Practical trade support

THE FOLLOWING CASE STUDIES SHOW HOW WE SUPPORT OUR CLIENTS WITH THEIR SOURCING EFFORTS FROM CHINA.

Quality problems

The issue: Products from China are defective or do not comply with foreign production standards.

The case: A company sourcing kick scooters from a Chinese manufacturer had problems with the stability of the steering bar, another company complained about excess fabric hair on the elastic bands of knee protectors.

Cause & solution: Both problems were due to production processes that could be discovered, analysed and finally solved through on-site quality control. In the case of the kick scooter, the factory workers used only their bare hands to check the screws holding the steering bar. The installation of a specific 'screw testing tool�decreased the percentage of defective goods from 20% to less than 2%. As for the knee protectors, the excess hair came from Velcro straps. After the straps were covered up with fabric during the production process, the issue was solved.

Contract misunderstandings

The issue: Contracts between overseas companies and Chinese manufacturers are prone to misunderstandings and different interpretation.
The case: A foreign company received an order of stainless steel trowels from China some of which were rusty.
Cause & solution: A laboratory test showed that the stainless steel used to produce the goods was of low quality (grade 1 steel). However, the contract didn't mention anything about the quality grade of the steel. Furthermore, according to Common Law (which the contract was based on) the foreign company had to prove that the trowels were not made of stainless steel. The solution to this kind of problems is a clear and comprehensive contract that states duties and rights of all parties involved and specifies quality levels of raw materials and end products.

Shipment timing

The issue: Goods are shipped out of at the wrong time causing unwanted warehouse costs.
The case: A shipment from a Chinese supplier arrived one month before the agreed time which meant additional storage fees for the foreign company.
Cause & solution: The foreign company's appointed forwarding agent only arranges a vessel booking space with confirmation by the former. this case, the foreign company did confirm the shipment and had to take the blame. The solution to this problem is thorough logistics process management including a clear time schedule of approval procedures.

Documentation troubles

The issue: Original shipping documents can be lost or destroyed.
The case: A courier company lost the original shipping documents of a shipment from China to Estonia. As a consequence, the foreign company in the destination harbour could not receive the goods.

Cause & solution: The recipient was missing the original Bill of Lading which allows the owner to receive a load of shipped goods. thorough analysis showed that the cargo could only be released against production of a bank guarantee proving that the goods were rightfully owned by the foreign company. In the end, the charges of the bank guarantee and all costs deriving from the long stay of the goods in the destination port (e.g. demurrage) had to be paid by the courier company.

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