the story goes:

In late June one of our oldest international clients, who we’ve been working with for the past 15 years, came to us with a challenging request. They wanted to present their special technology in an important exhibition in Hangzhou, the home of Alibaba, the following month. Sounds simple, right? So, where’s the issue?

The company is active in the digital printing sector, and its technology is based on heavy metal machines and special chemicals. Such highly advanced equipment is extremely sensitive to shocks and hot weather meaning its shipment requires careful preparation:

  • Which category should the machines be classified under so that they can be smoothly cleared through customs?
  • Is there a special license needed for importing the specific technology?
  • What arrangements need to be made once the goods have arrived in China?
  • Racing against Southern China’s summer heatwave – moving the machines from the warehouse to the exhibition site as quickly as possible
  • Arranging the relevant insurance for domestic transportation
  • Supervising unpacking and repacking all relevant spare parts and machine materials and pairing these with special markings
  • Taking care of residual waste disposal

Who takes charge of your products in China?

The shipping company?

When a local shipping company receives your products, it becomes the products’ “owner”. In other words, the shipping company is responsible that the products arrive to their final destination harmlessly. However, if something happens or if anything gets damaged, the shipping company, as the products’ owner, is the first one to be blamed and offer compensations. Therefore many shipping companies would rather avoid this grave responsibility, especially when the equipment in question is that complex.

The distributor?

A local distributor might help with some of the processes once the goods have arrived in China, but not with customs, licensing, or insurance. So, unless you have your own people on the ground to supervise and keep your company’s interests at heart, some things might be missed or overlooked.

The efficient solution: Manage your supply chain in China

Fourth Party Logistics (4PL) is your trump card. Local 4PL’s facilitate the ENTIRE supply chain operation, serving as your HQ’s logistical execution arm. Their role is to handle all shipment processes from A to Z: preparing the shipment documents and required licenses; choosing the optimal port; confirming document validity; negotiating customs clearance costs; securing smooth customs release and local distribution. Unlike a 3PL provider who focuses on a single function, a 4PL provider offers a comprehensive supply chain solution, with the proper oversight and managerial expertise to boost.

Read more about logistics services in China

Fast forward to July-

PTL Group’s team delivered SCM (Supply Chain Management) solution for the client’s project (total valued over 300,000 USD$).

Our full-scale SCM solution covered:

  • Research and analysis of the expected procedures and crafting a delivery plan
  • Instructing the company of the appropriate packaging (such as the recommended packaging materials) and briefing them on the delivery process
  • Monitoring the custom clearance process in the Shanghai port
  • Obtaining local transportation insurance coverage for shipment from Shanghai to Hangzhou
  • Supervising the domestic delivery operator
  • Arranging final destination unloading, site move-in and professional unpacking, in a way that prevents damages and enables future re-packing
  • Labeling the shipment with ‘Warning: Impact-Indicator’ to emphasize careful handling
  • The fluids wastage disposal

As you can probably infer, this story had a happy ending and the shipment operation was a success. Logistics in China doesn’t always have to be intimidating. Partnering with a reliable 4PL provider who also offers a wide range of complementing services, will set your business up for success.

Read more about our multi-disciplinary management approach, which has proven to be so valuable for dozens of international firms, and get in touch for any China business support.

Good luck with the Chinese challenge,
The PTL Group’s team

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