Our company assisted a retailer with the search for reliable import partners from China. This way trading costs were cut down up to 20%. The import route was managed properly to make the shipping chain secure and cost-effective. The most optimal solution was to transport freight by sea. This way all the goods were delivered risk-free through the best-matching shipment format – in containers of two types.
There were two categories of products to import from China. Electrical appliances destined for one company were shipped in FCL. The format of full container load shipping is the optimal solution for a single importer. It means that the container is loaded fully with goods of the company we assist with international trade.
The second case for the same importer was undertaken through the LCL format. Here, our client had a partner – the second buyer of decorative elements and accessories for the interior. That is why less-than-container load shipping was more suitable to cut costs. The transportation routes were almost the same. They took place by sea from China to Europe.
Key Points of the Sourcing Case to Consider
The sea freight costs can vary from different aspects. Even a season of shipping and other external factors can change the final price tag. Our case demonstrates that the comprehensive approach can cut costs by up to 20%. Take a closer look at the most important aspects of this very import trade strategy and import sourcing calculations:
The paying unit was optimal to make the base freight price more budget-friendly for our client. The first cargo was of 75 m3 volume with the same mass in tons (75 tons). This way the PU showing was 75 for this freight. The base freight turned out to be about $40.000 total which was 20% cheaper than the company planned to spend for shipping.
The optimization strategy of our company allowed estimating all the factors that matter for risk-free and cost-effective shipping. For example, our specialists undertook an in-depth analysis of essential factors like BAF, CAF, CSP, etc.
Finally, bunker and currency adjustment factors were taken into account together with the aspect of congestion surcharge. The client confirmed that the estimations and the budget plan required for import and other international trade activities meet individual business goals and other requirements.
As a result, we were able to optimize the final sea freight costs. The ideal solution was to use two formats of container shipment and cut some expenses while picking sides with the route by sea chosen for the transportation routines.
