One of the most important concepts in ocean freightthat many exporters don't know is the carrier's return window. The return window is the allotted time set by the carrier during which a container must arrive at the terminal in order to be loaded onto the departing vessel.
Carriers typically set a four-day return window, although this may change as circumstances change. Narrow shipping return windows are one of the biggest reasons for delivery/pickup problems in the U.S. because many importers don't realize there's only one small window for your container to reach the terminal.
Why is there a return window?
Each carrier is granted a limited time to store its containers in port before sailing. In order to regulate time and space and avoid carrier storage fees, many carriers often set what is called an "earliest return date".
The earliest return date is the first day the shipper's container can arrive at the terminal. Any earlier, the carrier incurs charges that may be passed on to the shipper. Therefore, the latest date your container needs to arrive at the terminal in time for loading is called the cut-off date.
Back to the window timeline and how it works
Suppose that Terminal X allows Carrier Y a total of 7 days of free time to store its containers before its vessel sails. Carrier Y's ship's sailing date has been set to Sunday, so Carrier Y may set the earliest return date for the container to return to the terminal to be Monday. Returning the container early will result in a storage fee being charged by the terminal. Your container also needs to arrive at the terminal in time for loading, which means that carrier Y may set a deadline on Thursday. This means that you, the shipper, are granted a Monday to Thursday return window to ship your loaded container to port without any additional cost.
Many carriers allow containers about 4 days of free time outside the port. This means that you can pull a container out of port for loading as early as last Thursday, given that the earliest return date is Monday. This is called pre-pulling.
1. Prepare the goods in time and receive the goods on the pre-agreed date
Unfortunately, it is very common for suppliers not to have their goods ready on the day of pickup. This snowballed and prevented loading onto the ship on the expected date. Here, the freight forwarder can notify and remind you of the upcoming pickup date. However, it is the exporter's responsibility to have the goods properly packaged and ready for pickup. If the exporter fails to comply with the pick-up date, he may have to wait two weeks until the next ship leaves. During those two weeks, a lot can happen, including supply chain disruptions and breaches of contracts with third parties.
In this case, freight forwarderscan help find alternatives, such as loading the cargo on another vessel with a shorter transit time. But there may not always be a viable option for this situation. It is the supplier's responsibility to ensure that production is completed on time so that pick-up and loading dates can be determined.
2. Prepare and provide all necessary documents, especially if the goods require special permission to be transported
As an importer, you must always be aware of all necessary permits required for your goods. But the responsibility for providing these documents rests with the provider. If your provider is not responsible for this, you should consider switching providers. If you cannot rely on your provider to prepare these documents, it may be a sign that you cannot trust him.
Freight Forwarder Responsibilities
1. Pressure the shipping company to give you the space they need on board
With ships fully loaded, carriers end up having to prioritize certain cargoes. This caused some non-essential clients with whom they have no personal relationship to fail to load. The freight forwarder'srole here is to negotiate with the liner to secure the space the importer needs. Note, however, that the freight forwarder's influence here is limited as the shipping company always has the final say.
2. Understand the importer's needs and advise him on the best shipping options
It is the freight forwarder's responsibility to know if a vessel will be transshipping on its route and to forward this information to its customers. This may seem like a small detail, but it makes a big logistical difference. Transshipment means that commodities are unloaded from one vessel and loaded onto another. This greatly increases the chance of unforeseen events and delays and the associated costs. Your freight forwarder should inform you of these details so that you can make an informed decision about your shipment.
3. Any additional paperwork required to check certain products with customs authorities
If you don't know if your item requires additional documentation to ship, you can provide the HS code of the product to your freight forwarder so that he can check with the relevant customsauthorities.
The importance of small details
Make sure the Incoterms you have with your suppliers are properly reflected in your contracts and that providing accurate and accurate information may seem like trivial details. However, taking the time to do these things can help prevent unnecessary delays and complications. Small details are often the factor in whether you will incur additional charges or if your shipment is facing delays.
That said, keep in mind that you can take all precautions, but at the end of the day, your shipments are still subject to factors beyond your control. We recommend that you always purchase cargo insurance for extra protection, but be aware that this will only limit the blow. Knowing the responsibilities of the other parties involved will help you better communicate with them so they can stick with the deal until the end of the deal.
International shippingis a complex process and there is no magic formula that can be used to avoid complications. You can only do what you can control, which is to learn as much as possible, get along with trusted suppliers and freight forwarders, and avoid troublemakers. Most importantly, perform your duties.
