Parallel Imports Undercutting an Appointed Distributor in Its Own Territory
Parallel imports undercut appointed distributors when wholesale pricing gaps across territories exceed landed transport and tariff costs.
Split Shipment
Meaning
The delivery of a single customer order through multiple, separate transport runs occurs when inventory is dispersed across different warehouses or produced at different times. Known as a split shipment, this practice allows distributors to fulfill parts of an order quickly rather than holding the entire delivery until the final item is available. However, it introduces complexity into both billing and warehouse operations.
Inventory Allocation
Distribution centers often face a trade-off between speed and consolidation. When a customer orders several high-value components and some are backordered, the supplier can send the in-stock items immediately to keep the buyer’s production line moving. This responsiveness is critical in industrial sectors where downtime is expensive.
The remaining items are shipped as soon as they arrive from the factory, which creates multiple tracking numbers and delivery dates for the same purchase order.
Logistics Cost
Sending multiple packages for a single order increases transport costs because of the loss of consolidation benefits. Every separate delivery requires its own packaging, handling, and shipping documentation.
Contractual Term
Commercial contracts must specify which party bears the additional freight costs generated by these partial deliveries. If the division of the shipment is done for the convenience of the supplier, the supplier typically absorbs the extra cost. Conversely, if the buyer requests immediate partial delivery, they are charged for the additional freight.