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Goods
can also be inspected at the warehouse for
defects and faulty goods can be returned
to the factory and replaced without having
to do extra paperwork.
There
is a lot of paperwork involved in returning
goods from a bonded warehouse and, "at
the end of the day you want to receive the
goods, pack it and ship it. You don't want
to waste your time with extra paperwork
and of course it adds cost to everyone."
In
north China, there were very few Customs
supervised warehouses or bonded warehouses.
The trend therefore was to use a common
warehouse, whereas in south China the situation
was the opposite. New big warehouses were,
for example, being developed about five
to eight kilometres from the Nansha international
container terminal.
There
was a barge system connecting this southern
China deepwater port to Hong Kong, which
was cheaper than trucking the cargo to Hong
Kong or Shekou and Yantian, and more convenient
for west Pearl River Delta factories.
However,
using a Customs supervised warehouse or
free trade zone did not imply the vendor
would receive his tax refund immediately.
He
would generally receive the tax refund when
the funds from overseas had been received.
(In China overseas retailers have up to
90 days to settle the bill).
If
a vendor delivered goods today to the warehouse
in principal he would receive his paper
for the tax refund. However, this certificate
could not be used straight away.
Only
after the vendor had received the tax refund
together with the foreign exchange certificate
for the money from overseas could he go
to the Tax Bureau for his refund. Shipping
managers were generally not aware of this
and neither were a lot of the big global
sourcing companies as they did not know
much about trading in China, considering
it "a big, complicated web."
It
was important for retailers to understand
that this method of supply chain management
exists as it could have created a truly
significant cost saving, a major advantage
for companies in any day and age.
Greater
efficiency and lower overhead costs are
the most important factors for the modern
globalised retailer. The service provider
who can open these possibilities for his
customer will certainly stand out in the
market.
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