SOP Freight Consolidation in China

SOP Creation: 11/10/2022

Process Start Date: 11/14/2022
Last Updated: 11/11/2022 as a first draft

SOP Goal 92/92

The purpose of this document is to share a freight consolidation best process guide
to aid the team in reaching our freight consolidation goal of 92%.

Our goal is to maximize all freight movements to reach optimum container capacity.

Our 92% goal has two measurable definitions:

1. 92% container capacity means we want to consolidate our freight in 40’ or larger
containers 92% of the time.
2. Containers are filled to 92% of capacity based on the usable volume of the
container.

Our Consolidation Process

Container preference ranked from High to Low:

● JB Hunt 53’ container/trailer

● 40’HC (or 45’HC) Container through Flexport or Rohlig depending upon the rate
● 40’ Container through Flexport or Rohlig depending upon the rate
● 40’ or 40HC’ filled with LCL consolidated freight from multiple suppliers -
consolidated at CFS (Flexport or Rohlig)

***JB Hunt 53’ trailers require a larger load zone at the factory. This must be made
through special arrangement between the JB Hunt contracted trucker and the factory.
Not all factories will be able to utilize a JB Hunt container.

Above containers count toward our 92% goal

● 20’ container - not preferred, minimized - counts toward the 8%

● LCL - least preferred, minimized - counts toward the 8%
 Shipping a 53’ container FOB Shanghai or FOB Yantian via JB Hunt is the preferred
option as the rate per CBM is 40% less than what we pay for a standard
container.

A 20’ container costs almost as much as a 40’ container so it rarely is a good option
to ship via a 20’ container. We do not consider shipping 20’ containers as
achieving our 92% freight consolidation goal.

Consolidation Guidelines

If the PO is less than 60 CBM: consolidate into one of our preferred shipping
methods outlined above.

● Cross check the SKUs included on the PO against the Sales Opportunity, Sales
Promise Date and in-stock & out-of-stock rates in Netsuite.
● If delaying the PO shipdate in order to consolidate with other POs doesn’t
jeopordize a Sales Opportunity or In-Stock rate, hold the PO to consolidate into a
full container.
● For full containers, assume a 70 day lead time from Vessel Departure to the
Receipt Date at our Indy Warehouse in the U.S.

Preferred Ports

A letter was sent to all Suppliers on September 6, 2022. It stated we prefer to

consolidate our shipments into 40’ or 40’HC containers whenever possible. In
addition, we have now added the JB Hunt 53’ container as an option.

“Our preferred ports and terms are FOB Yantian (Shenzhen) and FOB Ningbo.
Our Manila SC team will be working with you closely over the coming months to
transition this initiative into a working process.”

Freight Consolidation Letter to Suppliers

 True Brands’ buying terms are Terms are FOB port, we do not accept
ex-works terms.
Any supplier currently quoting ex-works terms needs to update to FOB
port terms.

Suppliers shipping via the below ports need to change to FOB

Yantian/Shenzhen:

Guangzhou
Zhuhai
Haikou
Zhanjiang
Jiagmen
Hong Kong
Shantou

Suppliers shipping via the below ports need to change to FOB

Xiamen:

Taibei
Fuzhou

Suppliers shipping via the below ports need to change to FOB

Ningbo:

Shanghai
Wenzhou

Suppliers shipping via the below ports need to change to FOB

Qingdao, if possible:

JB Hunt has highly competitive rates from Qingdao for their 53’ containers.

Tianjin
Beijing

Offshore Logistics Partners

 Flexport - CFS consolidation and freight forwarder used for ocean transportation

Flexport

JB Hunt - freight forwarder used when we have enough freight to fill 53’ trailers
sailing from the ports of Shanghai, Yantian & Qingdao. Qingdao rate is
extremely competitive.
(China based contacts will be inserted here.)

Rohlig - CFS consolidation and freight forwarder used for ocean transportation
(China based contacts will be inserted here.)

Domestic Logistics Partners

Flexport - dray from port to 3PL

CTE Logistics - 3PL transloader

CHR - intermodal rail moves and domestic trucking

JB Hunt - intermodal rail using their own 53’ trailer & domestic trucking

Definitions
FEU = 40’ Container (or 40’HC, 45’HC). Estimated usable volume is approximately 55-
58 CBM. 40’HC Container capacity is approximately 60-68 CBM

TEU = 20’ container. Estimated usable volume is approximately 25-28 CBM.

53’ JB Hunt Container/Trailer - Estimated usable volume is approximately 96 CBM.

The above estimates assume we are shipping small/medium cartons.

CY - Container Yard

CFS = Container Freight Station

CBM stands for cubic meters. It is a metric unit of volume that describes how much
space your consignment takes.
CFT stands for cubic feet

Transportation Incoterms

Formulas

How do you calculate CBM?

Easy online CBM Calculator

To calculate CBM, follow these few steps:

1. Find the dimensions of your package in centimeters (length, width, and height).
2. Convert cm to meters. To convert centimeters to meters, divide by 100. For
example, if the length is 15 centimeters, divide 15 by 100, which is equal to 0.15
meters
3. Follow the CBM formula and multiply all those values together.

Length x Width x Height = CBM

If you want to convert CBM to CFT, use the following equation:

1 CBM = 1 m³ = 35.3147 cu ft

To calculate CBM with inches:

1. Find the dimensions of your package in inches (length, width, and height).
2. Compute their product according to the CBM formula:
CBM = length × width × height.
3. Divide the result by 61,024 to convert the volume from cubic inches to cubic
meters.

Air Freight Shipments

Air freight is calculated using volumetric weight, rather than a standard CBM
calculation.

The standard formula used is length (cm) x width (cm) x height (cm) ÷ 6000 =
volumetric weight (KG)/1 CBM ≈ 166.6666 KG.