What happens when your cargo rolls

What happens when your cargo rolls
What happens when your cargo rolls

What does it mean when your container scrolls

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:

  • Overbooking
  • Ship omission (when a ship skips a port)
  • Ship weight problem
  • Mechanical problem
  • Customs issues
  • Missed deadline
  • Documentation issues
  • Pending Title Verification (for motor transport)

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 customs checks, 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.

What does the US export?

What does the US export?
What does the US export?

 

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, transport vehicles), 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.

5 common mistakes when importing from China

5 common mistakes when importing from China
5 common mistakes when importing from China

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 import destination, 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 import process 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 customs if 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 shipping times and minimize hiccups, always check with your freight forwarder for the best ocean freight rates.

Converting Bills of Lading: The Complete Manual and Recommendations

Converting Bills of Lading: The Complete Manual and Recommendations
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 forwarder is 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.

History of Incoterms

History of Incoterms
History of Incoterms

Now seems like a good time to dive into the history of Incoterms.

When were they first implemented? Why are they needed? What problem does each subsequent release aim to solve? More importantly, what can we expect to see in the future?

Below is the history of Incoterms - how they were born and how they have evolved over the years as commercial trade processes and practices have evolved.

A Brief History of Incoterms

FOB Incoterm was the first Incoterm created. Although its origins date back more than two centuries, the current Incoterms were not actually created by the International Chamber of Commerce (ICC) until 1936.

Since then, many changes have taken place in the international shipping world. To accommodate this change, new and improved versions of Incoterms appeared, such as those introduced in 1953, 1967 and 1976.

But for the past 5 years, revisions have alternated every decade and tend to be valid for the entire decade, e.g. Incoterms 1980, 1990, 2000 and 2010.

The importance of Incoterms and how they facilitate world trade cannot be denied. When Incoterms were first introduced, they were only available in 13 countries. After eight revisions, they are now widely used in over 140 countries and can be found in 31 different languages.

Reflections on the Evolution of International Trade

The world of international trade has changed a lot over the past 80 years—some big, some relatively small. These changes include new modes of transport, modifications to the types of international sales contracts, modifications to customs clearance of goods, new ways of information transfer, and more.

As this behavior changes, so must the terms that govern them. The ICC's goal of revising Incoterms is to keep shipping terms up to date and adapt to changing international trade demands.

Top 5 Shipping Documents All Shippers Should Be Familiar With

Top 5 Shipping Documents All Shippers Should Be Familiar With
Top 5 Shipping Documents All Shippers Should Be Familiar With

The maritime industry is known for its paperwork. Knowing all of this is already tedious - getting them right is a task in itself. Any seemingly innocuous error can cause problems and delays that can seriously disrupt your supply chain.

In general, many of these documents contain the same information - buyer, seller, item details, etc. But each document plays a different role, and it is important to not only ensure that the information written on each document is accurate, but that it is consistent across all documents.

Below are the top 5 shipping documents that all shippers should be familiar with, and the differences between them.

1. Bill of Lading

A bill of lading, also known as a bill of lading, is a contract of carriage between a shipping company and a cargo owner. This is a document issued by the carrier to confirm receipt of your cargo for shipment on their vessel.

Importer and exporter information needs to be listed clearly as the bill of lading is proof of ownership of the goods being carried on board. The information on the bill of lading should also correctly reflect the conditions of the Incoterm in which the transaction was made.

Once the goods arrive at their destination, the bill of lading needs to be presented to the carrier to release the goods, which then serve as a shipping receipt.

Type of bill of lading

If you have booked through a freight forwarder, you may encounter two different bills of lading: house B/L and master B/L. Read through our post on the difference between a house and a master bill of lading thoroughly to understand how they differ.

Depending on your working relationship with the importer, you may prefer to use Express Release or Telex Release, both of which are variants of the bill of lading.

2. Packing list

Just like a bill of lading, a packing list is a mandatory document for ocean shipments. It lists the tiniest details about the cargo. This includes not only the weight, volume and value of the overall shipment, but also the weight, volume and value of each individual box.

Packing slips inform your freight forwarders, importers, customs and carriers of the goods you are sending without actually verifying the contents. If Customs decides to inspect your shipment, a packing list helps to identify the box or item that is raising the alarm, facilitating the inspection process. This saves time and reduces the risk of damage to the shipment by avoiding opening every box in the shipment.

It is important that the packing slip is filled out correctly and the information listed is as accurate as possible as this may be used to generate the bill of lading. That is, the information on the packing list (number of pieces, weight, etc.) must match the information on the bill of lading, as both documents are required for customs clearance in most countries.

3. Commercial Invoice

Any international transaction involving import/export of goods must be accompanied by a proof of sale called a commercial invoice. To a large extent, it is similar to a standard invoice. But unlike a standard invoice, it contains details about the purpose of customs clearance of the goods and is one of the most important documents in ocean shipping. Details of all parties involved, including importers, exporters, freight forwarders, banks, shipping lines, etc., must be listed correctly on the commercial invoice.