International shipping involves multiple parties, so when something goes wrong, it can be difficult to identify the party responsible for every part of the process. As a participant in this intricate relationship, you need to understand not only your own responsibilities, but the responsibilities of other parties involved. Not knowing the responsibilities of your suppliers or freight forwarders is a huge risk for importers. In an industry as complex as ocean shipping, there is only a very fine line between risk and logisticaldisaster.
Importer's responsibility
1. Submit the necessary shipping data to the agent so that he can coordinate the shipment with the supplier
Such data includes the contact's email, name, phone number, and the name of his company. This information is key to streamlining the process. This is especially true when you are pressed for time. Given the time difference, it is best to provide this data as early and as accurately as possible. It can take up to two days to start processing your import from the moment you provide your supplier's contact information to the freight forwarder.
Advice: Once you confirm your purchase and know your item is in production, you should start managing your bookings with your forwarder to speed things up, rather than waiting days or even weeks for production to complete. The origin agent can update the freight forwarder at any time during the production process so that you can amend your booking if needed.
2. Know the working conditions of the Incoterm you choose for international sales, such as the back of the hand
It is not uncommon for suppliers to want to modify previously agreed terms. They may want to convert from FOB to CIF, which can be risky, or to EXW, where the importer takes care of most of the process.
What is the role of the freight forwarder if the Incoterm has not been agreed at the last hour?
At this point, there is nothing the freight forwarder can do except get a reply from both parties. Ultimately it is up to the importer to ensure that the supplier follows the agreement and most importantly, that the terms and conditions are properly reflected in the contract.
3. Liaise with your supplier to decide who will provide the specific documentation your item may need at origin and destination
Depending on the nature of your product, you may need to submit additional specific documents.
For example, a test report is one of the most common certificates of origin when importing into the EU. It certifies that the shipped goods meet the minimum quality conditions (strength, durability of materials, etc.) required by the European Economic Community.
In addition to different certificates of origin and destination, you may sometimes need to present other specific documents for import. In the case of importing honey into the EU, a certificate of origin is always required. And because it is an animal product, both importers and exporters must be registered in TRACES (Trade Control and Expert System).
The consequences of not preparing these specific files for your imports are dire. If your shipment has reached its destination and the deadline for you to present these supporting documents has passed, customs will ask for one of two solutions: re-export the shipment to the country of origin or destroy it. The important thing to note here is that any additional costs incurred as a result will be fully borne by the importer.
First, a fire in Maersk Honam in the Arabian Sea was a stark reminder of the dangers the crew faced in the ocean. The Singapore-flagged vessel was en route from Singapore to Suez with 12,416 TEUs on board when the fire broke out. At the time of writing, the blaze, which had been raging for five days, was under control, but four crew members were reported to have died in the blaze.
This first underscores the importance of crew safety at sea. But as a shipper, knowing that you have ocean freight on a burning ship is worrying. The Indian Coast Guard classified the blaze as a "chemical fire", which raised questions about the safekeeping of cargo and the declaration and documentation of all cargo, whether dangerous or not.
By law, all carriers are obliged to provide a minimum amount of insurance. But as the word suggests, it offers limited coverage. As a shipper, you can and should purchase additional cargo insurance to further protect your merchandise. This will cover your shipment in storage and in transit until it reaches the buyer's safe hands.
The stowage list for each ship is prepared based on the data on the manifest provided by each shipper carrying the cargo. Accurate cargo declarations play a vital role here. Due to the large volume of shipments by sea, customssimply does not have time to physically inspect and verify each shipment.
As a shipper, you can only ensure that you play your part by filling out all documents and declarations as accurately as possible. This includes bills of lading and packing lists, etc. You may not have control over other cargo on the same ship, or LCL containers, but you should take the worst-case scenario of every shipment - cargo insurance.
What is a general average?
There is a concept in the maritime world that everyone in the industry should be familiar with - generally average.
Legal Definition of General Average
"A principle of admiralty law, in the event of an emergency, if the cargo is abandoned or costs are incurred, the loss is prorated among the parties who have a financial interest in the voyage."
Unless you have general average insurance, general average is separate from the ocean cargo insurance purchased for your cargo. But with insurance, you can at least insure against loss or damage to your cargo.
Cargo insurance varies by cargo, and different insurance companies have different names. In general, however, all cargo insurance should cover physical damage to the cargo due to unforeseen circumstances beyond the owner's control. These apply to marine accidents, shipwrecks, pirates, etc. All this is provided that the goods are properly packaged according to their type of transport. Appropriate declaration forms must also be completed if necessary.
If your cargo suffers damage due to poor packaging, it is unlikely that your cargo insurance company will cover those losses. Please contact your freight forwarder (TJ chinafreight) or insurance company for more information on the policies available to you.
