How Overseas Transportation Costs Affect Your Business by ApptivoAptivo


									How Overseas Transportation Costs Affect
Your Business
Today’s global economy has changed the way businesses buy their stock. In the past almost all
businesses except for the larger companies would use a wholesaler to obtain the product(s) they
wanted to sell. Today, there are few wholesalers left and most businesses, even small ones, can
order directly from China or other countries reducing their costs.

China is the largest exporter of consumer goods and that’s because the overall price for goods
manufactured there is far less because of lower labor costs. However until the last decade or so
the shipping costs were restrictive as they counteracted any benefits from lower labor costs and
material costs.

The game changed when the shipping companies devised a method where they could make their
money by continuously financing the containers, which allowed the shipping costs to drop
significantly. The way shippers now made their money was directly tied to containers, which
changes the way the world traded. They are easy to load, can be shipped by ship, rail, or truck,
and if you are shipping from China it only takes about a month to arrive in port.

You can also ship by air for smaller shipments but it’s not as cost effective. For example, 5 to
40lbs will cost approx. $9/lb and it drops as the weight goes up with over 1000lbs costing
approx. $3/lb.

Shipping by sea with either your own container you purchased or by partnering with someone
else, is the most cost effective shipping. For example, a pallet is approx. $800, a 20 ft container
is approx. $4000, and a 40 ft container will cost $6000.

Of course there are also the port charges, taxes, and duties that you will be required to pay in
addition to the cost of shipping your container. You will also have shipping costs from the port to
your destination.

© 2011 Apptivo Inc. All rights reserved.
This article provides a good idea about what those costs can actually be.

The World Container Operators ranks China Ocean Shipping Company the fourth largest, over
500 ships and 150 container ships in their fleet. The China National Foreign Trade
Transportation Corporation operates more than 40 worldwide shipping services.

You can see why you should be entertaining purchasing directly from China or other similar
countries, because when you do you can significantly reduce your cost of goods pertaining to
your business. The global market has made it much more competitive both for suppliers and for
retailers. You need to take advantage of every opportunity that presents itself to reduce your cost
of doing business and this one can certainly do that!

© 2011 Apptivo Inc. All rights reserved.

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