5 Steps to Booking Freight to Your Crowdfunding Fulfillment Center

Something you need to know before shipping the physical products.

Skylar

October 10, 2022

Once the funding phase of your project ends successfully, an exciting new phase of the campaign begins – fulfillment of your backer rewards. There is no time to waste, it is time to deliver on the promises you made to your loyal backers. If you have been following along with our previous blogs, you know how to choose a quality fulfillment center that specializes in working with crowdfunding creators. However, before they can deliver your innovative new product to your backers, you have to arrange for your products to be shipped to their local warehouse. 

Oftentimes, creators are using quality overseas manufacturers who are highly experienced with mass production but working with a fulfillment center in the United States or their home country. Transportation of your goods from their facility to your chosen fulfillment partner can be a daunting task for those who have never shipped internationally before. Here are 5 steps to booking freight from your manufacturer to your fulfillment center that will help you understand and execute the process successfully. 

Choose how you will ship your freight

There are two main methods of booking freight. The first involves working with a full-service Freight Broker. This is a person or organization that acts as an intermediary between the customer and the freight company. They will find a reliable freight mover and oversee the process of determining cost, ensuring that the freight gets moved safely and take care of the process of getting the goods through any necessary Customs inspections. 

A good freight broker will arrange the pickup of goods from your manufacturer, direct the freight to the port of departure, book the mode of transportation, arrange for reception of the goods at the destination port, take care of insurance and customs, and work with you to solve any issues that may occur along the way. If you don’t want to learn the process yourself or don’t have time to deal with shipping, hiring a reputable freight broker can be the right move. Keep in mind, the broker makes money by charging a fee above and beyond the costs of shipping, and going this route may cost you more overall. 

A second choice would be to act as your own freight manager and work with a Marketplace to find international shippers and book freight. A marketplace acts as a portal where you can enter detailed information about your freight and compare prices from different freight companies. Some marketplaces such as Freightos have a streamlined, online method to get freight quotes, choose destination ports, and calculate customs fees, allowing users to effectively act as their own broker, to secure the best price and shipping options for their products.

Once on the marketplace, you will be prompted to enter pertinent information about your shipment:

A. Weight and dimensions of your product. Your manufacturer may package your product in individual boxes, on pallets, or a combination of both. It is important to communicate with them to understand how the products will be prepared when picked up for shipping. 

B. Enter the pickup and delivery addresses for your shipment. Typically from your manufacturers' location to the final destination of your fulfillment center. Make sure your address information is accurate and up to date. 

C. With marketplaces such as Freightos, you can also add services such as directly purchasing your customs certificate and/or shipping insurance. This is a convenient way to ensure a trouble-free delivery.

D. Select a shipping company based on the provided quotes, enter your company information and book the freight. 

Select the Correct Incoterms

These are codes that represent the rules that apply to the client and shipper to determine the costs and responsibilities of booking freight. If you are new to international shipping, these terms may be confusing to you. The most commonly used terms and their definitions are…

Ex Works (EXW) - The Seller (in this case your manufacturer) makes the goods available at its location so the Buyer (in this case your freight company) can take over all the transportation costs.  The freight company then takes over the responsibility of safe delivery from this point.

Free On Board (FOB) - The Seller safely transports the goods onto a ship at an agreed-upon port. At this point, the Buyer bears responsibility for the goods until the shipment arrives at the final destination.

Delivered Duty Paid (DDP) - The Seller delivers goods to the destination in the country of the Buyer.  The Seller adds the cost of this delivery to the price of the goods. 

Delivered Duty Unpaid (DDU) – This is similar to DDP except that it leaves the responsibility to pay for any of the destination country's customs charges, duties, or taxes to the customer before releasing the goods.

Calculate Customs Costs

Customs is a system of duties, tariffs, or taxes levied on products imported from other countries. This fee varies and is determined by a percentage of the overall value of the item that is based on established product categories (HS Code) as well as which country the goods arrive from. There may also be added fees for special inspections that can happen at the port during routine customs examinations. There are many online calculators that can help you determine customs costs if you are shipping yourself. If you are using a broker or marketplace platform, this estimate will be included in the quotation process. 

Choose a Transportation Mode

Worldwide freight is moved in a number of ways including by air, road, rail, or sea. Moving freight from your manufacturer to a selected port of call is likely done by trucking but for most crowdfunding creators, the biggest decision will be deciding how to get the goods from overseas via ship or airplane. Shipping by sea is much slower but less expensive so it’s best to plan well in advance. Air freight is faster but more costly and also has restrictions that may apply to some potentially flammable items such as batteries. It is important to evaluate your transportation mode based on your particular product, its components, and its contents. 

Congratulations on your campaign, now follow the suggested steps to get your rewards to the doorstep of your loyal backers and start your company’s journey to success.

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