Home – New Forums Logistics Trying to understand how freight works Reply To: Trying to understand how freight works

  • Total posts: 3,171

Hi Twelthie,

Seems the questions are straying from the freight query to sometimes to a drop shipping scenario through to quality check and so forth… No issue, just be aware though…

As it is planning stages and with little information about your big picture, eg more detailed intro of who or what your goals are some questions will prove difficult to answer.. such as the one about shipping from supplier to HK and then fulfilling your orders from there on an individual basis.. little outside the box from my side of things :)

But allow me to look at each question.. cant answer them thoroughly, sorry, but give you some insight if that is ok?

1) If I choose air mail, do I need to arrange a freight forwarder, or is it a sea freight thing? Or is air mail something the manufacturer would organise for and charge me? Depends on values and who you use.. Generally they air mail company will arrange clearance and processing of any duties should they be payable, or you may want to speak to Pete from the topic.. think you will find this is his area of expertise.

2) How does a 3PL/freight forwarder operate? Are they at the originating port to ensure that the cargo is loaded correctly onto the ship? How does the 3PL/freight forwarder’s role change if I go with airmail? Think 3PL may be a general term being applied, maybe.. Or you are referring to 3PL’s that do a broad range of services, one being 3PL and not specialising in it as such… and they may have an in house clearance centre or freight forwarding department as well.. Check each out, Mike appears to have this listed on his site from memory although generally speaking this question will relate directly to the category of freight forwarder.. The freight forwarders pretty much have a relationship/partnership with companies around the world in order to facilitate end to end delivery of goods – of which payment is determined by FOB terms or other.. as you have already established. Good question to ask a freight forwarder verbally

I guess what I’m worried about is, ports are so massive and my cargo is so small … how does it not get lost? (lol) ignore this mate, you pay someone to pick up goods and deliver them – same as sending something from one suburb in melbourne to another, no different just a bigger scale!

3) Are companies like DHL, TNT, FedEx etc useful to me on the import side? Or would I only engage with them when shipping sold goods to customers? Nope, can be used at any stage.. however, this will bounce back to a 3PL or Freight Forwarder who have negotiated rates with said companies that can be far better than what you would get directly yourself due to lower (potentially) volumes.. Also note, the manufacturer can possibly get even better rates, but dont tell Pete i said that.

4) On customs – do I have to deal with customs issues no matter what mode of shipping I choose, or is that a just a sea freight thing? Value and Customs driven.. But, you may have to deal with them if there are quarantine or other special requirements to clear the goods no matter what shipping method.

5) In terms of logistics, if I cue up a manufacturing contract I’m happy with + a solid 3PL, is that all I need to be in business? Nope… you need customers, you need lots lots more but this is a very open ended question with little history of your business plan (not asking for it) to add much more advice on a forum like this.. But if you are referring just to getting your stock here, well really a 3PL is only dependent on volume or capacity you use or how you will run your business.. do you want to run from home or from a 3PL that can fulfill your orders for you.. Also, you need to consider margins before engaging 3PL or your profits could erode rather quickly. To get products here you need, and sure i covered similar in my reply:
– Supplier
– Freight forwarder – Aussie Side to arrange ALL FREIGHT CONCERNS – they offer a door to door service incorporating paperwork, customs, clearance etc etc
– Somewhere to receive goods here – if small quantities to home? or if container a factory or 3PL to unload at and store and etc etc

6) To the Melbourne guys – on international trade fairs, how do I find out about these? There’s the Aus International Sourcing Fair – any others? Sorry i dont attend local fairs, is the Aus Int Source Fair in Melbourne? if so, do you mean how do you find a local fair being held by international manufacturers on OZZIE soil? Why not just go overseas directly?

7) Looking a bit ahead – if I manage to grow volumes, I might have to move my stock to a fulfillment service. How does this factor into the logistics picture? Like, if I had my manufactured stock sent to a Hong Kong fulfilment centre, how would I know that the quality of that batch is up to scratch? Do fulfilment centres offer that kind of checking service? Cant answer for HK, only what we do.. Although to be honest with you, you are better assessing quality whilst stock is still at manufacturers and this can be done through trade agents and the likes that you pay to inspect QC goods before leaving or mid production etc and is more cost effective than waiting til its here.. for many reasons, not just labour. Furthermore, should you ship goods to an aussie fulfilment centre you just advise your trust freight forwarder where goods are to be delivered to, advise your 3PL and wait for goods to arrive.. Then it depends what level of service you want from that point, if bulk selling, or individual pieces, or the list goes on.

Anyway, it appears to be a common theme in each reply but i strongly recommend speaking to a freight forwarder,, They are going to be the key to the kingdom, or at least to get you through the first gate.. PIVOTAL is all i have to say and i am saying that from being an importer, with a track record of selling goods not just warehousing…

Await your ‘rebuttal’ LOL


Jason Ramage | Lucas Arthur Pty Ltd | E: hello@lucasarthur.net.au   P: 61 3 8324 0344    M: 61 412 244 888