Today I’m thrilled to have a very special guest on the show Pam Cail. Pam is the VP of a company called HYCLogistics and she’s helped thousands of sellers get their goods to their warehouses from Asia.
They’ve been in business since 1948 and she knows shipping and logistics inside and out. The reason why I have her on the show today is because many people are intimidated by the importing process.
Plus, my wife and I import many times a year by sea and we’ve also been confused by all of the fees that we get nickle and dimed on. We pretty much accept these fees blindly but they do add up.
So I’ve invited Pam on the show to hopefully clear up the most scary questions that people have about importing.
What You’ll Learn
- Pam’s motivations for starting her business.
- The margins for a logistics company and how the fees are factored in.
- The biggest mistakes that people make when importing from overseas
- How to find the permits that are required.
- The Pros/cons of EXW vs FOB
- When you should use air courier vs air freight vs sea freight
- When to use a stateside broker vs an international broker.
Other Resources And Books
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Now if you enjoy this podcast, please leave me a review on iTunes. If you want to learn how to start your own online business, be sure to sign up for my free 6 day mini course where I show you how my wife and I managed to make over 100K in profit in our first year of business. Go to Mywifequitherjob.com, sign up right there on the front page, and I’ll send you the mini course right away via email. Now onto the show.
Intro: Welcome to the My Wife Quit Her Job podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.
Steve: Welcome to the My Wife Quit Her Job podcast. Today I’m thrilled to have a very special guest on the show, Pam Cail. Pam is the VP of a company called HYC Logistics, and she’s helped thousands of sellers get their goods to their warehouses from Asia. They’ve been in business since 1948. She knows shipping and logistics inside and out.
The reason I’ve decided to have her on the show today is because many people are very intimidated by the importing process. Plus my wife and I import many times a year by sea, and I’ve been often confused by all the fees on my invoices where we kind of feel like we’re getting nickel and dimed on. We pretty much pay these blindly in a lot of cases, but they do add up.
I’ve invited Pam on the show to hopefully clear up the most scary questions that people have about importing. With that welcome to the show Pam, how are you doing today?
Pam: Hi. Thank you. I’m doing great. I am. I’m very excited to be here.
Steve: Very excited to have you. What I want to start out with was can you give us a quick background story and tell us how you ended up running HYC Logistics?
Pam: I have always pretty much had a transportation background in my family. My father was the vice president of a large trucking company, and my mother was a school teacher. Together we’ve always talked about helping, learning, and also the trucking and transportation world. With that, I got into the accounting side of international shipping through a large a freight forwarder.
I started at the bottom doing accounts for savable accounts payable and have worked my way up. When Harvey Yaffee Company asked me to join their team, I was thrilled and I actually started as an accounting manager here, went into exports, imports. Now I am very happy to say that I run the company, and I’ve got a great group of people.
Steve: I’ve often wondered how someone gets into the shipping and logistics business. It sounds like it was something that you’ve done with your family and then you were interested in the business and worked your way up.
Pam: That’s exactly right.
Steve: I’ve always been curious; from a business perspective what are the margins like in such a heavy service based business? How are your fees factored in the equation when you help someone?
Pam: They are very minimal. I do have to say my CFO many a times says, “Who started this business?” Because most people in the jewelry industry, in the furniture industry, 200% 500% mark-up, whatever … In the shipping industry and freight forwarding like we do with the brokerage service, these are very minimal. At certain times if we make $50 that’s a good day. Anyway it ends up being relative to everything that actually is done at the shipment level if you do just brokerage or warehousing or transportation or whatever.
You make a minimal on each one of them. This is not one of those companies that you’re going to find, going to have the 24 karat gold garbage can. It’s nothing. We chose poorly if that’s what we wanted to achieve. All in all it’s a very necessary part of shipping in our economy and I guess having the background that I do, it’s certainly rewarding. We have time and we have the education to share with everybody and that’s what drives us, not the money.
Steve: A lot of people probably come to you with importing help. What are the biggest mistakes that you see that people have when they are first starting to do their first shipments when they first come to you?
