International warehousing is a strategic imperative for businesses seeking to expand their global reach and enhance supply chain efficiency.
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So if you are a logistic professional, supply chain manager, or business involved in international trade and looking to understand the various options and considerations for your warehousing needs this guide has everything you need to know about utilising international warehousing to deliver strategically located storage facilities in key markets, optimised logistics, reduced costs and exceptional customer experiences.
This comprehensive guide explores the intricacies of international warehousing, providing valuable insights for businesses considering this strategic move.
Keep reading to find out the different types, and the benefits and costs associated with international warehousing.
In today&#;s global supply chain, it is important that businesses enable themselves to reach new markets overseas. International warehouses allow businesses to import, store, and ship to audiences in countries abroad and expand their global reach while ensuring timely deliveries, reduced transportation costs, and improved customer experience. This ensures efficient delivery of products to customers abroad and overseas by centralising supply.
International warehouses are appealing to logistic professionals, supply chain managers, or businesses involved in international trade as they enable lower shipping costs, faster delivery times, and a smoother customer exchange to boost customer satisfaction.
For global businesses, international warehouses act as a central business hub. They are typically located in major trade centres in countries other than the seller&#;s origin near reliable transport links and routes.
By establishing a physical presence in key regions, businesses can better serve customers, mitigate supply chain disruptions and gain a competitive edge.
There are many different types of international warehousing, performing many different functions and services to suit the unique needs and requirements of a variety of global businesses:
A public warehouse is a warehouse storage facility managed by a third party. Space can be rented for long or short-term depending on demand and requirement.
These third-party facilities offer flexible lease terms and scalable storage solutions, making them ideal for businesses with fluctuating inventory levels or those entering new markets. Public warehouses provide shared infrastructure and services, allowing companies to focus on core competencies.
This is a suitable warehousing solution for businesses that experience seasonal surges, require temporary warehousing, or do not want to spend money to build their own warehouse facility.
In a public warehouse, a diverse range of businesses pay to store their goods and products alongside other vendors.
Owned and operated by the business, private warehouses offer complete control over operations but require significant capital investment and ongoing management. This option is suitable for businesses with large, consistent inventory volumes and specific operational requirements. This type of warehouse provides companies with control and flexibility over decision-making and business operations in the facility.
A private warehouse is often used by big retailers who store bulk and excess inventory. Organisations with private warehouses need their own employees, software, and equipment to operate efficiently and effectively.
Bonded warehouses are a secure space for businesses to store goods liable to pay import duty and VAT. Custom tax and VAT on goods and products stored in a bonded warehouse are deferred until goods are sold or removed from the storage facility.
This is a long-term storage solution that helps businesses and retailers improve cash flow by delivering goods closer to their final destination and postponing duty payments.
A distribution centre is a logistics building designed to store products and perform order fulfilment and packaging tasks. Goods in a distribution centre are often redistributed to the retailer or directly to the consumer.
Additionally, distribution centres also offer value-added services such as product mixing and cross-docking to efficiently meet customer requirements.
Fulfilment centres are an important link in the supply chain that assists businesses in managing inventory, order processes, and the overall customer experience. A fulfilment centre is operated by a third-party service provider who processes, and ships products customers have ordered.
This type of international warehouse allows businesses to outsource warehousing and shipping requirements.
Implementing an international warehousing strategy can yield substantial benefits for businesses operating in global markets:
Enhanced Customer Satisfaction:
By reducing delivery times and increasing order fulfilment accuracy, businesses can significantly improve customer satisfaction and loyalty.
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Reduced Shipping Costs:
Strategic warehouse placement can optimise transportation routes, consolidate shipments, and lower overall shipping costs.
Improved Inventory Management:
Effective inventory control is essential for avoiding stockouts and excess inventory. International warehouses enable better visibility and management of inventory levels across different markets.
Mitigated Supply Chain Risks:
By diversifying storage locations, businesses can reduce the impact of disruptions such as natural disasters, labour strikes, or geopolitical events.
Market Expansion:
International warehouses serve as a platform for entering new markets and expanding customer reach.
International warehousing allows businesses to enable business expansion by reaching and trading with new markets overseas. By streamlining business operations and the supply chain, international warehousing provides businesses with the warehouse storage solutions they need to operate international trade.
The cost of operating an international warehouse is influenced by several factors. Warehouse size, location and the type of goods stored significantly impact overall expenses. For example, storing bulky items requires more space than smaller products. Additionally, equipment costs, inventory turnover rates and labour requirements contribute to operational expenditures
Variable costs such as utilities, maintenance and packaging materials must also be considered. While public warehouses offer a more affordable entry point for businesses new to international trade, private warehouses, though requiring a larger initial investment, can be more cost-effective in the long run.
