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Supply & Demand – Influences that shape your supply chain solution

Supply & Demand:  In the Supply 101 section of the latest issue of RagTrader Jeff Kershaw and Joe Carbone advise on the importance of understanding both the drivers and impacters of supply chain decision making in the pursuit of a bespoke and efficient solution that achieves both business and brand goals while at the same time meeting customer needs.

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Offshore warehousing, 3PL, sorting & labeling – direct into store

As we gear up for peak season in the freight forwarding and logistics business it seemed timely to revive a blog post from earlier in the year.

The traditional supply chain method of overseas supplier packaged and delivered product is evolving. The pace of change is rapid and importers need to adapt or suffer competitive pressures through loss of sales and local sorting and distribution costs.

Historically, Australian importers have maintained local distribution facilities, either in-house or 3PL, in order to deliver product domestically. In today’s environment this can be an expensive solution when compared to some of the options available off-shore.

There is an increasing trend of transferring labour intensive activities, such as Pick and Pack, to low cost countries closer to the supply source. For example, Magellan Logistics provides a Pick and Pack solution in Hong Kong and Shanghai, that shorten the supply chain and provides significant cost savings to our customers. All orders are processed at a SKU level and packed for ultimate store delivery. The goods are then shipped directly to the customers designated outlet or warehouse. This enables Magellan’s customer to eliminate double handling and freight cost duplication, as well as reducing the physical cost of distribution.

If your company is considering using an off-shore distribution solution you should research and examine the options and find out what is most feasible for you.

Magellan Logistics can assist you with this with expert advice and consultancy.

If you would like to discuss this further please contact our team on 1300 651 888 or info@maglog.com.au

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Quality Control – Eliminate claims for non-compliant product

Traditionally, fashion companies have used buying agents or sourced resident teams to undertake quality control procedures at the manufacturer’s premises – either in-line or final quality control (Q/C).

However, this process has not always proved to be totally effective and product is often determined to be out of specification once it has arrived in Australia. Australian importers then need to engage in lengthy and costly discussions with their suppliers about who pays for what.

THERE IS A BETTER WAY AND MAGELLAN CAN HELP

Magellan can provide quality control facilities in its offshore warehouses that allow for detection of issues BEFORE the goods are exported. In the event of any non-compliance the goods are returned to the supplier for correction and re-delivery. This approach eliminates claims and the onus is put squarely on the supplier to get the product right BEFORE it leaves the country of manufacture.

Experience has shown that suppliers learn very quickly that if they deliver non-compliant product this will disadvantage them economically. It follows that self regulation becomes an imperative for them.

EXAMPLES OF QUALITY CONTROL PROCEDURES INCLUDE:

  • Needle detection
  • Button and stud testing
  • Swing Tag confirmation
  • Labelling confirmation
  • Thread snipping
  • Re-ticketing
  • Technical Q/C – (provided by client)

 

So, if you want to eliminate claims for non-compliant product in the future contact Jeff Kershaw at jeff@maglog.com.au or call on 0418 543 994.

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Magellan Logistics featured in Ragtrader Magazine, September 2014

Read the latest power brokers article where our sales director, Joe Carbone, shares his knowledge and experience on the supply chain.

Let us know your feedback in the comments.

(Hit CTRL + to zoom in)

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Magellan launches Moving Stylish Fashion Fast Campaign

Check us OUT!

Magellan Logistics are thrilled to be included in the latest Ragtrader magazine August edition, alongside influential fashion powerhouses. We have been serving our fashion, textiles, retail and footwear clients for the past 17 years, and it’s feels great to share our brand with the rest of the fashion world.

Let us know what you think!ragtrader-magellan-august-edition-logisticsragtrader-magellan-august-edition-logistics

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The Advantages Of Shipping FOB

AN EASY REFERENCE GUIDE ON SHIPPING FOB YOUR FASHION GOODS

When buying or selling garments or other goods across international boundaries, there are certain stringent terms of delivery that need to be adhered to for a successful importation. INCOTERMS are international trade terms which define all rules of engagement with regard to goods delivery to the intended destination or from the seller to the buyer.

INCOTERMS

are the widely used standards that guide international trade. When it comes to international shipping, FOB and CIF are the most commonly used agreements which determine the responsibility of both the buyer and the seller. At the same time, it defines the point where this responsibility passes to either party.

Difference between Shipping FOB and CIF

First, it’s imperative to understand the difference between FOB and CIF. As mentioned above, both are INCOTERM agreements.

FOB stands for “Free On Board”. Under an FOB agreement, the seller shoulders all transportation costs up to the port of shipment.  This includes all loading costs. On the other hand, the buyer is responsible for all marine freight, insurance, unloading costs right from the port of loading. Moreover, the buyer will meet all transportation costs from the destination port to his or her factory. It is important to note that all risk is transferred to the buyer when the goods are loaded on board at the port of shipment.

Under a CIF (Cost, Insurance, and Freight) agreement, the seller should provide minimum insurance for the goods in transit, pay for freight costs and is responsible for all costs of goods in transit up to the buyer’s preferred destination point.

Why should you consider shipping FOB for your garment and textile import?

Having explained the two agreement terms above, considering FOB to import your garments and textiles will give you an upper hand in minimizing overall import costs and increasing your convenience. More often than not, first time importers and people importing small quantities use CIF where convenience is guaranteed. You don’t have to deal with unfamiliar shipping and freight details. Notwithstanding the convenience factor, you may end up paying a fortune to import your textile, garments and other goods under this agreement.  This is because the seller will collaborate with his forwarder and is likely to mark up the costs charged by his forwarder to make a profit. As a buyer, you will have no control over the invoice.

Importing FOB Garments

When shipping FOB, you have total control over your freight costs. You have the benefit of hiring your own forwarder at an agreed freight rate, among other charges.  You will also be able to get exact and timely information from your forwarder, hence solving any service issues or hassles during transit. You will also enjoy transparency on shipping movements, as you have a local contact to provide shipping information, quoted costs for both freight and locals. On the other hand, if you ship CIF, you may not know who the local handling agent is and what their charges will be, which may bring with it inconvenience and additional costs in handling your shipment.

Ultimately, if you decide to ship with an FOB agreement, you will be in control of your shipment.  You will be in a position to choose a method of shipment, your own agents, organise for a convenient insurance policy and set your own transit time. With CIF, all the above-mentioned variables are controlled by the seller, which may disadvantage you.

Please download our INCOTERMS quick reference guide or refer to the Australian Customs and Border Protection Service Fact Sheet. 
(Note this fact sheet is a general guide only)

To request more information on shipping your goods FOB and how we can assist, contact Magellan on 1300 651 888 or email us at fashion@maglog.com.au with your enquiry.

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