/ By che / China Freight News

What is Fiscal Representation: The Ultimate FAQ Guide

A Fiscal representative is a VAT agent specializing in helping foreign companies with VAT registration in respective countries where they are needed.

Generally, the fiscal representative is responsible for reporting VAT and correct VAT calculations for their clients.

How Does Fiscal Representation Operate?

The fiscal representative usually operates on the following steps;

  • Step 1: Background check
  • Step 2: Bank guarantee
  • Step 3: VAT registration
  • Step 4: Paying your VAT bills
  • Step 5: The monthly compliance check
  • Step 6: Payment for fiscal representation

Who Requires A Fiscal Representative?

You will require a fiscal representative if you want or are currently trading in a country in which you are not a resident or have no establishment.

What Is The Role Of The Fiscal Representative?

Some of the duties for a fiscal representative include;

  • To deal with local VAT registration
  • Regulatory watch
  • To audit physical and invoicing flows
  • To manage the VAT declarations and intrastate
  • To do a monthly report
  • Assist in fiscal and custom inspections
  • To design optimized solutions
  • They do Act as technical consultants in accounting compliance and processing.

What Is The Cost Of  A Fiscal Representative?

The fiscal representative cost varies. We charge the representation per annum. You can contact the customer care team via our website for more details.

Which Countries Do You Need A Fiscal Representation?

We do have some of the countries below that will need a fiscal representative, which includes;

  • Germany
  • Belgium
  • Netherlands
  • Hungary
  • Portugal
  • Slovakia
  • Sweden
  • Slovenia
  • Croatia
  • Bulgaria
  • Finland
  • Denmark
  • Greece
  • Australia

What Do You Mean By VAT Fiscal Representative?

VAT fiscal representative is a local entity that generally represents a company in a foreign country by correctly calculating and filling the tax business. They also have a duty of providing monthly tax reports.

How Do You Compare A Limited Fiscal Representation (LFR) VS A General Fiscal Representation (GFR)?

General Fiscal Representation

It is also known as GFR, and generally, they represent a non-resident business concerning all services for which they register their business for VAT in their names.  Furthermore, they also help in the customs process, tax calculation, and filing tax returns annually for a company.

Limited Fiscal Representative

Limited fiscal representation is also known as LFR. It only represents foreign or no residents’ companies’ importers who bring goods into one EU member state.

At the same time sale, the goods in other EU members state to import without paying any value-added tax at the time of goods importation.

Does Online Market Require A Fiscal Representation?

Yes, the online market will also need a fiscal representative so long as you want to trade in a foreign country that will require a fiscal representative.

VAT is paid by both the online and physical business, which is stated by the law.

What Are Some Of The Benefits Of A Fiscal Representative?

Having a fiscal representative is one of the best decisions you may ever make since they come with the following benefits;

  • The fiscal representative will smoothly register your business with the local office for VAT.
  • They help you in the submission of your VAT returns
  • They efficiently process your VAT payments

What Is The Similarity Between Fiscal Representation To General Fiscal Representation?

There is no any similarities between Fiscal representative and general fiscal representative. They are both the local entity that generally represents all foreign business to register their companies for VAT.

How Long Will It Take To Change My VAT Registration To Fiscal Representative?

Okay, the change of your VAT registration to a fiscal representative will take a few weeks. But as the Brexit deadline approaches, we will expect the change to take longer.

The local tax authorities usually receive a bigger number of requests, so we advise you to plan ahead of time.

Does Additional VAT Reports Being Affected By Fiscal Representation?

No, the additional reports will not have any effect on fiscal representation. But you have to note that once the transition period ends, VAT transaction treatment will likely change.

This may affect the possible requirement for additional declarations, which may be thoroughly reviewed as we get closer to 1st January.

For Reclaiming A VAT Occurred In EU Under 13the Directive Claims Do You Need A Fiscal Representative?

Generally, the documentation needed might significantly vary. VAT recovery under the 13th directive claims to some member states may require a fiscal representation.

