Are there any separate charges for logistic services?

It is common for brands to question their international apparel manufacturing partners about logistics costs and additional service charges. At Hula Global, there are, logically, no additional or standalone logistics service charges.

This is because the company prioritizes sourcing and manufacturing over losing business to competitors while providing logistics solutions. This also demonstrates the company's transparency as a business. Buyers, though, should take the time to understand logistics support and the role it plays within the supply chain as a whole.

To streamline shipping, Hula Global partners with reputable international couriers and freight Forwarders. Instead of functioning as a logistics company, Hula Global collaborates with external service providers for air, sea, and land logistics.

Buyers are only charged the logistics providers' shipping fees, and Hula Global does not mark up service charges for coordinating or assisting. Buyers are therefore certain to only be charged a fair shipping price, as there are no excessive charges for services bundled into logistics.

The goal of this strategy is more to provide extra assistance operationally and offer convenience rather than to justify a new stream of revenue. Logistics is not a core line of business or a profit center for Hula Global.

The company's core competencies center around the areas of apparel manufacturing, sourcing, and production management. Logistics is simply a value-added service that assists brands, especially smaller or more nascent ones, with the challenges of cross-border shipping during the early stages of their growth cycle.

Since logistics is not the main focus of the business, Hula Global does not see itself as the cheapest shipping option in every case. There are many variables to land and/or ocean freight, such as destination, size of the shipment, means of transport, fuel price fluctuations, demand seasonally, and the global market, which may affect the pricing of freight.

Hula Global tries to work with quality carriers and, where possible, competitively priced freight, but in some cases, the price may be higher than available options at that time. Therefore, if the freight cost is the main concern for the buyer, they should assess and compare other freight service providers.

This level of openness and flexibility allows brands total control over their logistics. Buyers have no requirement to utilize Hula Global’s logistics planning and can collaborate with their own freight forwarders, couriers, and logistics companies.

Many brands, especially those that have been in business for some time, prefer to ship on their own to avoid losing control over the expenses, routing, carrier choice, and length of the freight contracts.

Hula Global has a small logistics team that focuses on helping brands that have not yet built an internal logistics function. For new brands, there is a type of shipping that is very complex, and it involves a lot of documentation, customs, and carrier coordination that is unfamiliar to them.

The logistics team helps them with movements through the basic shipping processes, integrates them with third-party providers, and ensures that their shipments are completed. The objective of this is to avoid the consolidation of growing brands and not to substitute for a professional logistics function.

As businesses grow, their logistical challenges tend to change in magnitude. When yearly shipments cross certain thresholds, e.g., $500,000, the need to secure dedicated logistical support becomes critical.

At this point, shipping costs become too high in the operational cost structure, and this money can be lost due to poor operational efficiency. Dedicated logistics hires, including full-fledged logistics managers, allow firms to secure better costs for shipping, better management of carrier relationships, better shipping route optimization, and better risk management.

Even before reaching this scale, many brands begin to formalize their logistics function earlier. A brand engaged in approximately $150,000 to $200,000 worth of annual shipments will also begin to derive value from having part-time logistical support and/or specialized freight forwarders.

This minimizes operational costs and maximizes the controllability of operational processes, including predictability and efficiency of deliveries. Most importantly, it takes logistics challenges out of the hands of founders and their teams, enabling them to direct their energies to product, marketing, and sales.

Business development involves assuming greater levels of control over a business's logistics processes. Hula Global is fostering this transition by encouraging brands to examine their goals and operational constraints truthfully.} Such honesty from Hula helps them to build operational goals and long-term objectives.

The greater the honesty, the less dependency Hula creates. More importantly, it prepares brands for the complexities of expanding supply chain processes.

To summarize Hula Global’s position with respect to logistics, it is clear that there is no additional cost associated with the provision of logistics, as it is not a profit-generating segment for the firm. What Hula Global sells is the shipping cost provided by the third-party international shipping and freight companies.

The logistics services offered by Hula Global are limited to operational support for emerging brands that do not have their own logistics capabilities. It reduces the provision of logistics services to the operational coordination of logistics.

The support offered by Hula Global is aimed at imbuing brands with a sense of responsibility as their shipping volumes increase, and to ensure that the transition to investing in dedicated logistics systems is made progressively.

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