Is the customs clearance efficiency for first-leg shipments to the Philippines too slow? That’s because you didn’t choose the right logistics.
Release date：2023-03-21 Reading volume: 3624
Is the customs clearance efficiency for first-leg shipments to the Philippines too slow?
That's because you didn’t choose the right logistics.
The cross-border e-commerce industry in China is developing rapidly, and logistics, as the bridge connecting buyers and sellers, is particularly important in this process. Compared to domestic e-commerce, cross-border e-commerce features long time spans, great spatial distances, and broad coverage. So, how do you choose a scientific and reasonable logistics model? Cross-border e-commerce logistics includes various types, such as international postal small packages, international express, dedicated international logistics lines, overseas warehousing, border warehousing, and logistics in bonded areas (free trade zones). Today, I will share the advantages and disadvantages of "direct shipping from domestic" and "overseas warehousing."
Direct Shipping from Domestic
As the name suggests, domestic sellers ship goods directly to overseas buyers. Compared to overseas warehousing, this is a more common and conventional logistics method.
Advantages and Disadvantages
The biggest advantage of direct shipping from domestic is its simplicity, low shipping costs, and ease of customs clearance, making it suitable for small, new sellers. The disadvantages include long shipping times, high shipping costs, significant variability in shipping channels, uncontrollable customs clearance risks, difficulties in handling returns and exchanges, and operational challenges for products requiring quality inspection.
How to Effectively Use Direct Shipping
First, determine if direct shipping is the "optimal solution" for your product. The following three situations are more suitable for direct shipping: new products or those with low and unstable order volumes, relatively high-value goods, and sellers operating on a small scale.
Secondly, choose your logistics provider carefully by setting assessment criteria: the company’s size, the resources it has acquired, and how long it has been established. If the company has multiple logistics channels, we can also accumulate logistics data, such as sales volume, refund rates, and types of logistics used. Additionally, we should examine which countries’ postal services can directly fly to which destinations, including flight schedules.
Tips for Direct Shipping
1. Shipping During Chinese Holidays
It’s understandable that people take breaks during Chinese holidays, but since our merchants and most customers are overseas, we must not delay shipping during these times.
2. Logistics Channels for Liquid Products
Direct shipping must adhere to different countries' regulations. For instance, batteries are classified as category 9 in China, while Taiwan does not consider them hazardous, allowing them on flights. However, liquid products remain a challenge across all countries, with no good solutions currently available.
Overseas Warehouse
Overseas warehousing refers to warehouses built or rented by cross-border e-commerce companies abroad. Companies can bulk export goods to these warehouses through general trade, and upon receiving orders, deliver the goods to overseas customers.
Advantages and Disadvantages
1. Reduced Logistics Costs: Shipping from overseas warehouses, especially local ones, is much cheaper than shipping from China.
2. Faster Logistics Times: Stocking at overseas warehouses can shorten transaction transport times and reduce disputes in the logistics process, shortening the payment cycle.
3. Increased Product Exposure: Improves pricing for items for sale, achieving competitive local sales and increasing sales volume.
4. Enhanced Customer Satisfaction: Upgrades after-sales services and provides more flexible local service.
5. Market Expansion: Overseas warehouses are more recognized by foreign buyers, facilitating word-of-mouth marketing and allowing sellers to accumulate resources to expand market reach and sales scope.
6. Increased Safety: 24/7 warehouse monitoring and real-time inventory synchronization enhance safety.
Of course, overseas warehousing is a double-edged sword with its own advantages and disadvantages.
The first drawback is the mandatory overseas warehousing fees, which vary by country. Sellers must carefully calculate the costs associated with overseas warehousing compared to their current shipping methods. Additionally, overseas warehousing requires sellers to have stable and substantial sales volumes, making it unsuitable for highly customized products.
What Products Are Suitable for Overseas Warehousing?
1. Generally, standardized, best-selling, or large and heavy products are recommended for overseas warehousing.
2. Products priced above five dollars are more suitable, requiring a certain price advantage and profit margin.
3. Products with considerable, stable sales volume or those with high logistics time requirements are also appropriate.
However, not all sellers are suited for overseas warehousing. If there are many SKU types that are seasonal or if the sustainability of best-sellers is unknown, sending stock to overseas warehouses may carry significant risks of expiration or unsold inventory.
How to Choose an Overseas Warehouse
To assess the quality of a third-party overseas warehouse, consider the following aspects:
1. Whether they require the first leg (the first segment of transport from the origin to the transfer point) to be integrated, as control of the first leg is crucial for the overall safety of the cross-border logistics chain.
2. Whether there is a professional team in the country providing services. A professional domestic team can ensure compliance before goods are shipped to overseas warehouses, maximizing avoidance of issues and additional costs abroad.
3. Whether they can provide a mature management system. The efficiency and reliability of the system are critical for an overseas warehouse to complete the process effectively.
4. Whether the overseas warehouse team is local. Each country has different regulations and even unspoken rules; understanding these is key to managing costs and risks.
5. Whether they select clients. Only an overseas warehouse that understands client selection can protect clients’ interests.
6. The method of calculating warehousing fees. The greatest fear when entering an overseas warehouse is stock pressure, so reasonable storage fees—especially free storage options—can save clients a lot of unforeseen costs.
7. The scale of the warehouse. A smaller warehouse will likely have lower stability.
8. Whether they have independent tax and legal services. Assurance in these areas allows sellers to operate without worries.
9. If in Europe, whether they have warehouses in multiple countries. Companies offering multiple warehouse options provide more flexibility.
Cautions When Choosing Overseas Warehouses
Sellers should be wary of the following:
1. "Guerrilla overseas warehouses": Operate without formal legal procedures and are not certified or regulated by relevant authorities.
2. Small-scale overseas warehouses with incomplete systems and immature services.
3. Ridiculously low pricing strategies.
Additionally, excess inventory can tie up a company’s funds. While many overseas warehouse companies offer significant discounts on storage fees, it is advisable for sellers to start with smaller shipments and replenish based on sales to avoid unsold products.
In summary, overall, overseas warehousing has more advantages than direct shipping from domestic sources. I recommend a high-quality service provider—Zoomasia Logistics!
Founded in 2020, Zoomasia Logistics is the former China office of SeaRoad Trading Company based in Cebu, Philippines, with over ten years of export history to the Philippines. They offer a complete service chain covering storage, customs clearance, shipping, and delivery, with one-on-one sales and customer service to ensure the safety of your goods.
