Term paper Of International Business i n the execution of Topic: - Role of freight Forwarder in Export
Submitted to: Mr.Vishwash sir
Submitted by: Mohd fahad Section: - 1803 Roll no. –a14 Reg. no. –
10809577
Lovely professional university 1
Freight Forwarder A freig reight ht forwa orward rder er (ofte often n ju just st forwa orward rder er)) is a thi third part party y logistics prov proviider. der. As a thi hird rd part party y prov proviider der a forwa rwarder rder dispatc dis patches hes shi shipme pments nts via assetasset-bas based ed carrie carriers rs and books books or otherwise arranges space for those shipments. Carrier Carrier types include waterborne vessels, vessels, airplanes, airplanes, trucks or railroads. railroads. Freigh Freightt forward forwarders ers typica typically lly arrange arrange cargo move moveme ment nt to an inte in tern rnat atio iona nall desti destina nati tion on.. Al Also so refe referr rred ed to as in inte tern rnat atio iona nall freight forwarders, they have the expertise that allows them to prepare and process the documentation and perform related activi activitie ties s pertai pertainin ning g to interna internatio tional nal shi shipme pments. nts. Some Some of the typi typica call in info form rmat atio ion n revi review ewed ed by a frei freigh ghtt forw forwar arde derr is the the commercial invoice, invoice, shipper's export declaration, declaration, bill of lading and other other docum documen ents ts requi require red d by the the carr carrie ierr or count country ry of export, export, import, import, or transhipment. transhipment. Much of this information is now processed in a paperless environment. environment. The FIATA short-hand description of the freight forwarder as the 'Arc 'A rchi hite tect ct of Tran Transp spor ort' t' illu illust stra rate tes s clea clearl rly y the the comm commer erci cial al position of the forwarder relative to his client. In Europe there are are forw forwar arder ders s that that speci special aliz ize e in 'n 'nic iche' he' area areas s such such as Rail Rail freight and collection and deliveries around a large port. The latter are called Hafen (port) Spediteure (Port Forwarders). A forw forwar arde derr in some some count countri ries es may may some someti time mes s deal deal only only with with domestic traffic and never handle international traffic. The The orig origin inal al funct functio ion n of the the forwa forward rder er,, or sp spedi edite teur ur,, was was to arrange for the carriage of his customers' good by contracting with various carriers. His responsibili responsibilities ties included advice on all docum documen enta tati tion on and and custo customs ms requi require reme ment nts s in the the count country ry of destination. His correspondent agent in far-away lands looked afte afterr hi his s cust custom omer ers' s' in inte tere rest sts s and and kept kept hi him m infor informe med d abou aboutt matters that would affect movement of goods. In modern times the forwarder still carries out those same responsibilities for his clie client nt.. He st stil illl oper operat ates es eith either er with with a corr corresp espond ondin ing g agent agent 2
over overse seas as or with with hi his s own own comp compan any y bran branch ch-o -off ffic ice. e. In many many instances, the freight forwarder also acts as a carrier for part of a move moveme ment nt it can can happe happen n that that in a singl single e trans transact actio ion n the the forwarder may be acting either as a carrier (principal) or as an agent for his customer.
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Contents Role of freight forwarder in the execution of export 1. Freight Freight forwarder forwarder 2. Abstra Abstract ct 3. Key Ke y wor words ds : (a) (a) Hist Histor ory y of frei freigh ghtt for forwa ward rder er (b) Typical job role of freight forwarder (c) (c) Resp Respon onsi sibi bili lity ty of fre freig ight ht For Forwa ward rders ers (d) (d) Frei Freigh ghtt Forw Forwar arde derr fund fundam amen enta tall roles roles (e) (e) Frei Freigh ghtt for forwa ward rder er – Dual Dual role roles s (f) Freight Forwarder roles in different countries (g) Freight forwarder plays integral part of transportation process. (h) International Freight Forwarder (i)Functions performed by freight Forwarder specifically (j)How freight forwarder helps you to export? (k) (k) Inte Intern rnat atio iona nall Freig Freight ht For Forwa ward rder ers s India India
4. Conclu Conclusio sion n 5. Refere Reference nces s
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Abstract: This paper is about the role of freight forwarders in the execution of export, where they are often seen as their 'arc 'archi hite tect cts' s'.. But But they they are are in dang danger er of bein being g bypa bypass ssed ed or disinter mediated, due to organisational and/or technological reasons. First, a need for an integrated approach to logistic chain chain has has been been alre already ady reco recogni gnise sed d in theo theory ry and and pract practic ice. e. Multinational firms in the industry or retail sector i.e. show an increasing demand for complex transport and logistics service like world-wide door-to-door delivery or one-stop shopping. Second, Second, the employ employmen mentt of new techno technologi logies es in connect connection ion with the Internet causes a deep change in the relationships along the logistic chain due to a change in intermediatio intermediation. n. This will be reflected by developing a theoretical framework based on Caisson’s theory of entrepreneurial networks in international business to provide some insight in the complex relationships between shippers, freight forwarders and other intermediaries or service providers along the international logistic chain. freight forwa forwarde rder; r; his histor tory y of freigh freightt forwar forwarder; der; Key Words: Words: freight internation international al freight freight forwarder; forwarder; functions of freight freight forwarder forwarder etc.
