"Goods are transported between countries for a variety of reasons, most of which are, of course, for reasons of adding value to the goods. With the rapid development of e-commerce, a large number of small businesses now require international transport, and the aim here is to explain the different steps involved in the transport of goods. There are many players involved in international transport, shipping companies, booking agents, freight forwarders, customs brokers; to introduce the four main players in LCL transport: shippers, consignees, freight forwarders and shipping companies.
The shipping company is the company that carries your goods at sea. You may never talk to them or even see their documents or letters.
However, freight forwarders are the logistics providers you will be dealing with. They can arrange transport from the shipper to the consignee - and you are one of them. The shipper is the originating shipper; this can be you or the factory or seller of the product you are buying. The consignee is the receiver of the shipment; this could be you or the person to whom you are selling the product. FIVE PHYSICAL STEPS AND TWO DOCUMENTATION STEPS IN INTERNATIONAL TRANSPORTATION: There are five physical steps and two documentation steps that must be performed for each shipment as it travels from the shipper to the consignee. Each step has an associated cost that must be addressed by someone, usually the shipper or the consignee. If you want to avoid cost surprises and unnecessary delays in your supply chain, make sure you explicitly agree who will pay for each of these seven steps each time you book a shipment. The seven steps of international ocean freight: export drayage, origin processing, export customs clearance, ocean freight, import customs clearance, destination processing and import drayage.
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.
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1. Export transport
The first part of the transport is the export transport. This involves the movement of the goods from the shipper to the forwarder's premises. For less than container loads, the freight forwarder's premises will always be the export consolidation centre (warehouse of origin), where the freight forwarder has his own personnel or appointed agents. The goods will usually be 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 haulage company. However, if the consignee is responsible, it usually makes the most sense to use a freight forwarder who can provide export haulage as part of the international transport. Handling the goods on the shipper's premises (loading onto a truck) is not considered part of the export haulage as unloading the truck on the freight forwarder's premises is not usually part of the export haulage.
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2. Export Customs Clearance
For every shipment leaving a country, customs clearance is necessary to fulfil regulatory requirements. Customs clearance is a transaction of drawing up a declaration and submitting the required documents to the authorities, and can only be carried out by a company holding a valid customs licence (the so-called customs broker). Export customs clearance can be done by a freight forwarder with a valid licence 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 transport process. The export clearance step must be completed before the goods leave the country of origin, or if not completed by the freight forwarder, it usually needs to be completed before the goods enter the freight forwarder's warehouse of origin.
3. Origin Handling
Handling of origin covers the physical handling and inspection of all goods from the time they are received at the warehouse of origin to the time they are loaded onto a container for shipment. Many steps are carried out by many different parties under origin processing, but all of these are coordinated and handled by the freight forwarder or the freight forwarder's appointed agent. In short, when goods are received, they are inspected (handled), loads are planned, consolidated 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 for by either the shipper or the consignee, regardless of who actually purchases the freight forwarder. For example, if the consignee decides to use Freight Forwarder A for the imported shipment and agrees with the shipper that the shipper must pay the origin charges, the shipper will automatically purchase the origin charges from Freight Forwarder A as well. This situation can create some friction if the shipper feels that the origin handling is not at market level, as they are forced to use Forwarder A in this case.
4. Ocean Freight
The freight forwarder decides to select a shipping company to perform the ocean freight from origin to destination in order to meet the schedule required for the shipment. The freight forwarder has a container transport contract with the shipping line, in which case the shipper or consignee does not have any direct interaction with the shipping line. The cost of ocean freight is ultimately borne by the shipper or consignee. However, ocean freight is never the full cost of transport from port to port. There are various surcharges imposed by the industry, such as fuel adjustment factors and currency adjustment factors, which are passed on to the shipper or consignee.
5. Import Customs Clearance
Import customs clearance can usually be started before the shipment reaches the destination country. As for export clearance, it is a procedure of making a declaration and submitting it together with the relevant documents so that the authorities can register the goods and collect any duties. Import customs clearance is handled by the freight forwarder or the forwarder's agent, or 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 destination warehouse of the freight forwarder or forwarder.
6. Destination processing
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 handling includes the transfer of containers from the ship to shore and from the port to the freight forwarder's destination warehouse. It also includes unloading the container and preparing the cargo for collection by the consignee. Destination handling of trucks used to transport LCL cargo 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 is handed over to the consignee. Similarly, if the agreement is that the shipper pays the ocean freight charges and the consignee pays the destination charges, it is in effect the shipper who decides from whom the consignee must purchase destination handling. As discussed in response to the origin charges, this can cause some friction or surprises for the consignee who did not plan for it.
7. Import Transport
The final leg of the transport is the physical delivery of the goods to the consignee. It can be performed by a freight forwarder or a local transport company appointed by the consignee. If this part of the transport is arranged by the shipper, it often makes sense to use a freight forwarder who can also arrange the import transport. Import shipping usually includes transport to a specific address, but does not include unloading from a truck, which is the responsibility of the consignee.