For all your importing from China, Tj Chinafreight is here to help – contact us now.

/ By che / China Freight News

Yard Storage: The Ultimate FAQ Guide

Probably, you’re wondering what yard storage is all about.

Well, this guide answers all your questions on yard storage.

Keep reading to learn more.

What Is A Yard Storage?

It’s a place whereby shipping containers in a trucker are stored in a gated yard.

This happens where the containers might not be delivered to their final destination before their last free day.

How Much Do You Charge For Yard Storage Services?

We usually charge for the yard storage services depending on the foot unit of the container. But it’s always an average of $20 to $450 per month.

What Types Of Goods Do You Keep On Your Yard Store?

We accept all types of goods so long as they are well preserved and may not cause any damages in the yard stores.

How Do You Qualify For The Yard Storage Services?

Anyone who has the legal documents required and can make payments for the yard storage services is qualified.

Are Your Yard Storage Containers Waterproof?

Yes, our yard storage containers are 100% waterproof, so there is no need to worry.

Our Office Hours And Gate Hours The Same Thing?

Well, office hours are when our yard storage offices are open for business, with the activities such as making payment in person if you wish so and making other official inquiries.

While gate hours are when our clients can access their containers, this will be done after gate clearance to enter the yard storage, no need to visit the office.

What Hours Do You Allow Access to Your Yard Storage?

We allow access to the containers from 10 am to 6 pm. Past 6 pm, no one will be allowed to the storage ward unless you have extended access.

Will You Provide Extended Access for The Yard Storage If Requested?

Yes, we provide extended access for yard storage for our business clients only. But in case you also need extended 24 hours access, with a valid reason, you will be allowed.

We need you to fill the special access hour application form.

You will be responsible for paying background checks for everyone you want to access the yard storage after the gate hours.

How Do You Book A Space For Yard Storage Service?

Booking a space for yard storage is easy and fast too.

You will only book via our website directly, or you can contact our customer care team, who are available 24hours to book the space.

Can You Book A Yard Storage Service In Advance?

Yes, you can book the yard storage services in advance by making a down payment of 25%.

Which Form Of Security Do You Offer For Your Yard Storage Services?

Our form of security to the yard storage is video surveillance and pin access to the yard.

Also, note that most of the managers live on the site of the storage yard for security purposes.

How Can You Tell The Size Of Storage Space You Will Need In The Yard?

We have our managers to guide you through the storage space you may need.

In the yard, or you can opt to use a size guide which we also provide for you to be aware of the storage space you might need.

What Is The Limited Number Of Containers Do You Need In Your Yard Storage?

We do not limit our clients for yard storage services unless the yard storage is full. In which we will refer you to our next nearest yard storage available.

For How Long Should My Container Stay At Your Yard Store?

Okay, our contacts normally run for one month in which you will be renewing monthly if you are interested in staying longer.

Your container may stay as long as you need in the storage yard.

What Are The Rules And Regulations On Your Yard Storage Services?

We have very simple rules and regulations guarding our yard storage. Below are some of the rules you may need to know;

  • Our offices hours are from 9 am- 5 pm from Monday to Saturday
  • The gate hours are strictly 10 am- 6 pm from Monday to Saturday
  • On public holidays and Sundays, we do not operate
  • Any late payment for the yard storage will be penalized
  • Only one vehicle will be allowed at the gate
  • You should assign one or two individuals only to access your container in the yard storage.
  • If you do not have all the required documents, you will not be allowed to use our yard storage services.

What Is The Process Of Terminating The Yard Storage Services?

Well, termination of our yard storage services is quite easy.

You will be required to give a two weeks’ notice and submit the contract letter to our office to be processed.

Do You Cover For Damages Inside Your Yard Storage?

Yes, we will be held responsible for any damages inside our storage yard.

What Does Will happen In Case Of Late Payment For My Yard Storage Services?

We generally have a penalty of 10% on top of your regular service payment in case of any late payment.

What Goods Do You Consider Hazardous For Yard Storage Services?

