7.4 Freight Booking, Consolidation & Exception Handling

Freight is the volatile variable that can quietly erase the cost savings you fought for during negotiation. A 5% price reduction on a component is meaningless if the logistics team books an express courier for a 200 kg pallet because they lacked a decision matrix. Booking freight is not an administrative task; it is a cost-control algorithm that balances velocity against volume. You must strip the supplier of the right to choose the carrier ("Prepaid & Add") and enforce a strictly controlled routing guide.

Carrier Selection Logic

Do not guess. Use a rigid weight-break model to select the transport mode.

Rule 1: The Courier Zone (< 45 kg)

• Mode: Integrator (DHL, FedEx, UPS).
• Logic: For small parcels, the "all-in" per-kg rate of a courier is cheaper than the minimum charges (handling, doc fees, pickup) of a freight forwarder.
• Action: Use your corporate account number. Do not let the supplier prepay.

Rule 2: The Air Freight Zone (> 45 kg)

• Mode: Freight Forwarder (Consolidated Air).
• Logic: Above 45 kg, courier rates become punitive. A forwarder consolidates your cargo with others to achieve a lower rate per kg.
• Constraint: Requires a "Spot Quote" or agreed rate sheet. Transit time increases by 2–3 days compared to courier due to consolidation handling.

Rule 3: The Ocean Zone (High Volume / Low Criticality)

• Mode: LCL (Less than Container Load) or FCL (Full Container Load).
• Logic: If Lead Time > 6 weeks AND Weight > 500 kg → Then Ocean.
• Risk: Sea freight exposes components to high humidity and salinity. Desiccant and vacuum sealing (MBB) are mandatory.

The Consolidation Mandate

Shipping five separate 5 kg boxes from Shenzhen on Monday, Tuesday, and Wednesday is financial negligence.

• The "Friday Rule": Unless a line-down situation is active, all shipments from the same region must be consolidated into a single weekly pickup (usually Friday).
• Regional Hubs: If you have > 3 suppliers in a region (e.g., Guangdong) → Then utilize a forwarder's "Buyer’s Consolidation" service. Suppliers deliver domestic (cheap/free) to the forwarder’s local warehouse. The forwarder builds one pallet and ships it under one Air Waybill (AWB).
  • Result: One customs entry fee, one handling fee, lower per-kg rate.

Packaging & Labeling Responsibilities

The supplier is responsible for the physical integrity of the goods until the risk transfer point (Incoterms).

• Palletization: If > 30 kg or > 4 boxes → Then Palletize. Loose boxes get lost; pallets generally do not.
  • Standard: Euro Pallet (120x80 cm) or Industrial (120x100 cm). No overhang allowed.
• Labeling: Every box and pallet must have a label on two adjacent sides.
  • Content: PO Number, Part Number, Qty, Box X of Y.
  • Visuals: "Fragile," "This Way Up," and "Do Not Stack" (if applicable).
• Volume Weight Trap: Freight is charged on the greater of Actual Weight vs. Volumetric Weight (L x W x H / 6000 or 5000).
  • Action: Mandate that suppliers minimize "air." If a supplier puts a small reel in a huge box, charge back the freight difference.

Pro-Tip: Instruct suppliers to photograph the pallet on the scale before the truck arrives. This photo is your primary weapon if the forwarder later claims the weight was higher.

Exception Playbook: When Things Go Wrong

Logistics is chaos management. React with a standard protocol.

Scenario A: Disputed Weight/Dimensions

• Trigger: Forwarder invoice is 20% higher than quote due to "chargeable weight."
• Action: Demand the "Proof of Weight" (Warehouse Receipt) from the forwarder. Compare against the supplier's pre-shipment photo and Packing List.
• Resolution: If the forwarder cannot prove the volume increase, pay only the quoted amount.

Scenario B: Damaged Cargo on Arrival

• Trigger: Crushed box or tipped shock-watch indicator.
• Action:
  1. Do not sign the POD (Proof of Delivery) cleanly.
  2. Write: "RECEIVED DAMAGED - SUBJECT TO INSPECTION" on the driver’s copy.
  3. Photograph: Before touching/opening the pallet.
  4. Notify: Supplier and Insurance immediately.
• Rule: If you sign for it as "clean," you cannot claim insurance later.

Scenario C: Lost Documents (Customs Hold)

• Trigger: Shipment stuck at port because Commercial Invoice is missing from the pouch.
• Action: Do not wait for the physical paper. Email the digital "Golden Set" (CI + PL) directly to the broker.
• Prevention: Mandate that a duplicate set of docs is taped to the outside of Box #1 in a clear pouch.

Final Checklist