Shipping Management Archives - Excelsior Worldwide Logistics Corp.

How to Mitigate Currency Fluctuation Risks when Shipping

excelsior on April 11, 2023

For decades, exporting products has been vital to the Philippine economy, allowing entrepreneurs to increase profits through global trading. Despite its downward trend recently, exports still account for more than $5 billion of the nation’s GDP. The continuous expansion of digital trading can provide new opportunities for Filipino business owners to export their products to various countries, potentially increasing export rates moving forward.

And despite being an essential part of the economy, numerous exporters face unique issues that can hinder their operations in the long run. For starters, not partnering with an international freight forwarding company can significantly risk the packages getting lost or damaged while in transit. But what remains one of the top issues exporters face on a day-to-day basis is foreign exchange, which constantly fluctuates for several reasons.

Understanding Currency Fluctuations

International forwarding invoices are often complex, with many factors contributing to freight rates around the globe. And one of the significant ones is currency exchange, which mainly refers to how much of each currency is needed when people exchange them. Some factors that lead to currency fluctuations are economic conditions, market sentiment, and political situations.

Currency exchange rates have always been a massive part of calculating freight costs, and even a tiny change in the rates will significantly affect shipping prices. Besides freight prices, currency fluctuation can negatively impact a company’s potential revenue and profit margins. This can decrease an enterprise’s competitiveness in the market, especially if most of its competitors come from countries with stronger currencies.

Mitigating Currency Exchange Risks

The risks of currency fluctuations when it comes to shipping prices are not a new thing. Many organizations have already implemented different techniques that allow them to reduce the impact of fluctuating currency rates when shipping their products.

1. Use Forward Contracts

One of the most straightforward solutions to decrease the complexities of shipping costs is to use forward contracts. This means that the merchant and buyer will agree to a fixed exchange rate that they can use for future transactions. This will allow both parties to know exactly how much the payment would be without worrying about changes in the currency rate.

2. Understand the Currency Adjustment Factor (CAF)

The concept of CAF is mainly used by freight forwarders, enabling them to mitigate the risk of currency fluctuations, especially for long-term contracts. Here, the shipper will have a flat percentage surcharge on the invoices sent to their clients, and this usually is based on the currency where the freight will depart and arrive. Exporters must know this concept to help them plan out their finances in the long run.

3. Currency Options

Apart from forward contracts, it will also help if companies consider currency options strategies when exporting their products. Many enterprises have used this risk management technique to protect themselves against currency fluctuations.

Like forward contracts, this hedging strategy gives businesses the right to export at a fixed price in the future. But the main difference is that the parties are not forced to finish the transaction when the deadline arrives. This is beneficial if the exporter believes they will get a more favorable currency rate, allowing them to mitigate the risks of financial losses.

Conclusion

With digital platforms opening up new opportunities for merchants to sell their products to international customers, exports are expected to continue to rise in the coming years. And so, firms must know the risks they might encounter when exporting products, such as the ever-changing foreign exchange rate. By understanding this, they can implement the proper currency fluctuation management solution that will protect them from financial losses in the long run.

Excelsior Philippines, the country’s top freight forwarding and customs brokerage company, has been in the industry for more than two decades, providing our clients with peace of mind that their shipments will arrive at their destination safely. We can also help you negotiate freight charges for the best shipment value. To learn about our services, contact us now by clicking here or calling (+632) 8525-9775.

How to Prevent Shipping Damage – Infographic

excelsior on June 30, 2020

Shipping damage can cost any business owner a significant loss in annual gross sales. Although it can be prevented, damages on shipping can happen more often and might bring a series of detrimental effects for both the buyer and the seller.

The reputation of a brand also relies heavily on its capability to secure its products during the shipment process. For exporters, as well as those who own an eCommerce business, maintaining the pristine condition of each product before it reaches the customer must always be a priority.

Reminders for Shipping Your Products

To first step for preventing shipping damage is setting a set of goals. Your package must be able to:

Keep the product safe despite any changes in the environment, such as temperature, humidity, etc.
Get through the process of freight transport, order fulfillment, and last-mile delivery.
Survive a four-foot drop (the most common height that package usually gets when dropping in transport)

Tips for Securing Your Products to Avoid Damages

Do not leave any void spaces on your package.

