Last summer was an exercise in developing a completely different kind of product from my normal wheelhouse; a costume. My Halloween costume had been so popular that I decided to have a go at commercializing it, and that took me on a path into manufacturing that I hadn’t yet taken; shipping by boat from China. The short version is it’s a ridiculously difficult mess.
The costume is called the Wacky Dancer, and you can visit the website or find it on Amazon. It’s awesome and we did a good job making it. That’s the pitch. The rest of the article is on shipping because if you’re ever going to try this yourself you need to be warned.
Deciding to Use Container Freight
When sourcing components from China, you’ll at first be delighted by the prices. Then you’ll click the order button and discover that shipping by air is often as much or more expensive than the product itself. Air is expensive, but fast and perhaps more importantly it’s easy. A typical order will take roughly a week to arrive after the payment processing is complete.
As a side note, the payment is challenging because you’re transferring from a US bank to a China bank. This can take a few days and cost roughly $20 for each transaction, and they usually don’t take credit card. Using PayPal avoids this mess, but not all factories support it.
One component was prohibitive to ship by air, though. The costume’s collapsible frames have a lot of metal wire in them and are bulky, weighing in at 550 kg (1200 lb in freedom units) and occupying 1.6 cubic meters for 1000 pieces, including the boxes and a pallet. The volume and weight were too much for shipping by air, so I had 100 shipped by air so I could start selling earlier, and I had the rest shipped by boat. Since I didn’t have my own shipping company, I had the factory in China use one they were familiar with. This is called a freight forwarder, and they exist to help people get stuff from one place to another. I got a document called a Bill of Lading, which is a PDF that says “your stuff was put in container X on boat Y and is being handled by shipping company Z.” Then I heard nothing for a month.
There are a lot of terms in the shipping industry, and you’ll quickly be overrun with TLAs (Three Letter Acronyms). In my case, I was using LCL shipping, which is short for Less than Container Load. It’s not a big enough shipment to fill a 20′ or 40′ standard shipping container, so a shipping company will group a bunch of LCL orders together to fill a container, then handle the logistics of splitting it up when it arrives at the destination port. My destination port was Chicago.
Container ships crossing the Pacific don’t end up in Chicago, and it’s odd to think of Chicago as a port, but from a logistics standpoint it makes sense. There are Foreign Trade Zones in every state, and they represent the line across which duties must be paid. My container ship, with a capacity of over 8000 TEU, was the Harbour Bridge. A TEU is a Twenty Foot Equivalent Unit. When you see a semi hauling a container behind it, there’s a good chance it’s 40′ long, which is 2 TEU. The Harbour Bridge is like 4000 semi trucks driving across the Pacific at once. She went from a port in China to a port in Korea before going across the Pacific Ocean for about 3 weeks and arriving in Long Beach, CA. After that, my freight went “intermodal” which is fancy speak for “we won’t tell you if it’s on a train, a semi, or the back of a sherpa.” In the meantime, I knew it was eventually going to end up at a specific warehouse in Chicago.
Customs and Invoices
When the ship arrived in Long Beach, I got a notification and an invoice. Until this time I had no idea how much it was going to cost to ship my cargo from China to my door. There were a few random fees, like a pallet fee (I bought a pallet!), but the interesting part of it was the cost of shipping. To get from China to Chicago (7000 miles) was $41. To get from Chicago to delivery in Madison, WI (only 150 miles) was $396.
| Description | Amount |
|---|---|
| Door Delivery | $396 |
| Ocean Freight Import | $41 |
| Pallet Fee | $40 |
| Stg Facility Window Fee | $35 |
The world is currently in a shipping glut. So many giant container ships have been built that there is far more capacity than demand, and shipping prices have tanked. Unfortunately for me, duties have not, and recently they’ve gotten worse.
