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Procurement Issues in China


Customs and Duty information is an important ingredient in the total cost equation. You can not simply look at unit cost. Duty rates and issues is an ever changing and perhaps confusing world. You should always look for the very latest information.

Moe details on Customs and Duties

Invoice Preparation:

Invoices need to be as carefully and precisely prepared as possible. Make sure all details on the invoice match the Price Quotation, packing slips and any other documentation. Customs inspectors have held up shipments for any inconsistencies. For example, if a Purchase Order(PO) mis-spelled a product name, it is best to either re-write and resend the PO, or to invoice with the exact mis-spelling.

For remittance in foreign currency, it will be important that details meticulously tie from Price Quote to Purchase Order to Invoice to actual writing of the check.

Partial shipment should also be avoided. If partial shipments are required, multiple POs are recommended.

For acquisitions, where a parent or related subsidiary is involved, it is imperative that the sending unit is the invoicing unit.

Trade Shows

Trade shows are a common way to find suppliers. A wide array of trade shows occur in Hong Kong, China and Taiwan.

Import/Export Companies:

There is a plethora of import/ export companies just waiting for your business. A quick web search will net you all the companies you need. There is no shortage of companies and sites on the net just waiting to "Link" up with you.

Shipping and Transportation

From the factory to the ocean, your product will travel by boat along the tens of thousands of miles of waterways, by rail or by highway. Of the three, highway is the most rugged of the means of transportation.

Once the product has reached an Ocean port, it will be loaded into sea containers for the long journey overseas. All of the major world wide ocean carriers can be found at these ports. Plan four to six weeks of time from the factory dock to the dock at the receiving end of your product's journey. China's ocean ports carry a tremendous amount of product and usually without unusual losses, holdups, customs or other problems. As a matte of fact, truck traffic at the border of the U.S. and Mexico can face longer customs delays than with China. That is not to say problems will not occur. Make sure your paperwork and customs documentation is in order as the Chinese customs is very stringent on this.

If you need to rush the product to it's destination, Air Freight is provided by almost all international air transportation carriers and can leave from a number of international airports. Plan one to two weeks from the factory loading dock to it's final destination.

If you need to ship air freight, be prepared to pay air freight rates. Air rates are about five to six times higher than Ocean Freight rates. Rates are largely determined by weight for Air versus mass(a combination of weight and size) for ocean.

More on Transportation

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