Transporting your product to an overseas or interstate market efficiently and competitively, is crucial for your business’s success. Understanding the basics of shipping terms, pricing, marine transit insurance and documentation, is therefore essential in order to make an informed choice about your shipping provider.
Before you Ship
Before committing to a shipping provider, it is important to do your research. Investigating the choices that other successful businesses and online retailers have made in regards to their shipping policies, can become a good point of comparison for your use.
When requesting quotes from shipping providers, it is important to clarify the details of the shipment. This will include the date, detailed origin, destination addresses and the dimensions of your goods. By providing these accurate details you can ensure that you receive the correct quote for your goods. If you have any special requirements, such as shipping hazardous goods, you must make these requirements clear.
Before shipping, it is important to have well-defined contracts and incoterms with your chosen provider. Incoterms (International Commercial Terms) are a standardized set of shipping rules developed by the International Chamber of Commerce.
Currently there are 11 terms that define the responsibility for the cost of shipping, insurance, duties, and taxes; the point of collection and delivery of the goods; and on whom the responsibility for the goods rests during each point in transit.
Because most shipping couriers and shipping options are charged based on size and weight, you want to do your best to keep your packaging as small and lightweight as possible. This will help you save not only on shipping costs incurred by you and your customer, but will also keep packaging costs from eating away your profit margin.
Exporting means more opportunities, but also entails greater risks. Transporting goods can be risky business particularly when your valuable stock, equipment or machinery is on the move. Therefore, whether you’re sending your goods across the country or across the world, make sure you’ve got the right shipping insurance in place for your consignment.
It is important to make sure that your goods are insured for their full replacement value in the country of destination. If you under-insure your goods, we will have to ‘average’ the value.
Export Consolidation and Origin Handling
The first part of the actual shipping process is known as export haulage. This relates to the movement of the cargo from the shipper’s to the forwarder’s premises. The goods would typically move on road (by truck), rail or a combination. If it were agreed that the shipper is responsible for this part of the transportation, it would typically be arranged through a local transportation company.
Origin handling covers all physical handling and inspection of the cargo, from receiving it at the origin warehouse till it is loaded on the ship. When the cargo is received it is inspected, planned for loading, consolidated with other cargo, stuffed into a container and moved to the port where it is loaded onto a ship. While it is always ultimately the freight forwarder performing origin handling, it can be paid by either shipper or consignee, depending on the terms of your shipping contract.
Customs Declaration and Forms
If you’re shipping outside of your own country, you’ll need to include the proper customs documentation. Your shipping provider will be able to inform you of exactly what forms you will need to attach to your freight. Completing these forms honestly, correctly and clearly will prevent your freight from being held up in customs.
Your freight forwarder will also be able to assist in finding the applicable duty and taxes in overseas markets. Electronic documentation has made this complex process much easier, but mistakes can be costly.
A shipping line will perform the ocean freight under a contract of carriage with the freight forwarder. While your goods may be transport on multiple vessels throughout the journey, the shipping line will oversee the process in its entirety.
The shipping line will then charge the ocean freight and relevant surcharges directly to the freight forwarder. The freight forwarder will then breaks up the cost in relevant proportions to each customer with cargo in the container.
As each step in the shipping process has costs associated, it is important to agree between the parties who is responsible for which part, before the shipment takes place. It is therefore important to understand the shipping process in order to select the most suitable provider for your needs.