History of Freight Forwarders The The orig origin inal al funct functio ion n of the the forwa forward rder er,, or sp spedi edite teur ur,, was was to arrange for the carriage of his customers' good by contracting with various carriers. His responsibili responsibilities ties included advice on all docum documen enta tati tion on and and custo customs ms requi require reme ment nts s in the the count country ry of destination. His correspondent agent in far-away lands looked afte afterr hi his s cust custom omer ers' s' in inte tere rest sts s and and kept kept hi him m infor informe med d abou aboutt matters that would affect movement of goods. In moder modern n time times s the forw forwar arder der st stil illl carri carries es out those those same same resp respons onsib ibil ilit itie ies s for for hi his s clie client nt.. He st stil illl oper operat ates es eith either er with with a cor corresp respo ondin nding g agent gent over overse seas as or with with his own own com company pany branchbranch-of offic fice. e. In many many instance instances, s, the freigh freightt forwar forwarder der also also acts as a carrier for part of a movement it can happen that in a singl single e tran transa sact ctio ion n the the forw forwar arder der may may be acti acting ng eith either er as a carrier (principal) or as an agent for his customer. 5
Typical Job role Freight Forwarder Freight forwarders process orders for the import and export of freight freight,, compil compile e docume documenta ntatio tion n for cleara clearance nce by custome customers, rs, produce invoices, process stock transfers, check the contents, compile and check documents of freight goods. They also tally and record record consig consignme nments nts and destina destinatio tion n detail details s of articl articles, es, conta contain iner ers s and passen passenger gers, s, and and make make frei freigh ghtt and and trans transpo port rt bookings and related arrangements. A freight forwarder may perform the following tasks:
check the number of articles or containers in consignments of goods received or despatched make sure articles are in good condition and correspond to invoices, manifests or other records arrange internal distribution of goods received prep prepa are and and attac ttach h docu docum menta entati tion on to art article icles s to be despatched make make su sure re clea cleara rance nce proce procedu dure res s (eg. (eg. paym payment ent of any customs entry fees or duties) are carried out, despatch goods and arrange delivery promptly on arrival spend time in warehouses packing and unpacking goods Drive between wharves, container terminals, airports and government departments weigh items contact senders to fix shortages and arrange replacement of damaged goods maintain records of receipts and despatches Under nderta take ke cler cleric ical al work work su such ch as fili filing ng,, accou ccoun nting ting,, updating customs records, preparing correspondence, and inputting and retrieving information from computers.
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RESPONSIBILITY OF FREIGHT FORWARDERS Although freight forwarders have acted as respected professionals since the last century, the legal nature of their activ activit itie ies s has only only rece recent ntly ly attr attrac acte ted d real real atte attent ntio ion. n. This This is because because freigh freightt forward forwarders ers have become become promin prominent ent links links in mode modern rn tran transp spor orta tati tion on sy syst stem ems, s, due due to the the impo import rtan ance ce of containers, and multimodal transport. In times of excess vessel capacity, too, freight forwarders have increased authority because it is they who are able to provide cargoes, thereby becoming influential participants in a buyer's market. market. It is for this reason that on occasion freight forwarders forwarders have voyage chartered and even time chartered ships. The The lega legall respo responsi nsibi bili lity ty of frei freight ght forw forwar arde ders rs ofte often n seems seems myst myster erio ious us beca because use frei freigh ghtt forw forwar arde ders rs have have assum assumed ed two two different legal roles - agents and principal contractors. Nor are the activities of freight forwarders directly regulated by any international convention, although their acts naturally bridge national borders. The result is that various national laws control their actions, giving rise to conflicts of law. In the the ligh lightt of the the fore forego goin ing g - the the emer emergi ging ng impo import rtan ance ce of freight forwarders, the often puzzling national laws, and the lack of international uniformity - it is apparent that an in inte tern rnat atiional onal conv conven enti tion on is nece necess ssar ary. y. The The Mult Multim imod odal al Tra Trans nspo port rt Conve Convent ntio ion n 19 1980 801 1 is ju just st such such a conv convent entio ion. n. Its Its adoption would give certainty to the law and protection to both the public and to freight forwarders themselves. The Multimodal Transport Convention 1980 has the advantage of clar clarit ity y and and simp simpli lici city ty and and is not encum encumber bered ed with with other other maritime, albeit important, matters such as freight, liens and electronic commerce, which make the Convention less likely to be enacted.
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Freight Forwarder fundamental roles 1. The
freight forwarder forwarder ensures that your goods receive the priori priority ty it require requires; s; your your documen documentat tation ion is approp appropria riatel tely y filled filled and your goods reach its destination destination in the specified specified time.
2. The
increasing specialization on transportation of goods and decimations operations means that the exporter of products would prefer to leave these formalities to "freight forwarder" in order to concentrate on his own business.
3.
An effici efficient ent "freig "freight ht forwar forwarder der"" can offer offer advice, advice, on the special requirements of different countries as well as to offe offerr a numb number er (s (sea ea,, air, air, rail rail etc. etc.)) of quot quotat atio ions ns for for a particular consignment being sent from point A to B.
4. The
"freig "freight ht forwa forwarde rder" r" role role is often often underes underestim timate ated d as one of the most important elements in shipping.
