Someone is considering developing a transshipment trade business and is wondering if it is useful. Friends have different opinions, some say it can circumvent barriers and generate profits, while others say it is complex and risky. The best answer points out that transshipment trade is useful, can circumvent trade barriers, increase trade opportunities, and generate profits, but it also has risks and requires good assessment and response measures.
Do you know about the risks of transshipment trade in Jingdezhen?
Resolved
I am planning to start a transshipment trade business in Jingdezhen recently, but I haven't dealt with this before, so I'm a bit unsure. I want to ask everyone, are there risks in transshipment trade in Jingdezhen? If so, what are the main aspects? I hope experienced friends can tell me, so that I can prepare in advance and carry out the business more smoothly.
Trade Expert Insights Answers
Transshipment trade in Jingdezhen does carry risks. Firstly, there are logistical risks, where cargo may encounter delays, damage, or loss during transit. For example, transport vessels encountering adverse weather could lead to delays, affecting delivery times.
Secondly, there are policy risks. Trade policies, both domestic and international, are constantly changing. Failure to stay updated may result in trade becoming restricted due to policy adjustments, such as increased tariffs raising costs.
Furthermore, there are market risks. Market demand is fickle. If market forecasts are inaccurate, and demand drops after purchasing goods, it can lead to inventory backlog.
Additionally, there are supplier and customer credit risks. If suppliers fail to deliver on time or customers default on payments, it can create difficulties for the company's cash flow. Therefore, comprehensive assessments and contingency plans are necessary before commencing business.
Yes, there are risks. For instance, customs inspections may occur during the transshipment process. If cargo information is inaccurately declared, it can easily lead to the detention of goods by customs, not only causing delays but also potential fines, which significantly impacts the trade process.
Exchange rate fluctuations are also a risk. When engaging in transshipment trade in Jingdezhen, it involves the exchange of different currencies. If exchange rates change significantly and unfavorably between the contract signing and payment collection period, it can result in exchange losses, affecting profits.
Intellectual property rights also pose a risk. Jingdezhen porcelain is renowned. If the goods involved in transshipment trade infringe on intellectual property, such as counterfeiting well-known brand porcelain, once discovered, it can lead to legal disputes and substantial compensation.
There are also warehousing risks. During warehousing at the transshipment point, goods might be damaged due to poor warehouse management, such as humidity. If the warehousing fee calculation method is not well-negotiated, costs may also exceed budget.
The risk of choosing an inappropriate trading partner is significant. If a partner is poorly managed or has a bad reputation, various problems may arise during the cooperation, affecting the smooth progress of transshipment trade.
Documentation risks cannot be overlooked. Transshipment trade involves complex documentation, such as bills of lading and packing lists. Any error or omission in these documents can lead to delays in cargo delivery.
Political situation risks must also be considered. If the political situation in the transshipment country or related trading countries is unstable, it could lead to risks such as trade interruption.
There is also a risk if transportation insurance is not adequately purchased. If an accident occurs during cargo transportation, and there is no appropriate insurance coverage, the losses must be borne by oneself.
Language and cultural differences can lead to communication risks. Poor communication with foreign clients or parties at the transshipment point can lead to misunderstandings of business requirements, affecting the trade process.