There are many steps in international trade to get your goods from one port to another. To maximize your supply chain, you must understand all the various stages of the ocean shipping process.
Whether you are a manufacturer, importer, or exporter, the most useful step you can take for your supply line is to work with an experienced freight forwarder and logistics team who understand the full process of ocean freight.
When you are building a supply chain that involves ocean freight, there are a lot of decisions. A shipping line is a working ecosystem with each cog playing a part in a symbiotic relationship. You must decide what is best for your business, and the only way to make an informed decision is if you are fully informed.
When you contact forwarders by phone or email, you need to have a list of pertinent details ready for them to calculate the quoted cost of transport. These details of shipment include the shipping date, origin and destination addresses, cargo characteristics, and dimensions.
Once you have supplied your prospective forwarders these details, they should get back to you with quotes promptly. Include crucial descriptions like whether a residential gate is necessary at the destination or whether you are shipping hazardous materials. A customs broker may also be required to ensure that the cargo meets all of the United States custom’s specifications.
You can then choose a quote with freight rates that fit your price range and shipping schedule. When you have selected a freight forwarding or shipping company, you need to prepare your cargo for transport, and this involves a lot of paperwork. This is one of the steps that a freight forwarder can help expedite to get your shipment to its port of destination.
The three main types of paperwork that you will need to ship your goods are a bill of lading, a commercial invoice, and a packing list.
A bill of lading is the document issued by the carrier to verify that the cargo is ready for shipment. A commercial invoice specifies the value of the goods, including the types of products and the consignee. A packing list is like a commercial invoice but identifies the type, number, and quantity of the goods.
With all of these documents needed at different steps of the way, it is wise to employ a freight forwarder with plenty of experience in international shipping.
Step 1: Export Haulage
The first physical step your cargo will take on its sea freight journey is called export haulage – when your load is moved from the original manufacturer’s or exporter’s warehouse to the origin warehouse.
If you have experience transporting goods or own your own trucking company, you may be able to save money and complete the export haulage yourself. Still, if you’re unfamiliar with the process, it is best to leave it to a professional freight forwarder.
Step 2: Export Customs Clearance
Authorities in the country of origin require registration of your cargo before it leaves the country of origin. A licensed customs house broker finalizes the declaration of freight with a certificate of origin before it leaves port after checking the contents of the cargo with the bill of lading.
It should be apparent who is handling this part of the process, which is why it is so helpful to rely on an experienced freight forwarder like Asiana USA.
Step 3: Origin Handling
This step involves a few different processes. When your shipment arrives at its port of origin, it is unloaded, inspected, and checked against the booking details provided by the freight forwarder. A cargo receipt is issued to verify that the cargo has been received and inspected and is ready for shipping.
The cargo is then packed into containers before the goods are loaded for transoceanic crossing. The freight forwarder always handles the origin handling, but payment for this process is dependent on the type of shipment. Some of the terms you might come across are Incoterms, agreed-upon acronyms in the international trade industry.
If the cargo is sold Ex Works (EXW) or Free Carrier (FCA), then the consignee or receiver of the goods is responsible for the origin handling costs. If the cargo is designated FOB (free on board) or DDU (delivery duty unpaid), then origin handling is the shipper’s responsibility.
Step 4: Ocean Freight
Your freight forwarder will have a contract with the shipping line chosen to transport your goods across the ocean. Your cargo may not be on the same vessel for the entire trip, but you can always check the shipping line’s website for particulars.
The freight forwarder issues a bill of lading that states the vessel and origin port, but this is not necessarily the ship that will take your load across the ocean. The shipping line that is carrying your cargo will directly charge the ocean freight to the freight forwarder, including surcharges.
The freight forwarder will then break down this charge into proportional amounts for each customer, especially if the shipment is LCL – less than container load – instead of a full container load. When you are looking at quotes, it’s essential to check whether the quoted price includes all surcharges.
Step 5: Import Customs Clearance
This process occurs at the port of destination when the authorities review the declaration of goods and other documents. Customs duty is the related charge for the products you’re bringing into the country.
If a freight forwarder holds a valid license, they can handle the import customs clearance. The cargo must be cleared through customs before it can enter the country, and frequently the process can start even before the freight reaches port.
Step 6: Destination Handling
This step involves everything needed to get the cargo off of the ship and into a secure holding zone or warehouse. A lot of documentation changes hands, including the original bill of lading.
The cargo, once it passes all the inspections, heads to the warehouse where it is once again inspected.
Step 7: Import Haulage
This final step is how the cargo gets to its final destination, whether it’s the consignee’s warehouse or personal address. If a freight forwarder is handling this step, they will either use their trucks or hire a third party to transport the goods.
The route is also determined by the forwarder, as they may have other shipments moving in the same direction and want to consolidate shipments.
Recently, the outbreak of the coronavirus has upset the inner workings of the international shipping lines. Although the virus is only just reaching foreign shores, its effect is influencing shipment lines all over the globe.
Now more than ever, it’s crucial to put your cargo into the hands of a company you trust with a reliable network and years of experience. Asiana USA has long-standing relationships with authorities in ports all over the globe and can help you realize your shipping goals.