What is the best incoterms to use if you import goods? Who should organize the transport, the supplier or the importer? Here are the views of UNIL of Norway.
Retailing is a tough business with small margins. Every cost counts. Norgesgruppen is the largest retail chain for groceries in Norway. Their private-brand company is UNIL, who imports cargo to Norway.
UNIL believes that Norwegian importers can profit from being more proactive and take greater control of inbound goods flow.
In our session on Transport and Logistics at Gardermoen, Jarle Kjelingtveit, Supply Chain Manager at UNIL, presented their experience related to inbound flow of goods.
UNIL is NorgesGruppen's fully-owned organization for development, import and marketing of its own brands. The goods are delivered exclusively to NorgesGruppen's wholesale business unit, ASKO. UNIL's import warehouse is located in Våler, near the E6 motorway and the port of Moss. UNIL manages a number of private labels, such as Jacobs, Eldorado and First Price.
Jarle Kjelingtveit, Unil
Like all importers, UNIL must relate to a number of challenges: Costs, lead times, transport quality, environment regulations, social responsibility, service, communication and cultural differences.
NorgesGruppen's ambition is that the entire group will be climate neutral and this also applies UNIL.
UNIL receives goods from Norwegian, European and overseas suppliers. Norwegian goods go directly to ASKO's warehouses or via UNIL and is mainly delivered by car. Overseas goods always goes via UNIL's main warehouse and arrives by sea. European goods arrive by ship and car and is delivered via UNIL warehouse, with or without cross-docking, to ASKO's reigonal wareshouses.
Optimal cargo inflow
The following elements are important:
- Focus on eco-friendly and ethically correct transport
Including sea, rail or combinations. Focus on newer truck fleets for trucking. Complying with laws and regulations.
- Minimal administration
Upsteam overview. Proper preparations for import
- Ownership of the import process and customs
Customs preparation. Control in a customs warehouse. Knowledge and expertise internally.
- Total cost overview
General overview of all costs in the cargo flow
The most important aspect of achieving good flow to Norway is to take control of the transport youself. Foreign suppliers often have limited knowledge of transport to Norway. And, FCA (Free Carrier) / FOB (Free On Board) terms enforces active choice of transport giving importers full control from the place of loading. Cargos arrive at the time you want. In this way importers can take ownership of the value chain and achieve cost savings.
Jarle Kjelingtveit believes that also importers who are smaller than UNIL should focus on this.
Sea transport from Europe
Sea transport to Norway is competitive from France, Benelux and most of Germany. Door-to-door costs are 10-20% lower compared to trucking. The shipping lines have been clever and extended their catchment area. However, transportation is only profitable up to a certain limit. Sea transport is safe, predictable and providers offers good traceability.
Lately UNIL also started using Unifeeder new route from Poland to Norway for some of its cargo from East Germany. As a policy, UNIL accepts the disadvantage of sea transport with limited frequency, if pricing and lead time are attractive.
UNIL also uses trucks for inbound goods flow, mainly from Denmark, Sweden or other locations where you can not justify the use of sea transport
Today, 50-60% of incoming import cargoes go by sea, thanks to meticulous and systematic monitoring.
Lessons learned and shared!
To find your provider of short sea shipping go to ShortSeaShipping.