2009: Taking Care of the Pennies (Part 9)
AVOIDING GRI on MATERIALS SHIPMENTS from CHINA to NORTH AMERICA
Executive on Demand Position:
TBA
Project Outline:
TBA
Project Outcome:
GRI or General Rate Increase is a shipping fee added to shipments out of China during busy times of the year. This fee ($USD 500 or more) is applied to each container being shipped during the busy times of the year such as the fall when Christmas goods are shipped and late winter (after Chinese New Year – Traditionally scheduled late January to mid-February) for spring gardening products.
It is important to know where these products are manufactured and the ports most frequently used to ship the goods. The global demand causes a backlog and companies are willing to pay the premium GRI to ensure space on a cargo ship. A buyer knowing and understanding the application of this fee can include in the sourcing strategy to include multiple sourcing factories preferably in different areas of China so that demand can be shifted between factories avoiding the ports that are overloaded at different times.