Indonesia Export News & Updates

Earlier today, we had a request from a potential customer in the UK just starting out in the import business. In this case, the lady was interested in Teak Root Furniture and was planning a small order of 5 coffee tables to test market response to the products.

Before I go any further, let me be clear: first time buyers and importers are very important to us – in the same way that every journey begins with a single step, so every working relationship begins with one small order.

In this case, however, it simply wouldn’t be right to accept an order without warning the potential client about the downsides of her plan.

If you’re interested in importing small orders to the UK (or anywhere else) by Less than Container Load (LCL) Sea Cargo, you may find the following to be of interest.

When it comes to furniture, there are two main drawbacks to shipping less than full container loads:

1. Cost of Shipping
2. Possibility of Damage

We picked out one of our Teak Root Coffee Tables to illustrate:

TRF-0144 is a fairly representative example of our Teak Root coffee tables. It measures (height x width x depth) 48 x 90 x 75 cm and is priced at US$157.89 – total value for 5 pieces: US$789.45.

In terms of cubic volume, that gives us approximately one-third of a cubic meter (0.33 CBM) but, as you may already know, LCL Sea Cargo requires a lot of extra packing material and sturdy wood crating in order to protect the products in shipping – we estimate the volume would be around half a cubic meter (0.5 CBM) once crated so 5 pieces would work out 2.5 cubic meters.

One of the first disadvantages of LCL shipping is that your overall volume is greater than it would be in a container, air cargo or courier shipment.  In this example, if you were shipping by container, you would be able to fit 3 coffee tables per cubic meter; by LCL you can only fit 2 of the tables per cubic meter.

Now let’s talk the actual freight costs.

Here’s a recent rate (July 2010) for LCL shipping from Bali to the UK:

In this rate, you can see we’ve given the total charge for 1 cubic meter as well as a few more total volumes – including our estimate for this order – so we can all see how the rate improves as the total size of the order increases.

Always with LCL, the first cubic meter is the most expensive because while many of the charges are per cubic meter, other charges like Fumigation, Documents and so on are the same for 5 CBM as they are for 1 CBM. That said, 2.5 cubic meters still gives you a pretty expensive per cubic meter cost of US$261.93 and, remember, this rate is only to the port – there will be more charges on the UK side for clearing customs, delivery to the final address, tax and so on.

The total cost of shipping 2.5 cubic meters — US$654.83 — will probably end up being more than the total invoice value of the products at US$789.45.

Long story short: in this case, the shipping is too expensive to justify the order.

The next issue is fragility. From the moment your wood crates leave our warehouse until they arrive at your door in the UK, they will have been loaded and unloaded at least six times (between trucking and consolidation).

Each time your crates are handled, they run the risk of being damaged – that’s why we always advise customers that we cannot guarantee products will arrive in good condition.

We’re not saying LCL isn’t safe; we are saying that certain ‘fragile’ products have a higher risk attached to shipping by LCL.

We’re happy to guarantee our products in a container but simply cannot guarantee them by LCL sea cargo.

Ok, that’s basically the email I sent the client earlier today – hopefully someone out there will have found the information useful.

Regards,

Sean