When you decide to produce your garments in Vietnam and ship to your country, then you will need to hire a Vietnam freight forwarder. In fact you can hire any freight forwarder in the world because they all work online by email. They will get your goods across the ocean, through customs, and delivered to your warehouse. I can introduce you to reliable ones. Read more below to know why they are important and what they do for you.
Shipping Terms: Ex-Works, FOB, DDP, CIF
Services Freight Forwarders Provide
LCL vs FCL
Ocean vs Air
Here are a few common shipping terms you should know about and understand before contacting Vietnam freight forwarders. When a factory quotes you a price, it should be one of the following:
An EX-Works price is essentially the cost of manufacturing minus shipping. If you agree to an Ex-Works price then you are responsible for picking up the goods at the factory and paying for all transportation costs from the factory, across the oceans, to your warehouse. Ex-Works is sometimes referred to as Ex-Factory.
FOB stands for free on board. The factory is responsible for everything up until the goods are free on board the shipping vessel. Whenever you talk about FOB you should include the name of the port-city. For example, the factory should say, “our price is FOB Ho Chi Minh City, or FOB Hai Phong.”
DDP stands for delivered duty paid. This price includes import duties and shipping all the way to your warehouse. So, if your garments enter the USA via Long Beach Port, yet your warehouse is in Las Vegas, then the freight forwarding company will arrange for vessel shipment to Long Beach and trucking from Long Beach to Las Vegas. DDP is sometimes called LDP. LDP stands for Landed Duty Paid.
The most common shipping terms are explained in more detail in this Wikipedia article - check it out to learn more.
Freight Forwarding Services
What services do Vietnam freight forwarders offer? Here is a basic list of services:
• Tracking your shipment
• Preparation of shipping, import and export documents
• Booking cargo space
• Negotiating freight charges
• Freight consolidation
• Cargo insurance
• Filing of insurance claims
All Vietnam freight forwarders have their own level of customer service and specialty. I recommend you contact at least three, and test their customer service. If you have your product description and know the port you will be shipping from, they should be able to quote you a shipping price and tell you the duty rate (import tax.) They will ask you many questions and if you don’t know how to answer, they should give you options and educate you. The first time will be confusing, but once you have all the details confirmed, the next shipment will be easier.
Vietnam has three main ports. One in Ho Chi Minh City (HCMC), one in Da Nang and one in Hai Phong. Compared to other ports in Asia, Vietnamese ports are small and consequently there are limited direct sailings to the USA. Most vessels must pass through Singapore or Hong Kong; these are called trans-shipments and require additional handling and consequently are more expensive. There is a direct vessel that goes from HCMC to Long Beach on Thursday and Friday, and the transit time is 19 days.
LCL vs FCL
LCL stands for less than container load. If you cannot fill a container, then you will share it with other shipments. A typical container is 67.5 cubic meters. Ask a Vietnam freight forwarder to confirm container volumes. Let’s say your shipment is only 20 cubic meters. Rather than paying for a full container, you only pay for your 20 cubic meters and the shipping company fills the remaining 47.5 cubic meters with other goods. This is beneficial because it cuts down your shipping costs, but it can also lead to delays if the goods in your container are not all going to the exact same destination. Lets’ say your container has your goods going to Pheonix, Arizona and some other goods are going to Las Vegas, Nevada. When the container gets to Long Beach, California, it needs to be opened and your goods will be put into a container going to Arizona, while the remaining goods will be put into a container going to Nevada. Every time a container is opened, unloaded and loaded there is a risk for damages or losses. This is LCL.
FCL stands for full container load. It means that you pay for the full container; hopefully, your goods fit perfectly, to fill it 100%. From a shipping perspective this is very straightforward. The container is not opened until it arrives at the final destination. A full container of t-shirts from HCMC to Long Beach will cost you $800 just for the container shipment costs. A Vietnam freight forwarder can give you today's rate.
Click here for detailed dimensions of various types of shipping containers check out this web page.
Ocean vs AirBasically you have two options when shipping. One way is by air and the other is by sea. Let’s take a t-shirt for example. Let’s say you are shipping 1,000 t-shirts. The shipping cost by air might be a $1.00/t-shirt, whereas the shipping cost by sea might only be $0.20/shirt. By air it will take 3 – 5 days and by sea will take 30 days. What you choose depends on your business model.
FinallyIf you need help choosing a reliable Vietnam freight forwarder company then ask me. I can recommend a few.
I wrote this book for you to be able to make your tech packs and understand how hard it is. If you have well done tech packs than half the battle is done.
TABLE OF CONTENTS
MY BEST ADVICE
VALUE OF A TECH PACK
27 DECISION POINTS
BILL OF MATERIALS
EXAMPLE TECH PACKS
TECH PACK SOFTWARE
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1. Which styles do you want to manufacture first?
2. Do you have tech packs?
3. Do you have any special factory requirements?
4. Have you produced before? If yes, then in what country?
5. What quantity per style per color do you order?
6. Does your company have a website?
7. Do you want to work with an agent or directly with the factory?
8. Do you plan to visit Vietnam?
Fashion Start-up Consultant
Ho Chi Minh City, Vietnam
Author and Dad