The Logistical Realities of Exporting
25th February 2018
From day one, nearly every small or medium business will face the same quandary of arranging the detail of delivery for what it produces: goods need to be delivered to the right person, in the right place at the right time for the right price.
The service a small company provides to its customers largely comes down to striking the right relationships with the best logistics companies, because it is their performance that will shape public perception. At its simplest level, for any fledgling small business, logistics is most likely to centre on getting packages delivered on time in the UK and then, perhaps later, around the world.
When you consider exporting internationally, the key strategy is to use local expertise. That is the experience of Lietcorp International, an LED lighting company which has built up a global distribution network within the past two years. Managing director, Harvey Sinclair, advises any small business following in its footsteps to consider working with local agents rather than trying to carry out every task itself.
“If you try to go it alone, you’ll come up against a lot of barriers you didn’t know were there and expose yourself to unnecessary risk,” he says. “We work with freight forwarding and logistics agencies in each country we now export to because they know the market inside out. They know which forms to fill in, how they need to be filled, which taxes and duties are due and how the whole process of getting our goods off the ship and on to customers works in their region. If you get it wrong, your shipments can be refused and can be left sitting in a port while your customers are asking where their goods are.
“You need these partners researched and lined up because, after talking to customers in export markets for ages, they’ll suddenly want everything yesterday the second they sign up. So, you need a partner who can help manage the process and allow you to set expectations accordingly. Overpromising is in every human’s nature because you want to tell a client what they want to hear, but it can be very detrimental.”
Hence, part of the logistics of expanding a business, Sinclair cautions, is to look beyond the nuts and bolts of getting products to market and to ensure the business is not overstretched. In the excitement of expanding, a huge order can be welcome news, but it can also bankrupt a company if the client is expecting payment terms of 90 days and beyond.
So Sinclair’s advice is that it is as vital, when setting up freight forwarding partners, to negotiate reasonable payment terms and achievable delivery dates with customers. New export clients, he cautions, will often sense you are keen to get their business and “try it on” with unachievable and unfavourable payment terms and delivery schedules.