Pam: I think one of them is telling the supplier that they are a new person in this. Just being overly honest because you don’t really know how they are going to react to you. Are they going to tell you things that may not be true or they might be true to them only? For instance, I was told that by one person that they only import into New York. This person came to me and said, “I see that you could only import into the United States by way of New York?” I said, “Where did you hear that?” They said, “Well the supplier.” See the supplier only imported into New York.
Therefore it was honest of the supplier, but it was misleading and they didn’t even know to ask the question, “Well, what about the other ports or is there anything else?” When you are a new person, you don’t even know the questions to ask. That’s the damn fault of not having a representative on the USA side.
When everything is handled on the Asia side, the China side or anywhere else, they don’t know the US customs laws. They don’t know what ports are available, what’s best, what our weather is even like. Are the rail roads flooded or are they iced over in Chicago during the winter? Those types of things we try to say, “Okay. Everyone is good at their area. Find an expert at their area especially if you are not.”
Steve: What are some of the questions that you should be asking to the vendor?
Pam: It depends on the shipment. That is one of those that has the weight, the volume, where your freight, what port they use, where are they going to ship out of, if it’s FOB. There are differences: is it air or ocean and is it airline or air courier express?
Steve: Let’s talk about that a little bit actually. I know typically when I go with a vendor they sometimes give me 2 different quotes. One for EXW and one for FOB. Can you comment on the pros and cons of both incoterms terms? First of all, if you wouldn’t mind defining them and then talking about the pros and cons.
Pam: Incoterms are an international commercial term. It’s used in both the exporting country and the importing country. In layman’s terms it tells you where and how your freight is going to be routed. As you asked, the Ex Works and FOB … The responsibilities of the partners … Ex Works is when your … Which would be my customer would be responsible for providing the financial means of getting their freight from the factory to the ship, the port.
FOB means Free On Board which means that the supplier of my client is financially responsible to get the product to the port. Then my client’s financial responsibility starts at the port, at exportation. There is big difference on that. If your freight forwarder doesn’t have a way to get your export freight to the port that could be a problem. You always want to make sure that if you do have Ex-Works terms on your commercial invoice, that you also have the ways and means of getting it from the warehouse to the port.
Steve: I noticed that the Ex Works quote is always less than the FOB quote probably because of that fact. Is that something you recommend or do you always recommend going with FOB at first?
Pam: No. I don’t have a preference. I do suggest that you get 2 quotes for your product because a lot of times the FOB will be more expensive than the EX Works. You need to judge and you need to analyze and say, “If the FOB quote is $500 more, would it better for you to get an Ex Works quote and have your freight forwarder bring it for $200 to the dock?” If you have that time and you have the desire it’s good to analyze all these. If not the simplest way for my clients is to have FOB terms. They know that it will get there when it’s supposed to and they don’t have to worry about a trucker or anything else on the Asia side that they are not familiar with.
Steve: I’m thinking about some of my factories that we use. They are deep within rural China where it might hard to actually get a freight forwarder there to move the goods to the port. Is that something that you guys handle too?
Pam: Yes, we do. We handle that because we have an agent and a partner over in China. That’s where I use their connection. Sometimes if you’ve got an agent that is not very large, they won’t have the connection. Sometimes if you’ve got agent that’s very large, they don’t want to take the time to go to rural China. They want to just do the nice easy [inaudible 00:12:11] type.
Steve: It just comes down to price really then, EXW versus FOB?
Pam: It does.
Steve: You also mentioned a couple of things. You mentioned air courier, air freight, and sea freight. Would you mind telling us what the differences are first? What some of the guidelines are in using one versus the other?
Pam: The air courier is the most expensive. The sea freight is the least expensive. With the caveat being that sea freight deals with minimums. You don’t want to have the shipment too small to where your minimums end up being larger than your courier. Then the middle of the road is airline is the fastest, but it also is not the most expensive and you can send a few cartons by airline that necessarily might be the middle of the road.
We always look at the carton count and see what’s best for the customer. I would highly recommend that anyone who has a freight forwarder and a broker that they ask for these options because surprisingly enough it maybe that you need to increase your carton count by 10 to make sea freight be so much cheaper.
Then the reverse depending on your financial status and so forth, you may not be able to do that or your supplier may not be able to give you 10 more cartons. Then you end up having maybe the courier versus the airline. Sometimes the courier ends up being cheaper than the airline because of the time of year and also the quantity.