Explosives, flammable liquids toxic materials are considered hazardous in our yard storage facility.

If you have further questions about then give us a call for clarification.

What Documents Do You Require For The Container To Be Stored On The Yard?

What we need from you to get our yard storage services are;

  • Insurance cover/proof that your goods are insured
  • A national identification cards
  • Copy indicating the type of goods which are inside the container

What Happens If My Container Got Lost In The Yard Store?

We advise you to get insurance cover for such cases, which rarely occur.

But in case the container gets lost, we will investigate and cater for the losses as per the agreement.

At Tj chinafreight, we offer cost effective shipping solution from China – talk to us now.

/ By che / China Freight News

Stuffing: The Ultimate FAQ Guide

If you have any question on stuffing, you will find the answer right here.

So, keep reading to learn more.

What Is Shipping Container Stuffing?

Container stuffing is a planned process of loading goods into a shipping container to be transported.

This planning process is done to ensure that the goods are not damaged while they are in transit and the de-stuffing process can take place safely on the other end.

The containers are also well balanced for shipping hence to ensure dangerous goods are not transported together.

How Does Stuffing Less Than Container Load (LCL) Compare To Stuffing Full Container Load?

Less than container load is a small ocean freight shipment where the shipper does not contract for a full container.

Full container load is an ocean freight shipment where the shipper contract for full container.

Less than Container Load allows you to maintain a smaller adaptable goods inventory while Full Container Load for a big volume of goods.

Less than Container Load involves multiple shippers products packed together while Full Container Load all products in a container is owned by one shipper.

Benefits Of The Two Modes Of Shipping Are;

Less than Container Load freight cost depends on cargo weight as opposed to a flat rate as is the case with Full Container Load shipments.

With Less than Container Load you spend less due to shipping fewer products more frequently on the inventory space.

When shipping a Less than Container Load you can pick up and drop off your container directly from the stores.

Where the containers are loaded and unloaded.

Full Container Load has a lower risk of damage since it is owned by one party.

Full Container Load is cheaper than Less than Container Load making it more economical option even though the whole container was not occupied to its maximum capacity.

Full Container Load shipping time is also perfect compared to Less than Container Load because the whole container is transported directly to the final destination.

Disadvantages Of The Two Modes Of Shipping Are;

Full container load shipping takes a longer time to reach its final destination hence due to long transit time shippers are advised to plan accordingly.

Less than Container Load is more expensive per cubic meter than Full Container Load.

Less than Container Load has a higher risk of products damage because it involves multiple shippers’ products.

Is There Recommended Shipping Container Stuffing Procedure?

The following steps are the fundamentals for a successful container stuffing;

The Right Container

The shipper has to take into consideration the type of freight he wants to ship such as frozen, dangerous or bulky cargo require different kind of containers.

Maintenance Of The Container.

It is important to regularly ensure that the container is maintained in good condition to avoid water contamination damages via holes and damaged doors.

The Vessel’s Route.

An often overlook problem is climatic disruptions during the vessel’s course.

In tropical climates the temperature in a container could increase up to 50C and cause wet damage like rusting due to lack of ventilation.

The Right Packaging.

If the cargo is not packed following its properties it is more likely to get damaged regardless of the chosen shipping or the stuffing method.

How Does Shipping Container Stuffing And De-stuffing Compare?

De-stuffing is the opposite of stuffing hence they are commonly used when the goods are loaded or unloaded from their final destination.

De-stuffing is the unloading of goods from a container at their delivery port while stuffing is the loading of goods into a container before departing from the port.

These terms are usually used during transportation of the goods from one destination to another hence are used on roads, seas and even air transportation.

What Is Shipping Container Stuffing Location?

Shipping container stuffing location is a specific location where the products were stored into a container.

The process of locating heavy cargo position to be below lighter cargo to ensure the container’s centre of gravity is low.

This is majorly considered by layers and dangerous cargo that are stuffed within the containers.

What Should You Consider Before Stuffing Shipping Container?

