Choosing a Customs Broker – What You Don’t Know Could Hurt You

Customs Brokers – What do they actually do?

The work of a customs broker can seem rather mysterious because when managed properly, the customs clearance process should be seamless and invisible to you.  In an ideal situation, customs clearance of your imported or exported goods should “just happen.”

The truth is, the cross-border clearance of goods that change hands from one party to another can be a complex undertaking that is fraught with potential risk, extended delays and excessive taxes or other unexpected costs.  

Customs brokers are responsible for managing the end-to-end process that starts with identifying goods that need to be shipped from one location and finishes with the successful delivery of those goods to a final destination.  Brokers handle the paperwork, taxes, shipping details and customs compliance requirements at every step in the process.

The Good, the Bad and the Ugly

You have endless choices available to you when it comes to selecting a customs broker. There are large variances among brokers in terms of cost, technical knowledge and overall competence.  Some brokers provide specialty expertise for certain industries or in transporting goods among specific countries.  Certain brokers have tightly managed internal controls and well established processes and procedures; others do not.

Perhaps crucially, some customs brokers actively seek to minimise customs clearance lead times but at the potential expense of full compliance.  Other brokers lack formal representation in the relevant locations and so rely on informal “arrangements” to get the job done. 

In the eyes of the authorities, you are responsible for the decisions made by the broker on your behalf, so it is essential that you can trust the customs broker you choose and that you share common objectives.

Customs Broker Checklist

When interviewing prospective customs brokers to facilitate your importing or exporting activities, be sure to cover the following points:

• Ask the broker what roadblocks are likely to be encountered with your particular customs clearance needs
• Ask how they handled a tricky situation in the past and what creative solutions they were able to implement.  For example, what steps do they take when a shipment is stuck at a border entry point behind a backlog of other shipments due to an extreme weather delay?
• Ensure they have 24/7 shipment tracking facility, not just online but on the phone with a real person
• Confirm that they will provide upfront and in writing a complete itemisation of the tariffs that you will be responsible for paying – in other words, total landed cost
• Ask for at least two references that you can personally ring to obtain a first-hand account of how the broker performed for other clients, ideally from your industry.  Then ring those clients.

The team at Mawson Global work with a variety of reputable, proven customs brokers every day and are here to help you with your broker selection process.  Please contact us if we can answer any questions for you.

Mawson Global’s Quick Look Analysis Provides Cost-Savings Proof

Every client we ever talk to shares a common characteristic – they want to improve profit. Yet the path to successfully achieving this isn’t always clear-cut or easy to follow. There are many ways a company can grow its business and bottom line, and one of the best is by reducing costs through global sourcing.

Mawson Global helps companies achieve this objective by offering global sourcing solutions that dramatically reduce their costs and improve their bottom line. Our mission is to reduce your risk by providing comprehensive assistance, valuable expertise, and effective solutions to your most challenging global sourcing needs. In 2012 we saved our clients more than $19 million.  

It’s easy to make claims of savings grandeur, but we back ours up with a complimentary quick look analysis.

This snapshot shows you exactly how much you can save by partnering with us to source a particular product. Each quick look analysis provides vital stats on the product you’re considering sourcing, including:

• How much the product will cost landed at your location including the current cost per unit, FOB cost, and estimated landed cost.
• How much you could save shown as total annual savings, three-year savings projection, savings per unit, and potential profit percentage.
• Approximate annual volume.
• Basic product specifications.
• A product image.

The quick look analysis is completely free, and you’re under no obligation to partner with us… although, most companies do when they see how much they can save!

All you need to do to start this process is take our Ten Product Challenge online at www.MawsonGlobal.com/Ten-Product-Challenge

Reliable and affordable global sourcing solutions are within reach -- find out how much you can save by requesting your quick look analysis from Mawson Global today.

If you require further information from Mawson Global, please contact us at +61 8 7123 2601 or online at mawsonglobal.com/contact.

Decision, Decisions: 3 International Shipping Options

Selecting an international shipping method is a complex decision for any global commerce company. There are numerous options, each with its own advantages and disadvantages, and significant cost differences amongst the bunch Choosing the right shipping method could be the difference in whether your freight arrives on time. Picking the wrong one could mean your shipment never arrives at all.

If your company is evaluating its shipping options, examining each one, as well as some of the pros and cons, is an important step in the decision-making process. The following is a quick guide to a few of the most popular shipping options to aid in your shipping search.

Less than container load (LCL) - LCL is an international ocean freight shipping option that allows a shipper to utilize just a portion of a shipping container, instead of the whole thing. LCL is ideal for companies with a low volume of international shipments or those who need an inexpensive means for transporting cargo. It also allows shippers to quickly move their cargo because they don’t have to wait to fill an entire container. However, with these benefits come a few drawbacks. Most freight companies combined several LCLs to fill containers. This means your product could be at risk of contamination or damage from other cargo in the container. For businesses shipping high value items or food products, LCL might not be the best choice.