Steve: Interesting, can we talk about the cut offs? When is a good time to use air courier versus air freight for example?
Pam: There is not really a precise cut off on that air courier versus air freight because air courier can be very pricey at Christmas time. It could be $8 a kilo whereas an airline maybe $1.97 a kilo. The difference on the courier and the airline is that on an airline is going to have to go an airport. You are going to have terminal charges and they are going to put it on a pallet. You are going to have to pay for those individual fees, the security filing, all that type. That will add extra dollars to your shipment but it won’t add all the way up to $8 a kilo.
Steve: Okay, would say then that air freight is always cheaper than air courier regardless of the size of your shipment?
Pam: No, I would not say that. Be careful with the season. I’m getting very good air courier rights right now. In a month, when the big retail stores start bringing in their end of the year holiday stuff, courier is going to go up fly up out of the chart. Then it’s going to be better to do airline and also think too that some of these airlines only need a small few packages to fill up their body in their cargo part. You will be able to get an airline right for a little cheaper. Whereas say in express shipment, that’s usually booked for the retail stores and so forth as a whole body of a plane.
Steve: Interesting. Okay, it sounds over the holidays; air courier will tend to be a lot more expensive than air freight. Whereas during the non peak times of the year, courier might be the same price or even cheaper than air freight, does that …
Pam: Yes, that’s it.
Steve: The reason for … Air freight, can we walk through that process? How much more of a hustle is it in the air courier because in the air courier case, they deliver everything straight to your warehouse. You don’t have to worry about anything right?
Pam: Right and it is much simpler, easier, they let the … It’s like sending a FedEx envelope. It’s all right there. All pretty, all but a bow on it. Airline, it would be the same basic airport from wherever you are guest origin is. Then it would bring in to the terminal whereas the courier will come into a warehouse or your final destination or whatever. You’d have to find the airport closest to where it would be. You would then need to take the second step of getting it to the final destination which would be adding trucking to it.
Steve: Okay, could I physically go to the airport and pick the stuff up myself though?
Pam: Yes you can. Yes you can. Now, depending on and I always say depending on the area that you are picking it up, some ports are more friendly, some airports are more friendly to having people walk in and go to the CFS. It is truly your right to be able to do that. Some of the busier airports, you will have to stay in line and wait for hours and pick decent time. You have got to weigh out what your value of time is.
Steve: Okay, and then you also have to factor in the cost of trucking from the airport to your destination which can be expensive as well, right?
Pam: Exactly. Then also don’t forget, our US customs brokerage services on an airline. You do have to … You have to pay for a broker just like in ocean freight for airline.
Steve: I see, I see. Okay, it ends up being a lot more of a hustle whereas air courier handles all that stuff and in my experience you pay the customs after the fact.
Steve: Okay, air freight is like sea freight. You have to handle all the customs and everything. The only difference really is that things are shipped by airline instead of boat and there’s no minimum it seems.
Pam: Exactly, right on.
Steve: Got it, got it. All right, that middle of the road option is that … First of all is air freight as fast as air courier or is it going to be slower?
Pam: It’s going to be slower but just by a couple days.
Steve: Okay, because of customs? Is that why?
Pam: No, just that they don’t … Air courier is known for getting to the United States in 3 days, 5 days whatever, however long it is. They leave every night. That’s how the name of the game is get it on there and put it on the first airplane that leaves China. Whereas the airline is a scheduled appointment just like an ocean freight is a scheduled …
Steve: I see. I see. Okay, and let’s talk about sea freight then and when it makes sense to go by sea.
Pam: It makes sense to go by sea when you’re carton count and your CBMs are around 3 CBMs. Depending on the size or the weight volume that determines what’s going to happen on sea freight. You can … I can’t say, okay 73 cartons is the magic number because your port may be different. Let’s concentrate more on the CBMs because that’s how ocean freight is calculated. Everything is calculated based on CBMs.
Steve: Which stands for cubic meters, correct?
Pam: Yes, cubic meters. Whereas an air freight, it’s all calculated by kilos and chargeable weight. Well on ocean freight, there’s no chargeable weight. A CBM is a CBM. A cubic meter is a cubic meter. We’ve got a small typo around here. I always tell the people I say, “Okay pretend it’s a small round table with corners.” To get an idea of what a CBM looks like. That’s the visual of a CBM.