5. The
"freight forwarder" forwarder" is there to ensure that your goods receive the priority it requires; that your documentation is appro appropr pria iate tely ly fill filled ed and and most most impor importa tant ntly ly,, your your goods goods reach its destination in order and in the specified time.
The 6. The
next next most most impo import rtant ant and and effe effect ctiv ive e func functi tion on of the the "forwarder" is to be an adviser and agent for the shipper, and that, is the "forwarder's" prime consideration.
7. The
transportation of goods from one place to another over short or long distances, is a fundamental activity in materials handling with many complexities in international cross border transportation i.e. large number of docu docume ment nts s are are requ requiired red to docu docume ment nt the the move moveme ment nt goods.
8. The
basic basic activi activitie ties s of a "fre "freig ight ht forw forwar arde der" r" in incl clude ude booking cargo space on ship, airplane, train, or any other form form of good goods/ s/ca carg rgo o tran transp spor orta tati tion on,, rout route e pl plan anni ning ng,,
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var various ious docu docum ment entati ation, on, expo export rt pack packiing, ng, ins nsur uran ance ce,, warehouse, collection and delivery consignment. 9.
And to provide service which involves establishing various inl nla and depo depots ts and clea clearrin ing g offi office ces s so that hat cust custom oms s clearance at the port of entry is done by the "forwarder" as well well as deli delive very ry to cons consig igne nee' e's s door doorst step ep,, with withou outt actually involving the consignee.
Freight Forwarder - Dual Role The The frei reight ght forwa orwarrder der tradi raditi tion onal allly act acts as an agen agentt who who arranges for the shipment of goods belonging to his client/the shipper. The freight forwarder as agent typically arranges for tran transp spor orta tati tion on,, pays pays frei freigh ghtt char charge ges, s, in insu sura ranc nce, e, pack packin ing, g, cus usttoms duties, es, etc., and then hen char harges ges a fee, us usua uallly a percentage of the total expenses. All the costs are (or should be) disclosed to the client. The specific scope of the forwarding agent’s duties, however, is determined primarily by its contract with with the the cust custom omer er (ord (ordin inar aril ily y the the sh ship ippe per) r) who who reta retain ins s its its services. At times, the freight forwarder has acted as principal contractor arranging the carriage in his own name. His fee, payable by the shipper, is a straight freight charge. He then arranges to pay lower freight rates to the carrier and obtains his profit from the difference between the two. Very often, the frei freight ght forw forwar arde derr cons consol olid idat ates es the the carg cargoe oes s of a number number of clie client nts s in into to a sing single le cont contai aine ner, r, resu result ltin ing g in savi saving ngs s whic which h benefit the freight forwarder and the clients. The forwarding carr carrie ierr may may also also prov provid ide e othe otherr serv servic ices es,, su such ch as pack packin ing, g, warehousing, cartage, lighter age and/or insurance. On these occasions the freight forwarders responsibility to the shipper is often that of a carrier. Whether acting as agent or principal, the freight forwarder (as is normal in commerce) usually attempts to contract out of as much responsibility as possible. This has often resulted in very conf onfus usiing standar dard tradi ading condi nditions ons, where the two contradictory roles and kinds of responsibility - of the agent and of the principal - are set out.
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The The resp respons onsib ibil ilit ity y of the the frei freight ght forw forwar arde der, r, as agent agent and and as principal contractor, will be described in the light of the civil law, the common law and certain national laws.
Freight Forwarder countries
roles
in
different
USA- In the U.S., a freight forwarder involved with international ocean shipping is licensed by the Federal Maritime Commission as an Ocean Transportat Transportation ion Intermediary Intermediary.. Simila Similarly rly,, freigh freightt forwarders that handle air freight will frequently be accredited with with the the International International Air Transport Transport Association Association (IAT (IATA) A) as a cargo agent. UK - In the U.K., freight forwarders are not licensed, but many are members members of the Briti British sh Intern Internati ationa onall Freight Freight Ass Associ ociati ation on (BIFA). (BIFA). Freight forwarders in the UK consolidate various goods from different consignors into one full load for road transport to Europe, pe, thi his s is often known as group age. Some freight forwarders forwarders offer additional additional related services services like export packing packing and case maki aking. The regul gulations ons regar gardi ding ng exporting untreated timber pallets and cases has got increasingly more strict and many for countries an exporter will be expected to prov provid ide e a phot photo o sani sanita tary ry cert certif ific icat ate e or risk risk the the expe expens nse e of having their cargo fumigated. ustr tral aliia most ost lice licens nsed ed Cus usto tom ms Clea Clearrance ance AUSRALIA- in Aus Agents (now more commonly referred to as Customs Brokers), operate under a freight forwarder.
IRELAND- Even in smaller markets, such as Ireland, the role of frei freight ght forw forwar arde ders rs is st stra rate tegi gical cally ly impo import rtant ant.. Inter Internat natio ional nal merchandise trade is worth €148 billion to the Irish economy [2]. 82% of manufactured products are exported, further 10
highli high ligh ghti ting ng the the impo import rtan ance ce of the the frei freigh ghtt forw forwar arde ders rs to a natio nations' ns' econ econom omy. y. As Assoc socia iati tions ons like like the the Irish Irish Intern Internati ationa onall Frei Freigh ghtt Asso As soci ciat atio ion n and FIATA help maintain the prof profes essi sion onal alis ism m of this this in indu dust stry ry thro throug ugh h educ educat atio iona nall and and representative roles. The FIATA Diploma in Freight Forwarding is an example of how this can be achieved.