Full container load (FCL) – FCL shipping involves transporting using an entire sea freight container. FCL is typically the best way to transport freight – even if you’re only sending a partial shipment – because it allows you to track your goods and avoid the risk of damage or contamination by other cargo. Companies shipping a large quantity of cargo internationally, as well as those who need a little more control over their shipping timetable – and can’t afford airfreight – will benefit from FCL.

Airfreight – Shipping cargo via airfreight is exactly as it sounds. It’s putting your cargo on a plane in order to transport it to its international destination. This option offers the most control and flexibility over the shipping timetable and provides a safer means of transport over ocean freight shipping options. These conveniences come at a price, though. Typically, airfreight is the most expensive shipping option of the three, and may be out of many small and mid-size businesses’ budgets.

You probably can’t personally deliver your cargo to every international client, but you can find an international shipping method and freight forwarder that you can be confident in.

Mawson Global provides support to companies facing the challenging decision of which shipping method is ideal for their business. We work directly with freight forwarders to provide clients with numerous options in each of these shipping categories, as well as sound, reliable advice on the right choices for your business.  If your company needs an international shipping solution that it can count on, Mawson Global can find one that fits the bill.

Importing: The Productivity Booster

Productivity. It’s essential to success. It can be elusive. And it’s the driving force behind businesses -- literally. Without it, the world would crumble and nothing would ever get done. Without it your company wouldn’t exist.

Productivity is vital to all businesses, but it’s especially important to those in global commerce. To be successful, manufacturers need to bring products to market quickly, ensure on-time delivery, provide outstanding customer service, and maintain their market share. A high level of productivity is required to accomplish all these initiatives.  

There are a lot of methods for increasing manufacturing productivity – from restructuring the workforce to reworking procedures. However, one of the best ways to up the output is by importing manufacturing machinery.

Importing machinery can make a plant more efficient at a fraction of the cost of local machine brokers. It can also be accomplished a lot faster than other methods and with minimal disruption, especially when importing fully complete sub-assemblies.

By looking to equipment suppliers in other areas of the world, manufacturers can often find a larger selection of machines, lower prices, and better customer services. However, locating qualified international suppliers can be a challenge, especially for those with limited resources to devote to the search. These limitations don’t have to prevent you from importing your equipment, though.

Mawson Global, a leader in global sourcing, has a proven method for helping manufacturers import machinery and components. Need a supplier of sanding equipment or corrugated cardboard box maker? Mawson Global can perform a comprehensive search and provide you with supplier recommendations that meet a company’s exact requirements.

With Mawson Global, the risks commonly associated with global sourcing are minimal because we have teams located around the globe. This “boots on the ground” approach means we’re familiar with the international standards, language, and culture of each of the countries we source from.

If your manufacturing company is searching for a way to boost its productivity without having to decrease it first, Mawson Global can help. Let us handle the search for your machinery supplier. With our assistance, your business can not only improve its output, but also slash costs and increase its profit.

What the Chinese New Year Means to Your Supplier

It’s the most important Chinese holiday of the year and one your supplier is likely looking forward to with great anticipation – Chinese New Year.

The Chinese New Year, known as Spring Festival in China, marks the beginning of the Chinese calendar year, the end of winter, and the first solar term of the Chinese year. This momentous cultural occasion is celebrated with festival that begins on the first day of the first month in the New Year and ends on the 15^th day of the year. During this time, migrant workers return home and gather for huge family reunions during which they catch up, feast, and wish each other peace and happiness.

Given China’s significant internal travelers, special arrangements are made with the area’s various methods of transportation, including buses, railways, and airlines, beginning two weeks before the holidays. This time period is called “chunyun,” which literally means “transportation during Spring Festival.” It is the world’s largest annual migration, and it could impact your company’s bottom line if you’re unprepared.

Given the massive relocation of its people, traveling to China during its New Year can be a fruitless endeavor. Suppliers may be difficult to reach or completely inaccessible beginning two weeks prior to the holiday as their workforces head home. During the Chinese New Year, many offices will be closed. Factories may operate on different time schedules -- closing early in the day and reopening much later than usual. Some may even close the week before the New Year and remain closed for the duration of February.

If your company is reliant on Chinese suppliers, you need a plan to ensure your business continues to operate during the holiday.

Mawson Global, a leader in global sourcing, can work with your organization and its Chinese providers to ensure everyone is on the same schedule during the holiday season. The Mawson Global team understands the importance of this holiday to Asian suppliers, and it can help your organization avoid delays and disruptions to its business before, during, and after the Chinese New Year.

The Western holiday season may be over, but for our Eastern friends, the celebrations are just around the corner. This year, the festivities kick off on Feb. 10. Make sure your suppliers can celebrate one of their favorite times of year and your business continues to run smoothly during the month February – contact Mawson Global for assistance with your global sourcing, marketing, and commerce solutions.

3 Steps to Avoid Recalled Products due to Packaging and Labelling Errors

The Scenario:

The product you imported has now been distributed all over Australia and Europe and you have found  it does not meet labelling laws and needs to be recalled – at your expense!

