Come see Flexport’s shipping container at CES 2016!

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90% of everything you see around you has been carried inside a shipping container like this one. And Flexport is bringing our own shipping container to Las Vegas!

We are very excited about showing some of our coolest clients and their featured products.

Bellabeat – as featured on Forbes, TechCrunch, Wall Street Journal, WIRED.

Nod – as featured on BBC, TechCrunch, TIME.com, WIRED.

Osmo – as featured on Bloomberg Business, Forbes, NBC, Wall Street Journal.

Electric Objects – as featured on Bloomberg Business, Forbes, the New York Times, TIME.com.

Ring – as featured on FORTUNE, Mashable, TechCrunch, Wall Street Journal.

 

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Looking to chat with someone on our team at CES 2016?

We’d be happy to connect at [email protected]!

Looking to learn more cool facts about shipping?

Check out www.flexport.com/blog

Schedule Your Shipments Around China’s Golden Week!

Golden Week in China runs from October 1 – 7 this year! Plan to ship by the end of September in order to avoid this national holiday, in which customs is offline and fewer vessels are scheduled, and account for a spike in port congestion as the world’s largest exporter comes back to life.

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Meanwhile, autumn may have just begun but major retailers are already in holiday mode, also known as “peak season” in freight forwarding. Just as you might anticipate for holiday passenger travel, we expect additional delays at the terminals, General Rate Increases and other potential costs associated with increased activity at the already overwhelmed port infrastructure. Chassis shortages, fulfillment center appointment backlogs and more could result in longer transit times.

Please take note of these upcoming events and their potential impact on your supply chain, from a speed, efficiency and cost perspective.

High Temperatures Troublesome for Air Cargo

A heat wave crushed Northern China last week, with temperatures surpassing 105° F in major cities like Beijing and Shanghai. The extreme weather grounded hundreds of flights and led to significant delays for air cargo shippers. Why?

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Air temperature and density have an inverse relationship. Lower air density limits engine performance and aerodynamic capabilities, meaning an aircraft requires a longer runway distance and faster acceleration to attain the same lift when climbing.

In other words, high temps result in weight restrictions, and since the majority of air cargo now travels in the belly of passenger planes, the preferred solution for airlines is to bounce cargo to the next flight. These occurrences are rare and typically don’t add more than a day or two to transit time, but with global temperatures rising across the board it may become an increasingly inconvenient supply chain risk.

Incoterms Explained: Protecting Yourself in International Trade

At last, you’ve found the perfect manufacturer. Samples looks great, pre-orders are rolling in… and then your supplier brings up incoterms. Who has the patience to memorize a dozen confusing acronyms with such subtle nuances? To better wrap your head around incoterms, we’ve come up with a scenario equally as complicated but a bit more relatable: buying a bed off Craigslist.

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Here’s the situation

You’re in the market for a new bed. After identifying a trustworthy owner on Craigslist, you successfully negotiate a fair price. Then comes the tricky part: how are you supposed to get the bed from point A to B? The bed is in Oakland and you’re across the bay in San Francisco. And did they mention the 5th floor walkup? Who is going to pay to move this? There’s no standard agreement for who does what in these situations, is there?

In your perfect world, the Seller would just take care of everything and bring the bed right to your bedroom. Guess what? Craigslist owner would prefer you come to them and do all the work. Actually, in practice both parties would prefer to pay a third party to make the arrangements, hence why moving companies–or freight forwarders for international cargo–exist (perhaps hiring your younger brother in this case). When you break it down, there’s actually a lot of work, fees, and risk involved here, which closely mirror the processes involved with international trade:

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Like most exchanges in life and business, moving stuff involves a little negotiating. After all, there are a variety of different methods of transporting the bed (via car, U-Haul, drone) which have unique cost structures and ultimately will require one party or the other to pony up more of their time, money and liability for the movement of the furniture.

On an international scale, this is exactly why we have incoterms–to clearly communicate the tasks, costs and risks associated with the transportation and delivery of goods. We can visualizing this example’s breakdown of responsibilities in the following table:

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You can interpret the divisions in the table as the points in which ownership and responsibilities transfer from Seller to Buyer. When negotiating incoterms, it helps to ask yourself: what parts of the shipment process do I want control over?

