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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.
 click image
to enlarge
"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.
The problem with Shanghai was that it
did not have a free trade zone that could
serve as a platform to export goods. Thus
a "Common Warehouse" had to be
found that would be able to accommodate
a massive volume of goods without any Customs
supervision.
The logistics team at Carrefour had six
months to put the necessary arrangements
in place before the products' promotional
launch in 2003. The programme comprised
taking the orders in December, allowing
60 days for suppliers to manufacture the
products, delivery from the suppliers at
the end of March, four to five weeks for
packing the goods, shipping in early May,
arriving at destination in early June, and
then delivery in June to the stores at destination.
Carton makers had to be found and specifications
gleaned from head office to determine the
strength of the cartons and type of paper
to be used. Paper had to be imported into
China because the nation only produces recycled
paper which is weak and less resistant,
as the fibre has been totally broken. The
cartons had to be strong to endure 25-30
days in the container at sea plus handling
at origin and destination, loading and reloading,
and loading again at the store.
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