NIGERIA- Nigeria is a very large market dealing with import and expo export rt.. Frei Freight ght-f -for orwa ward rdin ing g in Nige Nigeri ria a has has been been in pl place ace since the exporting of groundnut as a cash crop since 1914, though not initially as freight forwarding but as the means of transportation of both goods and services from one country to another. Following the methodology of their British forebears, agen agents ts were were us used ed to faci facili lita tate te the the tran transp spor ortt of good goods s and and services.
Freight forwarder plays integral part of transportation process. The freight forwarder plays an integral part in the transportation process. Freight forwarders act on behalf of the exporter in arranging ocean or air transport services. They are famil amiliiar with with the the import port rul rules and and regu regula lati tion ons s of forei oreig gn countries, methods of shipping, and documents connected with foreign trade. Freight forwarders can provide a number of services. During the initial planning phases, they can help choose the carrier and the most economical shipment size. At the beginning of the sale sale,, the the freig reight ht forwa orwarrder der can can prov proviide an expo export rter er with ith quotations on a number of costs. This information can be used in preparing an accurate price quotation to foreign customers. At the shipper's request, the freight forwarder can make the actual actual arrang arrangeme ements nts and provid provide e the necessa necessary ry servic services es for for expediting the shipment to its overseas destination. This can include: 11
1. Providing advice on foreign import regulations, 2. Arranging for inland transportation, 3. Booking space with the ocean or air carrier, 4. Completing export documentation, 5. Arranging for cargo insurance, 6. Providing guidance on packaging, marking and labelling, 7. Arranging for products to be packed and containerized, 8. Freight consolidation, but this is not a standard service. Freight Freight forwarders forwarders operate on a fee basis paid by the exporter. exporter. The fees consist of an agreed-upon amount, plus documentation charges. The cost for the services should be fig igur ured ed into nto the the price rice char charge ged d to the cus usto tom mer. er. Freig reight ht forwarders also collect a percentage of the freight costs from the carrier. There are several criteria to consider when selecting a freight forwarder: the freig reight ht forwa orwarrder der licen icense sed d or appro pprove ved d by the the 1) Is the appropriate entities? Ocea Ocean n frei freigh ghtt forw forwar arde ders rs must must be licen icense sed d by the the Fede Federa rall Mari Mariti time me Comm Commis issi sion on to handl handle e ocea ocean n cargo cargo.. Al Altho thoug ugh h not legall legally y requir required, ed, the Interna Internatio tional nal Ai Airr Transp Transport ort Ass Associ ociati ation on (IATA) registers freight forwarders to deal with international air cargo shipments.
2) Is the freight forwarders company big enough to handle your business when the forwarder is away from the office? Just because the forwarder is on a vacation, your export efforts shouldn't come to a halt because there is no one to answer questions or handle shipping instructions for your product.
3) Is the freight forwarding firm stable?
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Has Has the the com company pany "bee "been n arou round" nd" very very long long? ? Does oes it have have financial stability? Commercial banks and trade references can help with checking these criteria.
4) Can the freight forwarder handle whatever product you want to ship, whichever way you want to ship it (air or sea)? The freight forwarder should be an import broker to handle the customs angle for you in case you need to import something or have goods returned from overseas.
5) Does the freight forwarder have a good network of agents overse overseas, as, partic particula ularly rly in your your target target marke market? t? What do these these agents handle? A good network of overseas agents ensures a smooth path for your product with a minimum of delay. This is important for peri perish shab able le prod produc ucts ts or ones ones that that need need sp spec eciial hand handli ling ng.. A container of wine on a dock in warm weather can pose a real hazard to your product's reputation. Can the the frei freigh ghtt forw forwar arde derr comm commun unic icat ate e with with you you as a 6) Can novice? Is the freight forwarder willing to take the time to explain the terms and procedures in a way you can understand?
7) What is the freight forwarders document turnaround time? Is the the frei freight ght forw forwar arder der locat located ed near near the the airp airpor ort, t, st steam eamsh ship ip offices and bank banks? s? A strategic locati ation cut cuts docume ument turn turnar arou ound nd time time and and ensu ensure res s you you get get paid paid quic quickl kly y via via the the banks.
8) Does the freight forwarder have some knowledge of your product? If possible, choose a freight forwarder who has some knowledge of the special needs of your product. If the freight forwarder usually handles only furniture, will the company be attuned to the needs for shipping wine or fresh produce?
9) Have you checked the freight forwarder's references? 13
It is crucial to check references for any company that will be handling your business. Also check customer satisfaction. Does the the frei freight ght forw forwar arde derr have have erro errors rs and omis omissi sions ons 10) Does insurance? Even Even the the most most cons consci cient entio ious us frei freight ght forw forwar arde derr can can make make a mistake. A minor error on documents can delay your product, hurt sales and stall your receiving payment for the goods. Make sure ure your freight forw orwarder der has has "errors and omissions insurance" to provide for just this eventuality.
