Navigating the world of Shipping
Since we decided to undertake creating our own board game and self-publish, of all the aspects encompassed the most intimidating for me was (and still is) shipping. I had the passion for game design, found amazingly talented people to partner with to help fill my deficiencies (in particular artwork and social media), then collectively we had an understanding of the entrepreneurial business side and customer service aspect. Now that we have just completed our first mass production of Muskoka: The Board Game, getting our product from point A to point B has been an interesting process to navigate.
The best advice I can give: contact a logistics expert. I spent hours trying to understand the customs process, what type of duties or taxes we would be paying on our shipment, whether quotes included insurance, how it would be packaged, the list goes on. Thankfully we had a trustworthy and reliable connection through family friends who have dealt with this process many times and are handling our shipment. Borderworx Logistics has been great to deal with in answering questions and taking care of our needs, having factories in both Canada and U.S. Of the many new undertakings we’ve worked through to bring this game to life, I have appreciated outsourcing this one.
Even still, here are some practical things I’ve learned along the way:
- The difference between shipping terms like CIF, FOB and Ex Work. When we initially quoted manufacturers in early 2021, all basically stated FOB which stands for “free on board” or “freight on board”, that is to say the transfer of ownership and therefore risk occurs at the port. The seller (manufacturer’s in this case) are responsible to ensure shipment makes it there safely. The buyer (us in this case) assumes responsibility once loaded onto the boat. When we shortlisted manufacturers and requoted, one changed the shipping conditions to Ex Work, meaning we would assume full responsibility door to door. Faced with bearing all costs, logistics and responsibility, it was a major deterrent and one that could have been easily overlooked without that knowledge of terminology.
- The requirements for importing to Canada. Borderworx has been able to assist greatly with what we needed to do to be officially registered. This included generating a business number with the CRA (Canadian Revenue Agency) and creating an import account, as well as being set up with a customs broker. We obtained our HS (harmonized system) code that identifies product categories of international goods, corresponding to any duties owed. All these steps we were unaware of but needed to happen in order for our shipment to clear.
- The packaging and movement of goods. To gain an understanding into the approx cost of shipping say 1,000 vs 2,000 vs 5,000 copies, it required precise measurements of our game and knowing how they would be packaged together. Did we want a FCL (full container load) or LCL (less container load)...if FCL, did we want a 20’ or 40’ container...if we did 20’ how many copies of our game would fit in? If our games were packaged into cartons, how many games to a carton? Would they then be loaded on pallets? When it comes to the weight and dimensions, it is necessary to be exact as it will affect space and cost. Ultimately we did our best to estimate ahead of time, but upon completion the packing slip provided by our manufacturer gave the exact shipment details required.
As for challenges faced, the last few years has been an unpredictable and an often daunting time. According to Statista data in February 2020, the global container freight rate index was just above US$1,500 for a 40’ container. They calculated this rate based on eight major routes, including spot rates and short-term contracts, taking the average of five business days in the last full week of each month. Then COVID struck, people moved to online shopping as demand for goods increased, whilst simultaneously lockdowns and sickness caused strain, meaning shipping rates began to soar. Twelve months later in February 2021, that same container now averaged over US$5,000 - more than tripling from a year earlier. Another twelve months later in February 2022, now close to US$10,000 - almost double from a year prior and over 6 times the cost of 2 years before!
During 2022, as lockdowns ceased and things around the world began to reopen, the downturn occurred with month on month decreases in the average cost. There has recently been renewed fears of increasing costs, with countries like China implementing a ‘zero COVID’ policy (and since abandoning it), resulting in sick workers causing shipping delays. However, this has been offset by the current economic outlook in North America, with consumer spending dropping demand and the easing of supply chain issues.
For us we eagerly await, as last week production was completed and our first shipment commenced its journey. Our manufacturers delivered to port this past Monday. After being loaded onto a boat, it will cross the ocean to the West Coast of Canada. From there, it will be loaded onto rail to Toronto, where the container will be unpacked and moved by truck to our final destination. All of this is anticipated to take roughly 60 days, which will take us to mid-March and on time to fulfill our Kickstarter rewards to backers…where we get to experience being on the other side of shipping - as senders.