SESSION 3:

Supplier Outreach & Product Selection

T H E M I L L I O N D O L L A R C A S E S T U D Y

E U R O P E

Introducing Travis & Sam

Sam Scudellari ◍ Account Executive - Emerging Markets◍ ~2 years at Flexport◍ Started in operations for some of Flexport’s

largest Amazon accounts◍ Previously, 3+ years in accounting and asset

management

Travis Falasco◍ ~2 years at Flexport◍ 1 year running FBA operations for a large

Amazon seller ◍ 2 years operations management - Target Corp◍ 8 years military logistics - US Air Force

MDCS Challenge Updates

Web App Winner JSP Winner

MDCS Challenge Updates

Agenda

◍ Creating an Amazon Shipping Plan◍ Selecting Final Delivery Method◍ Amazon labeling◍ When to palletize◍ Inspections◍ Incoterms ◍ Shipping timelines◍ Calculating final delivery costs to Amazon◍ Market Updates - What to expect for Peak Sea

Freight Forwarder Vs Supplier

◍ If you are shipping via air and your cargo weighs more than 250 kg, then you need a freight forwarder

If cargo is less than 250 kg, then you can use your supplier who will leverage DHL Air Express. A freight forwarder will be too expensive in this scenario

◍ For ocean shipments always use a freight forwarder

Why Can’t I Use My Supplier For Shipping?

◍ Poor service. Shipping, US customs, etc. is not their specialty.

◍ A lot of pricing you get from a supplier will change later (not transparent)

◍ If you ever need information it takes a long time to get

◍ If your business is successful and starts scaling your shipping risk also scales exponentially if you stay with your supplier

FCL or LCL?

Full Container Load / Less Than Container Load

◍ LCL lets you keep your inventory low ◌ Ideal if you don’t have the money or space to accommodate a full container at

your warehouse ◌ Lets you ship in smaller volumes so you can keep your inventory lean

◍ FCL may be cheaper than LCL ◌ LCL costs more than FCL per unit of freight because freight agents prefer a

full container load ◍ FCL gets delivered more quickly than LCL

◌ Shipping LCL requires additional steps - such as loading and unloading the container

◌ When shipping FCL direct to a single FBA warehouse◌ Cartons MUST be labeled at origin, neatly stacked, and stacked no taller than

72”

Containers

Shipping Via Air

◍ Chargeable weight is the weight which airlines will use when determining the cost of a shipment

◍ Carrier will charge you for whatever is greater: the gross weight, or the volumetric weight

Inspections

◍ Always have your shipment inspected in China by an independent third party. Even if you have shipped with your supplier multiple times

◍ Recommended solutions: VTrust, Topwin Inspection, China Quality Check

◍ Tip: Try to negotiate (ahead of time) with your supplier for them to pay for the second inspection if the first inspection fails.

Creating An Amazon Shipping Plan

The Ship From address is…

◍ NOT YOUR SUPPLIER'S ADDRESS◍ Should be a warehouse address in the country

you import to◍ All US imports should be a Los Angeles area

address◍ Put all SKUs in one shipment plan!

Your Final Delivery Method?

Your freight forwarder may be able to provide trucking services, which will be more expensive, but faster.

Amazon LTL services are not available in the EU.

Delivering floor loaded FCL direct in the EU is near impossible.

Calculating Final Delivery Cost In Seller Central

UPS:

1. Select “Small Parcel Delivery (SPD) and “UPS.”

2. Complete the “Shipment Packing” section by entering the units per box, the number of boxes, and the box weight.

The estimated shipping cost will be in the “Shipping Charges” section.

Calculating Final Delivery Cost In Seller Central

Amazon LTL:

1. Select “Less than truckload (LTL) and “Amazon-Partnered Carrier.”

2. Complete the “Shipment Packing” section

Preparing Your Goods

◍ For LCL and Air, ship your cartons loose and labeled

◍ Only fragile products should be palletized ◍ For FCL, cartons must be neatly stacked,

labeled, and not stacked taller than 72”

Labelling

◍ Units must always be labeled!◍ Cartons should always be labeled!◍ UPS labels can be applied at origin

as well!