As the world's largest importer, the US import process can be described as complicated. In addition to the regular paperwork required for any ocean shipment (such as a bill of lading or packing list), there are a number of other costs to consider, such as fees and taxes. In this post, we'll take a deep dive into one of them: customsbonds.
A customs bond is like an insurance policy that guarantees payment of all duties and charges related to the goods. As an importer, you purchase a bond from a surety company that assures the U.S. government that all applicable shipping costs will be paid.
By sponsoring the importer, the sponsoring company is bound by the importer's liability. If the importer fails to fulfill the payment, the guarantee company may be obliged to perform and fulfill the guarantee conditions on its behalf before taking legal action against the importer.
It is important to note that customs bonds only cover U.S. duties and duties, not imported goods.
When do I need a customs bond?
As a U.S. importer, certain goods you bring into the country require you to submit a customs guarantee:
Merchandise valued over $2,500 for commercial use
Goods required by other government agencies, such as weapons or food
Without a customs guarantee, your imported goods will not be able to clear customs.
Difference Between Single Entry Bonds and Continuous Bonds
U.S. importers have two types of bonds to choose from: single bonds and continuous bonds. Which type of bond you choose depends on how often you import into the United States.
Single entry bond
A single-entry guarantee, also known as a single-transaction guarantee, is only valid for one transaction (import), as the name suggests, and can only be used at the port where the imported goods arrive. A one-time or occasional import is generally recommended. This is the better option if you import less than 3 times a year. However, much depends on the cost of bonding, and the breakpoint can vary between two and five shipments.
Please note that the Importer Security Declaration (ISF), which needs to be submitted before your shipment leaves the exporting country, is not included in the single entry bond and must be purchased separately.
Continuous bonding
Continuous Bonding, on the other hand, applies to an unlimited number of imports through all U.S. ports within a 12-month period. It covers all shipments during this period, so you don't have to get a single entry bond every time. This is the cheaper and better option for frequent importers who achieve three or more imports per year.
Serial bonds also include your ISF, so you don't have to make multiple purchases. Continuous bonds are automatically renewed each year until terminated by the guarantee company or the importer himself. Purchasing continuous bonds does not restrict importers to freight forwarders or customs brokers.
Note: If your customs broker assists U.S. Customs and Border Protection with customs clearance, you may be entitled to your broker bond.
Port capacity in Mexico increased from 260 million tons in 2012 to 406 million tons in 2017, an increase of more than 56%. Shippingaccounts for 90% of the world's economy, so it's important to know Mexico's main seaports to better understand how they operate. Below are the top 5 ports in Mexico.
5. Port of Ensenada
The Port of Ensenada is a deep-water port on the west coast of Baja California, just 110 kilometers from California, United States. It has cargo and cruise terminals and offers container unloading at its terminals.
The three most important overland routes for cargo transportation to and from the port are the Tijuana-Ensenada Expressway and the Tijuana-Ensenada and Tecate-Ensenada Federal Highways. Most cargo in and out of the Port of Ensenada uses these three routes, which also connect to major U.S. highways. Additionally, these routes provide direct connections to major U.S. border crossings such as Tijuana, Tecate, and Mexicali.
4. Port of Altamira
The Port of Altamira is located on the east coast of Mexico, facing the Gulf of Mexico. It is connected to 125 ports, most of which are located on the Atlantic coast. Domestically, its land and rail connections connect the port directly to the northern and central regions of the country, including important cities such as Monterrey, Saltillo, Reynosa, Guadalajara, Mexico City, and more.
3. Puerto Veracruz
Located 500 kilometers south of the port of Altamira, is the third largest port in Mexico, Puerto Veracruz. The Puerto Veracruz is also on the east coast of the country with direct access to the Gulf of Mexico.
Today, the port of Veracruz is the oldest and most historic port in the country. As the first port to be equipped with automobile transportation equipment, it is one of the most important ports for the Mexican automobile industry.
2. Lazaro Cardenas
Located in Mexico's Pacific Basin, the port of Lazaro Cardenas is one of the largest seaports in the region.
This deep-water seaport accommodates post-Panamax vessels and handles containerized, dry bulk and liquid cargoes. A new semi-automated terminal opened in 2017 and can handle more than 1.2 million containers per year. As a result, the port's capacity is expected to increase from 27 million tons to 29 million tons.
The port is well connected to Mexico City, just 620 kilometers away, and the U.S. Mexican rail network south of Kansas City.
1. Port of Manzanillo
Mexico's largest port, the Port of Manzanillo, is located in the state of Colima on the Pacific coast and handles Pacific cargo for the Mexico City area. Most importsdestined for central Mexico pass through the port of Manzanillo, which is an important port for Asian importers and exporters due to its geographic location.