If you are just starting to trade internationally, it is often cheaper to rent a space in a public warehouse than it is to buy and operate a private warehouse facility. However, while private warehousing is a large initial investment, it is considered cost-effective in the long term.
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Choosing the right freight forwarder to trust with the movement of your goods is key to streamlined importing and exporting. And if you&#;re a business or company, it could mean the difference between success and failure. Make sure you get it right by asking these ten essential questions before putting your cargo in someone else&#;s hands.
When a consignment has thousands of miles to travel, there&#;s always the possibility that something could go wrong, so having the right insurance cover is essential. It&#;s important to know who is responsible for this, and whether it&#;s included in the upfront cost, available as an add-on service or if it&#;s something you need to arrange yourself. Some freight forwarders offer freight insurance as an additional service, giving customers a convenient and flexible insurance option.
Accreditations are a benchmark of high standards and professionalism, so ask your freight forwarder what accreditations they currently hold. At John Good, we&#;re proud to partner with the British International Freight Association (BIFA), the Institute of Chartered Shipbrokers, the Road Haulage Association (RHA) and the United Kingdom Warehousing Association (UKWA). We&#;re also a licensed International Air Transport Association (IATA) cargo agent and an Authorised Economic Operator (AEO), which allows a quicker and simpler route through UK Customs. While all these accreditations aren&#;t essential to become a freight forwarder, they&#;re a sure sign that a freight forwarder takes their responsibilities seriously.
In theory, anyone can set up as a freight forwarder, with no formal qualification or certification required. This means that there&#;s a constant influx of new freight forwarding businesses to choose from. Ask yourself if you&#;d be happy to trust your cargo, and potentially the smooth running and reputation of your business, to a freight forwarder who has little or no experience. As well as checking how long your chosen freight forwarder has been in business, it&#;s also worth checking how much experience they have that&#;s relevant to what you wish to ship. Which leads on to the next important question&#;
You&#;ll find that some freight forwarders are &#;jacks of all trades, while others focus on specific types of cargo like food shipment next to cargo. Obviously, finding a freight forwarder that specialises in what you would like to ship is a smart move. While most good freight forwarders will be capable of managing shipments of any kind, they will probably have teams of specialists in place to deal with clients in particular sectors such as the automotive, food and drink, furniture, packaging, retail and eCommerce industries.
A freight forwarder is only as good as its network, so you&#;re looking for a company with well-established international links to help move your cargo around the world smoothly and offer you the best freight forwarder quotes. Don&#;t forget to ask specifically about the contacts it has in the countries you want to ship between. Check their global reach so can rest assured that they can easily facilitate most shipping requirements.
The three main types of shipping load services for sea freight include Full Container Load (FCL), Less than Container Load (LCL) and Roll-on, Roll-off (RORO), and you obviously need to check that your freight forwarder offers the right one for you. If you know that you won&#;t be shipping enough cargo to fill a sea freight container, then a freight forwarder that doesn&#;t offer the option to share container space will mean higher costs and a slower shipping process. Likewise, if you need to transport wheeled cargo then the RORO shipping option is the safest, fastest and most cost-efficient choice. Check if they can ship by any other methods such as shipping by air and road haulage services too, to ensure the right shipping solution for you.
One of the main purposes of using a freight forwarder is to reduce the stress and hassle involved in importing and exporting goods, so it&#;s important to confirm they will take care of all the relevant documentation on your behalf. Experienced freight forwarders are well-practiced in the completion of export and import formalities at all main UK ports, and can also facilitate fast-track Customs clearance if they&#;re an AEO (Authorised Economic Operator).
Having a reliable facility that enables you to track your cargo is invaluable, not only for peace of mind and convenience but also to allow any delays to be communicated to the relevant customers or contacts as soon as possible. Most innovative online tracking systems will allow you to check on the status of your consignment, at any time of day or night.
One of the key reasons you&#;re likely to use a freight forwarder is to simplify the complicated process of moving goods internationally, so if you can get your every need met by one company then so much the better. Check if your freight forwarder can offer a full &#;wrap-around&#; service, with options to take care of your cargo from product sourcing to storage and distribution.
Of course, you want to know what the bottom line is in terms of cost. But rather than simply asking &#;how much?&#;, also ask your freight forwarder &#;what&#;s included?&#;. A freight forwarder with a strong network will be able to offer the most cost effective solutions, and benefits such as specialised storage facilities, bonded warehouses (meaning accelerated removal and release of cargo), online tracking and quicker Customs clearance which can all add value.
No reputable freight forwarder will have any issues with answering these questions honestly, so ask away to make sure you&#;re putting your cargo into safe, secure and reliable hands.
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