Part 1. The issue of shipping your manufactured backpacks by Air from China to your home country.
The Idea Lab are backpack manufacturers based in South China. We take your ideas and we bring them to life through drawings, sketches, scribbles and technical drawings. We work with a large network of great suppliers who match our quality needs and pricing requirements. We know China. I personally speak both Chinese and Cantonese and have been living here since 2009. Pretty much China is my life & it is all I know. If i wasn't 6ft 6 with a Yorkshire accent, I could probably sometimes get away with being Chinese. There is however one thing I have absolutely zero control over. Shipping & the prices that go with it.
Once your backpack manufacturing order has been completed and passed its quality control, the balance released and packaged ready for export, in many ways it becomes out of our control, not completely but in terms of how things move.
Logistics and freight often moves a lot slower than we imagine it to. DHL sometimes seems to take forever as it goes via Singapore, the Congo, France and Germany before re-routing back to Korea and then the next day arriving on your doorstep. Ocean freight which will discuss in part 2 is even more of a behemoth in terms of delays and things running slow. What takes 5-7 days with DHL can be up to 45 days by sea if you are in the states. Although arguably it is much much more affordable. Or is it?
It is up to the client to choose how they want to ship their goods to their destination country. A local backpack factory in China will often never supply the goods under any other shipment term than EXW, so we will base this blog off working with absolutely no assistance from the supplier (as in EXW) and then at least you have a better idea how worse case scenario works. EXW stands for Ex-Works and it is best described as one of the many incoterms (see the below infograph for a closer read)
In short, an incoterm sets out the terms of delivery. As in the point where the goods are transferred "in ownership" from the factory to the client. EXW is the main one we will be dealing with as most backpack factory orders are under 1000 pieces.
What basically happens is the factory finishes the goods and then makes them available for collection by the buyer. We have to arrange a shipping agent to come and collect the customized backpacks and deliver them to port for shipping. It is here that the method of shipping diverges and we have two options.
To ship something by air we have to first package them in shipment ready cartons. Typically for backpacks we will use a carton sized as 40cm x 50cm x60cm, although it varies.
And depending on the size of the backpack on the order we can usually get somewhere between 10 & 20 backpacks per carton.
Let's say each backpack for ease of calculation weighs 1 kg. If you had for example 10 backpacks in a carton, the absolute weight of the box would be 10kg. But the volume weight is something different. The volume weight is calculated to give you an accurate weight of the carton according to its dimensions. Using our above dimensions let us work one out together to see what is the difference.
40cm x 50cm x 60cm = 120,000.
We then divide this by 5000 (this number varies for different shipping companies) but 5000 is a good benchmark.
120,000 / 5000 = 24.
So the volume weight of the shipment is 24kg. Even though the parcel only weighs 10kg, the actual chargeable weight is 14 kg heavier than the absolute weight.
If say the average cost of shipping to the United Kingdom is $4 per kg then the difference in shipping cost between the volume weight and the actual weight is $56.
24kg * $4 = 96 USD
10kg * $4 = 40 USD
The difference is $56 USD.
So if you have 10 backpacks in each carton, thats a shipping cost of $9.60 USD per backpack.
If you have 15 backpacks in each carton, thats a shipping cost of $6.40 USD per backpack.
So you can see that even when you are manufacturing your backpacks and the unit ex works cost is relatively affordable, say a mean price of $10-12 per backpack is a good start, there will be an extra 50% that needs to be allocated on top for shipping fees.
Unfortunately it gets worse. Yes I am the bearer of more bad news. There is a little thing called import duties which if not taken care of can you ruin even the most happy go lucky traders of days. Import taxes vary depending on the country and the declared value (sorry, we can't under declare the value of goods - thats a big no no) and you should consult with a local shipping agent to find out exactly how much they will cost in taxes. We are backpack manufacturers and exporters, we work in the realm of backpack design, custom backpack manufacturing and export. So we have little, in fact no capabilities to assist with import...but we wish we did. It would make everyones lives a lot easier.
So there you have it a short and sweet summary of how to move your backpacks from the factory in China to your front door and have a rough idea how it all works.
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