It is for the importers themselves to know the intricacies of sea freight if they are to sail through the environment of international shipping. The following is an in-depth review of the five key tips importers need to keep in mind, pointing out the sense of importance each holds.
Incoterms are to be considered as parameters that set the guidelines for the responsibilities of both buyers and sellers in an international trade transaction. They state exactly which party is responsible for every detail in the shipping process, covering items such as transportation costs, management of risks, and customs clearance, among others.
There are 11 Incoterms but only four are for sea freight. The four are FAS (Free Alongside Ship), FOB (Free On Board), CFR (Cost and Freight) and CIF (Cost, Insurance and Freight)
FAS means free alongside ship hence the seller is supposed to deliver the goods alongside the ship, and then the purchaser gets responsible from that point.
FOB is the abbreviation for free on board. Here then, the seller loads the goods onto the ship and the risk is transferred onto the buyer.
CFR involves the cost and the freight to the port of destination to be paid for by the seller as the Insurance is to be handled by the buyer.
CIF states that in this case, "The seller shall pay for Insurance and Freight." So, in this case, the buyer has a broader coverage.
Expertise: A good freight forwarder knows everything about shipping regulations, customs requirements, and logistics as they pertain to international trade.
Network: They would have an established network of carriers in their repertoire and hence can assure better rates and services for the importer.
Custom clearance: They guide customs documentation and compliance to make sure the shipments are cleared from customs smoothly and efficiently.
Packages of such nature shall be well wrapped, considering the robustness of the materials used to withstand sea transport. The weight for each package, size, and nature of goods in the course of transit shall, therefore, be put into determination to ensure the safety of the goods and to avert damage.
Proper and correct labelling is necessary. Indication of the destination, handling instructions, and any hazard warnings that may be required on the labels would be appropriate. Such labelling would ensure correct identification of the shipment and observance of the international shipping regulations. There must be full and proper filling of all shipping documents, including bills of lading and packing lists. Such documentation is crucial for customs clearance and will preclude any unnecessary delays.
Compliance would mean being aware of what both the exporting and importing countries require of a freight forwarder about customs and abiding by those rules. The regulations seem to have a way of changing quite often, so awareness of current changes would be the order of the day if one were to function seamlessly.
Make use of a customs broker who can assist you in running through the requirements to be compliant, and who can also help you if any problems or other issues arise at any time.
Subscribe to industry publications and news services to stay current with news about impending changes in regulations, tariffs, and trade agreements. At a minimum, some staff who will be in charge of logistics and compliance will have to be trained. This will help them get the latest knowledge regarding regulations and practices. Consult also the freight forwarders, customs brokers, and legal experts for additional valuable information. These will also let you know about regulatory changes that might affect your business operations.
At Hexalog, we provide tailored solutions for the peace of mind needed for your business.