The notification said that I needed to get my customs paperwork in order. I owed duties which needed to be collected. The shipping company told me to hire a customs broker to do this. I reached out to one and gave them all the paperwork I had, and searched for the appropriate tariff code which established the duty rate for my particular goods, and they gave me a large invoice that included many duties and some hefty charges for their efforts in filling out paperwork with information I got from other paperwork and filing it with the government. The second invoice included this, most of which I don’t understand:
| Description | Amount |
|---|---|
| Customs Entry Fee | $115 |
| RLF | $25 |
| PSDO | $45 |
| MPF | $25 |
| Duty | $74 |
| Single Entry Bond | $60 |
| Outport Entry Fee | $125 |
The Final Mile(s)
The freight was in a warehouse and I had apparently paid $396 for it to be delivered to me. I now needed to submit a delivery order to them along with proof that I was cleared with Customs. In order to be able to deliver, they need to know when, if you have a loading dock, if you have a forklift, or if you require a thing called a liftgate, which is a mini elevator attached to the back of a semi. Basically, they need to know that when they arrive, you have the capabilities to remove the freight from their truck.
When the freight arrives at the warehouse, you have typically 5 free days of storage at the warehouse before they start charging you daily to keep it there. It turns out that a surprising amount of freight is just abandoned at this point, because the consignee (the person receiving the freight) can’t get it picked up in time, can’t pay, goes bankrupt, or the market changes and they can’t make any money off it. After what amounted to a breakdown in communication with the shipping company (it took them 4 of my 5 days to get back to me about some paperwork, and they couldn’t schedule delivery for the next day), I took it upon myself to rent a U-Haul, drive to the warehouse, and pick up the pallet of frames myself. It was definitely a window into the trucking industry, and after some struggles with the proper process, I managed to get my freight onto my rented vehicle and drive home, and later claw back some of the $396.
Price Breakdown
In all, there were 1000 frames. 100 were shipped by air, and 900 by sea. It cost 3x the value of the goods to have the 100 delivered by air. It cost roughly 3/4 the value of the goods and an afternoon of driving and lifting for the 900.
Please Somebody Do This Better
In the end I got my freight. It worked out somehow. It opened my eyes to the shipping industry, though. Most transactions are done with rudimentary PDF forms that are scanned and faxed and emailed back and forth, and everybody wants to exchange the same data, but on their special PDF. Heaven forbid if you don’t know their acronyms or their process, and they will make you pay dearly for any information asymmetry. Since so many companies have a hand in the transportation of the goods, it’s challenging to say who has taken care of the different parts of the process, so it’s largely left to the consignee to make sure everything is moving along.
Should You Ship?
I will probably do it again, but next time I’ll know more and be able to do it better. As a general guideline,
Use air if:
- You are in a hurry to get your materials. Time on a ship is time that your money is tied up and not manufacturing or selling.
- Your goods are light or small or cheap.
Use ship if:
- You have a lot of goods. There are some fixed price fees per shipment, so a single large order is better than a bunch of small orders.
- You have the time to wait. You can ship some by air and the rest by boat to bridge the gap in time.
- You have thin margins and need to save every dollar you can.
- You are a glutton for punishment and paperwork.
We’ve covered the challenges of shipping from China by air before, and a nice datalogger to get even more information about your shipment. Are there any hacks to get stuff from there to here without so much pain? Let us know in the comments!
“weighing in at 550 kg (1200 lb in freedom units)”
Ooooh! Jab!
B^)
Funny how some ‘muricans call an ancient british insitution (of which colonial rule they wantet to “free” themselves of) for “freedom units”.
Even funnier when you consider that the British themselves have adopted the metric system. Well, at least officially – and God only knows what will happen after Brexit.
aww crap, we’re heading back to turnips & horse hands, aren’t we? -_-
I think measuring horses by “hands” has never gone away, and don’t Brits still use “stones” as a unit of mass?
“but, does she weigh the same as a duck?”
definitely only officially:
https://en.wikipedia.org/wiki/Metric_Martyrs
Except for using miles on the roads! Go figure.
