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The Difference between Air Freight and Air
Courier Services.This is an important distinction that you
must never slip up on. I often see people (even so-called“experts”) refer to
door to door courier services as “air freight”. It is true that the goods
travel by air, butthere is a clear distinction that should always be noted.
4.2 Air Freight.This is usually reserved for small to medium size high
value shipments and is almost invariably arrangedon an airport to airport
basis. If you use post gopher review, I would recommend arranging it through a
freightforwarding company.The freight forwarder can usually offer much lower
rates than the airlines themselves because they buybulk capacity at huge
discounts and in effect they then retail that capacity to shippers like
you.There are risks involved unless you thoroughly discuss the matter with the
forwarder so that you arecertain that you know ALL costs that may
be involved. I suggest being wary of using air freight untilyou have gained
some experience in importing.There are a multitude of issues to deal with
including “inland” charges by the supplier (local freight,tolls, government
export charges), and then charges at the receiving end, including: customs
clearance,unpacking containers (they use special air containers), inwards
airport fees, storage, delivery fromairport to depot, delivery from depot to
you, etc.
It is worth repeating that you must obtain
all quotes in writing.
4.3 Air Courier Services.These services are provided by the likes of UPS, DHL,
FedEx, TNT, etc. They usually (but not always,
unless specified) provide a door-to-door service, and most often they
provide customs clearanceservices as part of the deal.
4.4 International Express Mail Service
(EMS).I include this because it is so often used
and is in effect an air courier service conducted by post gopher review postal
services. It is in almost all cases a door to door service, although under
certaincircumstances you may be required to collect from a mail center. The
postal service in most countrieswill handle clearance for you, and will collect
any duty and/or sales tax payable either when you pick upor when you collect
the goods.
4.5 Evaluating different freight services
for cost effectiveness.Here I should add
a note about cost effectiveness, because it can be too easy to think that the
lowestfreight cost per item is the one to choose. It may be, but not
necessarily so.You should consider what is known as opportunity cost. Faster
delivery means quicker turnover of yourcapital, and can considerably reduce
your capital cost. While I am not teaching business economics, Isuggest you
consider what it might cost you in lost earnings on the capital needed to pay
for your goodswhile they are in transit. It may cost you interest payments, or
it may lose interest that you couldotherwise earn.There is also the need to
consider the lost sales that might result from the delay.
Some people see glamor in being a
distributor, and others think that being an agent is the best way to
sellmanufacturers’ products. The fact is that these terms are often
misunderstood, and there are traps for theunwary.
5.1 Agencies.An agent sells products on a commission basis, and
shipping costs are borne by the overseas supplier.This has the advantage for
you of minimizing your cash outlay and risks, but commissions are
invariablywell below the rate of profits you could expect when handling the
same volume working for yourself asan importer. Agencies are rarely granted
by Chinese companies but if they do, the terms will always beheavily weighted
in their post gopher review.You should never consider acting as an agent unless you and the
supplier have signed a firm contractspecifying the terms of the agreement. You
should get advice from a lawyer before signing any contractbut especially one
with a Chinese company. You should understand that legally enforcing a contract
witha Chinese company is almost impossible, even if the contract states that
the applicable law is the law of your home country.Justin Yuang is a practicing
lawyer I know in China and he has had some success in helping westernersenforce
contracts with Chinese companies. He emphasizes that success rates in court are
low, and herecommends negotiation instead. He says he succeeds more often
through negotiation. If you need helpcontact him via this email: justin@stingroup.com.cn.I know of many cases in which a supplier employs an
agent to sell in a new area or new country, and ifthe agent succeeds, the
supplier then establishes a branch office and takes over all the business. I
haveeven known local manufacturers who have done this. This often leaves the
agent out in the cold, withlittle or no redress. They own all of the customer
details because the customers are theirs and they haveall the names and contact
details. This is why you should consult a lawyer before taking on an
agencyagreement.
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