Why do so many USA customers request LDP logistics for trade in recent years?
Now many clothing enterprise feedback, recently a lot of customer requirements of the way of changing the FOB terms of delivery to the LDP delivery, because the customer wants to lock their costs, reduce their risk, with the most convenient trade their way to clinching a deal, but also want to reduce their costs, more hope to exporters can supply low price, can also be sent to the door.
In short, everyone wants to maximize profit and minimize risk in business. Therefore, American customers prefer the shipper to deliver goods directly to the door. Generally, THE ORDER QUANTITY placed BY THE BUYERS WHO want to do LDP is relatively large.
As long as the goods are not contraband and the goods and information are accurate, both China and the United States are officially double clear, and there is no risk of cheating and falsification. As long as the seller and buyer make a good sale contract, and control the collection link, the risk can also be reduced.
It is understood that most compradors or buyers set up in China will choose DDP/LDP terms for purchasing because the cost is controllable. The gross profit margin of the garment-textile industry is between 5%-10%. Because of the low gross profit margin, the freight logistics price is more important to export to the United States, to save logistics costs and improve the gross profit of the garment-textile itself.
That is to say, most USA customers now hope that the supplier can do business in this way. The current market feedback: Now customers generally ask the supplier to offer FOB and LDP prices, and then they can choose a way to do business according to the price and advantage!!
What about the guarantee of the right of cargo?
What should I pay attention to when operating LDP logistics?
Under such special provisions, the following five points shall constitute the whole; Points needing attention in LDP logistics transportation:
Smooth customs clearance at the port of destination: Since all the overall transportation matters are entrusted to the goods transportation agents, the smooth level of customs clearance at the port of destination depends entirely on: whether the third trader’s local customs import record is good or not; Whether the freight forwarding has a good operation record at the local customs; Whether the qualification of the local customs clearance agent in the local customs is excellent;
Due to strong seasonality, LDP logistics often have strict requirements on the transportation time. Under normal circumstances, FCL goods can be delivered within 3 working days after arrival at the port, while LCL distribution will be delayed by 1-2 days.
In the actual operation process, the requirements on documents are relatively high. The data should be as accurate as possible during the export declaration of China Customs, and AMS and ISF should not be changed as much as possible. If it is LCL, it must be changed if the number of air containers is not correct, and do not change the data of sea FCL if the difference is not large. The bill of lading should be concise and clear.
If brand goods are to be made, the consignee must be prepared to authorize them in case of customs inspection, to avoid the high storage costs and detaining charges caused by the delay.
In the case of random customs inspection, unpacking inspection is completed and the goods are normal, the goods can be picked up about 5 working days after they arrive at the port.
What are the risks of LDP logistics?
Now I learned a lot of suppliers are not willing to contact with the clauses, giving reasons are mostly “the risk is too high, we don’t do”, “we only do FOB, don’t want to do the LDP” “do if the LDP one thousand had an accident, we dare not adventure”, and so on reasons I understand you, FOB do for many years, as long as the FOB off easily, Nothing happened, suddenly said to do LDP, but also to deliver the door to the guests, bear all the transportation and risk, fear and worry are sure to have.
The main risks of LDP logistics are divided into three sections:
Transportation risks exist in the whole transportation process, including land transportation, sea transportation, and air transportation. Transportation risks can be insured by commercial insurance, which can cover the whole course or a period.
The risk of customs clearance, the LDP suppliers are very important, must choose a reliable and capable supplier, understand the setup time, qualification, professional ability, market reputation, field trips, for office space is best seen on the market vendor directly to see things, all kinds of additional charges that generate the goods at the port of destination.
Payment risk. As a supplier, all the work in the early stage is to receive payment.
For exporters, LDP is relatively risky. The more links I am responsible for, the greater the responsibility I will bear. I should not only bear the production of the whole batch of goods, but also bear the cost of the whole transportation, and all kinds of extra costs caused by accidents.
I should also master the time of the overall transportation. The seller is responsible for both Chinese import clearance and American import clearance, which involves the risk of changes in trade policies and customs regulations in both countries.
Fortunately, the US law is relatively perfect, and China-Us trade relations are also relatively stable, as long as the goods are not counterfeit or contraband, the customs will not seize the goods. If you are worried that the buyer will default on the payment, not to mention LDP, even FOB, or even ex-factory price, there may be a fraud. So it is not the terms of carriage that determine the buyer’s credibility.
What are the advantages of operating LDP logistics?
LDP logistics has great advantages for both sellers and buyers. First, for sellers:
Control of goods rights. Since THE SELLER IS responsible for the whole process of LDP from the delivery to the delivery, the seller naturally holds the entire right of the goods, which helps to deal with the collection problem.
The growth of profits. The profit of LDP logistics is more than that of FOB, and the competition pressure of FOB is great. Costs are also more transparent. Because LDP logistics is the seller responsible for the whole transportation of goods and helps buyers to reasonably avoid taxes and reduce costs. So there will be a certain profit on the quotation.
Can increase the diversity of orders, after all, a variety of trade methods and a variety of transaction odds.
Major advantages for buyers: save trouble, save taxes, save business tax.
In addition to the above, I believe that the biggest advantage of LDP logistics is to help close orders. Because now LDP logistics has slowly become a trade trend between China and the United States, the momentum is very strong. To be honest, now the customers ask, do not do LDP logistics have a choice, in the future if most customers tend to LDP logistics price, you are not willing to do, but can do a lot of suppliers.
How does the LDP logistics process work?
Provide packing list information, price, picture, and consignee address (consignee can be more than one, the warehouse can be distributed).
LDP SUPPLIERS provide a variety of shipping dates or flights for selection and arrange transportation and customs declaration after confirmation.
After the goods ARRIVE, NOTIFY the EXPORTER, and then declare, clear, and pay taxes to the United States Customs.
After customs clearance, notify the exporter to confirm whether the goods can be delivered. After confirmation, notify the purchaser to confirm the address → appointment time → delivery.
After the goods are delivered, the buyer will sign for POD (receipt), and scan the Email to the exporter after the receipt
Fee settlement and completion of this order.