Having extra space in your boxes makes the products stored inside extremely prone to damages. If you’re transporting fragile products such as glassware and plates, keep in mind that it will be shaken and rattled at some point along the way, so you have to fill in the void spaces to prevent them from sustaining any cracks.

The following materials are excellent shock absorbers that you can put inside the boxes to ensure the safety of your shipment:

Bubble wraps
Corrugated boards
Engineered foam
Kraft paper
Polybags (for preventing water damage)

Be mindful of fragile items.

In case you have to put more than one fragile item in one box, make sure that they are stored separately. Organize the interior of the box by creating partitions using corrugated boards so that each space is well divided for your products.

Label each box properly.

Indicate your fragile packages through proper labeling, so that anyone is well aware of its contents and take extra care while lifting them. This can also be applied to products that must be held in a specific position.

Purchase parcel insurance.

The most efficient measure against shipping damage would be getting parcel insurance. It doesn’t necessarily mean that shipping damage is an inevitable situation, but it’s always better to be prepared than facing the consequences later on. Parcel insurance can protect you financially from losses incurred by shipping damages, saving you from more trouble in the process.

Hire a freight forwarder

While freight forwarders are usually hired to ensure the timely arrival of shipping products and clearing most of the necessary documents, hiring one can also help you minimize the odds of getting your products damaged. Since these people are highly knowledgeable about logistics and shipping processes, they can give you expert advice on how to package your products correctly.

Excelsior Worldwide Freight Logistics conducts free orientation for those who are willing to learn. It is our advocacy to share our knowledge & experience worth more than a decade in the business. Visit our website today at www.excelsior.ph to learn more about our service.

5 Most Common Shipping Problems

excelsior on February 15, 2020

The shipping industry in countries like the Philippines is often involved with a lot of requirements when it comes to transporting goods from one place to another. Due to the complexity of the shipping process, it’s not surprising to know that issues and other problems might arise which could disrupt the supply chain of those businesses who rely on services like freight shipping.

Fortunately, such issues can be apprehended by hiring a trusted freight forwarder and customs broker. But still, it would be an advantage for those who are investing a lot in import and export business to be aware of the most shipping problems.

Problem #1 – Missing Documents

The most important document that must always be present at hand during the shipping process is no other than that original copy of the Bill of Lading (BOL). It might sound like a no-brainer but believe it or not, many shippers tend to misplace them due to certain reasons. If you ended up losing your Bill of Lading, there’s a high chance that you will experience delays with the release of your shipment. Make sure that your Bill of Lading is always secured via a reliable channel.

Problem #2 – Unanticipated Closures and Cancelations

One troublesome shipping problem that frustrates many businesses nowadays is when unexpected events happen, leading to the port getting closed or the freight carrier canceling its trip to the destination. The reasons may include strikes by port workers or truckers, and natural disasters. In cases of natural disasters, it’s always better to face the delays instead of the carrier risking the safety of everyone on board and your shipment.

Problem #3 – Overweight Cargo

Failure to properly check the weight of the cargo often results in several problems throughout the shipping process. First, there’s going to be inaccuracies to the documents as the cargo’s weight is essential information that must be submitted. Second, the shipment might become so heavy that it will require different lifting equipment, wasting you a lot of time and (and most likely, money) in the long run.

Problem #4 – Lost Shipment

In addition to missing documents, every shipper must know that if they’re going to have their goods transported on a massive carrier, chances of it going missing are quite high. Ports are now starting to grow larger, and with a plethora of other shipments, you will have to hire a trusted third-party agent to keep an eye on your products.

Problem #5 – Holidays

National holidays can be a good time for being merry and taking some rest from work, but it could mean delays on your part as the shipper. To prevent such problem, do some research on the upcoming port or terminal closures at both origin and destination. Anticipate the holidays by scheduling your shipment before the specific dates, unless you have to suffer a stressful shipping process filled with tons of other cargoes and port congestion.

