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Acting
as a go-between, a Chinese import-export
firm would be able to handle the importation
of materials to facilitate the production
and packaging of the goods in China, and
take care of the necessary shipping arrange-ments
for the finished products to be exported.
They
(retailers) don't have the people or the
knowledge in trading, supply chain, or know
how to deal with vendors, not just logistics,
how to deal with Customs, suppliers for
materials and displays - it's not easy.
It's not just a trading job as it involves
a lot of logistics," said former Carrefour
global supply chain manager, and the man
responsible for providing the ultimate solution
for the one euro logistics challenge, Pascal
Martin.
Ask
a freight forwarder, he said, what is the
China Inspection and Quarantine Bureau (CIQ)
and at best you'll get a blank stare, and
it's the same with the factories and freight
forwarders in Hong Kong, "they don't
know how it works in China."
In
the end they'll ask the factory in China,
but most do not know they can export from
another province. Take a box set of textiles,
containing a scarf, gloves and hat, often
times different factories will produce the
items and ship everything separately overseas
to assemble the set at destination. Yet
it could have been packaged first in China,
adding greater value to the products, and
then shipped out.
"A
lot of people don't know they can do it
because they are told by their Hong Kong
office or local supplier that they can't.
It's not true. There are a lot of things
you can do."
Hence,
the assumption is to improve communication
between a mass retailer's sales and logistics
departments, in a bid to realise cost savings,
particularly in the case of mass retail
sales. In hindsight, this would have helped
the supply chain flow smoother, but with
people not knowing much about trading in
China, challenges lay ahead for Carrefour
in pulling off this ambitious operation.
Handling
a retail sales promotion involving 27 million
pieces of merchandise is no mean feat in
any circumstances. The project required
goods to be sourced, manufactured and packaged
in China and then shipped overseas and delivered
to the retailers.
The
first major step was dealing with Customs.
How do you prepare Customs documents for
the shipment of millions of small pieces
from 90 suppliers that were destined for
shipment to all 30 countries in the Carrefour
retail network?
Mainland
suppliers usually make the customs declarations
themselves, but in this instance Carrefour
would be receiving goods from different
suppliers and mixing them together to fill
hundreds of corrugated cardboard displays.
The goods to be shipped out would therefore
be completely different to what the supplier
had delivered and originally declared -
not an easy hurdle to clear in China.
Exporting
products from the mainland involves dealing
with Customs and the China Inspection and
Quarantine Bureau (CIQ), which certifies
the goods dispatched from the factory will
be shipped out in the container. Hence the
shipping documents must match and be declared
to both the CIQ and Customs. However, the
logistics provider was dealing with displays
containing a mixture of many different products.
The
solution needed an import-export company,
which meant either enlisting the help of
a firm with exporting rights, something
the French retailer did not have, or establishing
a facility in a free trade zone. Using a
free trade zone was rather expensive and
requires adequate warehouse space. They
decided to base the operation in Shanghai
because it was cheaper than shipping from
southern China.
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