A company has 10 to 30 clients in China. They have different needs because of the different production schedule and ability. Client A needs about 2 tons supply per month, client B, 7 tons per two months, client C, 8 tons per month, while client D, 5 tons every quarter. This kind of situation is often a huge headache for the company. Under the traditional supply mode, he will arrange delivery according to the customer order. Then the company has to deliver frequently in small lot size because of the irregular delivery time. As this delivery way results in a high freight charge, he has to increase the price. As a result, sometimes we almost lose the Chinese clients for the price.

Then the company set up a warehouse in Hong Kong to reducethe high shipping cost result from frequent deliveries in small lot size. But the cost is also much higher than he expected. The high rental of warehouse,high loading and unloading charge, and high personnel cost in Hong Kong. What’s more, the cargos have to be transported to the customers from thewarehouse in Hong Kong by China-Hong Kong trucks (trucks with the license plate of China and Hong Kong). There will be a lot of money spent on the transportationand customs declaration. In addition, the transportation course and customs declarationare broken down to carry on. 

So, is there a place or area providing the sameservices as Hong Kong without the disadvantages? Or in other words, if we canfind another place to set up a warehouse, this place should be equivalentin functions to Hong Kong, but the efficiency of distribution and customs declarationis higher than that in Hong Kong, while the total cost is much lower than inHong Kong.

He chooses the bonded warehouse of Dongtai International Logistics Company Ltd as his overseas warehouse in Shenzhen, China. The advantages are listed following. First reason is the 1/3 rental of the warehouse in Hong Kong. Second, it is in a bonded zone, and equivalent in functions to Hong Kong. Last one is the high efficiency in customs entry-exit. As a supplier, what he should do is to make a prediction about market share and production sales in China in the next one or a half year, then deliver all the production to the warehouse of Dongtai Logistics in Shenzhen Export Processing Zone in China. The cargos can transit to the warehouse from Hong Kong, or from the port like Yantian Port.

Mr. Fan

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