About 35 years ago, when I was visiting the UK I got on a bus in London. There was a sign stating that “packages weighing more than xx kg and having a girth of yy inches are prohibited.” (Apologies, I do not recall the xx and yy values becasue I was pondering the mismatch of units.)
of course the US doesn’t use “English Units”… the names are the same but most of them have different values…
https://en.wikipedia.org/wiki/United_States_customary_units
It is an ancient taxation system. British lowered units for tax amount. :)
That’s the reason why most of US imperial units are some percentage smaller.
Nevermind that the pound came from the Roman unit (the “libra” as in “libra pondo”—literally a pound of weight—and the source of the “lb” abbreviation for pound). As ancient a tradition as the Latin “Britannia” and “Britanniae”.
Lets get this straight. The kilogram is a unit of mass and the pound is a unit of force. The slug is the imperial unit of mass.
Yay, the truth is out on slugs. Haven’t ever used slugs apart from college and hated them then (school was mks, college was mks for some courses, imperial for others). Does NASA use slugs?
NASA generally uses either metric or standard units, I doubt you’ll find any imperial units at all. If you do, it would probably imply you’re in the cafeteria.
I certainly hope I won’t find slugs in the cafeteria! Ewwww!
B^)
Yo, NASA dude here. I’ve not seen Slug used yet but kilos and pounds are used frequently
Sure, the units are technically that, but let’s be real:
when was the last time you measured mass? Probably never. I bet any “mass” you measured was based on measuring its weight, and assuming a given gravitational pull.
So, while yes mass and weight are different, let’s cut the crap about measuring mass.
(Unless you actually are through some type of inertial system, etc. Then please tell me more.)
Freedom units? HAHAHAHAAHAHAHAHAHAHAHAHAHA
Freedom means choice and US has wide wariety of possibilities when it comes to units ;-)
So, here’s a question —- doesn’t DHL, UPS, FedEx, etc handle larger containers, as well? Did you immediately rule them out or were they too expensive. I believe they handle all the tariffs, etc, etc.
“Stg Facility Window Fee” ?
St. George Logistics ?
http://www.stgusa.com/
I would assume staging facility.
stgusa is a freight importing company, and lists a Chicago area office/depot… so, I wondered if that is what Bad Bob meant…
My relative (automobile dealer) was shipping a couple of cars from Italy to the USA.
He had 2′ remaining in the storage container. (lengthwise).
So, instead of shipping it like that, he bought 4 motor scooters (in crate) and stacked them in that space.
Now, he is also a scooter dealer!
B^)
Out of topic but how much did it cost ?
I didn’t ask, sorry!
He used to ship “totaled” mini-SUV’s (e.g. Toyota Rav-4) to Italy, inside them and their containers he’d place
all the parts needed to repair them. There, a relative would rebuild them and sell them locally, the money from the sale made it worthwhile. Again, I didn’t ask about the costs…
Thank you anyway.
” It turns out that a surprising amount of freight is just abandoned at this point, because the consignee (the person receiving the freight) can’t get it picked up in time, can’t pay, goes bankrupt, or the market changes and they can’t make any money off it. ”
Sounds like a good way for the rest of us to get some cheap stuff. Their problem is our solution.
“The costume is called the Wacky Dancer, and you can visit the website or find it on Amazon. It’s awesome and we did a good job making it. That’s the pitch. ”
Just imagine if manufacturing was as flexible. The plans could go to whomever was closest to the customer. Less shipping, faster delivery.
“Sounds like a good way for the rest of us to get some cheap stuff. Their problem is our solution.”
I can just imagine get the winning bid on a large unmarked pallet and finding it is full of golf shoe spikes…
B^)
There is a company you all probably know that got their start this way. Harbor Freight.
Now the name makes sense to me!
Horror Fright
FTFY
B^)
“Hazard Fraught” is my favorite.
There’s a story told about the old-time film producer Sam Goldwyn, who in his earlier life sold ladies gloves imported from Europe. He was shocked by the customs fees back in those days and came up with a work around. He had his European suppliers deliver just a few cratefuls of right gloves, and left them in the port duty unpaid. Eventually customs auctioned them off and as the only bidder he got them at a price far below the duty he would have had to pay. He then got his suppliers to send the matching left glove, went through the same business again, then reunited the pairs back at his warehouse.
