4 Secrets of Late Delivery from Chinese Suppliers Part 1: You are not on VIP list

Filed Under:Shipping & Logistics   |   Viewed by: 20421 Persons

You found a Chinese supplier on a trade show like Canton Fair, the suppliers looked good and professional, you gave them business, sent the payment and waited to receive the products. However, one delay after another, months on, your stock and inventory is running out, but the supplier still didn’t make the delivery……

From now and then, I received emails from frustrated buyers, asking me to assist to speed up the delivery from their suppliers. To solve this late delivery issue, firstly we need to know why the suppliers didn’t ship the products within the time limit provided in the contract.

1) Supplier is too busy, and you are not on the top of their priority list

Many buyers try to find big and established suppliers, despite their own business size and order size. They didn’t notice that big but busy suppliers often fail to catch up the deadline of delivery.

One of my Lebanese client has been buying car mats from a decent-sized supplier from East China Zhejiang province. They buy one 20’ every month, the order size is not big, and surely not small.

The cooperation has been good. But since early 2012, the buyers can’t receive products in time, the situation went from bad to worse in recent months. The buyer become very frustrated and puzzled, why all of sudden, the supplier can’t deliver orders in time?

We did some research on the supplier, found that they received a big contract(10 million USD) from Kmart, all their production lines are occupied to produce the order from Kmart, the orders from small and medium sized buyers have to be postponed. The boss of the factory do hope to set up new workshop to increase the production capacity, but it can’t be done overnight, they need to buy land(province like Zhejiang don’t have too much land left to build new factories), buy equipments, hire and train skilled workers, it will take years……

2) With or without a contract, it makes big difference

Most buyers underestimate the power of contract. Aside from being used in lawsuit as evidence of mutual agreement in all aspects of transaction, more importantly, contract can be used as precaution. The contract set the boundary and limit so the other party won’t go beyond too far.

A good late delivery and penalty clause example:

Should the Seller fail to complete the inspection procedure of the goods, the Buyer shall agree to postpone the delivery on the condition that the Seller agree to pay a penalty which shall be deducted when seller remitting the payment of the goods. The rate of penalty is charged at 2 % for every 5 days, odd days less than 5 days should be counted as 5 days. But the penalty, however, shall not exceed 50% of the total value of the goods involved in the delayed delivery. In case the Seller fail to make delivery 25 days later than the time of shipment stipulated in the Contract, the Buyer shall have the right to cancel the Contract and the Seller, in spite of the cancellation, shall nevertheless pay the aforesaid penalty to the Buyer without delay. within 7 working days after the cancellation of the contract,the Seller agrees to refund advance payment, except when the delay in delivery is caused by force majeure. The buyer shall have the right to lodge a claim against the Seller for the losses sustained if any, above the penalties paid by Seller. Excluding the delay in delivery caused by force majeure.

With a remind of such a clause in contract, the supplier will think twice when they delay the delivery.

3) The supplier is trading company, they can’t control the production progress of associate factory

Recently we are inspecting kitchen products for a client in Shandong, the client buy 6 containers from the supplier, and the supplier buy the products from 3 to 4 factories. The delivery was delayed for 5 months.

On trade show, many trading companies make up themselves to look like factories, without visit, you can’t tell if they are trading companies or factories. Trading companies and factories have their own advantages and disadvantages(we have wrote an article about it). Good trading company can manage the supply chain and production for buyer effectively and smoothly, but bad trading company could mess it up.

In our case, the trading company lost control of their associate factories, which causes the 5 month late delivery.

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Comments

3 Responses to " 4 Secrets of Late Delivery from Chinese Suppliers Part 1: You are not on VIP list "

  1. Blues Young on  FEB   4th , 2013 19:38 PM

    One thing I know is that suppliers won't mean to delay the delivery.

    As a trader of steel, sometimes it's hard to control the production schedule with the mill, if the mill make a delay, our delivery would be effected accordingly.

    So usually, we try to have more space of delivery time when signing a contract with the buyer. It does help!

    Shanghai Anya, Blues Young

  2. Mary on  JUL   28th , 2012 9:16 AM

    Hallo,

    I would like to buy handbags and shoes in small quantities from Aliexpress, and then re-sell on Ebay. Therefore i am looking for cheapest or free shipping in order to make some profit. Some suppliers on Aliexpress say they offer free shipping by china post air but i have read elsewhere that China post air is not there or is not safe. Some suppliers say they can ship via Hongkong post. Is it safe to accept china post air? Does it take long to receive the shipment? Or is China Post air fake? Thanks

  3. Korey J Davis on  JUN   28th , 2012 19:17 PM

    This is both an informative and interesting article regarding late deliveries from Chinese suppliers. I think the article brings up some fantastic points about why buyers aren’t receiving their orders in a timely fashion. There are many ways to prepare for, and sidestep this issue. One of my coworkers actually wrote a blog post about how to avoid delays from Chinese manufacturers. Check it out here:

    http://www.chinaperformancegroup.com/2012/03/avoiding-delays-with-chinese-manufacturers/

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