Most of the port's exports go to the neighboring United States, Canada, Guatemala and Colombia, but also to countries further afield, including Japan, China, India, Malaysia and Singapore. Its main exports include beer, automobiles, cement, sugar, copper, steel pipes, carbon, glucose and resins.
As a shipper, it is not uncommon for your container to be rolled. When seaborne cargo is referred to as "rolling," it means that it was not loaded onto the vessel it was intended to sail on. Containers roll for a variety of reasons, including but not limited to:
This tends to happen more with cargo that needs to be transshipped or has its final destination in lesser-known ports. This is because they need to be loaded onto different vessels multiple times, which increases the risk of them being rolled over and missing connecting vessels.
What happens when your cargo rolls
If your shipment is rolled due to carrier issues, the carrier will automatically reschedule your shipment and place it on its next departing vessel. Any additional costs involved will be borne by the carrier.
However, if your shipment is rolled over due to missing paperwork or customs issues or does not meet certain requirements, you will be charged a rolling fee. Note that the cost of the rollover is usually higher than the shipping price itself.
In the unfortunate case of your cargo being rolled over, the carrier will notify the booking party. If it is due to a carrier issue, the booker will also receive an updated booking confirmation with the new details. If you book through a freight forwarder, your forwarder will receive this information from the carrier and forward it to you.
What to do when your container scrolls
It's never fun to hear that your vessel didn't ship. Right now, you rush to notify your supply chain partners, update your accounts, edit spreadsheets, and basically try to clean up and correct as much of what you end up with (if any) as possible. Whether it's your fault or not, there's still a lot of accounting to do, not to mention the potential delays your supply chain is facing right now.
The first thing you should do when you hear that your container has rolled is to find out why. If it's an issue like overbooking or a missed ship, there's little you can do other than wait for the next voyage and sort out the supply chain. If this happens, you may want to always have a contingency plan in place.
If it's a paperwork issue or missed deadlines or customschecks, make sure to resolve the issue before your next sailing date to reduce further delays. Contact your freight forwarder, they can give you better advice.
The impact of the U.S. market on the global economy is undeniable. As the second largest exporter in the world (after China)
America's largest export partner
Its NAFTA neighbors Canada and Mexico continue to be the top U.S. export partners, with 30% of total U.S. exports going to these two countries. The bulk of these exports belong to the transport(vehicle parts, transportvehicles), minerals (refined petroleum) and machinery sectors (combustion engines, telephones, low voltage protection equipment).
U.S. state exports
Looking at U.S. state exports, airplanes, aircraft parts, and helicopters continue to dominate most state exports, with at least 17 of them being the main export.
The top 10 exporting states (excluding air exports) include Washington, California, Kentucky, South Carolina, Georgia, Florida, Louisiana, Texas, Nevada, and New York. Louisiana and Texas' top exports are oil, while Nevada and New York are gold and diamonds, respectively.
The separate import process can be complicated. Doing so in a country that speaks a completely different language and has completely different rules and regulations can be even more overwhelming.
China is the largest exporter in the world, whether you are a new importer from China or an experienced importer, you need to pay close attention to certain details that may affect your imports. Below is a list of the top 5 mistakes made when importing from China.
1. Don't know the way of doing business in China
You cannot do business without proper communication. This applies to any merchant from any country trying to make a business deal. China is a vast country with many different cultures, customs and languages. There are at least eight different language groups, not to mention hundreds of dialects. The official language is Mandarin, but that's not to say you need to be fluent in Mandarin to do business with a Chinese businessman (although this will help a lot in your case). However, if you want to build a long-term relationship with a Chinese businessman, going beyond basic introductory phrases can be very handy.
Also keep in mind Chinese culture and the way of doing business. What may seem polite to you may be rude to the Chinese, and vice versa, and you definitely don't want to lose the deal with an easily avoidable misunderstanding.
2. Not investigating applicable rules and regulations
Knowing the trade rules for the products you import is part of any import or export process. But when importing from China, it is best to take extra precautions. It is not uncommon for Chinese suppliers to produce goods that do not meet international standards. In fact, it has been reported that only 5% of Chinese suppliers in some industries actually meet the guidelines implemented by the EU.
Depending on your importdestination, we recommend that you properly investigate not only the importing country's import laws, but also the regulations that apply to the product. This way, you know exactly what to look for when choosing a supplier in China to ensure that the products you import meet the correct standards. This helps prevent customs clearance and delay issues. Your country's chamber of commerce and customs office is a good resource for product guide information.