We generally recommend importers buy FOB terms for savings, protection from liability in origin country, and better control and oversight as the Buyer names the freight forwarder. Similarly to moving a bed through the Bay Area, you wouldn’t want the Seller to have her friend with the banged up pickup truck handling your new bed and risk it getting damaged, so you purchase the furniture on FOB terms and take charge of your own destiny once it’s in your van!

Importing 101 for Crowdfunding Campaigns

Running and completing a successful crowdfunding campaign requires creativity, dedication and maybe even a bit of luck. Importing your products should not.

Check out to the guest blog post we did for Fulfillrite below:

 

Although the logistics and customs clearance process can seem like a bit of a black box, the actual process is pretty simple. We’ve included a few tips below to shed some light on the process for those of you that are new to the importing process.

1) Select the Best Supplier

Finding the right manufacturer is key step #1 that may require some homework. You want quality, reliability and communication – cheaper does not always mean better. It pays to shop around in order to identify which partner will be by your side when you need to meet a last-minute production deadline.

Tips on locking down the right one:

  • Research manufacturers of your products around the world via portals such as Alibaba and Global Sources
  • Check out your competitors’ suppliers on ImportGenius.com
  • Attend an international trade show for the opportunity to meet potential suppliers face to face
  • But before you start your campaign, make sure the product you are importing is actually allowed into the U.S. and complies with all U.S. regulations (the legal stuff can get a bit boring, but we included some tips in section #6 below)

2) Plan to Plan Ahead

Shipping goods internationally takes time. Until the driverless hyperloop is complete, your primary options for moving products will be Ocean or Air.

In terms of timeline:

  • Ocean Shipments: Estimate about one month from the time your goods leave your supplier to arrival at your warehouse in the US.
  • Air Shipments: Estimate approximately one week for air shipments, but keep in mind air freight is significantly more expensive (sometimes up to 3x the cost of ocean shipments).

3) Don’t Navigate the Import Process Alone

Demystifying the import/export business can be overwhelmingly difficult. While big companies have dedicated teams with the luxury of direct relationships with major carriers, small and medium sized businesses will usually book through agents. These middlemen are notorious for poor service and price discrimination, offering far better rates to clients with bigger shipping volumes.

Get a customs broker and freight forwarder on your team during the early planning stages – you can find great ones at NCBFAA.org. Don’t wait until your first shipment is ready to move. These companies have a wealth of information that will help you avoid the most common pitfalls experienced by budding global companies.

In addition, a reputable freight forwarder will help you negotiate the best rates and manage the importing process for factory to final destination. They will make sure all documents are in check and keep tabs on the status of your shipment.

Some key documents you’ll hear about include:

  • Commercial Invoice – Issued by your supplier confirming the quantity and price of your goods
  • Airway Bill / Bill of Lading – Issued by your freight carrier confirming the title and movement of the goods

4) Be Nice to Your Customs Broker

Clearing your shipment through U.S. Customs can also turn into a headache without proper guidance. Depending on what product you are importing and from which country, there are 120 different forms that may need to be filed with more than 10 different government agencies. And the legal responsibility for complying with these regulations lies with the importer (aka you).

We recommend using an experienced customs broker to help ensure compliance with all the various laws (and assist with paperwork!). A strong customs broker will make sure your goods are properly classified and all the right forms are filled out on your behalf. Oftentimes brokers and freight forwarders are one in the same or close partners.

5) Factor Import Costs In Your Estimated Product Costs

There’s a real cost to moving a container to the other side of the world. In addition to the costs of manufacturing your product, don’t forget to include freight, customs and insurance when calculating the total costs of goods.

Painting an accurate picture of your total product costs is crucial in determining your product margin (and your profitability!). Working with a great forwarder and customs broker is invaluable in figuring out your landed cost.

6) Don’t Forget About the Legal Stuff

Like we mentioned above, you’ll want to make sure the product you are importing is actually allowed into the U.S. Certain items, such as furs and ivory, rare or protected goods and pirated designer products may have restrictions imposed on them at the country of origin.