What is an International Freight Forwarder? "Once upon a time, people thought of customs brokers and frei freight ght forw forwar arder ders s as simp simply ly agent agents s some somehow how link linked ed to the the shipping shipping industry. industry. Now, at last, last, these go-between go-betweens s are being being given their due as crucial middlemen in making life easier for importers and exporters. .... Simply put, the freight forwarder is the cargo cargo expediter. expediter. As intermodal intermodal transpor transportation tation becomes becomes more more comp comple lex, x, the job job of frei freight ght forw forwar arder der becom becomes es more more essential essential and difficul difficult. t. He must coordin coordinate ate the complexit complexity y of financial, financial, transpor transportt and other service service activiti activities. es. For example, example, he will: - Arrange to receive export shipment for a client at any point of origin in the United States. - Arrange consolidations of less-than-container load lots. - Arra Arrange nge forw forwar ardi ding ng to seab seaboa oard rd of the the carg cargo o load loaded ed aboard ship. - Arrange for insurance coverage. - If necessary, arrange free domicile delivery abroad. Here are five ways international freight forwarders can really bring out the best in your company:
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1. Clearance through customs: Customs paperwork is a tricky and and sord sordid id maze maze,, espe especi cial ally ly if all all you you know know abou aboutt are are the the busin busines ess-t s-too-bus busin iness ess comm commer erce ce aspec aspects ts of trade trade.. Custo Customs ms authorization is a complex area that will only further tax your understanding and clog your ability to take care of customers, vendors vendors,, and market marketing ing.. Interna Internati tional onal freight freight forwar forwarders ders,, in addition to knowing all the ins and outs of proper shipping proc procedu edure res, s, offe offerr custo customs ms clea cleara rance nce serv servic ices es to aid aid you you in simplifying your business. 2. Any and all issues arising with documentation: In order to receive your payment from a bank, there are many documents that may be required to satisfy the involved bank or financial institution. One such document is the bill of lading. A proper bill of ladi lading ng will will faci facili lita tate te fast fast paym payment ent,, so you you can can keep keep your your business moving along with your freight. Insuranc ance: e: Not Not only only do many many frei freight ght forw forwar arder ders s prov provid ide e 3. Insur insurance options for your shipments, they know what is best for the needs of your business, and can quickly determine the most protective and cost efficient way that you can complete each transaction. Invent ntor ory y manag anagem emen entt: Who bet better ter to hel help you you with ith 4. Inve inve in vent ntor ory y mana managem gement ent than than the the serv servic ice e that that handl handles es your your freight? Freight forwarders and international freight forwarders can help ensure your product, which means you will always have a clear handle on your company's assets. Logisti tics cs and and suppl supplyy-ch chai ain n manag managem emen ent: t: Logis Logisti tics cs is, is, of 5. Logis course, the management of the flow of goods and resources betwee between n the the poin pointt of orig origin in and and the the poin pointt of consu consump mpti tion on.. Careful planning is a necessity of successful freight flow, and freight forwarders are professionals at accomplishing this task.
What specific functions does a freight forwarder normally perform? 1. Preliminary advice to the exporter:
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Explaining Explaining exporter's exporter's responsibili responsibilities ties / obligations obligations under Terms of Sale (Inco terms) requested.
Assist in negotiating inland and ocean rates; provide ideas on optimal and most cost effective shipping alternatives.
Assist in determining the best way to ship i.e. - container vs. break bulk, consolidation vs. exclusive use, conference vs. non-conference, air vs. ocean.
Packing / Marking recommendations.
Explain port functions in connection with export.
Advice Advi ce as to what what the the expor exporte terr sh shoul ould d accom accompl plis ish h and and what the forwarder will accomplish for him.
Review import licenses, where applicable.
Reco Recomm mmen enda dati tion ons s rega regard rdin ing g rece receiv ivin ing g paym paymen ents ts exports -- explanation of methods of payment.
Interpret and control Letters of Credit.
Advice as to possible problems may encounter: Improper packi packing ng,, cheape cheapest st meth method od of sh shipp ippin ing g not not alwa always ys the best best,, docu docume ment nt di disc scre repa panc ncie ies s that that can can caus cause e slow slow or nonpayment and/or confiscation of freight in foreign port, consequences resulting from late delivery of freight and/or late documents.
Estimate complete Export transportation and related costs for quotes (on Performa invoice) and L/C.
Advise of drawback opportunities for previously imported cargo being exported.
for for
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Can put exporter in touch with experts in the fields of trad trade e fina financi ncing, ng, in inte tern rnat atio ional nal mark market etin ing, g, gove govern rnme ment nt export export requir requireme ements nts,, intern internati ational onal banking banking,, and marine marine insurance.
Most Most forwa orwarrders ders have ave a "libr librar ary" y" of info nformat rmatio ion n on U.S/overseas ports, which exporters can use as guidance.
2. Booking the freight / Shipping Operations:
Provide custody and control of material in transit.
Expedite production and delivery.
Coord Coordin inat atio ion n of posit positio ioni ning ng empt empty y cont contai aine nerr to be delivered / returned (inland carrier), where stuffing takes place.
Choosing the steamship line as required.
