|Shipping Your Product
shipping a product overseas, the
exporter must be aware of packing, labeling, documentation, and
insurance requirements. It is important that exporters ensure that the
correctly so that it arrives in good condition;
correctly to ensure
that the goods are handled properly and arrive on time at the right
correctly to meet U.S. and foreign
government requirements, as well as proper collection standards; and
against damage, loss, pilferage and delay.
exporters rely on an
international freight forwarder to perform these services because of
the multitude of considerations involved in physically exporting goods.
forwarder is an agent for the exporter in moving cargo to an overseas
destination. These agents are familiar with the import rules and
regulations of foreign countries, the export regulations of the U.S.
government, the methods of shipping, and the documents related to
foreign trade. Export freight forwarders are licensed by the
International Air Transport Association (IATA) to handle air freight
and the Federal Maritime Commission to handle ocean freight.
exporters in preparing price quotations by advising on freight costs,
port charges, consular fees, costs of special documentation, insurance
costs, and their handling fees. They recommend the packing methods that
will protect the merchandise during transit or can arrange to have the
merchandise packed at the port or containerized. If the exporter
prefers, freight forwarders can reserve the necessay space on a vessel,
aircraft, train, or truck. The cost for their services is a legitimate
export cost that should be included in the price charged to the
the order is ready for
shipment, freight forwarders should be review all documents to ensure
that everything is in order. This is of particular importance with
letter of credit payment terms. They may also prepare the bill of
lading and any special required documentation. After shipment, they can
route the documents to the seller, the buyer, or to a paying bank.
Freight forwarders can also make arrangements with customs brokers
overseas to ensure that the goods comply with customs export
documentation regulations. A customs broker is an individual or company
that is licensed to transact customs business on behalf of others.
Customs business is limited to those activities involving transactions
related to the entry and admissibility of merchandise; its
classification and valuation; the payment of duties, taxes, or other
charges assessed or collected; or the refund, rebate, or drawback
should be aware of the
demands that international shipping puts on packaged goods. Exporters
should jeep four potential problems in mind when designing an export
shipping crate: breakage, moisture, pilferage and excess weight.
cargo is carried in
containers, but sometimes it is still shipped as breakbulk cargo.
Besides the normal handling encountered in domestic transportation, a
breakbulk shipment transported by ocean freight may be loaded aboard
vessels in a net or by a sling, conveyor, or chute, that puts an added
strain on the package. During the voyage, goods may be stacked on top
of or come into violent contact with other goods. Overseas, handling
facilities may be less sophisticated than in the United States and the
cargo could be dragged, pushed, rolled, or dropped during unloading,
while moving through customs, or in transit to the final destination.
is a constant concern
because condensation may develop in the hold of a ship even if it is
equipped with air conditioning and a dehumidifier. Another aspect of
this problem is that cargo may also be unloaded in precipitation, or
the foreign port may not have covered storage facilities. Theft and
pilferage are added risks.
are often familiar with
the port systems overseas, so they will often specify packaging
requirements. If the buyer does not specify this, be sure the goods are
prepared using these guidelines:
popular method of shipment is
to use containers obtained from carriers or private leasing companies.
These containers vary in size, material, and construction and
accommodate most cargo, but they are best suited for standard package
sizes and shapes. Also, refrigerated and liquid bulk containers are
usually readily available. Some containers are no more than semi-truck
trailers lifted off their wheels, placed on a vessel at the port of
export and then transferred to another set of wheels at the port of
strong containers, adequately sealed and filled when possible.
provide proper bracing in the container,
regardless of size, make sure the weight is evenly distributed.
should be palletized and when possible
and packing filler should be made of
avoid pilferage, avoid writing contents or brand
names on packages. Other safeguards include using straps, seals, and
any product-specific hazardous materials
air shipments require
less heavy packing than ocean shipments, though they should still be
adequately protected, especially if they are highly pilferable. In many
instances, standard domestic packing is acceptable, especially if the
product is durable and there is no concern for display packaging. In
other instances, high-test (at least 250 pounds per square inch)
cardboard or tri-wall construction boxes are more than adequate.
costs are determined by volume and weight, specially reinforced and
lightweight packing materials have been developed for exporting.