  • Pre-treatment.

All the products must be treated correctly earlier to stuffing hence to reach their destinations in good condition.

  • Pre-cooling of cargo.

Sufficient pre-cooling of the goods will have a positive result compared to the products that have not been pre-cooled.

  • Optimal stuffing.

Proper coverage of floor will improve the flow of air during shipment.

  • Avoid wedging or jamming cargo into containers.
  • Cargo to be stripped or unloaded first should be stuffed into the container last.
  • Place the goods that are heavy or wet on the bottom will light goods on top.
  • Dangerous and incompatible goods should not be stuffed in the same container.
  • The container has to be balanced by distributing cargo weights evenly as possible.
  • Block and bracing.

Cargo should fill the container accordingly to avoid it from moving during transportation.

  • Provide a lift clearance at the top for the items to be handled by the forklift.
  • Do not exceed the maximum payload of the container.
  • Containers have to be stable with the weight of cargo evenly and carefully distributed.
  • Choose the best experts in the container stuffing.
  • The container should be sealed with the customs official during stuffing.
  • Choose the best container stuffing to make shipping safe and efficient for your product and that helps in money savings for your company.
  • It is important that the container is filled as full as possible but not so full that goods would be damaged or the stripping would be slowed down.

How Should You Stuff Shipping Container Without Wasting Spaces?

Stuff shipping should be done without leaving spaces in between the cargo in a container to prevent movement during transit.

This is avoided by;

  • This is the process of preventing the loading from moving up and down.
  • It is the method of preventing the load from moving side by side.
  • This method can be done using various materials such as ropes, timber beams, plastic foam or chains hence to prevent cargo from sliding in any direction.
  • The first decision you’ll need to make is whether you will ship loose cargo or palletized goods.
  • Choosing the right pallet will maximize the storage of your container, reduce transportation costs and ensure efficient handling of your goods.
  • Loose cargo.If you are shipping loose cargo its’s best to have your cargo palletized.

Cargo consolidation occurs when cargo from one or more shippers is combined into one shipping container.

What Is The Difference Between Shipping Container Stuffing And Shipping Container Stripping?

Container stuffing is a planned process of loading goods into a container to be transported.

Shipping container stripping is unpacking or unloading of cargo from the container.

Stuffing is the process of loading a container with loose goods prior to shipment while stripping is the process of unloading a container when it arrives at the port.

Container stripping is the unloading or unpacking of cargo from the container.

Conversely container stuffing refers to the loading of cargo onto the container with the aim to use as much of the container’s capacity.

This ensures that the cargo will be protected from loss or damage during the transit.

For all your shipping needs from China, contact Tj Chinafreight now.

/ By tjchinafreight ivy / Shipping

7 Container Interesting Facts

7 Container Interesting Facts
7 Container Interesting Facts

In this blog post, we've rounded up some of the most interesting and exciting facts about containers. Hope you like it!

1. Only about half of the containers are owned by shipping lines. The rest are leased, usually for 1 to 10 years.

2.Once an ISO tank has been labelled for food, it cannot be used for other types of goods. The same goes for ISO tanks marked as chemicals. This is to prevent contamination risks.

3.Once an ISO tank is marked as a chemical, the type of chemical it can transport next depends on the three chemicals it has previously transported.

4. Maersk is the only shipping company with GPS on reefer containers. All 270,000.

5. Reefer containers don't generate cold air, they just keep the temperature! They cannot return to their original temperature.

6. About 97% of the containers are made in China. This is due to lower labor costs. Also, it is easier to produce containers close to where most products in the world are produced.

7. With proper maintenance, a container can last about 30 years - maybe more! 40ft containers tend to last longer than 20ft containers. This is because, unlike 20-foot containers, they are usually not packed within their weight limit.

/ By tjchinafreight ivy / Shipping

What are the 5 largest ports in the US?

What are the 5 largest ports in the US?
What are the 5 largest ports in the US?