On ocean freight usually from China and Asia they actually come loose. All your cartons come loose. Then when it gets to the United States, it is palletized at the container freight station which is the CFS. You are not paying for the weight of the pallet. You are not paying for someone in China to handle it differently. You don’t have to worry about a pallet jack or a fork lift or anything like that. We do agree with the Asian way of sending it loose freight because of we do not want to pay for any extra weight than we have to.
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Steve: So just to summarize what you said. Sea freight is just by volume. It’s charged by volume whereas air freight is always charged by weight. It makes sense when you have stuff that’s super heavy that you go via sea freight because there’s no incremental cost to adding more stuff because it’s all calculated by a container load.
Pam: Exactly, exactly.
Steve: Okay, can we talk about less than a container load versus having your own container? How does LCL work?
Pam: A less than container load is LCL freight. What happens there is that say you’ve got your cartons and you only have 5 CBM, we are going to assume an FOP which means free on port. Your supplier is going to bring it to the port. The port has a container freight station where they put all these individual cartons together and they load a container. All right, I can arrange a container, my agent can arrange a container, the freight forwarder can arrange it, it could be any which way. We are going to say this is just a generic container.
Pam: MSC has a generic container which is Mediterranean shipping line. Your 5 CBMs are part of this 20 foot container which unless you are sending water you really can’t go much more than 25, 28 CBMs in a 20 foot. Your 5 CBMs are part of we’ll say this 25 CBM container. Now, your freight is put with several other people’s freight. You don’t know them. You don’t know what it is, you don’t know their documentation status, you don’t know if they’re smuggling drugs, you don’t know if they are packaged right. The only thing you can know is that if it is HAZMAT it will not go into a normal container. It will go into a HAZMAT container. You are not going to be exploding … There’s not going to be your container blowing up because you got something next to you inside that container.
You’ve got all, we’ll call it all freight of all kinds and it’s on the container and now you get into the CFS. Your 5 CBMs are put together with this paper work, signed off, checked in, loaded in the container. When it gets to the United States, it is then taken off the vessel with a huge crane and it is taken back to a container freight station where it is actually divided up again. Your 5 CBMs and say your 70 cartons is put over here with this paper work and so forth. That container is divided out again.
The negative part of the LCL and sharing a container is that if your buddy, your new BFF that’s in that with you, if they get called for an exam, the whole container stays in an exam state until it is all cleared. US customs will not partially clear a container. Your paper work and your items might be perfect but if you are sharing it with somebody that’s not, that’s when it’s a negative. You might have a delay or a cost for sitting on the dock. That would be a downside of that even though you are an innocent party.
Steve: For example, let’s say I was sharing a container with someone who didn’t properly label their goods, customs goes in and they notice that the goods weren’t labeled properly, that would delay my shipment as well?
Pam: Yes, yes.
Steve: Okay, I see. Is there any control over who your buddy is on a container?
Pam: I have made that control because I do my own containers. I know that we handle the paper work; I know the due diligence that goes into the products that are picked and put on the container. The control of that is and can be handled if you’ve got somebody like me that will basically hand pick who your new BFFs are.
Steve: I see. Okay since you guys do a lot of business, and often times it’s from the same originating port, you are able to put together different customers within the same container because you know what’s in there and you know that they’ve labeled everything properly and it will clear customs, is that accurate?
Pam: Exactly. They will all have their continuous bonds and we won’t have any hang ups as far as a single entry bond having to be signed off.
Steve: I see, okay. Given that you know who your buddies are on a container and everything clears, is there any other disadvantages to using LCL?
Pam: I don’t really know. It is more costly after it gets to probably about 7 to 10 CBMs. We always recommend if you are at the 10 CBM mark, it is actually going to be cheaper for you to get a full container and only fill it up half way or see if I can find somebody to marry with you because the port charges are so expensive. The core load of these are so expensive. Basically they want to deter having to unload 200 cartons on the CFAs.