5 Common Shipping Mistakes to Avoid

excelsior on December 15, 2019

Mastering the nuts and bolts of shipping is a crucial skill for businesses that specialize in transporting their products from one place to another. While shipping is simply defined as placing goods or people on a carrier to be brought to its intended destination, it could be a pretty lengthy and complicated process for those with limited knowledge about logistics, as well as customs requirements.

Shipping also plays a vital role in the capability of an enterprise to provide the highest degree of customer experience to their clients. One way to do this is of course, avoiding mistakes in every shipping transaction as much as possible. Though such a task is easier said than done, the first step a business owner must do is identify the potential shipping errors ahead of time.

Fortunately, we’ve compiled some of the most common shipping mistakes as well as efficient methods of avoiding them:

Improper Packaging

An easy way to increase the chance of shipment damage is by incorrect packaging. Products may vary in shapes and sizes, and some might be even so fragile that a well-secured packaging is required in order for it to be safely moved from point A to point B.

When shipping a set of products, have a thorough assessment of the most appropriate type of box, and invest in high-quality protective cushioning if needed. Having a professional in the shipping industry is another surefire way of preventing damages in shipment brought by improper packaging.

Wrong Shipping Address

Once shippers failed to pay more attention to what is written on the Bill of Lading (BoL) miscommunications with the carrier company might arise. For example, a wrong shipping address could result in freight transporting the products in the wrong destination.

Checking the shipping address multiple times is one and the only solution to prevent this mistake. Make sure that every detail is correct, including the ZIP codes of the intended place.

Letting a Single Carrier handle all Shipments

Availing the service of a single carrier can help foster positive relationships between business the carrier company. However, relying on a single carrier could prove to be a risky option. In the event that a well-trusted carrier company experienced a strike or downscaling of its facilities, its clients could end up having large piles of shipment with no one to move it around.

Creating more connections with multiple carrier companies is one way of avoiding such hassle, not to mention access to opportunities in terms of having competitive rates and operations.

Inaccurate Shipment Weight

Carrier companies tend to be prudent and specific when it comes to weighing the shipments of their clients. They always have certified scales placed at their terminals to make sure that every shipment’s weight is worth the fee they require. Some businesses neglect to weigh their products and as a result, they are forced to pay an additional fee on their bills.

Purchasing a high-quality weighing scale and using it on products beforehand prevents any unnecessary expenditures in shipping.

Not Keeping Delivery Receipts

Delivery receipts serve as evidence that a shipment is free from any damage before the delivering process. Presenting these receipts on situations such as shipment damage provides validity that can save a business from bearing all the costs brought by the damages during the shipment process.

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Shipping Terms Every International Importer and Exporter Should Know

excelsior on July 15, 2019

If you’ve been managing a business for quite some time now, you might’ve experienced some difficulties when it comes shipping your goods from one place to another. Aside from ensuring the safety and timely arrival of your cargo, you also need to familiarize yourself to several jargons associated with the shipping industry. Most business owners nowadays ended up getting confused about some of the technical terms used in shipping. While you don’t really have to be a pure expert when it comes in dealing with these terms, your knowledge about them could prove to be pretty handy in the future indeed.

So, to help you avoid unnecessary misunderstandings and minimize errors while you communicate with your shipping company, here are some of the most common terminology used in international shipping:

Bill of Lading (BoL)

Bill of Lading, also known as BoL is a document given by a carrier to a shipper. This document is issued on a receipt form with the sign of the vessel’s representative and acts as a written proof of contract that a transportation has been made.

This document is very important as many ports do not allow anyone to claim their goods without presenting their BoL. Unfortunately, some notorious freight forwarding scammers use BoL as a way to steal money from the others. Know more about the other freight forwarding scams through this infographic here.

Carrier

Carriers can be an individual or legal entity that offers transporting services for passengers and goods. Examples of carriers are airlines, shipping lines, railroad and trucking companies.

Backhaul

If a driver takes a cargo during the return trip of a commercial vehicle, it’s technically referred to as a backhaul. Cargo vehicles do this practice as a way to maximize the productivity of their trips.

