5 Common Reasons for Shipping Delays from China 10 Causes of Shipping Delays from China - Part 1

Freight Ship

Often when our clients enquire about the transit time for their container to reach their port, we like to add a week over the transit time stated by the shipping line.

To this they often come back stating that their forwarding company told them it takes a week less.

According to Drewry Shipping Consultants, only about 65% of the vessels are on-time on average. Click To Tweet

We like to account for this contingency, because vessels are rarely “on-time”. In fact based on research from Drewry Shipping Consultants, on average only about 65% of the vessels are “On-Time”, so the transit times quoted by carriers should always be taken with a pinch of salt.

In my post on avoiding logistical delays during the Chinese New Year I focused on the reasons for shipping delays from China during the Chinese New Year. However, shipping delays from China & elsewhere can occur at any time.

There are various reasons for the delays and in this post I look at some of the common reasons for shipping delays from China. This will be a two part post. Some of these causes are avoidable and we look at what we can do to avoid or minimise the risk of these delays while others are simply unavoidable.

1. Container not being returned to liner by cut-off date

For full containers (FCL), the container is normally loaded at the supplier’s premises & then sent back to the container yard at the port. Every time you book a slot on the vessel, the shipping line issues a “cut-off” date, which is the date by which the loaded container should be returned at the port.

Often for various reasons the container is not returned on time, leading to the container missing the scheduled vessel.

In case of an LCL shipment, the goods are sent to a groupage company’s warehouse (In simpler terms, a large forwarder), where they “group” several LCL shipments and consolidate them into a single container, which is then sent to the port as above.

This is probably the most common reason for delays when it comes to sea shipping. Some of the reasons for not meeting the cut-off date are covered below, but this can happen due to a lot of other reasons too such as problems during domestic trucking, issues discovered during “loading inspection” that require negotiation with suppliers or re-working, etc.

Avoiding liner cut-off date delays with proper planning. Click To Tweet

Advice: In most case, this can be avoided with proper planning. This should include, picking up container on time, planning well for domestic-logistics (when buying EXW), & being very specific on your deadlines with your suppliers if buying FOB.

2. Delays at China Customs Due to Incorrect Documentation

This from my experience is the second most common problem when it comes to causes for shipping delays in China. The customs paperwork is normally straight forward, however there can be delays both at port of loading & port of destination due to either incorrect or questionable paperwork.

Many Chinese suppliers get export rebates from the government, which can range anywhere from 0% to 17%. These rebates sometimes, account for a larger proportion of the profit margin than the direct margin from the sale.

Therefore, some manufacturers claim incorrect HS codes in order to maximise their rebate income which is a form of rebate fraud.

On other occasions, unintentionally entering the wrong HS code also happens, either due to not being sure of the correct HS Code or due to a simple data-entry error.

There are several other paperwork related issues that can cause delays in customs clearance of your China shipment, for e.g. not having the correct documentation for products with batteries.

Advice: Ensure that you are working with factories that are used to “export” processes. In case you are working with factories not experienced in international trade, use a reliable forwarder who knows the processes well & ideally has experience in your given product.

The experience becomes more relevant when working in developing countries like India or Brazil that have complex customs clearance processes. It is also a good practice to clarify the HS Code for your product with your factory.

3. Customs Inspections

Customs at both “Port of Loading” & “Port of Destination”, select a proportion of the containers for inspection. Each customs has their own policy for selecting the containers to be checked, but this is normally based on a few factors like the risk profile of a given product or history of the exporter but can also be on random basis.

chinese customs

It is difficult to know the exact criteria for this & it varies from country to country. This is normally referred to as a “Random Customs Inspection”. Unfortunately, when this happens you not only miss the “cut-off” date in most cases but also have to pay the customs charges for the privilege of having your container inspected.

On top of that you often have to pay container rent charges & demurrage charges.

Normally the customs in the importing country is more concerned with what is coming in, than customs in the country of export, however the percentage of containers selected for inspection can vary significantly and depends on several factors like a country’s import & export policies, risk-management systems & priorities, etc.