Brilliant! :)
Or before “The Wall” was built in Berlin, residents who lived on one side and worked on the other were allowed to commute each day.
One commuter would show up at the border checkpoint each morning and evening carrying a sack of sand.
The sand was inspected, and eventually various tests were made on the sand.
As this was driving the border guards nuts, they finally told the guy,
“We know you’re smuggling something, but we don’t know what it is. If you tell us, we’ll let you continue to do it.”
The guy agreed and said, “Bicycles”.
You left out the part about the guy crossing the border on a bicycle every day.
Only in one direction did he cross with a bicycle.
Yah… heard story in the 60s… only it was wheelbarrows full of sawdust.
When will we see post about shipping TO China ?
‘The boxing up and shipping of a factory’ :-D
When those 20+ trillion come up for repayment, I guess …
Nahhh, they’ll just take it in National Park real estate…
…including mineral rights.
Here ya go!
https://en.wikipedia.org/wiki/Offshoring
Our company ships to China. Quite regularly, too. Their customs is absolutely crazy. If there is a single appearance defect, customs won’t clear it and will send it back.
If only those guys were working on the outgoing direction.
Companies that ship a lot do not do the PDF scanning and faxing process. There are automated systems to help with the logistics of all of this but they are complex and expensive. There are also better forwarders with built in customs clearance capabilities that are more of a one stop shop. The air freight companies like UPS, DHL, and Fedex often have other modes available as well and have become complete logistics companies. If you are going to be doing this on an ongoing basis it might be worth you while to talk to them about this. They also can get you lower air rates if you are not really looking for overnight speeds, some air freight companies offer a slower option where they put your cargo on a plane when there is excess space available (the plane is going anyway). Might be a week or two to get your stuff but its considerably cheaper.
Agree, we use DHL for air freight (this is different to air express) and may also use their LCL service. They are more expensive than the budget brokers but the service is less stressful.
Having said that, the shipping industry, particularly the parasite business that swarm around the wharves of western ports have a lot to answer for…
Or just get it manufactured in the US and get it faster?
This. I was waiting for the part where he calculates how much it would cost to manufacture locally.
Really? Since when did robots unionize?
Funny how those terms are logically opposite. “Union state” and “right to work”.
Double the labor? Buddy your living in a fairytale land. Ever been to a Walmart?
Manufacturing anything in Wisconsin would cost 10x or more what it costs in China! It’s the whole reason when you drive home at the end of the day in your $20k car from your “right to work/Union state” jobs you can sit in your fluffly recliner and watch your reality tv on your oversize flat screen and order take out that you eat from your tv stand. Walk around your house and find all the junk you own from China and multiply the price by 10. That you’re maga.
WI has been right to work since about 2015. Shipping within WI will be similarly price to other Midwestern states. MI, IN, and IA are all right to work and possible closer to his location than somewhere else in WI. This also assumes that there is a place in WI that will actually make this which is has a low probability since the main apparel hubs are LA and NY.
True. I was not able to find any company in Wisconsin capable of manufacturing the costumes, and ended up hiring a few local freelancers at more than minimum wage.
At the end of the day, it probably would have cost about the same, or only marginally higher to do it locally. Of course, he is in Wisconsin. Down here in Alabama, probably cheaper than China. All of our textile and clothing manufacturers are closing plants down left and right. You could probably get really cheap labor, but it’d take three or four rounds of hiring before you filled your manufacturing line up to full staff (after people wash out of the training program or walk off the job). Just ask Hyundai how much fun it was starting their car plant up (then they didn’t even figure out that you have to blow the chips and swarf out of the oil galleries before you assemble the engines or they blow up later with seized bearings and galled cylinders).
While our costumes are assembled in the United States, many of the raw materials could not be sourced here, and I had to acquire them overseas.
