The process of shipping can be a bit confusing, particularly with the documentation required at different stages of the process, particularly if it’s an international shipment. There are stringent rules and regulations surrounding shipping internationally, and failure to ensure the correct documentation is in order, will undoubtedly result in delay, missed deadlines and a whole heap of frustration, money and credibility.
Here’s our simple (ish!) 11 step shipping process aimed to help you and your company understand the fundamentals:
There are a few groups involved in the shipping process:
The Insurance Company
The Freight Forwarding Company
The Shipping Company
The Intermodal transport providers – rail or road hauliers
The Customs House Agent
The Customs Authorities in at least 2 countries
The Port Authorities in at least 2 countries
And that’s not to mention the warehouse handlers, sea port handlers…..!
Here’s what they do and when they do it:
- The Importer (buyer) enquires about a product to the Exporter (seller). The Exporter quotes for the product and produces specifications. Once they both agree on the quote and specifications, they enter into a contract, which includes the terms of payment, delivery, transportation, insurance and time frames.
- The exporter then prepares and sends a pro-forma invoice to the Importer. At the same time, the importer prepares and sends an export order and purchase order back. The Importer can arrange a letter of credit from their bank, which works as a guarantee for the Exporter that he’s going to get paid for the order upon arrival. A letter of credit is a legal document issued by the importers bank and sent to the exporters bank.
- The exporter manufactures the goods, arranges insurance as per the contract, arranges the pre-shipment inspection and any necessary quality checks, along with packaging, labelling and ‘marking up’ (a standard shipping practices)
- The exporter then arranges transportation with a Freight Forwarding Company, who is responsible for arranging transportation from the exporter right the way through to the importer, which usually includes ‘intermodal’ transportation (rail and road haulage to get the shipment to and from the sea ports or airports), international transportation (sea or air), arranges customs clearance, document checks and port duty levies. They can also get you the best shipping prices because of their huge number of contacts in the industry.
- After handing over the shipment documentation to the shipping line, the exporter receives a bill of lading back, which he passes onto the Importer.
- The exporter applies for a certificate of origin to complete the documentation.
- At this stage, the consignment is loaded into the shipping container and consequently the ship itself.
- When the consignment reaches its destination port, the importer presents the documentation to the Customs Agents for import clearance.
- Once the shipment has cleared customs, the Importer can take delivery of the goods. Usually, the Freight Forwarder will be involved at every stage of the process, and will arrange for the transportation of the goods, over land to their final destination.
- The Importer will arrange (usually via the Freight Forwarding Company) for the destuffing of the shipping container and hands it back over to the shipping line at an appointed yard.
- The exporter will receive payment from the bank.
There are many documents involved in international transportation and these include:
Certificate of Origin documents
Shippers Letters of Instruction
Letters of Credit
Bills of Lading
Import and Export certificates
It’s not surprising that the process of shipping goods can be both daunting and confusing. Getting it wrong could result in calamity!
That’s where highly experienced, highly skilled Freight Forwarding companies can ease the pain of international exportation. We are Gloucester Freight, with over 30 years experience in deep sea and air freight transportation, we take the strain out of exportation! Visit our website www.gloucesterfreight.co.uk for more information or call us on 01452 729915 for a no obligation quote.