They would rather say, “Okay we are dealing with union laborers; we are dealing with port charges that our government mandated so it’s more pricey.” They’ll put extra charges on there, extra fees for that, which is the extra labor and time that they are going to have to do that with. They are going to have to prioritize all those 200 cartons and they come every which way on those pallets. It’s not a nice neat like you would think in a warehouse type environment, palletizing. They’ll just throw along any each way to get them all together.
Then of course something like Amazon or someone that you would want to send it and have a good name for yourself. You would not want to send a pallet looking as though it was all mixed up and upside down yeah.
Steve: Interesting, when you have your full container it doesn’t need to be unloaded for inspection?
Pam: No it doesn’t it will … If it does need inspection and I say an exam inspection, they’ll take the whole container and run through the electronic ice. Then if that still fails then they will ask for it to be moved off of the site. Then they’ll unload it and that’s called an intensive exam. Those are really pricey.
Steve: Okay how often does that happen?
Pam: Not very often we rarely have intensive exams but that’s not to say that you don’t get them. The exams … We usually say about 30% of the US customs has to be examined, things that go through US customs about 30%. That’s where we get into this. Examined and intensive examined are 2 different things. Running it through a laser basically seeing if there is anything that flashes up is totally different and a lot cheaper because it can all stay in the container.
When you start unloading, now you’ve got union workers, government workers and you’ve got an offsite facility. You have to take it off site this that is bonded for an intensive. That’s why it’s so pricey as well.
Steve: Okay how does one decides on a good port of entry for a shipment; let’s say if you don’t live near water?
Pam: It depends your final destination, and how quickly you need it too. Now why we send so much to Long Beach is because it takes 13 to 15 days of sailing time to get it there. Well that’s pretty quick. If you’ve got your decks on a row and your supplier is actually done when they say, and you’ve got it all, everything paid documents everything perfect.
You could have your freight in 30 days if you did a container or whatever. You could have it easily at your warehouse in 30 days. It only takes we’ll say 15 for ground purposes, 15 days for sailing, a few days at the port on each side. It doesn’t … This is one that doesn’t get an exam and you are sitting here looking at 23 days.
Steve: If I’m in New York for example, would it pay to get it shipped to Long Beach and then trucked over. Would that be the fastest way versus sailing all the way around?
Pam: That would be the fastest way, it’s not the cheapest but it would be the fastest way.
Steve: Okay, I see and there is just tradeoffs that depend on how fast you need your goods. What would be cost differential for example for a container?
Pam: I don’t even know to be honest with you. I can tell you that we just, we looked at a trucking for … From LA to Tampa and it runs about $4500.
Steve: Okay for a container load?
Pam: For a container load.
Steve: Okay that’s significant.
Pam: Very significant. New York probably $5200 maybe, because there is a little diversion there.
Steve: Sailing to New York takes significantly longer right?
Pam: It does because it’s called all water A-W-S is all water. We’ve got all water to Houston, Miami, New York. The only one that we have that’s the most economical would be to LA or possibly Seattle to Cama getting into upstate up there. It does take even a couple of more days longer to get to Seattle to Cama than it does LA. Now the other choice is not to truck it. Bring it in to LA and to put it on a rail. A rail road and rail it to New York.
Steve: Interesting okay.
Pam: How it works is there is … We do it in degrees. The ocean freight, sea sailing is the cheapest. You want to keep it on there as long as you can if time doesn’t matter. [inaudible 00:35:55]. Then the rail … The rail road is cheaper, then truck it. You want to keep it on the rail as long as you can. Then the third is you track it the shortest distance you can.
Steve: Okay that makes sense. Can we talk a little bit about customs bonds, first of all what are they and why do you need one?
Pam: All right in order to import into the United States you have to have a customs bond. That gives basically permission for a responsible insurance policy for US customs to get their duty and taxes paid okay? We’ve got 2 types; we’ve got a continuous bond and a single entry bond. A single entry bond is based on 1 entry, 1 shipment and it’s paid every time. It is more costly and it is based on duty and value of your commercial invoice. In a matter of speaking you could easily pay more for a single entry bond than a customs bond, a continuous bond. A continuous bond is $500 for 12 consecutive months.
