Every day more companies in the world rely on Chinese suppliers to have more dynamic businesses and a wider range of products to offer. However, this interaction with the Chinese market is often linked to issues and challenged related to the way the supply chain and logistics are managed.
It becomes crucial for companies to understand that the Chinese market works differently than others in the world and that certain considerations related to transportations, logistics, and other services must be kept in mind when doing businesses with a new supplier in China. When these concepts are not kept in mind, it is very probable for companies to experience unpleasant surprises that may affect the way their entire logistics operation.
Thanks to this, it in this article, we will share some hints or golden rules that companies need to bear in mind when doing businesses with suppliers in China.
Choose your transportation and logistics supplier carefully
China is one of the most densely populated countries of the world, so it is not a surprise to find out that there are thousands of companies that may offer your organization the same service. In terms of logistics, you can find a lot of companies that may offer you to ship your goods and take care of all the subjects related to the logistics.
Even though this may sound appealing sometimes, it is recommendable to avoid falling into this trap and try to find a serious company that reached a medium or big size and has experience in the logistics field. This way you can avoid potential mistakes and things that could probably go wrong along the process of shipping your goods.
It is very important to find a logistics supplier that is able to meet your needs in time. The reason to this is that if you fail in having everything that you need in time, you probably won’t be able to address your customer’s’ needs when the peak demand is taking place, and this will mean that your logistics network has failed.
A good way to proceed in this kind of situations is to hire an international company that is also headquartered in China. This way, you will have international support but will also be able to meet all the international requirements to obtain your goods from China, such as, following the right protocols, negotiate rates and fees, use the standardized paperwork, follow the international terms of commerce, among others.
Check on the system capabilities
Not so long ago, logistics would only take care of moving boxes from one place to the other via aircraft or ocean. At least 30 years ago, logistics started to be managed differently and companies started to used standardized systems of information. This allows everyone in the business to do a better planning and synchronization, and visibility became crucial matters.
In this sense, it is very important for your company to choose a supplier that may allow following your goods along the supply chain in order to avoid possible disruptions or delays in the schedule.
Choosing a Chinese supplier that has the proper infrastructure and technology to allow you to check where your freight is along the supply chain may be one of the most important things to do, since it will let you know with more accuracy when your goods are arriving at their destination and what to do in case there is a disruption along the supply chain.
It is recommendable to find a supplier in China that uses a good IT system that may allow you develop a closer partnership with it in order to be more effective and efficient along the process.
Services and rates
Knowing the amount of money that you are investing and the kind of things that you are getting in return is vital for the health of any company in the world. Thanks to this and keeping in mind that there are so many options for everything in China, it is very important for your company to check on the prices of services in the market before choosing one.
Usually, good long-term relationships between Chinese and international companies can be held in the time when the suppliers in China have more technological systems and offer more serious services. International companies are often willing to pay a bit more to Chinese companies if this means they will get a better service.
Visiting the supplier’s facilities in China and know how the market works in that foreign country is a good way to understand how services will be provided to your own organizations and if the prices you are paying for them are right or above the average. It is very likely that if you find a serious company, you will be able to also find a good deal since Chinese companies tend to be very competitive and will always try to gain a new client.
Related: How to avoid the most common logistics mistakes by David Kiger
* Featured Image courtesy of Manuel Joseph at Pexels.com