Many companies require delivery ‘just-in-time’. This allows them to hold lower levels of stock, ties up less money in stock inventory and saves money on storage costs. Most export agreements contain a penalty clause for late delivery. This puts the burden on the exporter to ensure they deliver the goods on time.
To meet deadlines you need to understand the lead-times and possible delays at every step of the supply chain. Your goods must meet the requirements of the country of destination to ensure they clear customs smoothly and quickly.
Your transport options
There are four ways of delivering your physical product. However, it is likely that logistics will require you to use more than one option:
- By road: To transport your goods to the port or airport of departure. Road transport may also be likely once your goods reach another country.
- By rail: Rail is also commonly used to transport goods to and from ports and airports. Often cheaper than road transport, use of rail depends on the country you are exporting to and the level of infrastructure development.
- By air: Air freight is the fastest delivery option, but also the most expensive. It is a good option for perishable products like food and flowers. Faster delivery, lower insurance costs, and better inventory control can make air freight a cost-effective option for other goods as well.
- By sea: Sea freight is the most economical way to deliver products, especially large consignments and bulk items. It is also the slowest means of export transport.
The method of delivery you choose will depend on the:
- type and value of your product
- urgency of the order
- level of infrastructure in the country you are exporting to.
Growing demand for quick delivery has resulted in increased options for fast delivery from New Zealand into our major export markets. Freight forwarders, air express companies and couriers provide a range of services, allowing exporters to offer door-to-door delivery and minimum delivery periods. These include overnight services into most Australian centres from major New Zealand centres.
Export service providers
Services in the freight industry vary depending on the operator.
- Courier services: Couriers focus on providing a hassle-free and fast delivery service. This service usually comes with a price premium but they offer ways to trim costs if needed. For example, instead of using a door-to-door fastest delivery service, use a slower service or get goods dropped off at their depot to save costs.
- Freight forwarders: Freight forwarders offer a variety of services from handling all freight and logistics to advice or brokering shipping rates with transport companies.
- Customs brokers: Customs brokers specialise in clearing goods through customs. They can provide advice on customs codes and tariffs, prepare customs documents and pay customs duties on your behalf, which you pay back later.
- Transport companies: Transport companies transport your goods from one point to another. A number of ship, road, rail and air freight companies prefer not to deal with individual export companies unless it involves large regular shipments. Most prefer business to come via freight forwarders.
Your logistics
Based on your order and your customer’s delivery requirements, you can work out the logistics by identifying each step in the supply chain.
Give each step a time allocation in days, weeks or months. Working backwards from the required delivery date you can determine when you need to dispatch the goods, and when production and preparation should start. Don’t forget to build in margins for delays.
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