Mechanics of booking and shipping: special handling cons consiidera derattions, ons, ETA dest destiinat nation requ requiired red port port of export, port of destination, direct vs. transshipment, numb umber/kind of pac packages, com commodi ditty pre precise description, size and type of container.
Handl andlin ing g freig reight ht or othe otherr money oneys s adva advanc nced ed by shippers, or remitting or advancing freight or other moneys or credit in connection with the dispatching of shipments.
Provid Provide e NVOCC NVOCC consol consolida idatio tion n servic services es to export exporters ers for LCL and FCL modes.
3. Documentation for shipping:
Certify and notarize invoices.
Normally prepa epare doc dock receipt, bi billl of ladi din ng; warehou house rece eceipt, ins nsu urance cert ertificate, AID
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docum document ents, s, certi certifi fica cate te of orig origin in,, speci special al cust custom oms s invoices, inspection certificate.
May May prep prepar are e or assi assist st in prep prepar arin ing g with with expor exporte ter: r: commer commercial cial invoic invoice, e, packing packing list, list, draft, draft, transm transmitt ittal al letters, consular invoices, export license, drawback forms, and shipper’s export declaration.
4. Notifications made in connection with the shipment:
Noti Notifi fica cati tion on norm normal ally ly made made to expo export rter er/s /shi hipp pper er,, consignee, and consignee’s broker.
Notif otific ica ation tion made ade for for ins nsur uran ance ce,, payment, and advice purposes.
While shipment is underway, forwarder may trace as necessary, assist in filing claim when necessary and correct errors learned after the fact.
L/C, L/C,
cont contra ract ct,,
5. Distribution of negotiable documents for collections:
Forward Forward documents documents to Bank, exporter's exporter's foreign foreign sales representative, consignee or consignee's broker.
How freight forwarder helps you to export? They can provide advice on the permits, licenses, inspections, and an d ot othe herr do docu cum men entts an and d pr proc ocee eedi ding ngs s tha hatt are re requ quiired according to the import laws in the country of destination. And 18
they help with customs clearance in the country of destination, working with a customs broker.
Product Preparation Freight forwarders understand the different types of packaging and containers best suited for your shipment. They know the markings and labels the products need in order to get through customs and be able to enter the country of destination, and to meet the requirements of the different free trade agreements, in order to take advantage of duty-free treatment as applicable. When the shipment is relatively large, it will most likely be transported in a container by ship, where it is possible to share space with other exporters. The freight forwarder knows how to secure the cargo against changes in temperature, vibrations, and impacts that result when the cargo is loaded and unloaded. In the majority of cases, insurance does not cover damages that are due to ina nade deq qua uatte pac ack king ng,, an and d it is therefor ore e important to count on the experience of packing professionals.
Freight Freight forwarders have a thorough knowledge of ocean freight companies and their relative strengths and weaknesses. There are hundreds of ocean freight companies and it could be that there are only a few that are in the best conditions to carry your specific product from your origin to its destination, within the the time timefr fram ame e requ requir ired ed and and at an adva advant ntag ageo eous us cost cost.. The The advice of a freight forwarder will be very valuable in making that that dete determ rmin inat atio ion. n. Many Many frei freigh ghtt forw forwar arde ders rs have have ampl ample e know knowle ledge dge and and exper experie ience nce with with air, air, ocean ocean,, and and land land frei freight ght companies, such as airlines, trucking companies, and railroads, so they they can can off offer a com compl plet ete e ser service vice,, from rom your our pl plac ace e of production or sale to the customer abroad. In many cases, an exporter has to choose between air, ocean, and land freight, or a combination. The mode of transportation you choose will depe pen nd on the type of produc uctt you are shipping, the timeframe you have for delivery, and the cost. Ocean freight would normally be less costly than air freight, but you have to consider the amount of time it will take for your 19
produc prod uctt to re reac ach h th the e cu cust stom omer er.. Wh When en pa paym ymen entt co cond ndit itio ions ns depend on the date of delivery, the time factor can affect the exporter's cash flow. A freight forwarder can help the exporter evaluate the pros and cons of the different modes of tran tr ansp spor orta tati tion on,, pr prov ovid idin ing g an es esti tima mate te of del deliv iver ery y ti time mes s an and d costs.
