The 7 steps of international shipping

Release time:2024-03-20 14:13

The 7 steps of international shipping

International shipping is essential for numerous purposes, primarily to enhance the value of goods. E-commerce's exponential growth has made global transport a necessity for numerous small businesses. This guide aims to outline the crucial steps you need to know before scheduling your initial shipment, ensuring a smooth international transportation process.

 

In international shipping, various stakeholders play crucial roles, including shipping lines, booking agents, freight forwarders, and customs house brokers. If you're dealing with cargo that fits into a standard shipping container but doesn't fill it, and your shipment isn't urgent enough to warrant the higher costs of airfreight, a Less Than Container Load (LCL) solution might be what you need.

For LCL shipping, there are four main players you should be familiar with: the Shipper, Consignee, Freight Forwarder, and Shipping Line.

Each plays a vital part in ensuring your cargo reaches its destination efficiently.

 

international shipping

The shipping line operates the vessels that transport your cargo across the seas. In most cases, you won't interact directly with them or even see documents from them. Your primary contact will be the freight forwarder, the logistics provider managing the transportation between the shipper and the consignee, with one of these parties being you.

 

 The shipper, located at the origin of the shipment, could be you, a factory, or a seller from whom you're purchasing products. Conversely, the consignee, who receives the cargo, could be either you or an individual or entity to whom you're selling the products.

In the intricate process of moving goods internationally from the shipper to the consignee, there are seven essential stages: five physical movements and two centered around documentation. Each step incurs specific costs, typically borne by either the shipper or the consignee. To sidestep unexpected expenses and avoid delays that could disrupt your supply chain, its crucial to have a precise agreement on who covers each of these costs for every shipment you arrange.

 

These seven steps in international shipping are Export Haulage, Origin Handling, Export Customs Clearance, Ocean Freight, Import Customs Clearance, Destination Handling, and Import Haulage.

 

the shipping process

If in doubt, look to the contract between the shipper and consignee. If it is a sale of goods, often the handover of liability for the goods is agreed in a contract, which will then also be the source for establishing who pays for what.

 

Export haulage

Export Haulage covers the initial leg of the journey, moving the cargo from the shipper's location to the freight forwarder's facility. This facility, especially for less than container load (LCL) shipments, serves as an export consolidation center, a hub where the freight forwarder's team or their appointed agents consolidate various shipments. Transportation to this point typically involves road (truck) or rail, possibly both. Responsibility for this step falls to the shipper if they're tasked with arranging transportation to the forwarder. Conversely, if the consignee holds this responsibility, utilizing a freight forwarder that includes export haulage as part of their comprehensive international shipping service is often most efficient.

 

Its important to note that the process of loading the cargo onto a truck at the shipper's location is distinct from export haulage. Similarly, unloading the truck at the forwarder's facility is generally not included in this step.

 

Export customs clearance

Export Customs Clearance is an essential step for all goods leaving a country, ensuring compliance with regulatory requirements. This process involves the creation of a declaration and submission of necessary documents to customs authorities. Only entities with valid customs licenses, known as customs house brokers, can carry out this task.

 

This crucial step can be undertaken by a freight forwarder if they possess the required license, or by an agent they designate. Alternatively, the shipper can appoint a customs house broker directly. This broker may not be involved in any other part of the shipping process. The completion of export customs clearance is a prerequisite for the cargo to leave its country of origin. Often, this step needs to be finalized before the cargo can be accepted at the freight forwarder's consolidation center.

Origin handling

Origin Handling involves the comprehensive processing and inspection of cargo from its arrival at the origin warehouse until it is securely loaded onto a ship. This phase includes numerous steps such as cargo inspection (tallying), loading planning, cargo consolidation, container stuffing, and transportation to the port for loading onto a ship. These tasks, although executed by various parties, are coordinated by the freight forwarder or their appointed agent.

 

The responsibility for origin handling falls to the freight forwarder, but the cost can be covered by either the shipper or the consignee, independent of who contracts the freight forwarding services. For instance, if a consignee selects Forwarder A for import and agrees that the shipper covers origin charges, then the shipper will pay Forwarder A for these services. This arrangement can sometimes lead to disagreements if the shipper finds the cost for origin handling above market rates, especially since they are obligated to use Forwarder A in such scenarios.

Ocean Freight

Ocean Freight is a critical step in the shipping process where the freight forwarder selects a shipping line to transport the cargo from its origin to the destination. This selection is made to ensure the shipment meets the established timelines. In this arrangement, the freight forwarder enters into a contract of carriage with the shipping line. Both the shipper and the consignee typically do not engage directly with the shipping line, as the freight forwarder acts as the intermediary, managing the transportation and ensuring the goods reach their intended destination efficiently.

 

The cost of ocean freight is a significant consideration in the total shipping expense and is ultimately billed to either the shipper or the consignee. It's essential to note that the ocean freight charge covers only the transportation of cargo from one port to another. Additionally, the shipping industry applies various surcharges, including the bunker adjustment factor (BAF) and the currency adjustment factor (CAF), among others. These surcharges account for fluctuations in fuel prices and currency exchange rates, respectively, and are passed on to the shipper or consignee, affecting the overall cost of shipping.

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Import customs clearance

Import customs clearance is a crucial step that can often commence before the cargo even reaches its destination country. Similar to export customs clearance, this process involves the preparation and submission of a declaration, along with the necessary documents, allowing the destination country's authorities to register the shipment and assess any applicable customs duties. This procedure can be carried out by the freight forwarder, an agent designated by the freight forwarder, or a customs house broker specifically appointed by the consignee.

 

To ensure a smooth import process, the import customs clearance must be finalized before the cargo is moved out of a customs bonded area within the destination country. Typically, this means the clearance process should be completed before the cargo is taken out of the forwarder's destination warehouse or that of the forwarder's agent. This step is essential for preventing delays and ensuring that the cargo is legally entered into the destination country, ready for further transportation or collection.

Destination handling

Destination handling encompasses the necessary steps to prepare cargo for release to the consignee upon its arrival at the destination. This process involves the transfer of the container from the ship to the shore, and subsequently, from the port to the freight forwarder's destination warehouse. Additionally, it includes the un-stuffing of the container and the organization of the cargo, making it ready for collection by the consignee. This step is crucial for ensuring that the cargo is securely and efficiently processed through the final stages of its journey, allowing for smooth handover to its final recipient.

 

Truck for haulage of LCL consignments

The process of destination handling, vital for the final stages of LCL consignment delivery, incurs several charges and is invariably conducted by the freight forwarder or an appointed agent. Whether these costs are borne by the shipper or the consignee, they must be fully settled before the cargo is released. This arrangement, especially in scenarios where the shipper covers ocean freight and the consignee is responsible for destination charges, effectively means the shipper dictates the consignee's choice for destination handling services. This scenario can lead to potential discord or unexpected expenses for the consignee, who may not have anticipated these specific obligations.

Import haulage

Import haulage marks the final step in delivering the cargo to the consignee. This phase can be managed by the freight forwarder or a local transportation company selected by the consignee. When shipping arrangements are made by the shipper, leveraging a freight forwarder that offers import haulage is usually the most efficient choice. This part of the shipping process entails transporting the cargo to a designated address, though it is crucial to note that the responsibility for unloading the cargo from the truck falls to the consignee.

 

 

Understanding the seven steps of international shipping is crucial for businesses engaged in global trade. From export haulage to import haulage, each step involves specific processes and costs. Clear communication and agreements between the shipper, consignee, and freight forwarder are essential to avoid unexpected costs and delays. By familiarizing yourself with these steps, you can ensure a smoother shipping process and better manage your international logistics needs.