And when importing electronics and some of the great new hardware devices, it’s important to understand there are extra rules around products that contain batteries. Batteries are classified as “Dangerous Goods” and must be shipped adhering to strict regulations. This means you’ll want to make sure:

  • Your supplier has an export license and are willing to declare themselves on all necessary documents
  • Your supplier has all updated documents (like a MSDS and Drop Test Report

But don’t fret too much about the legal stuff – your freight forwarder or customs broker can help you make sure that you comply with all the regulations. Which is why you want them involved early, rather than discovering a potential show-stopping issue once cargo arrives at the port.

Assuming you made it through all the tips above, you are now well-prepared to begin the process of importing your goods after your successful crowdfunding campaign!

 

Ship directly to your Canadian customers

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Ship directly to your Canadian customers

Become a Non Resident Importer and take care of business yourself!

Drop shipping straight into Canada vs. shipping to Canada through the U.S. can potentially save thousands of dollars in additional handling, export fees, and transportation costs. It shortens your supply chain and frees up precious cash flow for business operations.

You can register your company as a Non-Resident Importer (NRI) with Canadian Border Services Agency (CBSA) – the equivalent agency to the U.S. Customs Borders and Protection (CBP).

There’s clear benefits to set yourself up as an NRI in Canada:

  • Competition – Price your product to Canadian customers to compete head-to-head
  • Profit – Eliminate the middleman (the U.S.) and increase your margin
  • Control – Manage your supply chain end-to-end, including any border issues
  • Service – You control your customer’s experience from A-Z
  • Increase – Reap the rewards of your marketing $ – grow your presence and market share in Canada

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Guide to Importing Products with Batteries

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Guide to Importing Products with Batteries

Lithium batteries are one of the more complicated products to import – not only because they are easily overlooked in the greater product, but also because they are considered hazardous materials.

The Department of Transportation (DOT) and the International Air Transport Association (IATA) impose more stringent regulations around importing materials that could affect the safety and security of everyone involved in transporting them. Batteries, for example, fall under their oversight.

Batteries fall under hazardous materials (hazmat) regulations depending on type and wattage. They will be considered a dangerous good if:

  • wattage / cell is greater than 20 wh, or
  • wattage / battery is greater than 100 wh, or

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Guide: Sending Products to Amazon Fulfillment

Guide to sending products to Amazon’s fulfillment centers

You’ve enrolled in Fulfillment by Amazon (FBA) and registered your products to sell – now what? How do you get your products to FBA, and what do you need to do to ensure everything goes smoothly?

There are three key aspects to this process:

  1. Labeling each product unit properly
  2. Packaging your units for shipping, and labeling each package properly
  3. Shipping your products to Amazon properly

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China Shutting Down! Countdown to Chinese New Year

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While the personality of the new year’s animal sign is considered calm, gentle and thoughtful, the annual celebration’s impact on international trade is anything but.

It’s that time again: mark your calendar for Chinese New Year, February 18th – 27th. Often overlooked by US importers until the last minute, CNY is the country’s most important holiday during which one can expect 10 days of radio silence from suppliers, agents and partners. Factories shut down completely and frequently take several weeks to return to full productivity.

It is highly recommended that all shipments arrive at port at least 10 days prior to the 18th to ensure smooth departure. Major congestion can be expected in the week leading up to and following CNY–when ports and customs often run on a skeleton staff–so we encourage booking well in advance to ensure space and to avoid rate hikes and delays. We also anticipate the West Coast port congestion to become further aggravated by the CNY rush, resulting in longer overall transit times and possible demurrage charges.

Bottom line: plan ahead. Please note that the new year is celebrated in many areas outside of China, such as Singapore and Taiwan. In today’s global economy it is more important than ever to keep tabs on major holidays around the world that may disrupt your supply chain.

Verify your customers aren’t on the Denied Parties List

Uncle Sam is watching you

Uncle Sam is watching you

The Government checks who you’re selling to

This sounds ominous, but it isn’t meant to scare you or worry you about privacy violations. This is a security issue.

The U.S. has a number of trade embargoes against a number of countries and people. Trade embargoes are results of policies that restrict or limit the movement of goods in or out of a country, or to or from certain people. Due to these sanctions, each of these entities may not export goods from the U.S. or receive exported goods from any U.S. citizen.

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