Packing goods to minimize volume and weight while reinforcing them may
save money, as well as ensure that the goods are properly packed. It is
recommended that a professional firm be hired to pack the products if
the supplier is not equipped to do so. This service is usually provided
at a moderate cost.
marking and labeling is
used on export shipping cartons and containers to:
the identity of the contents;
receivers identify shipments; and
compliance with environmental and safety
overseas buyer usually
specifies which export marks should appear on the cargo for easy
identification by receivers. Products can require many markings for
shipment. For example, exporters need to put the following markings on
cartons to be shipped:
of origin (U.S.A.);
marking (in pounds and in kilograms);
of packages and size of cases (in inches and
marks (international pictorial symbols);
markings, such as "This Side Up" or "Use
No Hooks" (in English and in the language of the country of
for hazardous materials (universal symbols
adapted by the International Airi Transport Association and the
International Maritime Organization); and;
(if applicable, also included in the
language of the destination country).
should be clearly
marked to prevent misunderstandings and delays in shipping. Letters are
generally stenciled onto packages and containers in waterproof ink.
Markings should appear on three faces of the container, preferably on
the top and on the two ends or the two sides. Ant old markings must be
completely removed from previously used packaging.
addition to the port marks,
the customer identification code, and an indication of origin, the
marks should include the package number, gross and net weights, and
dimensions. If more than one package is being shipped, the total number
of packages in the shipment should be included in the markings. The
exporter should also add any special handling instructions. It is a
good idea to repeat these instructions in the language of the country
of destination. and use standard international shipping and handling
freight labeling are strictly enforced. For example, many countries
require that the country of origin be clearly labeled on each imported
package. Most freight forwarders and export packing specialists can
supply the necessary information regarding specific regulations.
consider having the freight forwarder handle the formidable amount of
documentation that exporting requires as forwarders are specialists in
this process. The following documents are commonly used in exporting;
but which of them are necessary in a particular transaction depends on
the requirements of the U.S. government and the government of the
shipments are handled by air
which can never
be made in negotiable form.
is a contract
between the owner of the goods and the carrier (as with domestic
shipments). For vessels, there are two types: a straight bill of lading
which is nonnegotiable and a negotiable or shipper's order bill of
lading. The latter can be bought, sold, or traded while the goods are
in transit. The customer usually needs an original as proof of
ownership to take possession of the goods.
is a bill for
the goods from the seller to the buyer. These invoices are often used
by governments to determine the true value of goods when assessing
customs duties. Governments that use the commercial invoice to control
imports will often specify its form, content, number of copies,
language to be used, and other characteristics.
is a document that
is required in some countries. It describes the shipment of goods and
shows information such as the consignor, consignee, and value of the
shipment. Certified by the consular official of the foreign country
stationed here, it is used by the country's customs officials to verify
the value, quantity, and nature of the shipment.
is a document
that is required in certain nations. It is a signed statement as to the
origin of the export item. Certificate of origin are usually signed
through a semiofficial organization, such as a local chamber of
commerce. A certificate may still be required even if the commercial
invoice contains the information.
certificate of origin
required for products traded among the NAFTA countries (Canada, the
United States, and Mexico).
by some purchasers and countries in order to attest to the
specifications of the goods shipped. This is usually performed by a
third party and often obtained from independent testing organizations.
receipt and a warehouse receipt
are used to transfer accountability when the export item is moved by
the domestic carrier to the port of embarkation and left with the ship
line for export.
appears on the commercial invoice, and ocean or air waybill of lading
to notify the carrier and all foreign parties that the item can be
exported only to certain destinations.
is used to control exports and act as a source document for official
U.S. export statistics. SEDs must be prepared for shipments through the
U.S. Postal Service when the shipment is valued over $500. SEDs are
required for shipments not using the U.S. Postal Service when the value
of the commodities, classified under any single Schedule B number, is
over $2,500. SEDs must be prepared, regardless of value, for all
shipments requiring an export license or destined for countries
restricted by the Export Administration Regulations. SEDs are prepared
by the exporter or the exporter's agent and delivered to the exporting
carrier (for example, the post office, airline, or vessel line). The
exporting carrier will present the required number of copies to the
U.S. Customs Service at the port of export. Often, the SED is prepared
as a by-product of another document, the Shipper's Letter of
is a government
document that authorizes the export of specific goods in specific
quantities to a particular destination. This document may be required
for most or all exports to some countries or for other countries only
under special circumstances.