A commercial invoice is a legal document that lists the goods sold and their selling price—that is, what the importer agrees to pay for those goods, and is sent to the party paying for the goods. As mentioned earlier, the packing list details the items in the shipment and serves as evidence in the event of disputes and claims, and is sent to the consignee of the shipment.

4. Certificate of Origin

According to the International Chamber of Commerce, Certificates of Origin (COO) are "important international trade documents that certify that the goods in a particular export are obtained, produced, manufactured or processed entirely in a particular country. They also serve as an exporter's declaration.

A Certificate of Origin is required for customs clearance, which determines the amount of duties and taxes that need to be paid. It also helps determine whether there is a tax exemption in the case of special trade agreements between exporting and importing countries.

5. Letter of Credit

A letter of credit is a formal, binding payment agreement between a buyer and a seller. The international sourcing process is a lengthy one considering the length of time it takes from the time the seller ships the goods to the safe hands of the buyer. This makes it difficult to determine when payment is due, especially if the importer cannot verify the authenticity of the purchase.

This is when letters of credit come into play. It is considered one of the safest payment methods. The importer first develops a list of terms and conditions that must be agreed upon by both parties.

Once the buyer and seller have finalized the terms, the seller begins preparing the goods according to the conditions. After the goods are shipped, the seller then goes to his bank with the proper documents as evidence that the goods have been prepared and dispatched according to the agreed terms and conditions. His bank will then verify and pay for the reimbursement before claiming it from the buyer's bank.

America’s Largest East Coast Port

America's Largest East Coast Port
America's Largest East Coast Port

A massive union strike in California a few years ago forced many BCOs to look for alternatives to reach the continental U.S. rather than via the West Coast.

In a way, some experts say, it was the perfect precursor to the expansion of the Panama Canal and the opportunity it now offers East Coast ports.

East Coast ports are undoubtedly taking advantage of changing tides with massive expansion and investment up and down the coast.

Here's a look at the largest ports on the U.S. East Coast and what they're doing to accommodate the growth in demand and opportunity.

1. Ports of New York and New Jersey

New York/New Jersey ports are estimated to account for more than one-third of North Atlantic trade.

In response to increased competition from other East Coast ports and to be able to handle larger ships from the newly expanded Panama Canal, the port has deepened its port to 50 feet.

It has completed the raising of the Bayonne Bridge connecting New Jersey and Staten Island, New York, and can now handle vessels up to 18,000TEU.

2. Port of Savannah

Its intermodal system is being improved to gain better access and increase its market share in the Midwest, making the port a more cost-effective and viable option.

When these projects are completed, port authorities estimate that U.S. businesses could save up to 40 percent in shipping costs through the port.

3. Port of Virginia

The project became the deepest port on the East Coast.

Investments in intermodal transport have also begun - particularly the expansion of port rail and motor transport.

4. Port of Charleston

Container traffic at the Port of Charleston has grown 8 percent annually since the recession ended in 2009. This is largely thanks to changes in trade flows in and out of Asia rather than Europe.

The port is also currently being deepened to accommodate 18,000TEU vessels - up from the 14,000TEU vessels currently capable of handling.

Is your Christmas made in China?

Is your Christmas made in China?
Is your Christmas made in China?

It's that time of year again to light up Christmas trees and decorate them.
Depending on where in the world you are, you may need to buy a Christmas tree -- or simply go and cut down a fir in your backyard.

Given that China is the world's largest exporter, it's no surprise that it is also the largest producer of artificial Christmas trees. It is estimated that about two-thirds of the world's Christmas decorations come from China - even though Christmas is not even a legal holiday in China.

Who knew Santa's logistics headquarters was in China?

More specifically, the production of Christmas goods takes place in the area around Yiwu in eastern Zhejiang province.

There are more than 600 factories and workshops there. Yiwu's market size is comparable to that of 26 large department stores, and it is the birthplace of most of the world's Christmas merchandise sales and listings.

Yiwu has direct freight trains to Madrid, London, Prague and Tehran. In fact, the London-Yiwu railway, which opened in 2017, has a total length of 12,000 kilometers and passes through France, Belgium, Germany, Poland, Belarus, Russia and Kazakhstan. The whole journey is less than 20 days.

Christmas year round

Production in Yiwu is almost year-round - their only time off is during the Lunar New Year period in January or February.

In addition to that, Christmas trees are being made every day. Even at Christmas itself.

However, most orders arrive in the summer to give workers enough time to complete their tasks by Christmas. Therefore, the busiest seasons for the production of Christmas decorations are June and July.

What does Germany export?

What does Germany export?
What does Germany export?

