NEWS & BLOG
Views: 22 Author: Site Editor Publish Time: 2022-08-30 Origin: Site
There are various reasons for transporting cargoes between countries, most of them, of course, are for the reasons of adding value to the goods. With the rapid development of e-commerce, a large number of small businesses now need international transportation, and the aim here is to explain the different steps in cargo transportation.
There are many players involved in international transportation, shipping carriers, booking agents, freight forwarders, customs brokers; introducing the four main players in consolidation shipping: shipper, consignee, freight forwarder and shipping carrier.
Shipping carrier is the company that delivers your cargo at sea. You may never talk to them or even see their documents or letters.
Freight forwarders, however, are the logistics providers you will deal with. They can arrange transportation from the shipper to the consignee - and you are one of them.
The shipper is the shipper at the point of origin; it can be you or the factory or seller of the product you are buying.
The consignee is the recipient of the shipment; this in turn could be you or the person to whom you are selling the product.
There are five physical steps and two documentary steps that must be performed for each shipment as the goods move from the shipper to the consignee. Each step has an associated cost that must be addressed by someone (usually the shipper or consignee). If you want to avoid cost surprises and unnecessary delays in your supply chain, make sure you explicitly agree who pays for each of these seven steps each time you book a shipment.
The 7 steps of international shipping:
If in doubt, check the contract between the shipper and the consignee. In the case of a sale of goods, the transfer of responsibility for the goods is usually agreed in the contract, which will also be the source for determining who pays what.
The first part is export haulage, which involves the transportation of goods from the shipper to the forwarder's place of business. For less than container loads of goods, the premises of the freight forwarder is always the export consolidation center (origin warehouse), where the freight forwarder has its own personnel or appointed agent. The cargo is usually transported by road (by truck), rail or combination. If it is agreed that the shipper is responsible for this part of the transport, arrangements are usually made through the local transport company. However, if the consignee is responsible, it usually makes the most sense to use a freight forwarder that can provide export drayage as part of international transportation.
Handling the goods at the shipper's premises (loading onto a truck) is not considered part of the export shipment, as unloading a truck at the freight forwarder's premises is not usually part of the export shipment.
For each piece of cargo leaving a country, customs procedures must be carried out to meet regulatory requirements. Customs clearance is a transaction in which a declaration is drawn up and the required documents are submitted to the authorities, and can only be carried out by a company holding a valid customs license (so-called customs broker).
Export clearance can be done by a freight forwarder with a valid license or by an agent appointed by the freight forwarder. Alternatively, it can be performed by a customs broker appointed directly by the shipper, who is not necessarily involved in any other part of the transportation process. The export clearance step must be completed before the goods leave the country of origin or, if not done by the freight forwarder, usually needs to be completed before the goods enter the freight forwarder's warehouse of origin.
Origin processing covers the physical handling and inspection of all goods from receiving them at the origin warehouse to loading them onto a container for shipment. Many different parties carry out many steps under origin processing, but all of them are coordinated and taken care of by the freight forwarder or agent appointed by the freight forwarder. In short, when the goods are received, they are inspected (sorted), planned for loading, combined with other goods, loaded into containers and moved to the port, and then loaded onto the ship.
While it is always the freight forwarder who ultimately performs the origin handling, it can be paid by the shipper or consignee regardless of who actually purchases the freight forwarder. For example, if the consignee decides to use Freight Forwarder A for the import shipment and agrees with the shipper that the shipper must pay the origin charges, the shipper will also automatically purchase the origin charges from Freight Forwarder A. This situation can create some friction if the shipper believes that the origin handling is not at market level, because in this case they are forced to use Forwarder A.
The freight forwarder decides to choose a shipping carrier to perform the sea freight from origin to destination to meet the schedule required for the shipment. The freight forwarder has a container shipping contract with the shipping carrier, in which case the shipper or consignee does not have any direct interaction with the shipping carrier.
The cost of ocean freight is ultimately borne by the shipper or consignee. However, ocean freight is never the full cost of transportation from port to port. There are various surcharges levied by the industry, such as fuel adjustment factors and currency adjustment factors, which are passed on to the shipper or consignee.
Import clearance can usually begin before the cargo arrives in the destination country. As for export clearance, it is a procedure of making a declaration and submitting it together with relevant documents so that the authorities can register the goods and levy any duties. Import customs clearance is carried out by the forwarder or the forwarder's agent, or by the customs broker appointed by the consignee.
The import clearance procedure must be completed before the goods leave the bonded area of the destination country. Usually, this means before the goods leave the freight forwarder's or freight forwarder's destination warehouse.
As for the origin, the goods also need to be loaded and unloaded at the destination before they can be released to the consignee. In short, destination processing includes transferring containers from the ship to shore, from the port to the freight forwarder's destination warehouse. It also includes unloading the container and preparing the cargo for pickup by the consignee.
Trucks used to transport LCL cargo
Destination handling includes multiple destination charges and is always performed by the freight forwarder or an agent appointed by the freight forwarder. Fees can be charged to the shipper or consignee, but full payment is always required before the shipment can be handed over to the consignee. Again, if the agreement is that the shipper pays the ocean freight and the consignee pays the destination charges, it is actually the shipper who decides from whom the consignee must purchase the destination handling. As discussed for origin charges, this can cause some friction or surprises for the unplanned consignee.
The final leg of transportation is the actual delivery of the goods to the consignee. It can be performed by a freight forwarder or a local transportation company appointed by the consignee. If this part of transportation is arranged by the shipper, it usually makes sense to use a freight forwarder who can also arrange import transportation. Import shipping usually includes transportation to a specific address, but does not include unloading from the truck, which is the responsibility of the consignee.
STU Supply Chain is an international freight forwarder that can help you find efficient and cost-effective international shipping. Our international freight forwarding services optimize the international shipping process from providing warehouses of origin to handling complex customs documentation.
At STU Supply Chain, we utilize our international offices and expertise to handle the paperwork and logistical processes of international shipping for our clients. Contact us today to learn more about our international shipping services and how we can help you.