That means if you got it today this is June, it would expire on June 9th. It’s not a January to December, and you can’t partial you can’t pay for a half of the year. Its 12 months continuous and it starts where it is. In a matter of depending on your duty and your commercial value, you could easily pay for your continuous bond in 3 shipments. Sometimes 2 if you’ve got a high duty rate or a high commercial value right? Remember its $550 a thousand based on the duty and commercial revenue.
Steve: Okay and in general if you plan on doing at least 3 shipments it pays to get the continuous bond?
Pam: Yes, if there is several other caveats to the continuous bond that I personally like. I think it is good to be known by the US government as you support the economic and the retail market wherever you are selling if you are a wholesaler, retailer whatever. You want the government to know that you are not a fly by night. That you are not doing this one time. You are invested in the US economy.
With a continuous bond, that’s what its stating to somebody that just sees a log. It says, “Okay this guy’s really serious about making a difference in our retail or wholesale world.” Whereas a single entry bond it says, “Oh I’m going to give this a try, I’m going to put my toe in it just a little bit, and it may not happen.” Also you’ll have …
Steve: Would you say then you are less likely to get an in-depth exam if you have a continuous bond or?
Pam: I would because that is what we hear. There is nothing of course written that way but it does seem to be an issue on that. Why, if I could explain why. With the single entry bond, the physical paperwork, the documents, they hold your commercial invoice, your packing list, the 7501 which talks about the duty and your release. That is the paperwork, and it basically has to be taken to US customs and signed off. Then that paperwork has to be reviewed at the same time that they are reviewing your product.
You got US customs officer that is actually got your stack of papers in his hands, and he is also looking at your 70 cartons or whatever. He is, just in human sight. If you’re going to have to put your John Hancock on something, you are going to look twice because you know that your authorities know that you are standing right there by and if it doesn’t say that it is made in China or if something doesn’t look right then shame on you. You are just lying; you are leaving yourself wide open for an exam I think personally because of just human nature.
Steve: Interesting, okay that is really good to know. Couple of other things that I often get asked is how do you know what all the different permits that are required when you are importing something in?
Pam: US customs and the government, it stated that you as the importer have to know everything you need to import. You don’t have to do it but you have to know what you need. Let’s just be real, you don’t know everything you need because you don’t even know what to ask. You know that if you’ve got [inaudible 00:42:06] and so forth, you know that if you got a food article that you know food and drug is needed.
It is very important that your US customs broker is up to date and knows about this. If you need certificates, if it’s something that requires FDA or XCC trademark, but if you have a blue tick with the trademark, you’ve got to have permission and that’s got be part of your document packing. That is very important to get this done before it sits at the port, because remember the port is very expensive because it’s union labor and that port has got a lot of movement in it, and that space is very expensive if you are holding, if you are taking up a room.
Pam: For the actual cost, do your due diligence ahead of time. Make sure your customs broker is familiar with the rulings and the filings that are associated with your [inaudible 00:43:21] code which is how deviant taxes are calculated.
Steve: Okay, I can’t imagine doing all these stuff on my own which is why I have always used a customs broker, but I’m just … Can we just go through the entire process from beginning to end, in terms of what’s necessary. I imagine when someone comes to you, you probably ask them very specific questions on how large their shipment is, exactly what they are importing. Can you just walk me through the process as if I was coming to you as a client.
Pam: Sure, the very first thing is we ask a group of 13-17 questions, and that makes it much easier for you to get a qualified quote. We are strong and your quote needs to be your invoice. How can you run a company if you keep getting bills that come through after the facts? We ask very detailed questions. Where is your supplier, what is your incoterms, is it FOP or Ex-Works, do you even have a picture of it so that my compliance manager can look at it and make sure that we are suggesting the correct [inaudible 00:44:44] code.
We go through your carton count, volume pieces, how the value is done. We make sure everything is fair including the commodity, the origin destination. We even go in to; do you need a lift gate at the final destination? Does your warehouse have the access for a regular truck to come in or do you need a lift gate? If you have, do you live in a rural area if you are going to have it be delivered to your house? Will you have someone there to unload because you only have 2 hours free time. Then you start getting charges for holding up the truck driver, and the container or their truck.
We try to get as much information as we can on this, and then that is the generic first of, and then we start getting nitty gritty. We start taking you through the ocean freight? This is your cost. Do you want marine insurance? That’s insurance that covers you while you are at sea. Do you want additional insurance? Do you want warehousing? Do you want trucking? That’s talked about.