3. Selecting the wrong Incoterm
Incoterms are a clear set of conditions that both importers and exporters are obliged to comply with in any international transaction. This prevents misunderstanding and confusion about costs, risks, management and responsibilities. When importing from China, it is highly recommended to pay close attention to the pros and cons of the Incoterm you choose.
The three more common Incoterms used for importing from China are FOB, CIF and EXW Incoterm. However, each of them has advantages and disadvantages that can play a significant role in your total import cost. CIF Incoterm seems to be the better option because of its low cost and relatively less responsibilities. But this can backfire because with limited control, you'll most likely have to kowtow to all supplier decisions, which can end up costing you significantly. In general, we recommend choosing FOB Incoterm as this gives you more control over the entire importprocess and its costs.
4. Choose unreliable suppliers
As an importer, you are responsible for the products you import. This means that you are responsible for customsif anything goes wrong with your imports, and you are liable if your products cause harm to any consumers. That said, it is very important to choose a reliable supplier from China.
Before entering into an agreement with a supplier, make sure you have done proper research on their production process. This means knowing where it gets its material and even talking to other importers who import the same product or deal with the aforementioned suppliers. You may also want to visit the production site in person for extra assurance. Consider bringing in an expert who understands the production process of your imported product, so he can advise you on potential problems that may arise.
5. Not planning ahead
Time is an important consideration for any import you make from China. Any one of the above mistakes alone can cause a lot of delays and disruptions in your logistics chain, let alone two or more of them. With these in mind, always start planning your imports from China and allow extra time.
Ideally, you should book your cargo at least a few weeks before your vessel sails. This gives you extra time for your origin agents and suppliers to prepare all the required documentation in a timely manner, prepare for shipment, and allow a buffer of time should something go wrong. For the best shippingtimes and minimize hiccups, always check with your freight forwarder for the best ocean freightrates.
Converting Bills of Lading: The Complete Manual and Recommendations
In a world of increasingly globalized economic fragmentation, shipping forwarders find themselves dealing with more trading companies and their foreign-to-foreign transactions than old-fashioned factory-to-importer freight.
The success of such contracts often depends on the ability of the trade agent to conceal factory contact details from the end buyer by issuing a conversion bill of lading.
What is a forwarding bill of lading?
A converted bill of lading is a second set of bills of lading issued by the carrier (or its agent) to replace the original bill of lading issued at the time of shipment.
Although it technically handles the same cargo, the information on the converted bill of lading is intentionally redacted for a variety of reasons and is not meant to be the same as the original bill of lading it replaces.
Reasons for Issuing a Conversion Bill of Lading
Conversion bills of lading are only issued upon surrender of the original and may be requested by any of the three parties directly involved in the purchase/sale of the goods: the owner/seller (or authorised representative), the trade agent and the ultimate buyer.
Reasons for needing to convert bills of lading include:
The seller (probably a trade agent) wants to hide the name of the actual exporter from the consignee to prevent the consignee from entering into a deal directly with the exporter.
The seller does not want the buyer to know the actual country of origin of the goods.
The original bill of lading may be detained in the country of shipment, or the vessel may arrive at the port of discharge before the original bill of lading.
The trade agent prefers to receive payment from the final payee before paying the shipper, thus easing his cash flow.
The cargo may be resold en route as a high seas sale and the port of discharge must now be changed to another port.
The destination customs or consignee requests to edit the cargo description. E.g. "tool" instead of "garden tool".
The goods were originally shipped in small packages on separate bills of lading and the buyer wanted to have only one bill of lading covering all packages to facilitate his sale. The reverse is also true - a single
bill of lading is issued for bulk cargo, which the buyer prefers to split into multiple bills of lading covering smaller packages.
Tips on how to handle converting bills of lading
1. The freight forwarder shall verify the reliability of the consignor authorized to issue the second set. Obtain their written authorization and a signed bond (countersigned by the bank if the agent deems it necessary) indemnifying the freight forwarder for all consequences of issuing a second set of bills of lading.
2. Freight forwarders should also consider whether they also need to obtain written authorization from other parties who may be affected by their actions, such as shipowners or shippers or banks. If the carrier authorizes the freight forwarder to issue an exchange bill of lading on behalf of the carrier, the written authorization of the shipowner must be obtained. Otherwise, the shipowner will make a valid claim to the agent for the loss caused by the unauthorized issuance of the second set.
3. If the principal requires the agent to issue a conversion order based on the client's indemnity, the agent shall obtain proper wording from the principal before issuing and obtain the complete indemnity approved by the principal.
4. It is also advisable to ensure that the freight forwarderis insured with the insurance for which the transfer order is issued. They should provide their insurance company with the exact reason for issuing the converted bill of lading.