When I was in France, I had a nationalistic boss who wanted me to order some PCB assembly locally. It didn’t go over well and was more expensive than China. Western factories live for the big expensive aerospace/military industry, and can’t do anything that’s not high end or high volume anymore.
I beg to differ. Both Arduino and Raspberry PI are made in Europe, and if you visit Ivrea and the nearby towns you’ll find a lot of PCB makers, that could build consumer-grade or automotive-grade electronics.
People is also statled when I open my IKEA kitcken and show them the “Made in Italy” label on the cabinets and on the appliances.
For real. I live in Germany, and the percentage of consumer goods made here (or broader, in the EU) is absolutely shocking to an American.
I went looking for statistics to back up this feeling, but ran aground. If you look at imports/GDP, for instance, it’s mostly non-consumer. Anyone have any numbers to back up this vague feeling?
Both of those are sold at a high price for the value, and Raspberry is in this weird situation where you can’t get any quantity of it without significant shipping costs. It’s again the high end industry model.
Our manufacturer works in Europe, but buys the naked PCBs in China. He is good, when the volumes have strated, but with the prototypes you can have some adventures. Which is probably the same or worse in China.
That generalisation is probably true – Western manufacturers are usually high-end, and either aerospace etc, large quantity, small run expensive prototype or otherwise specialist and so not great for people like us.
They also tend to have much higher quality raw materials and processes, which may be great if you want something of that quality, but if you’re making hobbit stuff you probably don’t need it, and if you’re making costumes which will be worn once then chucked, then quality is pointless.
I would need a Wacky Fireplug costume, since there is no way I’m fitting in an 18″ tube!
Y combinator has a startup taking on these kind of shipping issues.
Thank you!
Thank You !
When the article first mentioned the destination port being Chicago, my first reaction was, “I didn’t know they made container ships small enough to get from the ocean to the Chicago port.” One of my relatives is a sailor on a Great Lakes cargo ship, but the canal locks from the Great Lakes to the ocean are relatively small.
We have PayPal, maybe someone should set up ShipPal?
Suggestion:
Next time use your own local Freight Forwarder. They will take care of contacting an overseas agent and book the vessel for you. The loop works far better that way. Especially near the last leg of the journey when the forwarder needs to get in touch with you about customs clearance and delivery schedules. – I do this for a living.
I agree. That $41 shipping fee is often offset by high ‘locals’ which are the charges for offloading the freight. Using a domestic shipper can drive those costs down.
All of which adds to the complexity of the process which was your point I guess.
China also allegedly steals the Wests Intellectual product. No wonder when the West shows China how to make it. China has always copied stuff going back 100’s of years, fact.
I got a solar geyser delivered via sea. A solar tube type, the big one, 30 tubes of 1,8m. The interesting thing was the shipping cost. The wooden crate was about 2.5m x 1m x 0.6m. Shipping from China mainland to Chinese harbor : $50, Chinese Harbor to South African harbor + 600km inland, delivered to my door: $5. I suspect they were delivering a partially empty container here anyway and just put mine on free to secure the sale.
Solar geyser?
I had to look that up!
http://www.solarent.com/about-solar/how-solar-works.php
Apparently “geyser” means “domestic water heater” in ZA.
There are companies that specialise in consumer-friendly sea shipping of sub-TEU stuff. A friend worked in a remote bit of China for a year, and wanted to bring back a big load of souvenirs and stuff. She got about 1/4 pallet size box delivered to her door in the U.K. for about £80, though it took about 3 months I think. No grief or hassle though.
It may have been simplified by her sending it when she was still out there? But I don’t think that affects customs.
Anyway, companies that do this exist, and offer slow shipping at a sensible cost with little hassle, primarily for tourists, short-term workers, and expats.
The term to search I think is “tea crate”. Hers was shipped in a wooden box that was I believe really a tea crate!
I wonder if the tea crates I saw at Celestial Seasonings in Gunbarrel, Colorado, were some “international unit”?