Now we have to talk about the Asia side. Does your China supplier have an export license if it’s going to be FOB terms because remember FOB means they get it all the way, and it’s to the ship. Your supplier has to clear it through China customs. Your supplier has to make sure the documents are correct, and in China they have to be licensed just like we have to be licensed in the United States. If not then we need to find somebody who is, that can offer that service.
Steve: Incidentally if you go Ex-Works, the responsibility then is on you to clear China customs, is that correct?
Pam: Yes, that is correct. We need to find out a little more, and then sometimes people don’t know. We will interact with the supplier at this point in time, and we will ask these questions, and keep the client in copy. Sometimes they get too in depth with the answers, and they get confused as far as what are we really trying to say or something especially if you’ve got a language barrier. Then we bring it on, and we go through and we take care of everything, make sure everything is taken care of even if we are not responsible for it.
We make sure that you are taken care of with the terms in China. We get it on the water, we bring it to the port, after the port we break it down. If it’s LCL, if it’s not LCL which is less than container load. If it is a full container, we will get a tractor; we will bring the container to our warehouse. We will take it apart at that point in time, unload it and then we can store it, or we send it on to the final destination.
Steve: Do you have warehouses at each port?
Pam: Not at each port, we have a warehouse in California, and we have a warehouse in Tampa. We are looking into a warehouse in Miami at this point in time. At this point our warehouse in California is more the storage and the traditional warehouse. The Tampa warehouse is more for bundling, shrink wrapping, maybe making something, putting a bow on it.
It’s a little more, what should I say, detailed, and whereas, I was thinking the traditional warehouse is your fork cleft, and you’ve got a bunch of boxes moving around. They can do, is it broken, is it damaged, but can that fork cleft driver really put some shrink wrap round a perfume bottle or a lotion and make it look as good as if it was on a Macy’s shelf, probably thinking not. That’s why we ended up with our Tampa warehouse.
Steve: Doe that imply then that people can ship their goods from China directly to you for some processing and then have you forwarded directly to Amazon’s warehouse?
Pam: Yes, most definitely.
Steve: Okay, I didn’t realize that was a service that you guys offered.
Pam: We do, when I say we are full service we are full service. We can pick it up. The only thing that I can’t do is I can’t pick your product, but everything else I can take care of it, and we can take what you want. We’ve actually improved some people’s product that has got into Amazon. Somebody used to put their product in like a little baggy, for lack of a better word. He folded it over and put a sticker on it, and that was his label, the danger warning and all that. Well when we took it to our Tampa warehouse because he just wasn’t getting the dollar value that he felt like he needed.
We took it our Tampa warehouse and said, “What can we do?” Rather than the 3 labels, and they weren’t always even, we made up an insert that bagged the product, so you could see it, and then we shrink wrapped it to where it did the like the image. Where it all sucks around the product, so that it was nice and neat rather than this zip lock bag. He is very happy; he has gotten his price up because it looks like it is an expensive product that it is. The product was being devalued based on the packaging, and our Tampa warehouse came up with that idea, and he is very happy.
Steve: Interesting, hey Pam, where can people reach you if they need to contact you? If they have any questions about the import process or anything like that?
Pam: You could reach me at, firstname.lastname@example.org, and then copy please my A team that will go to several people incase I’m out of town or away from my desk or helping someone else, and that would be email@example.com.
Steve: Thanks a lot for your time today Pam. I learnt a lot especially about the air freight versus sea freight. I have actually never used air freight before; I didn’t even realize that that was an option actually.
Pam: Good, it’s a bright new world out there.
Steve: Yeah, and the disadvantages of LCL versus full container, I was not aware of those either, so I learnt a lot today.
Pam: Wonderful, wonderful well I would be happy to help you anytime.
Steve: Awesome, well thanks for your time Pam. Take care.
Pam: Thank you, bye bye.
Steve: Hope you enjoyed that episode. Importing your goods from overseas for the first time can be quite intimidating, and hopefully today’s interview with Pam gave you some insights on what’s involved. If you have any questions you can always contact firstname.lastname@example.org and tell her I sent you.
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