With the U.S. accounting for more than 26% of the world's total consumption, it's no surprise that the maritime industry is critical to its economy. That said, some of the largest and busiest ports in the world originate from their coastal regions. If you're considering importing, exporting to or importing from the US, in addition to checking container shipping rates, I suggest you do some research on the major US ports. In this article, we'll take a more detailed look at the top 10 US ports.

1. Port of Los Angeles

The Port of Los Angeles is located in San Pedro Bay, California, in the western United States. Given its strategic location, it's no wonder it is responsible for much of the trans-Pacific trade. Also known as Port of America, it covers 7,500 acres and has 43 miles of waterfront. Currently, it is the 19th busiest port in the world in terms of container volume. It is estimated that approximately $1.2 billion in cargo is shipped to and from the Port of Los Angeles every day.

2. Port of Long Beach

Next to the Port of Los Angeles is its sister port, the Port of Long Beach. Together with the Port of Los Angeles, they are responsible for more than a quarter of the total North American container trade. The Port of Long Beach is worth $180 billion in annual trade activity. Container shipping to and from Long Beach is very popular as it is considered one of the main gateways for trade with Asia.

3. Ports of New York and New Jersey

On the East Coast, the Port of New York and New Jersey are the top ports. It is the largest and busiest port on the East Coast of the United States and the third largest port in the United States. It offers access to one of the most concentrated consumer markets in the world.

4. Georgia Port

The main ports of the Port of Georgia are the Port of Savannah and the Port of Brunswick. The Port of Savannah has the largest single-dock container facility in North America and the largest concentration of import distribution centers on USEC. The Port of Brunswick is considered the port of choice for new car imports, with over 500 acres leased or owned by the automotive industry.

5. Port of Seattle-Tacoma

Washington State's two major ports merged in 2015 to jointly operate their cargo terminals. The Ports of Seattle and Tacoma are jointly operated by the Northwest Seaport Alliance. The two ports combined accounted for 5.3% of the North American market in 2015, handling more than 2.1 million TEUs. As container traffic to the ports of Seattle and Tacoma increased in April 2017, both ports recorded their strongest international container traffic in the first quarter since 2005.

/ By tjchinafreight ivy / Shipping

How to properly prepare a LCL shipment

How to properly prepare a LCL shipment
How to properly prepare a LCL shipment

When we send LCL (Less than Container Load) shipments, the merchandise needs to be prepared carefully. When you are preparing an LCL shipment from an FCL (full container load) shipment, it is important to keep the differences in mind. More specifically, since LCL shipping requires container sharing, you should be extra careful.

The most common cause of LCL shipment damage is insufficient packaging. It is important to note that some insurance companies do not provide coverage in this situation. That said, the right packaging and finding the right material is almost a science in itself. This is not a risk you should take. The difference between using the best and most adequate material and using material that may be a little too big or too small is huge.

If you are a frequent exporter/shipper, you should already know the specifications for preparing LCL shipments. However, if you're just starting out in the export world, here's a tip: Before you start looking for container shipping rates, it's recommended that you read what to expect and how to properly prepare a LCL shipment.

This problem is best broken down into the various factors that ensure the safe transportation of goods. This includes whether your item contains fragile items and the total number of boxes. Once we have these answers, we need to reflect that as clearly and accurately as possible on packaging and labels.

Some aspects to consider include:

1. Box and Packaging

Pack all items in boxes. Not in a suitcase, nor in a bag or any other type of container. Certain companies sell boxes designed for export. If you are shipping delicate items, it is recommended to first fill the box with plastic wrapping bubbles to protect your item. Additionally, each box must be properly sealed. Keep in mind that these boxes may be susceptible to strenuous exercise during sea travel.

2. Labels

Clearly identify each box: shipper name, consignee name, destination country, freight forwarder name and booking number.

If possible, mark these details on each side of the box. This ensures visibility of cargo as it is palletized and stacked in containers. As containers are consolidated, your cargo may go through various stages of loading and unloading.