I don’t think there’s a precise definition but it’s a roughly standard capacity. Plastic ‘tea crates’ are commonly used for office moves in the U.K. – we were given 2-3 crates each to box our desks when we moved.
Oh, are we talking about “milk crates”?
B^)
Larger than milk crates in the U.K., and with lids.
So, about 0.02 cubic smoots?
My daughter got to meet Oliver M. Smoots not too long ago. He’s still 170 cm tall.
Tea crates were the ubiquitous storage container for people moving house in the UK in olden days. Large enough to be efficient but small enough to be moveable by one person.
Pretty much every moving company, storage company and box company here in Australia uses the “tea chest” as one of their standard cardboard box sizes for moving and storage and the like.
Just FYI about the flailing tube man concept:
https://hackaday.com/2017/08/24/ask-hackaday-saving-the-world-with-wacky-waving-inflatable-arm-flailing-tube-men/
Also, this:
https://www.youtube.com/watch?v=UpkJoQUFqXM :-)
TL; DR;
“freedom units”/imperial-units
US-CN tariffs are inconvenient to people who want the profit-margin that comes from what basically replaced slavery in the united states.. It’s not a human-rights violation if it’s not in ‘murica
If you think I’m an idiot or uninformed do real research regarding why there are no silicon foundries in Mexico.. The labor is too high because the people aren’t submissive to a totalitarian government.. Same as the US
give us time…
Did you have the option for DDP (Delivered Duties Paid) shipping? If so, what was the price? If not, you probably want to look for an agent/manufacturer who can offer those three letters!
What about shipping a product to China? We tried it, the shipping costs 10x times the price, and when it arrives the local Chinese customs release the product one per three times.
Yep, Chinese customs are slow and very good at finding reasons that your package cannot be released. If you do send anything to China, try not to send it in the same year as Chinese New Year.
Look into Flexport. They solve many of these issues and allow you to track the boat as it crosses the sea. Your story is actually among the better ones. Many LCL shipments get caught in the customs loop, as containers are sometimes examined wholly. Meaning if Joe Smo decides to try handling the customs part himself with no past experience, you might be waiting weeks for deconsolidation. This is an industry ripe for change, and some of the biggest players (looking at you, FedEx Trade Networks) are among the worst.
Shipping from somewhere else in Asia, but my LCL partner uses a rather simple set of software with a complicated price structure, and the end result is that the trip over always looks really cheap, and the pickup option looks more expensive. Not because it costs $50 to get to the US and $xxx to get to my city, but because the trip across the ocean is a fixed price and the pickup/delivery is where the options are. It doesn’t mean it would cost $50 if you were picking it up dockside; or that unloading is the most expensive part. It just means their software isn’t designed to give easy to understand line-items.
Perhaps you could hire someone locally.
Just make stuff and sell stuff from your home country. Sorted.
I do. The goods are assembled in the USA. However, sourcing the raw material here was essentially impossible. Thanks for your handy solution, though.
This article contains so many first time errors.
Shipping from China isn’t difficult at all if you go about it the right way.
Firstly China trade in USD/Yuan so use a proper forex company to handle the transaction without the silly charges and you get interbank rates if sending from a different currency I use OFX here in the UK.
Secondly ask for FOB pricing on shipments and arrange a local freight forwarder to handle the import, offloading and forwarding aspect, on average our UK handler charges £360 to do this and includes forwarding of 1200KG 8m2 of crates direct to our door. when then receive and invoice for the inevitable import/VAT which we pay direct to HMRC.
Not sure where the limit on air freight has come from in the article, we regularly ship in 2000+Kg of crates in one consignment to the UK on the same flight, yes its expensive.
As an example out last import
$170,000 USD paid to our supplier plus $160 FOB for 950Kg of LED panels.
OFX gave us an exchange rate of 1.30 with no fees, money was sent instantly to China and received by the end of the day.
Manufacture began and three weeks later our UK handler received the BOL and Ci
Further six weeks later HMRC send us and invoice for VAT and our handler for import and forwarding/handling from Felixstowe port, two days later its in our warehouse.