Overseas manufacturing tends to be significantly less expensive than domestic manufacturing. That does not, however, mean that there are not unique costs associated with manufacturing overseas. One of the most obvious costs is moving your product from the manufacturing facility to your distribution facilities. While many large producers tend to ship their goods over water, it is often faster to do so by air. There are significant costs associated with the speedier option, some of which you might not realize. Knowing these costs beforehand can help you to make a more realistic budget and to decide if air freight is right for your business.
The major costs of airline shipping are determined by the carrier. Most major carriers have relatively similar rates, which are based upon complex formulas that include the amount of space your items take up on the plane, the cost of jet fuel and the general whims of the market. These costs are relatively hard to dispute, as it seems that most carriers have cut their costs as much as possible to stay competitive. When dealing with overseas manufacturing, it is often possible to get a better rate by locking in a contract with a particular shipping company to do a set amount of business.
At the same time, there are variables of which you must be aware when dealing with shipping products by air. The holidays, for example, tend to count as a premium time during the shipping year and thus prices go up. This is largely related to supply and demand, of course, but it’s something that you will have to deal with if you choose to ship your overseas products by air. Other variables, including weather, might delay your shipments or cause other issues – all problems that will impact your bottom line and may lead you to looking for other shipping options.
With this said, there are very good reasons to ship your goods from your overseas manufacturing facility to your distribution sites. Air shipping is significantly faster than shipping over water, and most air freight companies tend to have a slightly better reputation for getting items in on time than their seabound brethren. Air freight can allow you make sure that you beat your competitors to the shelf, but you will pay for that edge. You simply have decide what’s best for your business and what makes the most financial sense.
Shipping by air is expensive, but can be worth the price. The best thing that you can do when making your shipping choices is to go in with your eyes open to the possible costs. Always leave a bit of room in the budget for overages when it comes to shipping items by air, and make sure that you are willing to have a backup plan in place if the prices go too high. Overseas manufacturing always has costs associated with shipping, and choosing to move your products by air simply means that you will deal with another cost. Whether it is worthwhile is up to you.
If your company is trying to determine the best shipping method, whether it be by air or sea, contact ITI today and we’ll help you get your goods shipped off in the most economical and speediest way possible.
