Factory relocations are large and complex. There are a considerable number of moving parts which can be further complicated when you’re dealing with the intricacies of international shipping. With great complexity comes huge potential for disruption, so it’s vital that every link of the chain is strong and every box is ticked.
Customs and shipping are a vital part of the puzzle, so, where do you start, what do people often get wrong and what crucial information do you need to help the process run smoothly? Here, we will simplify and demystify customs and shipping processes in a time where international trade has never been more interesting and more potentially perilous.
Getting the documentation right
If customers are shipping internationally, documentation is always the first and most obvious key concern. Commercial invoices, packing lists and certificates of origin are the most important documents to consider, alongside any more specific files, which you might need to reach out to local governments for if you’re shipping certain equipment.
In the eyes of customs, a relocation is still seen as a sale, so a commercial invoice will still be required. This will be used primarily as a customs declaration.
The packing list is an itemised list of everything that’s being shipped. It will contain not only the item or serial numbers and names of the items themselves, but also the weight and size of said items.
A certificate of origin proves that the items in the shipment are of a certain origin under the definitions of a particular bilateral or multilateral free trade agreement.
In both the UK and the US, the certificate of origin you’ll get from the chamber of commerce is standard. Invoices and packing lists, meanwhile, can change format depending on the customer or the client, but generally contain the same basic information. Where is the equipment coming from? Where is it being shipped to? What do the items look like and how valuable are they?
Ultimately, you can include as much or as little information as you desire in an invoice. Some like to pad it out with dense information and others like to keep it simple. As a bare minimum, however, you should always include the shipper, the consignee, a description of the contents and the value of the equipment in each shipment.
Getting this information should be as simple as telling the client what you need. Nine times out of ten they’ll know exactly what to send, but be prepared to offer advice if the client is inexperienced.
As far as documentation is concerned, there are few geographical specifics to consider. Certain countries might require certain pieces of information on an invoice or certain additional documents, such as a bill of lading in the case of China. However, more often than not, for exporting outside of the UK all you need are the key details described above. It will vary from client to client (it’s up to the shipper and the consignee what they want on the documents), but as long as you have the basics down you shouldn’t run into any problems.
Any complications you’ll encounter when exporting outside of the EU tend to come from customs. When exporting outside of the EU, you’ll have to enter all the shipping data into the customs computer, and sometimes that computer will inform you that certain additional information is required, depending on the shipment and the country you’re exporting to.
If you don’t know how it works and what they might want from you, then you won’t be adequately prepared to react. So, it’s important to have a solid idea of what they are going to ask you for and to have all relevant electronic documentation prepared before you begin the process, to avoid costly delays.
Different countries will have their own rules when it comes to customs, of course, so it’s important to do your research and have a thorough understanding of all local customs processes before taking that first step. It will be one way for Chinese customs (which is notoriously stringent) and one way for Australian customs and, unfortunately, you have no choice but to obey the laws of the land.
All customs, however, are unpredictable by their very nature; if they want to inspect something at random, they will inspect it and it could set your whole relocation back by days or even weeks. So, always keep your customers in the loop and let them know that these delays can and will happen, and give yourselves a buffer in case your exported goods are subject to random checks.
By air or by sea?
Of course, the shippers and the clients are the two main parties involved in any international relocation, but there are other agents to consider: shipping lines and/or airlines.
Your choice of transportation depends on three key factors - size, cost and time. It’s up to the shipper and the consignee to determine the most cost-effective and expedient way to ship each individual item or container.
Size - Size is a key factor in deciding whether or not your factory items can or should be shipped by air or sea. During disassembly, it’s possible for more modular equipment to be broken down into smaller parts, but some equipment can’t be broken down and will be too large to be shipped by plane.
Cost - Cost is always a key factor to consider when making any export decision. Whilst shipping by plane might be more expedient, shipping by sea is far more cost-effective.
Time - Timescale and location are key considerations, particularly given the time-sensitive nature of the industry. If a client suggests a certain timescale that would be impossible to meet by sea; try to find a way to make it work by air.
It’s all about working on a case-by-case basis; asking what the customer wants, judging what is possible with the equipment, weighing the pros and cons and deciding which method works for which situation. The real skill is in reaching a compromise with customers, taking their demands and what is logistically possible into account.
Some customers, for example, will be eager to ship by air until they see the costs and soon sober up. Always work to reach a compromise and change the schedule accordingly - perhaps shipping some items by boat and some by plane if necessary. Act flexibly and expect your customers and their clients to do likewise.
Close to the wire
One of the worst things you can do in this business is to promise a client a deadline that is simply untenable. Always give yourselves a lot of fat in your timing because there are always potential problems to contend with.
You could run into a complication with customs or the airline might suddenly decide to change their terms and tell you at the last minute that a part is too heavy. These are the kinds of eventualities you always need to keep in the back of your mind as a worst-case scenario.
Factory relocation is a major job that should never be rushed. Take your time and give yourself a lot of wiggle room, otherwise, you might get stuck. Temper your expectations, tell customers that you’ll “do your best” and let them know there is always the potential for delays that are beyond your control.
Decommissioning is a complicated process. Some larger machines simply can’t be disassembled, whilst others are more modular and can be taken apart and put back together again with minimal fuss.
So, ease of disassembly is something else that needs to be taken into consideration by engineers during the site survey. It’s also worth considering that, if you’re sending large shipments of multiple containers, it’s far more likely your equipment will catch the eye of customs officials.
It’s also important to let the engineers worry about the actual machines themselves. Whilst a cursory knowledge can be helpful, the cost, the size, the weight and the logistics of shipping are what’s important. Leave the machinery to the engineers.
The perfect job
A perfect job relies on all of the moving parts in the chain working in perfect harmony - everything being packed and moved on time, the trucks turning up on time, the shipments arriving and departing and everything being delivered before the deadline. Customs and international transfers are a small part of a project that also includes the site survey, the risk assessments, the decommissioning and the packing. It’s a large, complicated plan and all elements of that plan need to be harmonising perfectly in order to keep things running smoothly.
So, one final piece of advice we’d offer is to make sure all of the various links in the chain are working together and moving as one. Because one weak link can mean heavy delays, unhappy customers and some very large and expensive equipment potentially being left gathering dust in customs.
IES has planned and executed countless international factory relocations for some of the biggest names in engineering, technology and pharmaceuticals. Find out more here.