3. Counting

Mark each box with a number that indicates its position relative to the total number of boxes. For example, if your shipment consists of 30 boxes, you should label your boxes as follows: 1 of 30 boxes, 2 of 30 boxes, 3 of 30 boxes, So on and so forth.

You can include this number on the main label of the box or write it separately.

4. Fragile labels

If shipping fragile items, be sure to label them clearly and visibly on each box that contains fragile items.

Just like the number of the box, you can note it on the main box label. But we recommend that you put a special "fragile" label on the box. Place it on all four sides of the box to ensure visibility as your box may move around in transit.

5. Palletizing and shipments

To get a LCL shipment quote, you need to provide the total amount of the item. If you are not sure how to calculate it, the following video will explain how.

6. Labeling of non-stackable pallets

As mentioned before, you should properly palletize the cargo inside the container. It is not uncommon for trays to be stacked together. However, you may not always want your cargo to be stacked, especially if they contain fragile items. If you want your pallets not to be stacked, you should explain this to your forwarder when booking. We also recommend putting this label on the box - on the four sides of each box.

7. Automatic palletizing

Palletizing of goods usually takes place when the goods arrive at the warehouse. If you prefer to DIY this part of the shipping process, be sure to use plastic pallets or fumigated wood. This prevents the risk of your shipment being rejected by customs authorities at your destination port for non-compliance.

8. Uniform packaging

Arrange your items evenly and uniformly. Avoid a section protruding too high or having an unbalanced weight. Shipping charges are calculated based on the cubic volume of the item. Uneven distribution can increase your numbers and lead to higher costs.

/ By tjchinafreight ivy / Shipping

Why you should choose FOB over CIF when importing from China

Why you should choose FOB over CIF when importing from China
Why you should choose FOB over CIF when importing from China

Significance of choosing a CIF

Under CIF, the buyer takes ownership of the goods only at the port of destination. The seller is responsible for cost and shipping, and the transfer of title takes place at the port of destination. This is usually subject to a third person, usually a customs agent whose consignee is listed on the bill of lading.

This means that the agent, not the buyer, has the legal right to claim against the goods. The agent will then ask the buyer to pay for the destination, including customs clearance, taxes, etc.

Many novice buyers find this option particularly advantageous because they are relatively not responsible for the goods - logistically and financially. Also, Chinese suppliers often offer lower prices if buyers agree to CIF Incoterms.

Why are you so obsessed with CIF?

As you can imagine, there is a problem with choosing a CIF. This is a pretty bad practice for imports from China. Here are some features of CIF incoterm:

  • Prices for purchasing items under CIF are very low and competitive - often much lower than under FOB incoterms.
  • You usually don't know about item management as this is handled by the seller.
  • You are also often unaware that the consignee on the bill of lading is listed as the clearing agent (at destination), not yourself. (This applies to MBL or Carrier B/L)
  • After the goods arrive at the port of destination, certain decisions made by the agent may result in you having to pay five times the actual required fee. In addition to the arrival fee that every importer should pay above, you run the risk of ending up having to pay more. These include handling fees, exit fees, entry fees, etc. - basically the agent's concept of "own" to drive up prices, or unexpected surcharges on standard fees such as terminal fees.
  • Plus, having control over merchandise means they have better control over time. This means they may be in their favor - waiting for your item to arrive before notifying you. This will incur additional charges because you do not have enough time to schedule the delivery. This results in delays and additional charges that you must pay and settle before picking up your shipment.

FOB or CIF: Investigate Before Choosing

Common practices include an agreement between the destination agent and the seller to set a low price for the item being sold. This is to lure you before the destination inflates the cost, and then divide that profit among them. This has happened quite a bit with products imported from China, and such cases have been on the rise in recent years, especially in Latin America.

FOB works well for LCL as profit margins tend to be lower. As a result, this gives sellers and agents more power to drive up prices. If you're considering choosing a CIF Incoterm, you should ask yourself if it's really worth exposing yourself to such a risk at a low cost.