EU's largest economy

As the EU's largest economy, Germany accounts for about one-fifth of the EU's overall GDP. It has been enjoying economic growth for nearly a decade. But it seems the tide may be turning.

The world's largest car exporter

As the world's fourth largest economy, Germany also has a pivotal economic presence on the world stage.

This is especially true for the auto industry, where five of the ten most valuable car brands have Germany as their home. That said, it's no surprise that Germany is the world's largest auto exporter.

In fact, around 21 percent, or one in five cars shipped around the world, is exported from Germany, according to the Economic Comprehensive Observatory. The second-largest car exporter is Japan, which accounts for around 14 percent of Germany's exports.

Of Germany's car exports, 58% are exported to other European countries. Asia and North America received 21% and 16%, respectively.

With the U.S. now threatening to impose tariffs of up to 25 percent on cars and auto parts imported from the European Union, the German auto industry has reason to worry. Outside of the European Union, the United States is the largest importer of German cars.

Germany's largest trading partner

German exports totaled $1.33 trillion in 2017, up from $1.25 trillion in 2016. Two-thirds of them are European countries.

By country, Germany's largest export destinations are the United States, France, China, the United Kingdom and the Netherlands. Collectively, these five countries receive more than one-third of Germany's exports.

6 common Incoterms mistakes to avoid

6 common Incoterms mistakes to avoid
6 common Incoterms mistakes to avoid

Incoterms are an essential part of any international ocean cargo. It is established by the International Chamber of Commerce or the ICC and sets out clear guidelines that buyers and sellers must execute transactions according to the parts of the transaction identified by each Incoterm.

Incoterms establish rules and responsibilities for both parties that can be used to resolve differences in the event of a dispute. The choice of Incoterm is determined and agreed upon by the buyer and the seller, who not only understand the responsibilities involved with each Incoterm, but also ensure that he/she is able to meet them.

Despite its importance and the potential consequences of misuse, many buyers and sellers are still unaware of some of the key responsibilities of every Incoterm.

In this article, we'll cover the six most common mistakes in Incoterms listed in Incoterms 2010.

1. Containerized goods use FOB

Despite common belief and practice, FOB Incoterm should only be used for non-contained ocean freight. This error is so common that it becomes a misunderstanding that is deeply ingrained in the minds of importers and exporters.

The main risk involved is the port of origin. Under FOB, the risk is formally transferred when the cargo is loaded on board. However, it is common practice for the shipper to hand over the cargo to the carrier at the terminal awaiting loading.

Since the cargo is at the dock, it has not yet been considered on board. Any damage sustained during this period is still technically the shipper's responsibility and the shipper's insurance should cover this part of the process as well.

However, when disputes arise, the shipper can and does often argue that he has done his part. So, in order to avoid hassle, delays and, more importantly, disputes that can lead to a deterioration in the relationship with the supplier, often the result is that the consignee has to bear the cost.

Apart from FOB, FAS, CFR and CIF are also not suitable for containerized cargo due to the above reasons.

2. Do not specify a location

Many people are unaware that Incoterms rules allow specifying locations. In fact, the failure to specify the full address may be controversial, as the ambiguity allows the seller to choose any delivery point he wishes within the general location provided.

This may be inconvenient for the buyer at all, especially if he has to spend extra time and money to transfer the goods to the final location he originally booked.

3. Seller commits to DDP or DAP without checking if he/she can handle import responsibility in buyer country

Under DDP and DAP, the seller is responsible for paying all arrival charges at the destination. With DDP, this includes paying local taxes (eg GST, VAT, etc.) and handling customs clearance at the destination. Note that unlike DDP, DAP does not require upfront customs clearance fees.

The latter requires him to register as an overseas importer in the destination country, a country-dependent process that can require a lengthy and lengthy program.

4. Buyer uses EXW regardless of his/her influence in the export process

This is similar to the role-reversal point of view mentioned earlier. Under EXW, the seller's responsibility is minimal and ultimately ends with the correct packaging of the item.

From then on, the buyer is responsible for export procedures from the country of origin and any necessary communication with the exporting authorities. For the buyer, it may not be that simple, especially if he/she is not familiar with the export process in the country of origin. In some cases, the seller may be required to participate.

5. Using CIP or CIF without checking that insurance coverage is adequate and complies with commercial contract requirements

According to CIP and CIF Incoterms, sellers are obliged to insure the goods. According to Incoterms rules, only minimum coverage (110% of contract value) is required.

However, depending on the conditions of the contract of sale, this may be insufficient and insufficient for the item being shipped. This amount needs to be met if the commercial contract requires more coverage.

6. Failure to align Incoterm with the bank's payment security requirements

This applies to international payment methods, such as letters of credit, whose secure and reliable nature suggests a lack of complete trust between buyers and sellers.

For letters of credit, payment can only be made after submitting the required documents to the bank to demonstrate that the trading conditions have been met.