Documentation When goo When goods ds are tra transpo nsporte rted d int intern ernati ational onally, ly, pack packagi aging ng and documentation are critical to the export process. One of the mai ain n di difffe fere renc nces es be bettwe ween en se sellli ling ng in insi side de th the e co coun unttry an and d exporting is the documentation required. Export Expo rt do docu cum men enttat atio ion n re requ quir irem emen entts are ve very ry sp spec ecif ifiic. A missing document or one that is not correctly filled out can delay the shipment in customs or in some other point along the way.. Fre way Freigh ightt fo forwa rwarde rders rs are fam famili iliar ar wit with h the doc docume umenta ntatio tion n requirements and can advise the exporter, and even prepare the th e do doc cum umen entts tha hatt are req equi uire red, d, in ord rde er to en ensu sure re an expeditious shipment. When the order is ready to be shipped, the freight forwarder can review the letter of credit, the commercial invoice, and the pack pa ckin ing g li list st to en ensu sure re th that at ev ever eryt ythi hing ng is in or orde der, r, an and d ca can n prepare the bill of lading and any other special documentation that may be required, depending on the product being shipped. And after the shipment, the freight forwarder can send all the documentation directly to the customer, or the customer's bank that is going to pay for the import on the customer's account. Cost
Estimates
A freight forwarder can provide the exporter with an estimate of the costs involved in the exporting process. This estimate is very important when the exporter quotes a price to a customer abroad, because the price must be sufficient to cover all the costs related to the delivery of the product to its destination. The There reffor ore, e, it may be ad adva vant ntag ageo eous us to co cons nsul ultt a fre reiigh ghtt forwarder before negotiating the price, in order to get a quote for the freight costs, port costs, insurance costs, customs fees, charges for special documentation, and the freight forwarder's fees. 20
Freight forwarders work on the basis of a fee they charge the exporter, which normally consists of an agreed-upon amount plus charges for documentation. Freight forwarders also collect a percentage of the freight they contract with transportation companies. Onc nce e you have an est stiimate of all the costs involved in delivering your product to the customer abroad, you are in a position to quote a final price to the customer, and if your quote is accepted and the customer sends you an order, you can prepare the pro forma invoice, with a comple complete te breakd breakdown own of all th e components of the amount billed.
How
to
find
a
freight
forwarder?
There are numerous freight forwarders in the principal export and transportation services markets. A good way to look for a forwa warrder woul uld d be to ask othe herr expo porrters, espe pec cially companies similar to yours in terms of size of the company, point of origin, target market, and your line of business or the product you are exporting. By consulting directly with another exporting company, you can obtain their personal perspective regarding the freight forwarder, and their overall experience, such as the services provided, the results achieved, and any particular advantage or problem they encountered.
Consideratio ion ns
in
Selecting
a
Freight
Forwarder
Exporters ea eac ch ha hav ve thei eirr own nee eed ds to consi side derr when selecting a freight forwarder, and the following are presented as su sugge ggest stio ions ns re rega gard rdin ing g fa fact ctor ors s to be ta take ken n in into to acc accoun ount. t.
General It's important to look for a freight forwarder that is accredited. They must have a license from the Federal Maritime 21
Commission in order to handle ocean freight. Freight forwarders that handle air freight must be registered with the International Air Transport Association (IATA). You should de detter erm mine whethe herr the freigh ghtt forwarder is fina fi nanc ncia iall lly y st stab able le.. Yo You u ca can n re requ ques estt cr cred edit it re refe fere renc nces es an and d confirm them. You could also consult freight companies to see whether the freight forwarder has a good payment record. If the th e fre reiigh ghtt for orwa ward rder er is a lar arge ge co com mpa pany ny,, you co coul uld d se see e whether it is listed on the New York Stock Exchange or the NASDAQ and request a copy of their annual report. You You co coul uld d as ask k th the e fr frei eigh ghtt fo forw rwar arder der fo forr re refe fere rence nces s fr from om it its s customers, and then call those customers to ask about their satisfaction with the service provided. You could ask the freight forw fo rwar arde derr di dire rect ctly ly,, or it its s cu cust stom omer ers, s, if th the e fo forw rwar arde derr ha has s knowledge and experience with your company's product, your preferred mode of transportation, and the destination country. You should find out whether the forwarder is large enough to meet your company's exporting needs. Do they have an office in your destination market? Do they have a network of agents abr bro oad? Do thei eirr offices an and d agen entts ha hav ve the abi billity to commun com munica icate te on li line? ne? Do the they y hav have e war wareho ehouse use fac facili ilitie ties, s, in case you need that service? Do they have sufficient staff to manage the volume and needs of your exporting exporting company? Do they have insurance against errors and omissions? Are they willing to take the necessary time to explain the terms and proc pr oced edur ures es in a way th that at yo you u ca can n cl clea earl rly y un unde ders rsta tand nd? ? You sho hou uld inqui uirre about the cost of using the freight forwarder's services. How do they charge for their services? Do they th ey ch cha arg rge e th the e ex expo port rter er a fix ixed ed fee pl plus us rei eim mbu burs rsab able le expenses? Do they charge the freight company a percentage of the cost of freight? How much do they charge for packing and documentation?
Packaging
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Depending on the type of product you are shipping, you may need a freight forwarder who can advise you and help with packaging. The freight forwarder should be able to explain the different types of packaging that can be used to export your product, any special packaging and labeling requirements for yourr pro you product duct according according to you yourr des destin tinati ation on mar market ket,, and the type of packing that will best protect your products while in transit.
Modes of Transportation The freight forwarder should be able to evaluate the relative advantages of transportation by air, ocean freight, truck, or rail, and an d mak ake e re reco com mmen enda dati tion ons s reg egar ard din ing g the be best st mod ode e of transportation based on your product and the timeframe for del eliivery. You shoul uld d find out ho how w the frei eigh ghtt forwarde derr det eter erm mine nes s how long a sh shiipment will take to reach its destination, what stops the shipment makes along the way, and what changes have to be made from one mode of transportation to another. Freight forwarders should explain the factors they take into account in order to avoid problems with the shipment. Freight
Cost
Quotation
The The co cost st of fre reig ight ht ca can n be a si sign gnif ific ican antt co comp mpon onen entt of th the e overall cost of exporting, so the freight forwarder should be able ab le to ex expl plai ain n ho how w th they ey ge gett fr frei eigh ghtt qu quot otes es fr from om sh ship ippi ping ng companies; whether freight rates are quoted based on volume, weight, type of product, or some other criteria; the formulas used to calculate the cost of freight, the factors that affect the cost of freight; how long a freight quote is valid; and the trends the th e fre reig ight ht for orw war arde derr se sees es in the co cost st of fre reig ight ht,, an and d it its s projec ecttion for cha han nges in freight co cos sts in the fut utur ure e.