Advantages of choosing FOB over CIF

Unless you are dealing with a seller or agent you can trust, or have an agreement to list yourself as the consignee on the bill of lading, it is best to choose FOB Incoterm to avoid risk. FOB Incoterm provides features that CIF Incoterm does not. The responsibility for paying, contracting and managing the goods rests with you, the buyer.

Although it requires some extra effort on your part compared to a CIF, it is much less risky as you get immediate clarity on the costs involved. That said, problems like delays and unexpected extra costs can be avoided with good planning.

FOB also has the following advantages:

  • By controlling the agents involved, the buyer is able to exert pressure to lower the commercial price.
  • By minimising costs, it enables buyers to obtain tax benefits, such as a reduced VAT burden.
  • FOB also allows buyers to get better insurance prices, as you'll be looking for deals that cover most of your logistics. Unlike CIF, CIF only covers the movement of goods from the port of destination to the buyer's facility.

FOB or CIF: Considerations

One thing to keep in mind when choosing FOB is that complications can arise if the supplier refuses to work with the shipping company of your choice. Suppliers sometimes receive certain rebates for using specific freight forwarders and may therefore be reluctant to work with other consignees. This is a fairly common question. Therefore, the consignee should be prepared to put pressure on the shipper to help the freight forwarder smooth the process.

In short, new importers should not commit to CIF Incoterm unless you are familiar with seller practices. This is especially true when dealing with products imported from China. It is always recommended to use the services of a freight forwarder and choose FOB Incoterm when the situation allows. This is to avoid unpleasant surprises when the goods arrive. If you have any questions about choosing FOB or CIF, please feel free to contact our sales experts at TJ chinafreight!

/ By tjchinafreight ivy / Shipping

Why your NVOCC should be FMC licensed

Why your NVOCC should be FMC licensed
Why your NVOCC should be FMC licensed

Choose NVOCC: Make sure it is FMC licensed

Given the number of NVOCCs in the world, choosing the right NVOCC for you can be a daunting task. How do you know which one is best for you? The first and most important step in this process is to ensure that your NVOCC is licensed by the Federal Maritime Commission (FMC).

What is NVOCC?

Let's start with the basics. N VOCC stands for Non-Vessel Operating Common Carrier. Its role includes contracting sea freight and shipping companies to move cargo from one point to another. It has agreements with carriers to provide its ships with a fixed number of slots each year in exchange for low rates.

NVOCCs are the largest traders in the container shipping industry. It issues bills of lading, takes responsibility and liability for the goods, and can also own and operate its own or leased containers.

NVOCCs and Freight Forwarders

NVOCC and freight forwarders are OTIs (Ocean Transportation Intermediaries). But they are not synonyms. NVOCCs can issue their own bills of lading, freight forwarders cannot; they can only work against carrier (or NVO) bills of lading.

Perhaps the most important difference is that, in some cases, NVOCC accepts all responsibility and liability for the goods. On the other hand, freight forwarders are not responsible for this. In addition, freight forwarders can act as agents or partners of NVOCC, but the reverse is not possible.

What does FMC do?

The Federal Maritime Commission is the U.S. federal agency responsible for regulating international shipping by U.S. ocean freight. FMC was established in 1961 to take over the responsibilities of the Federal Maritime Commission and has since been responsible for administering the regulatory provisions of shipping law. Today, it has more than 6,250 NVOCC registrations in its database.

What does it mean for NVOCC to have an FMC license?

With the FMC license, NVOCC can negotiate contracts with steamship companies. It also allows them to confirm their own House Bill of Lading as a Carrier Bill of Lading. For customers and suppliers, this is proof that the NVOCC is legally conducting business within the regulations set forth in the United States.

What happens if you work with a non-FMC licensed NVOCC?

This is the equivalent of hiring an unlicensed and uninsured contractor to work on your property. If something goes wrong, you have nowhere to go for help and support. In a more drastic way, basically, the only rules unlicensed NVOCCs have to worry about is getting paid and doing minimal work for the carrier/customs to accept your cargo as they are not subject to the regulations set by the FMC and obligations.