Customs Broker

Customs Brokers are private individual or firms that works as a guide for both importers and exporters in meeting the necessary requirements given by the customs authorities. Many people usually mistook customs brokers to freight forwarders, but both professions have several distinctions with each other.

Freight Forwarder

These are persons or company that specializes in logistics and organizing shipping processes in place of an individual or company to transport their goods.

Hazmat

A shortened term for “hazardous materials,” hazmat is a material that could pose safety risks to anyone that it comes in contact with. Unlike other forms of cargo, shipping hazmat requires special endorsements from all involved parties.

Intermodal

Cargo can be considered as an intermodal once it was shipped using multiple forms of transportation, like a cargo truck and rail transport.

Less Than Truckload (LTL)

When the weight of a shipment ended up being less than the required weight of the truckload rate, that is described as Less Than Truckload or LTL.

Tender

Tender is a fixed cost to move a cargo.

Transportation Management System (TMS)

Transportation Management Systems or TMS is a software designed to help businesses and even some freight forwarding companies to optimize their planning and execution in the physical movement of the goods. There are several benefits that can be obtained by investing in this kind of system.

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Things to Consider When Shipping for Trade Shows

excelsior on March 16, 2018

As mentioned in our previous post, attending trade shows is one of the most effective ways to grow the client base of your import-export business. In fact, studies have shown that 81% of trade show display attendees have buying authority – which means that 4 out of 5 people that you might talk to during the event could be your next customer!
Since potential customers and quality leads thrive in this kind of event, it is only essential that you give your best when presenting your product. One of the first steps to ensure a successful trade show is to ensure a smooth logistics.

Successful attendance at trade shows requires timely arrival of your materials at the destination. To help, we detail in this post the things you need to consider when shipping for trade shows.

1. Ensure Efficient Transportation Planning

Trade shows are very time-dependent events. Thus poor transportation planning could lead to a variety of penalties even before the show begins. It is therefore critical to choose a logistics partner with proven event logistics expertise.

There are certain types of information that your chosen carrier will need to know to ensure that your trade show shipments will arrive on time at the convention center. These are:

Name and address of the convention center
Name of the show
Specific event room or hall
The booth number
Name and contact number of your company’s on-site contact
Dock number for delivery

2. Plan for Show’s Conclusion as Well

The numerous instances when your company can incur penalties during move out.
One of such is not meeting requirements included in the Material Handling Agreement (MHA). MHA is the bill of lading for the movement of your booth, and it basically lists all pieces that the shipment contains as well as what company is assigned to the carrier.
If the company is not specified, the decorator will not allow the carrier to pick up the freight after the show. Due to this delay, the decorator may take control of your shipment and picks another carrier to transport your freight. This can increase your transportation cost significantly.

3. Build Relationship with the Parties Involved in the Logistics Process

Facilitating a successful trade show requires collaboration between Installation and Dismantle (I&D) teams, freight forwarders, decorator, and exhibitor. If you plan to maximize your trade show experience, you need to have a clear understanding of the entire logistics process – from unloading and installing to dismantling and loading out.

Penalties and additional overtime costs can escalate quickly if there are any inefficiencies in these processes. Having the right logistics partners, therefore, can help you navigate these time-critical tasks and avoid the heavy penalties that trade shows levy.
Overall, attending trade shows, though quite demanding and exhausting, can be an effective way to grow your import-export business. By partnering with a trustworthy and reliable logistics provider, you can improve your chances of achieving a successful trade show event.

Allow Excelsior Worldwide Freight Logistics Corp. to help you navigate the world of import and export. For any queries that you may have about our services, you may call us at (063) 525-9775, or you can send us an e-mail through wecare@excelsior.ph

Types of Container Units Used for Shipping Cargo – Infographic

excelsior on May 16, 2017

Aside from gargantuan cargo ships, another object that most people often associate with international shipping industry is container units. These long, rigid, metal boxes form the most integral part of the entire shipping industry- and are the structures that shippers rely on to store various types of cargos that need to be transported from point A to point B.

Having said that, a variety of container units can be used depending on the type of products to be shipped or the special features. To know which one suits best to the products your business is shipping, check out this infographic.