As fashion executives around the world reported in the first BoF- McKinsey Global Fashion Survey, the year 2016 can be summarised in three words: uncertain, changing, and challenging. But in spite of this, fashion remains one of the key value-creating industries for the world economy.
It’s not hard to think of a product made up of components sourced from multiple locations, assembled offshore and sold in a local Australian shop. An elegant suit made in Hong Kong from Italian wool cloth, and sold in Collins Street? A sofa manufactured in Indonesia to a Sydney customer’s precise specification covered in fabric milled in China’s Shandong province, perhaps? You’ve probably got a house full of items just like these.
But did you ever consider the logistical procedures that make it happen?
Time from order to delivery into store, handling costs, import duties and the protection of the manufacturer’s and consignee’s intellectual property are some of the main factors that need to be considered when arranging for the importation and delivery of goods with complex supply chains. There are countless others, but that’s for another day.
Using the Italian wool suit as an example, the consignee imports fabric from Italy and arranges for it to be delivered to their warehouse in Melbourne. From there it is shipped to the factory (3rd party) in Hong Kong to be manufactured into a suit. While this is great way to protect the consignee’s intellectual property and ensure the details of the supplier of fine Italian wool fabric remains a trade secret, it also effectively means the goods are double handled, there is additional duty to be paid and considerably more time and cost is added in the supply chain.
The alternative is to use Triangle Shipments (sometimes known as handovers or third party shipments).
Using the same example, the consignee would order the fabric from the supplier in Italy and arrange for it to be shipped directly to the 3rd party – factory in Hong Kong. On the face of it is clear that this will reduce handling, time and costs, but the question of protecting the consignee’s trade secrets still remains.
The answer to this lies in the concept of the Switch Bill. In traditional forwarding, a Bill of Lading is produced by the carrier and notes the goods, the consignee and the destination (among other things) and is effectively the contract for the transportation of the goods.
In a Triangle Shipment, 2 Bills of Lading are produced – the first one details the original consignee and true supplier of the goods. The second BoL is prepared to travel with the goods from origin (supplier) to the 3rd party that shows the original consignee as the supplier of the goods and the 3rd party as the consignee. The effect of this is to render the supplier of the goods (Italian wool fabric) anonymous, thus protecting the IP of the original consignee.
Triangle Shipments are a specialist freight forwarding service. While the concept is pretty well known and most forwarders do it, it is a boutique offering. Critical to a forwarder’s success with Triangles are strong relationships with both clients and overseas agents alike.
To ensure the triangles go to plan, a forwarder will have a thorough understanding of their client’s requirements developed as up to date and clear SOPs, combined with regular communication with shipping agents. Instructions may include the stripping of documentation, repackaging of goods and in some instances, the removal of labels and tags. Getting this right, every time, is the only way to ensure that clients’ relationships are protected.
Magellan has a solid track record with Triangle Shipments – some of our customer service team members estimate that up to 80% of their work involves Triangles.
If you think a Triangle Shipment is the perfect solution to your freight forwarding needs, then don’t hesitate to get in touch with us on 1300 651 888, or visit www.magellanlogistics.com.au.