more detailed and informative than a standard domestic packing list. It
an itemizes the material in each individual package and indicates the
type of package, such as a box, crate, drum, or carton. It also shows
the individual net, legal, tare, and gross weights and measurements for
each package (in both U.S. and metric systems). Package markings should
be shown along with the shipper's and buyer's references. The list is
used by the shipper or forwarding agent to determine the total shipment
weight and volume and whether the correct cargo is being shipped. In
addition, U.S. and foreign customs officials may use the list to check
is used to
assure the consignee that insurance will cover the loss of or damage to
the cargo during transit.
must be precise
because slight discrepancies or omissions may prevent merchandise from
being exported, result in nonpayment, or even result in the seizure of
the exporter's goods by U.S. or foreign government customs. Collection
documents are subject to precise time limits and may not be honored by
a bank if the time has expired. Most documentation is routine for
freight forwarders and customs brokers, but the exporter is ultimately
responsible for the accuracy of its documents.
number and kind of documents
the exporter must deal with varies depending on the destination of the
shipment. Because each country has different import regulations, the
exporter must be careful to provide all proper documentation. The
following sources also provide information pertaining to foreign import
Assistance Centers (see http://www.doc.gov/).
Trade Information Center (1-800-USA-TRADE).
government embassies and consulates in the
handling of transportation
is similar for domestic and export orders. Export marks are added to
the standard information on a domestic bill of lading. These marks show
the name of the exporting carrier and the latest allowed arrival date
at the port of export. Instructions for the inland carrier to notify
the international freight forwarder by telephone upon arrival should
also be included.
may find it useful to
consult with a freight forwarder when determining the method of
international shipping. Since carriers are often used for large and
bulky shipments, the exporter should reserve space on the carrier well
before actual shipment date. This reservation is called the booking
increasingly made on a through bill of lading under a multimodal
contract. The multimodal transit operator (frequently one of the
transporters) takes charge of and responsibility for the entire
movement from factory to final destination.
cost of the shipment, the
delivery schedule, and the accessibility to the shipped product by the
foreign buyer are all factors to consider when determining the method
of international shipping. Although air carriers can be more expensive,
their cost may be offset by lower domestic shipping costs (for example,
using a local airport instead of a coastal seaport) and quicker
delivery times. These factors may give the U.S. exporter an edge over
shipping, the U.S. firm
should be sure to check with the foreign buyer about the destination of
the goods. Buyers often want the goods to be shipped to a free-trade
zone or a free port where they are exempt from import duties.
rough handling by carriers, and other common hazards to cargo make
insurance an important protection for U.S. exporters. If the terms of
sale make the exporter responsible for insurance, the exporter should
either obtain its own policy or insure the cargo under a freight
forwarder's policy for a fee. If the terms of sale make the foreign
buyer responsible, the exporter should not assume (or even take the
buyer's word) that adequate insurance has been obtained. If the buyer
neglects to obtain adequate coverage, damage to the cargo may cause a
major financial loss to the exporter.
by sea are covered by
marine cargo insurance.
shipments may also be
covered by marine cargo insurance or insurance may be purchased from
the air carrier.
shipments are usually
insured against loss, damage, and delay in transit by cargo insurance.
Carrier liability is frequently limited by international agreements.
Additionally, the coverage is substantially different from domestic
coverage. Arrangements for insurance may be made by either the buyer or
the seller, in accordance with the terms of sale. Exporters are advised
to consult with international insurance carriers or freight forwarders
for more information.
sellers and buyers can
agree to different components, coverage is usually placed at 110
percent of the CIF (cost, insurance, freight) or CIP (carriage and
insurance paid to) value.
it is very important to
consider the effects of tariffs, port handling fees, and taxes when
determining your product's final cost as they can be high. Typically,
the importer pays these charges. However, these costs will influence
how much the buyer is willing to pay for your product.