The intensity of random inspections also depends on “key events” in importing/exporting country that may require increased monitoring of cargo due to security risks. Customs inspections are also designed to prevent intellectual property issues, i.e. exporting or importing trademarked or patented products.

Advice: There is not much you can do to prevent to this, however, if you follow the advice above and have solid paperwork and your products are fairly standard, there is a lower probability of this happening.

4. Port/Terminal Congestion

This normally happens when there are more containers at the port than the port can handle either due to resource constraints or other factors. In China, this normally happens just before the Chinese New Year or around October, i.e. for anticipated Christmas sales.

Port Congestion

Advice: Chinese New Year tends to be the worst time for this and in the post on How to Avoid Logistical Delays to your shipment During the Chinese New Year I looked at how this can be avoided.

5. Vessel Delays due to Weather Conditions

Vessel delays due to poor weather conditions happen often. They effect the scheduling in two ways:

  1. When a vessel has to skip a port of call due to poor weather conditions or
  2. When the vessel is at the port but cannot leave due to bad weather

Advice: Pray & hope for the best.

weather conditions

Conclusion

While some of the above issues can be avoided with proper planning and occur less frequently as you get experienced, the best practice is always to add at least a week more than the quoted transit time for sea shipments as contingency.

In the next part of this post, we will look at 5 more reasons why vessel delays may occur. If you found value from this post, please spread the love by sharing this post.

I would love to know if you have had any experiences due to vessel delays and how it they impacted your business.

Ashish is the founder of IMEX Sourcing Services, a sourcing & QC company helping people importing from China manage their costs & risks as well as develop new products. Ashish also does consultancy work in the field of International Trade & Import Risk Management & loves to write during his free time.

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  • Carol Hilton

    Just try air or courier for small or midium goods shipping from China, it is much more faster compared to sea shipping.

  • Vino Mody

    Wonder if anyone has information on the average percentage of containers for electronics products from China with problems (small to big) requiring opening the container and sorting upon receipt at the US freight forwarder warehouse? I get numbers varying from 5% to 10%. Examples of problems: labeling issues, wrong products, defective products, etc. Appreciate you sharing your data. Shipments to Mexico get delayed when containers have to be inspected in a US bonded warehouse before they are moved to Mexican Maquila, for example, in El Paso, Texas, the border town.

  • Ashish Monga

    Good point Alexander. I have found this to be an issue especially with developing/bureaucratic countries. Developed countries tend to be a lot more flexible on minute paperwork errors like spelling etc, but in developing countries we have seen shipments being help because of a small typo.

  • Ashish Monga

    Watch out for Part 2 James, we cover that.

  • Ashish Monga

    Hi Amanda,

    CNY is a nightmare when it comes congestion. We always try to advice client to beat the CNY Rush but despite all the prep, it is hard as factories also have longer than expected production times during this period or trying to do finish projects in a hurry, also causing quality issues.

  • Ashish Monga

    Hi Eric,

    With improper documentation the issue can very often be sorted before the cut-off time but customs inspections definitely hurt more in terms of the time & money lost. From our experience, on avg. we have about 1 in 20 shipments inspected. What has your experience been like?

  • Eric Pater

    In my experience the custom inspections in China is a more frequent issue than #2 improper documents.

    But maybe i am just very unlucky.

  • Alexander

    Great read! I am looking forward for the second part. Just to add, minute paperwork errors can delay a shipment and can hold up in the customs five to seven days. Just make sure to accurately write each of the product description and make sure that you include the right HS code as well as this can be a nightmare!

  • James

    Port delays really damage business! Is there any chances that vessels re-route or even make unscheduled stops causing delays?

  • Amanda

    Great article. I can totally relate to the fourth reason – port congestion. This has happened to our company on the recent CNY. Our stocks didn’t arrived on time and worst it was delayed for almost 2 months. This has greatly affected our cash flow as we didn’t anticipated that that is going to happen if we had known earlier then we would have been prepared. Looking forward to the second part!