Consolidating from several factories

They receive goods from your suppliers, book them in against a reference you give them, hold them until the rest arrives, and then load. Most will restack or re-palletise, wrap, and produce a combined packing list and a loading plan. Many offer photographs on receipt, carton counting, weighing and re-measuring, and container loading supervision.

Everything in that second sentence is usually an EXTRA, ordered by name. A warehouse that was asked to receive and load will receive and load; it will not spontaneously check your goods against a specification it has never seen.

They do not know what you ordered. Unless you send the purchase order, the packing specification and the carton dimensions, the only reference they have is the delivery note the supplier wrote — so "received in good order" means the cartons arrived and were not visibly damaged, and nothing at all about what is inside them.

They are not your inspector. Counting cartons is not sampling product, and a consolidator's receiving check and a pre-shipment inspection answer different questions. Where quality matters, inspect at the FACTORY, before the goods leave — because once cartons are at the consolidator, opening and repacking them costs money and the factory is no longer standing next to the line.

They are not a party to your supply contracts, so they cannot enforce your terms against your suppliers, cannot reject on your behalf unless you gave them criteria, and cannot chase a supplier who is late — although a good one will tell you promptly that somebody is.

And they are not, by default, your exporter. That question is the subject of the third section, and it is the one buyers ask last and should ask first.

Draw the journey and mark where each party stops. Supplier A's responsibility ends at their factory gate, or at the consolidator's door, or on arrival — depending on the term you agreed with them, and you probably agreed a different term with Supplier B. The consolidator's responsibility starts when they accept the delivery, on whatever terms are in THEIR contract with you. Between the end of one and the start of the other there is usually a gap, and everything that gets lost, gets lost there.

So name the receiving check, in writing, in three places at once: in each purchase order, in the consolidation instruction, and in the delivery note the supplier is told to send with the goods. What is counted, against which document, by whom, and what happens when it does not match.

The most common single failure is quantity. Cartons are counted, pieces per carton are assumed, and a shortage inside sealed cartons surfaces at the destination — by which time the goods have left China, the container has been sealed and unsealed, and there are three parties who can each point at another. Ask for a percentage of cartons to be opened and piece-counted on receipt, and for photographs. It is a small extra charge against the only evidence anyone will ever have.

Insist on marks that survive the warehouse. Every carton should carry your shipment reference and the supplier's identity in a form the warehouse can read without opening it. Unmarked cartons in a consolidation warehouse are the definition of a problem waiting: they can be mis-allocated to another customer's load, and when a shortage appears nobody can say whose they were.

And agree the cut-off. A consolidation waits for the slowest supplier, so decide in advance how long you will hold the others and what happens when a factory is late — ship without them, hold the container, or split. Holding costs storage; sailing without them costs a second shipment. Deciding under time pressure, with a vessel booked, is how buyers end up paying both.

This is the question buyers ask last, and in China it decides more than the freight arrangement does. Goods leaving the country need an export declaration, and a declaration is made by an entity with the right to make it. When one container carries goods from four factories, there are only two honest shapes.

Each supplier declares its own portion. Several declarations, one container. Each factory is the exporter of its own goods, each is paid directly by you, and each can pursue its own export rebate. It is the cleanest arrangement for matching the money to the goods, and it is more paperwork and more coordination for whoever is booking the container.

Or a single exporter buys and re-exports. An agent or trading entity purchases from each factory domestically, then exports the combined consignment under its own name. Then that entity is your counterparty, that entity is on the declaration, and your money goes to it rather than to the factories. That can be entirely proper — but you should know it is the shape you are in, because it changes who you have a contract with and who you could recover from.

What is not a shape is the informal middle: paying factories directly while somebody else declares the goods as theirs, with no purchase between them. It contradicts the principle China's own foreign-exchange regulator states — that trade receipts and payments follow "whoever exports shall receive foreign exchange, and whoever imports shall make payments" — and it leaves your payment evidence and your export documents describing different transactions.

Ask three questions at booking, not at loading. Who will be named as exporter on the declaration for each supplier's goods? Who is invoicing me, and does that match? And whose name goes on the bill of lading as shipper? The answers take five minutes at the start and are extremely expensive to change once a container is booked and a vessel is cut off.

Write one document and send it to everyone — every supplier and the consolidator — rather than telling each party its own half. Most consolidation failures are not errors; they are two parties acting correctly on different information.

It should carry: the shipment reference and how every carton is to be marked; each supplier's expected carton count, dimensions, gross weight and delivery window; what the consolidator checks on receipt and what they photograph; the cut-off date and what happens if somebody misses it; who is exporter of record for each portion; and where the combined packing list goes.

Give the consolidator your carton specification, not just a count. They are the only party who sees all of it, and they are therefore the only one who can tell you that Supplier C's cartons came in two centimetres taller than specified — which is the difference between a container that closes and one that does not, and which is only cheap to find out before loading.

Expect mixed carton sizes to load worse than any single size. Different footprints leave voids that a uniform load would not, so a consolidated container of four suppliers' cartons holds less than the same volume in one size. Plan the space with the real dimensions from all four rather than with the sum of the four volumes.

And keep something unpaid on every supplier until after the consolidator has confirmed receipt against the packing list. A balance released when goods leave a factory is a balance released before anybody independent has counted them — and in a consolidation, "anybody independent" is the whole point of the warehouse.