Logistics & Shipment Coordination in an RMG Buying House
In the Ready-Made Garments (RMG) industry, Logistics & Shipment Coordination is a critical function of a buying house. Even if product development, production, and quality control are perfectly managed, failure in logistics can result in delayed shipments, financial penalties, and loss of buyer trust.
For buying houses operating in Bangladesh—one of the world’s largest apparel exporters—efficient shipment coordination ensures smooth export operations and timely delivery to international buyers.
- What is Logistics & Shipment Coordination?
Logistics & shipment coordination refers to the planning, organizing, and managing of the movement of finished garments from factory to buyer destination.
The main objectives are:
Ensure on-time shipment
Maintain correct documentation
Avoid customs delays
Reduce freight cost
Ensure safe delivery of goods
It is the final and most crucial stage before order completion.
- Key Stages of Shipment Coordination
- Production Completion Confirmation
Before shipment, the buying house ensures:
Bulk production completed
Final inspection passed (AQL approved)
Goods properly packed
Carton marking verified
Without QC approval, shipment cannot proceed.
- Booking with Freight Forwarder
The buying house coordinates with:
Freight forwarders
Shipping lines
Airlines (for air shipment)
Shipment mode selection depends on:
Buyer requirement
Delivery deadline
Cost consideration
Sea shipment is cost-effective, while air shipment is used for urgent deliveries.
- Export Documentation Preparation
Accurate documentation is essential for smooth customs clearance.
Common documents include:
Commercial Invoice
Packing List
Bill of Lading (B/L)
Air Waybill (AWB)
GSP Certificate (if applicable)
Certificate of Origin
Inspection Certificate
Any documentation error can delay shipment.
- Customs Clearance
The buying house coordinates with clearing & forwarding (C&F) agents to:
Submit export documents
Complete customs formalities
Ensure cargo release
Smooth customs handling ensures on-time vessel departure.
- Shipment Tracking & Buyer Update
After dispatch, the buying house:
Shares shipping documents with buyer
Provides ETD (Estimated Time of Departure)
Provides ETA (Estimated Time of Arrival)
Tracks shipment until destination
Continuous communication builds buyer confidence.
- Types of Shipment Terms in RMG
Understanding Incoterms is crucial in logistics coordination.
- FOB (Free on Board)
Factory delivers goods to port, buyer arranges freight.
- CIF (Cost, Insurance & Freight)
Seller arranges and pays freight & insurance.
- Ex-Factory
Buyer collects goods directly from factory.
Most Bangladesh RMG exports operate under FOB terms.
- Challenges in Logistics & Shipment
Buying houses often face:
Vessel space shortage
Port congestion
Customs delays
Documentation errors
Freight rate fluctuation
Political or weather disruptions
To manage risks:
Book shipment early
Maintain multiple freight partners
Double-check documents
Keep buffer time in T&A plan
- Role of Merchandiser in Shipment Coordination
The merchandiser ensures:
Shipment schedule matches production plan
Buyer instructions are followed
Documents are accurate
Payment terms (L/C or TT) are respected
Strong coordination between factory, freight forwarder, and buyer is essential.
- Importance of Efficient Logistics in RMG Buying House
Effective logistics management ensures:
✔ On-time delivery
✔ Reduced freight cost
✔ Smooth customs clearance
✔ Avoidance of delay penalties
✔ Strong buyer relationship
Late shipment can damage reputation and result in order cancellation.
- Digitalization in Shipment Management
Modern buying houses use:
ERP systems
Online shipment tracking tools
Digital document sharing
Automated freight comparison systems
These systems increase transparency and efficiency.
Conclusion
Logistics & Shipment Coordination is the final but most sensitive stage in an RMG Buying House operation. It connects production success with buyer satisfaction.
A professional buying house must ensure:
Accurate documentation
Timely booking
Efficient customs handling
Clear communication