Company C, a manufacturer and seller of various lighting equipment, faced significant challenges with its procurement process from multiple Chinese suppliers. Previously, products were exported to Japan using consolidated shipping (LCL) for each supplier, which resulted in several issues. The costs associated with consolidated shipping led to higher purchase prices due to elevated freight unit costs, while the reliance on suppliers for exports created inconsistent lead times for procurement. Additionally, as the number of suppliers and the frequency of exports increased, the complexity of import management grew, making operations more cumbersome.

To address these challenges, we proposed implementing a “Buyer’s Consolidation” strategy for Company C. This approach involves an NVOCC (Non-Vessel Operating Common Carrier) collecting small-lot products from multiple overseas suppliers at a single shipping point on behalf of the buyer. These products are then consolidated into one container and transported to the destination. We established a system to consolidate products from various Chinese suppliers at our base in Hong Kong, allowing for the export of full containers to Japan as needed.

This new strategy has yielded significant benefits for Company C. By switching from LCL to full container loads, transportation costs have decreased substantially, leading to reduced import and export costs. Additionally, the consolidation process has optimized the time from procurement to sales, resulting in shorter lead times and improved overall supply chain efficiency. Furthermore, better control over shipping schedules has allowed for more precise inventory planning, optimizing inventory management.

Another advantage of this approach is the streamlining of operations. By unifying the point of contact for import and export operations with our company, we have enhanced the efficiency of customs clearance and other procedural management tasks. The implementation of buyer’s consolidation offers several key benefits: cost savings through optimized cargo space and reduced handling expenses; improved efficiency in logistics processes; a reduced risk of damage due to fewer touchpoints in transportation; and enhanced control over the shipping process, allowing for better planning and responsiveness to market demands.

By leveraging our expertise as an NVOCC and implementing buyer’s consolidation, we have helped Company C transform its international supply chain into a more cost-effective, efficient, and manageable import process for their lighting equipment business.