Insurance The freight forwarder should be able to explain the different type ty pes s of in insu sura ranc nce e av avai aila labl ble, e, wh what at ev even ents ts ar are e co cove vere red d by 23
insurance, the cost of insurance, the process for presenting a clai cl aim m for los ostt or da dam mag aged ed ca carg rgo, o, who is re resp spo ons nsib ible le for preparing the loss report and presenting the claim, how the claim is processed, and the timeframe in which a reimbursement ca n be expected.
Customs You should be able to understand from the freight forwarder how your products will clear customs in the destination country, whether whet her the fre freigh ightt fo forwa rwarde rderr wor works ks wit with h a cus custom toms s bro broker ker,, how much the customs broker charges and who pays that cost, who pays the duties and customs fees, and who processes duty drawbacks when applicable.
Documentation You should determine whether the freight forwarder is familiar with the export documentation required, which documents are prepared by the freight forwarder and which you must prepare as the exporter, how much the forwarder charges for preparing the documentation, the process for reviewing export documen docu mentat tation ion,, and whe whethe therr doc docume uments nts can be tra transm nsmitt itted ed electronically. If you are exporting using a letter of credit, you should determine how the freight forwarder ensures that all documents are in accordance with the terms of the letter of credit, and the responsibilities and the relationship between the expo ex port rter er,, th the e fr frei eight ght fo forw rwar arde der, r, and th the e ba bank nk re rega gard rdin ing g th the e presentation of the documentation required according to the letter of credit.
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International Freight Forwarders India S T Cargo Services, commitment to service to our role as an international freight forwarders India.
Air Freight
Consolidation Service Import and Export Door-to-Door Express Service
Ocean Freight
Full Container Load (FCL) Less than Container Load (LCL) Cargo Consolidation Service Oversized and Project Cargo Import & Export Cross Trades
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Trans-border Truck Freight
Import export business Full Truck Load (FTL) Less Than Truck Load (LTL)
Customized Global transportation solutions
Dangerous goods handling Inter modal Truck/Rail/Ocean
Throu Through gh our partne partnersh rships ips with with establi establishe shed d intern internati ationa onall and Indian freight forwarders & forwarding agents, we are able to negotiate competitive import and export pricing for ocean (FCL and LCL), truck (FTL and LTL) and air shi hip pments nts while consistently providing reliable and efficient service.
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Conclusion According to me freight forwarder plays an important role in the execution of export as they are those who act on behalf of the exporter in arranging ocean or air transport services. They are familiar with the import rules and regulations of foreign countries, methods of shipping, and documents connected with foreign trade. When you have decided to export the products of your small business, or you are considering the possibility of exporting, in addition to marketing and financial aspects, another consideration is logistics: how you are going to deliver your products products to your customers customers abroad. Logistics includes various aspects, such as the packaging of your products, the mode of transportation, and the export documentation that has to be prepared. freight forwarder acts as the exporter's agent and performs various functions involved in foreign trade. A freight forwarder can give advice on how the goods should be packaged and the marks and labels that are required, and can make arrangements to have the goods packaged and placed in containers for export. They contract space with ocean, air, and land freight companies on the exporter's behalf, to transport the goods to their destination abroad. They can arrange for storage in a warehouse if necessary, while the goods are in transit, and contract insurance to protect the cargo while in transit. Freight forwarders can obtain credit from the different service prov provid ider ers s in invo volv lved ed in the the expo export rt proc proces ess, s, and and then then coll collec ectt money from the exporter to pay these service providers on behalf of the exporter. 27
Freigh Freightt forwar forwarder ders s can advise advise export exporters ers regardi regarding ng letter letters s of credit or other banking documents for collecting on the export sale.
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http://www.associatedcontent.com/article/561611/h ow_a_freight_forwarder_can_help_you_pg3_pg3.html ?cat=3
2.
http://freightforwardermalta.com/
3.
http://www.allbusiness.com/operations/shipping/53 0812-1.html
4.
http://en.wikipedia.org/wiki/NVOCC
5.
https://www.thebenche.com/forum/documentsshipping/3776-10-important-questions-whenchoosing-freight-forwarder.html
6.
http://www.exportersindia.com/indianservices/freight-forwarding-agents.htm
7.
http://www.malaysiaexports.com/inex13.6.freigh.fo rwarders.htm
8.
http://www.articlesbase.com/ask-an-expertarticles/five-advantages-of-international-freightforwarders-for-export-and-import-1232365.html
9.
http://www.redbookintl.com/index.php? option=com_content&view=article&id=107&Itemid =99〈=en
10. http://www.hcbennett.com/freight%20forwarder's
%20functions.htm
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