Ask the Experts: Efficient Shipping from Thailand and Philippines

with Mike Bellamy of AsiaBridge Law

Darren writes: How do I get my merchandise from Thailand and Philippines shipped efficiently?

MB: Hi Darren,

Thanks for your question.

Just like picking suppliers, the problem isn’t finding a shipper, as there are so many to choose from, the problem is how to find the right shipper for you. Assuming you keep it easy and purchase “FOB Local Port Thailand or Philippines” from your supplier, then the role of your shipper (3^rd Party Logistics provider or “3PL) will be to orchestrate the movement of your goods from the SE Asian port to your destination point.  In most cases this means organizing ocean freight or express air for the international leg of the journey then customs clearance in your nation plus local trucking for domestic delivery.  As such, you should be looking for 3PLs that have experience importing product from the given country into the specific domestic port you have in mind back home.  Here are some steps to help you make your selection a bit easier:

1. Ask around or do an internet search with key words such as “3PL” or “Freight Forwarder” + “name of port”.  This will most likely generate a significant list.
2. The next step is to contact the ones that seem to have what you’re looking for and learn if they will be a good fit for you.  We like 3PL’s that have at least 5 years of experience importing products from the given country of origin into your destination port and have some experience in your product classification too.
3. Your prospective service providers should be able to give you a list of client references they are currently doing business with.
4. Once you narrow it down to a hand full of options based on initial talks and references, ask for an estimate on freight.  What separates the great companies from the good ones will be the format and timing of their quote.  If they take more than a few days to get back to you, it probably means that they don’t have well developed shipping channels and are trying to set something up just for your order. If at all possible, try to avoid having your order serve as some 3PL’s first attempt at doing business on that particular route. Pay special attention to the form of their quote. It should be an actual form based on a template, not just a few sentences or pricing sent via email.  If they don’t have a set format for estimates or quotes that is a sign that their level of professionalism/experience is probably not what you should accept.  The quote should be easy to understand and if you are unclear about a particular line item on the quote the 3PL should be able to explain it to your satisfaction. Don’t be afraid to ask questions! Better to ask in advance before getting hit with surprise charges later.
5. Shipping rates change on a day to day basis, and unless you are ready to ship immediately after receipt of the quote, most likely the quote will be an estimate.  So we like 3PLs that will hold their quote valid for an allotted time or at least offer to re-quote closer to the actual ship date so that the buyer knows the exact costs in advance.
6. On countless occasions we have had shippers send us invoices after delivery which were much higher than the agreed estimate.  So as you are confirming price, ask this powerful question, “Does this price include everything to get the product from X to Y, even taxes, duties?”, or “Is there anything that is not included in this price?” and “Will you put in writing that the amount to be invoiced will not exceed the agreed estimate?”
7. It also helps to negotiate your terms with the shipper so that the goods are paid upon delivery, as opposed to paying them upfront.  Though you may negotiate this, you don’t actually have a lot of leverage since the shipper has physical control of your goods and could choose not to immediately release them if there are any confrontations about pricing at the last minute.  So it is very important to find a professional company upfront and negotiate the terms and pricing well in advance.

Hope this helps.

I welcome any follow up questions you may have.

Regards,

Mike Bellamy

About the Expert

Originally from upstate New York, Mike Bellamy moved to Asia in 1993. At AsiaBridge Law, Mike serves as the Senior China Business Advisor to both Fortune 500 companies and small businesses. Recognized as an expert on China sourcing, he has been interviewed by the Wall Street Journal, CNBC, Financial Times & Bloomberg.

A featured presenter on China business issues at seminars, trade shows and corporate events across the globe, many of his presentations are archived at www.asiabridgelaw.com/resources. Mike is also the author of “The Essential Reference Guide to China Sourcing” which includes a foreword by Global Sources’ COO.

Thai flag photo by Markus Winkler  

Ship photo by Chris Pagan