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Shipping your exports—3 key considerations

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When it comes to shipping, export businesses are too often preoccupied with cost. You must take a more strategic view.

It’s time for your business to ship product to foreign markets, but where do you start? In Canada alone, there are hundreds of logistics firms that claim: “We can do everything you need.”

How do you go about choosing the right options for shipping your exports? And how do you evaluate and select the right service providers?

First, don’t get hung up on price. Instead, look for the optimal way to move your product at terms that will be acceptable to your customers.

Trying to save a few dollars at the risk of missing a delivery deadline just doesn’t make sense.

Your customer relationships are hard-won and you expect them to last for a long time. The same should go for the carriers, forwarders, brokers and other service providers you trust to move your product.

You should aim to cultivate a long-term relationship with a reliable partner that has a corporate culture that aligns with yours and has the core competencies to meet your business needs.

With this in mind, here are three key considerations to govern shipping in your export business.

1. Saving and controlling costs

The costs associated with an average importer/exporter’s transportation and logistics requirements typically represents 7 to 15 per cent of the value of cost of goods sold.

However, factors such as International Commercial Terms (Incoterms), fuel cost fluctuations, peak season volume variances and security initiatives can have an impact on your company’s shipping costs and should be reviewed, negotiated and controlled on a regular basis.

The right service provider will help you manage these details on a day-to-day basis, while you focus on your core business.

2. Mitigating risk

Dealing with missed deliveries and damaged product is unavoidable, but the most potentially destructive setback for a business can be non-compliance with international customs and security regulations.

Increased security and regulatory measures have resulted in more customs examinations, audits and fines. Failure to comply with customs and security regulations and documentation requirements can result in restricted access to global markets, hefty fines, penalties and product that sits undelivered in an impound for months.

Again, this is why it is so vital to partner with a reliable logistics firm that understands your business and its needs, and has the expertise and experience to help you navigate your target markets.

3. Creating a competitive advantage

Your transportation and logistics partners should help your company to create a competitive advantage.

It doesn’t matter if you ship parts to an aerospace manufacturer, or lawn furniture to a home improvement retailer. If you have a supply chain that allows you to deliver goods faster, more affordably and more reliably than your competitors, it will help you become a supplier of choice for your customer. And again, it comes down to the relationship you have with your logistics company.

Final thoughts

Few smaller businesses have the resources or the sales volume to hire a logistics director, and yet, this is what every exporter really needs. The next best thing is to find that reliable and trustworthy third-party partner that can help you grow your business.

Besides BDC, various government departments, agencies and institutions offer services and advice to exporting businesses, including Export Development Canada, the Canadian Trade Commissioner Service and the Canadian Border Services Agency.


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