/ By tjchinafreight ivy / Shipping

6 Facts About Drug Shipping

pharmaceutical transportation
pharmaceutical transportation

Pharmaceutical transportation

If ocean shipping is not a sufficiently challenging process, try to imagine pharmaceutical shipping. We are talking about the logistics of drugs, pharmaceuticals, biomaterials, etc. Not only do these need to be kept at extremely precise temperatures, any issues in shipping can result in huge financial losses or worse, without potentially saving a life.

Logistics companies are often under enormous pressure to deliver medicines under high demand. These typically include zero damage, zero lateness and the possibility of track and trace.

To maintain accurate temperatures during transport, companies often use special equipment, including cryogenic containers, dry ice, thermal blankets, and insulating packaging. Sometimes temperature sensors are also included to monitor the temperature of the product throughout shipping.

But, of course, it never goes as smoothly as it looks in transit, and it's always a good idea to have extra resources on hand. In the event of delays such as Food and Drug Administration (FDA) inspections or other unexpected setbacks, further steps may be required.

Here are six interesting facts about pharmaceutical shipping.

  • Medicines need to be kept at precise temperatures to maintain their efficacy. These include the flu shot and insulin.
  • Pallet insulation blankets can be used to protect from sunlight, humidity, etc. It maintains a constant temperature range around 15°C to 25°C.
  • 7 out of 10 leading pharmaceutical products require temperature-controlled shipping.
  • Biological materials (e.g. blood, tissue, reproductive material) and clinical trials need to be stored in cryogenic containers that can be kept at -150°C for at least 10 days.
  • A temperature change of as little as 2°C can completely destroy a drug product.
  • Pharmaceutical companies lose an average of $150,000 per small package shipped due to cooler temperatures. For larger shipments, this can cost millions of dollars.
/ By tjchinafreight ivy / Shipping

What is a letter of credit?

There is no shortage of complex paperwork and documentation in the maritime world. You may know the more important bill of lading and packing list etc. But there are other equally important ones. In this article, we'll learn more about a letter of credit, what it is, and how it works.

What is a letter of credit?

According to the International Chamber of Commerce, a letter of credit is:

What is a letter of credit?
What is a letter of credit?

“On behalf of the buyer (customer/importer), the bank undertakes to pay the seller (beneficiary/exporter) the specified amount in the agreed currency, provided that the seller submits the required documents within the predetermined period.”

In other words, a letter of credit is a way, and one of the most common, where an importer promises to pay its foreign seller. It acts as a formal, binding legal agreement. Additionally, shippers generally consider this to be one of the safest payment methods.

In every transaction, there are sellers and buyers. In the vast world of trade, there is no way to know if the person you are dealing with is reliable. Given that it takes a long time for the goods to arrive by sea, the importer needs to guarantee payment before the goods arrive. This guarantee comes in the form of a letter of credit.

How does a letter of credit work?

It serves as a regular instruction from the importer's bank to the bank guaranteeing advance payment to the exporter. However, this first requires both parties to meet certain requirements. Buyers usually set these terms and conditions, which usually include:

  • Port of departure and port of destination
  • Shipping method
  • Route
  • Product description, including technical description (if applicable)
  • Number of Products
  • Needed file
  • Consignee details
  • Notifying Party Details
  • Latest shipping date

Once the seller agrees to these terms, the buyer's bank (or issuing bank) proceeds to issue the letter of credit. This will be sent to the seller and his bank (designated bank). According to these conditions, the seller prepares his goods and documents. After shipment, the seller will bring the copy of the document to the designated bank for verification.

When the nominated bank verifies that the documents match those listed on the letter of credit, it pays the seller. Then it goes to the issuing bank with the documents. The issuing bank then certifies itself. Upon satisfaction, it will refund the amount paid to the seller to the nominated bank.

When complete, it notifies the buyer that the shipment is complete and that all documents are correct and in their possession. The buyer then pays the issuing bank, which signs the bill of lading to allow the goods to be released to the buyer.