China Bond-Logistics Service

China Bond-Logistics Service <mature stage> & India <beginning stage>

As the economic globalization is further accelerated, Chinese government is speeding up the tempo of reform to meet the increasing demand of the manufacturing industry and international trade. A number of bonded logistics parks and centers have been established along the Coastal Ports; such as Shenzhen/Yantian, Guangzhou, Xiamen, Shanghai, Suzhou, Qingdao, Bejing, Tianjin.

In principle, all importing goods into China must have to apply Import Duty in accordance to the set scale of tariff per HS coding category; except few issues of exemption. All exporting goods must have to apply VAT tariff to shipper/exporters, of whom may enjoy a certain % of Export Refund upon filing export declaration through completion of China Export Customs process. However, the complexity of international trade is not meant to be as simple as the 2 channel thus a flexibility solution in logistics handling is vital factor of Best practice in business decision.

Hereby, we would like to illustrate business demands as challenges, before a Bond-logistics solution is to apply by introduction.

Challenges to enhancement of efficiency in Business demands, and to make use of the policy advantage for business decision, to name for popular business models:

When material firstly imported before production, are required to export in order to reconcile the Import Duty liability and import tariff and amount withholding by manufacturer or importer.

Solution and Advantage: entering into BLP <Bond Logistics Park>.

Scenario 1:- China made products <consisting of imported material> is to re-sell within China

Solution and Advantage: entering into BLP <Bond Logistics Park>.

To enable the manufacturer completing the export declaration and reconciliation of Import Duty liability..
Cargo right and ownership became to the Buyer, upto buyer’s next decision of cargo move.
Immediate import duty deferred, available for keep-inventory, and for next buyers imported within China, and or re-export to overseas.,
Status changed of Buyer became a Shipper now. New and revised Shipper’s Invoice is made.
Any value add function such as pick-pack, tagging, re-label, VMI.
Saving extra cost and time to eliminate the transaction of physical Export and re-export, supported by appropriate location closest to vendors or buyers.
Scenario 2:- Importing Goods for multiple demands by entering Import bond-warehouse:-

Overseas Exporters and Chinese Importers the requirement and demand to exercise the best of the interest by selecting import bond-warehousing of imported goods into China:-

When exporter may not confirm with buyers, and temporary hold imported goods, VMI <vendor management inventory > distribution model.
Import duty deferred, during non-urgent importing process.
Imported goods are part of PO, and to hold as storage, and awaiting for arrival of other merchandise. Sometimes goods may need long period of import documentation application and hold in bond.
Enjoy a favorable import tariff, by difference of tariff scale of HS code. Some HS code may be favorable by part entry, and some may be better by assembly.
Storage can be interpreted as more meaning to business decision in dollar-wise, such as, to collect late payment by buyers, and also enable a speculation on best -selling price in right timing.
Scenario 3 – Complexity of exporting goods for world-wide distribution:-

More and more international buyers are modifying the worldwide Distribution Management by seamless supply chain flow that to be direct, exact, cost and time saving with better pre-planning. Ideally, the manufacturers can do all the work to accomplish the need of buyers; however, most of the manufacturers in China may have limitation to fulfill those tasks which facilitate the best model of distribution. Therefore, Scanwell is to serve as an extension in between by running the bond-distribution, as well non-bond distribution. .
Challenges and advantage:

Buyer’s PO per Exporter, is always not identical to Sales Order of distribution.Thus,it is critical to fulfill a direct, exact Sales Order for multiple end-buyer distribution overseas. The solution of moving into Export Bond is helping completion of Export declaration per Export, as well as to re-sort and pick-pack at origin to multiple end-buyers, especially for pre-sale orders.
Some Sales Order to end buyers may need a combination of set, which production is made by different factories that to re-assemble before distribution.
End-buyers are meant to same importing countries, of multiple countries that those export PO should be segregated in transportation mode to save transportation cost.

Re-export documentation flexibility is a must requirement in fulfilling the Documentation Flow, with right products, right invoice pricing, right end consignees, right final destination; without error.
International transportation cost is not standing alone, that there are numerous intangible cost existing within a business corporation.

Bond Facility of China:-

You may or may not be heard of some terminology of bond facility in China; there are:-
BLP <Bond Logistics Park- all functions in Bond Logistics, import, export, re-export, Export VAT approval receipt, international transshipping, international trading, display, maintenance, simple processing, pick-pack >
FTZ <Free Trade Zone- Bond areas with warehousing for simple processing of products, re-export functions, international trading >
Import Bond-warehouse-A Customs Bond warehouse for importation only.
Export Bond-warehouse - A Customs Bond warehouse for Exportation Only.
EPZ <Export Process Zone-An area confined with multiple approved Bond-Factory, under presence of Customs house supervision in controlling of imported material for processing, and bond-transfer to export customs points.