We’ve all seen it happen before, a product gets recalled, not because it is faulty or subpar, but because a business overlooked the importance of following all rules and regulations for labelling and packaging. The question remains, how can you ensure your new product is not recalled because you overlooked a labelling requirement in another country?

Follow these three steps to ensure your business does not have an expensive product recall.

1. Find consultants in your country or the countries you do business in to draft the labels and help you understand all the requirements for import
2. Use third party inspection agents to check labels prior to shipment
3. Use a customs broker to find out what paperwork you need to import the product

Over preparing and double checking is the first step to saving time and money in the long run. You do not need to be the expert on each rule and regulation your business will face, but it is important to hire someone who is an expert.

What other precautions can you share to make sure a labelling mistake does not lead to an expensive recall?

How to Evaluate Suppliers

Every company should have expectations that their suppliers will be honest, socially conscious, lawful and proceed with strong safety measures.

Firstly, suppliers should strive to minimize the total cost of their products and services, so your company can offer the greatest value to your customers. Remember value is not just about product cost so make sure you evaluate the other costs of the relationship. Additionally, suppliers should be able to provide a stable supply stream and respond quickly to any problems or inquiries that may arise. Suppliers that can support your company’s local, regional and global efforts are best. And finally, a work environment where suppliers keep the health and safety of customers and employees in mind is critical.

If you are presented with list of a few hundred potential suppliers, begin your evaluation by narrowing that list down to five suppliers at most. Make an effort to keep the key factors mentioned above in mind. Next, contact each of these suppliers and perform a set of checks you see are important. The feedback you get from this interview should help you to further narrow your potential list of suppliers from five to two or three, having done so by considering both the pricing and non-price factors.

After narrowing your list, confirm the legitimacy of those two or three suppliers. You should verify:

• that the supplier has loyal customers.  All the certificates and promises in the world mean nothing if the supplier cannot give you satisfied clients for you to contact!
• that the supplier has a strong control system and that they have quality experience in production so they’re able to supply your company with what they say they will.
• that the supplier is financially stable and has a good reputation. Professional service providers are available for your company to use in order to conduct these verification factors at relatively reasonable prices. Professional services are great if your company does not have the resources in place in-house that are necessary to assess suppliers.

Lastly, negotiate pricing and then move into the actual production process.

Once you have chosen the appropriate supplier, begin to establish an on-going relationship. Perhaps you can consider not requiring advanced payments once you have a strong business relationship set-up with a supplier, or be open to renegotiating conditions down the road if there is fair reason to do so with your chosen supplier. 

Dealing with Production Problems in China

Have you ever dealt with production problems, sub-standard goods or an unacceptable delay? Perhaps even a project that came to a full stop without warning. Follow these tips to help overcome production problems with your Chinese suppliers.

Keep a representative or local third party inspector on site in the factory. This is the only way you really know what is going on. You need someone who protects your interests on site. Mawson Global’s on the ground team will make sure our client’s needs are understood and acted on by supplier management.

Monitor progress closely. Shaking hands typically is not enough to ensure production will move along at a satisfying pace. More importantly, if you notice a factory is not moving in the right direction for even a few days, contact them immediately and try to understand why.

Complete a quality assurance check prior to any shipment. Even if you have a small order, any set back during production may have resulted in rushed production. Overall, not doing a final inspection prior to shipping will be more expensive than getting a third party to ensure that the products fit your quality guidelines.

Most of the production issues arise from selecting the wrong supply partner.  Make sure you are as important to the supplier as they are to you!  You can do this by selecting someone who is a similar size to your company, by making the time to personally visit the factory and by involving the supplier in your long term plans.

Mawson Global helps clients by developing and implementing strategies that remove the risk of sub-standard quality and that form lasting relationships with suppliers to ensure projects are completed on time at the right cost.

Quality Sourcing Tips –Tips for China Product Sourcing

If you are buying product from China or planning to have your product manufactured in China, take the following steps to ensure you get good quality from China. This strategy is best for hands on buyers who require a certain quality standard.

1. Qualify New Suppliers – perform background checks and make sure you know who is really making your product. This should also include audits on the factories and an evaluation of the new suppliers to make sure they fit your business model. If you are sourcing small orders, the largest factory may not be your best fit.
2. Review the Purchasing Method – make sure the contract has fair terms and conditions. Some Chinese suppliers are not motivated by your next order, so your leverage is the money you still owe them.
3. Perform Quality Control – prior to placing an order, take the time to define precisely what you need and expect to receive. Do not overlook describing limits and tolerances. Furthermore, perform regular product quality inspections. This should be done before and during production as well as prior to shipment.
4. Create a Buyer-Supplier Relationship – make promises with your suppliers and keep them!  As long as your buyer-supplier relationship is good, don’t bounce around to save a few pennies. In China, business is often performed face-to-face, so rather than cultivating these relationships via email or the phone, take the time to travel and have personal meetings with your suppliers.

Sourcing can be a daunting task, but with a little patience and the desire to form a lasting relationship with your manufacturing partner, it is a great way to save your business money. What other tips do you have for having a successful relationship with new suppliers in China?