Tracking Your Shipment

◍ UPS tracking in seller central

◍ Amazon LTL is tracked via the carrier’s BOL and PRO tracking number

3 things to consider for transit timelines

Manufacturer to PortBooking, pick-up from manufacturer site, delivery to port/on-vessel

◍ Air: 1-2 days◍ LCL: 7-9 days◍ FCL: 2-3 days

Port to Port

◍ Air: 1-2 days for direct or 3-5 days for deferred◍ Ocean: 14-16 days

3 things to consider for transit timelines(Continued)

Port to Final Destination (customs clearance - prep in advance of arrival)Pick-up from port, delivery to final destination or Amazon prep warehouse.

◍ Ocean: 5-6 days◍ Air: 1-2 days

Prep (labeling, palletization, etc.)

◍ FCL/LCL consol box (direct to Flexport warehouse): 1-2 days for UPS, 4-5 days for Amazon LTL (2 business days to book Amazon LTL partner)

◍ LCL non-consol: 1-2 days at CFS, 1-2 days transfer to Flexport warehouse, then add above

◍ Air: 1-2 days UPS

Incoterms

Terms of sale that define who arranges for the payment and handling of the goods during shipping, from the moment the goods leave the seller’s door up until their arrival at the buyer’s warehouse

◍ You and your supplier set incoterms

◍ 11 incoterms, but the most common are FOB, EXW, and FCA

FOB (Free on Board) – the supplier is responsible for getting your goods from the factory to the port

EXW (ExWorks) – the freight forwarder is responsible for getting your goods from the factory to the port

Cargo Insurance

Always get freight insurance because:

◍ 50% of freight claims are denied by carriers ◍ Your cargo will pass through many hands and places

before it gets to you, increasing the chances of damage◍ If damage or loss occurs, carriers will do their best to

limit their liability or avoid it altogether, even if they are at fault

Shipping Documents

◍ Bill of lading - the ticket outline the journey of your cargo from origin to its destination

◍ Telex release - an electronic release of the B/L◍ Express bill of lading - agreement between buyer and seller

Shipping Documents

Commercial InvoiceNeeded to clear shipment through U.S. Customs. Needs to contain:

◍ Country of origin/ manufacture◍ Full name and address of Importer on Record◍ Full name and address of supplier/ manufacturer ◍ Complete description of merchandise in English ◍ Quantity of units for each product◍ Unit value for each product, including currency declaration ◍ Total extended value, including currency declaration

Packing List

◍ Information must match what is listed on the commercial invoice

Getting Through Customs

Give your freight forwarder the commercial invoice, packing list, and/or product information. Be as accurate and detailed as possible so your customs broker can correctly classify your goods to avoid holds at customs.

Types of Customs Exams:

◍ X-Ray Exam - The container is driven through an X-ray machine.

◍ Tail Gate Exam - Customs will peek inside the container. ◍ Intensive Exam - The container is opened and stripped.

Peak Season

◍ Peak season occurs in Q3 and Q4 in preparation for the winter holidays

◍ Expect high, volatile rates, rolled cargo (cargo is moved to a later shipment due to a lack of space on the scheduled carrier), trucking delays, and other interruptions

◍ Plan ahead – book carriers early and expect to need more time to load/unload at origin and destination because of congested ports and warehouses

◍ Prepare for extra fees as a result of congestion ◍ Be Flexible

Follow Along: Your Homework

1. Speak with your Freight Forwarder and plan out your shipment of inventory

2. Shipping to Amazon: https://www.flexport.com/help/109-shipping-to-amazon

3. For help with H.S. Code classification: https://hts.usitc.gov/current

Get all of the resources and links from this session: https://www.junglescout.com/session9-HW

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