/ By tjchinafreight ivy / Shipping

Hapag-Lloyd fined $822,000

Hapag-Lloyd fined $822,000
Hapag-Lloyd fined $822,000

Approved by the Federal Maritime Commission on April 22, German carrier Hapag-Lloyd has been ordered to pay a civil penalty of $822,220 for 14 violations of U.S. shipping law -- $58,730 per violation Dollar.

The FMC's Enforcement Bureau investigated a complaint from freight company Golden State Logistics that Hapag-Lloyd imposed demurrage charges on 11 containers that could not be returned in time due to lack of storage space at the terminals (LA, LB ports) .

The Bureau of Enforcement launched an investigation into whether Hapag-Lloyd’s practice of imposing demurrage fees violated the U.S. Shipping Act and found that Hapag-Lloyd either failed to provide a location for the return of equipment or even did so when assessing demurrage fees. The location does not have an appointment to return the empty box.

This is part of an ongoing dispute over demurrage and demurrage (D&D) charges in the industry. Long controversial, D&D fees have become a hot topic in the industry as more and more containers are overloaded at terminals and ports over the past two years. In response to these complaints, the FMC has become increasingly vocal about fees, recently encouraging shippers and haulage companies to alert the Commission to disputes over fees.

Hapag-Lloyd fined for detention charges and told to stop violating Shipping Act (file photo)
Hapag-Lloyd fined for detention charges and told to stop violating Shipping Act (file photo)

Liner companies believe demurrage is necessary to ensure the efficient use of very scarce containers, while other stakeholders in the supply chain have complained that due to port congestion, container returns cannot be achieved within the stipulated time. Additional costs should not be borne by the business.

The findings of this incident will support the shipper's argument that it is unfair to charge when a timely return of the container is not possible.

The FMC said: “We have been focusing on the issue of container detention and demurrage for many years, providing multiple opportunities for parties to weigh possible solutions, and in the Container Detention and Demurrage Rules provide information on the collection of containers Specific requirements for the return of demurrage charges for empty containers, but despite such efforts, Hapag-Lloyd has not been able to change its behavior or practices.”

The FMC added that evidence showed Hapag-Lloyd had not changed its policy on container detention and demurrage rules. The FMC Commission provided extensive notice and opportunity for comment prior to developing demurrage and detention rules that clearly set out the criteria for imposing detention for the return of empty boxes, and when there is documentation indicating that there is not enough appointment time to return these It is unreasonable for Hapag-Lloyd to impose demurrage charges when shipping containers.

/ By tjchinafreight ivy / Shipping

Why is the commercial invoice important?

What is a commercial invoice?
What is a commercial invoice?

What is a commercial invoice?

A commercial invoice is a document created for international shipments that contains important information about the export. It includes more details than a regular sales invoice and is used to calculate duties and confirm that the goods are legal. Commercial invoices are also used to create customs declarations.
It is important to obtain a commercial invoice and not a pro forma invoice, which is not accepted by customs.

What's in the commercial invoice?

Commercial invoices should be issued in English. If other languages ​​are used, at least the detailed description of the product should be translated. Including the HS code will significantly speed up customs clearance. The invoice includes the following information:

  • Invoice number corresponding to the packing slip number
  • Invoice date
  • Order number
  • Consignee information (recipient): name, address, phone number, tax ID, etc.
  • Shipper Information (Sender)
  • Party Information Notified to Shipper
  • Shipping Information: Freight Forwarder, Date of Export
  • Clearly describe the goods (type, package quantity, unit, weight, etc.) according to the packing list and bill of lading
  • HS code
  • Incoterms on which the sale of goods is based
  • The price of each item in a specific currency (usually in U.S. dollars)
  • Total sales
  • Payment instructions
  • Insurance
  • Origin of the product (country of origin or manufacture)
  • Invoice signature with issuer stamp

When do I need to issue a commercial invoice?

A commercial invoice is required for any goods shipped outside the EU. Used as a customs declaration, provided by the exporter (shipper).
In other words, every time you ship a package from the EU to a country outside the EU, you need to fill out a commercial invoice.

Do you need to keep records of commercial invoices?

Yes, it is very important to keep records of commercial invoices and any customs documents.

If you are VAT registered, you will also need to record your exported goods in your VAT account. This is important as you will need this information at all times when completing your VAT return.

/ By tjchinafreight ivy / Shipping

A Simple Guide to Customs Declaration

Lifting a container from stack to a ship.
Lifting a container from stack to a ship.

What is a customs declaration?

A customs declaration is a document showing a list and detailed description of the goods imported or exported. Customs declarations are mainly submitted by travelers at the borders of individual countries upon arrival or departure.
Through customs declaration, customs authorities control the type of goods or items that are imported or exported. Essentially, it is used to determine import duties or to comply with export regulations during export or import.

Through customs declaration, customs authorities control the type of goods or items that are imported or exported. Generally, the control has two main purposes:

  • Import: Protect the country from goods that are harmful or dangerous to the economy and the environment.
  • Exports: Executive orders restrict the export of certain goods and impose surveillance measures.

Passengers who fail to declare their imported or exported goods correctly may be subject to fines or confiscated goods. However, in some cases, high import duties are imposed on certain goods to prevent citizens or businesses from importing them.

Who should file a customs declaration?

Generally, it is the owner of the goods or a person acting on his behalf (representative).
The person in control of the goods can also do it. These people may be individuals or companies, and in some cases associations of individuals.
As a rule, these people should be established in the EU.

Simplified customs declaration

Simplified Declaration (Article 166 UCC)

If certain details or documents are missing when submitting the declaration, the declarant is allowed to place the goods under the customs procedure on the basis of a simplified declaration. Abnormal use simplified declaration without authorization.

Centralised customs clearance (UCC Art. 179)

Customs declarations can be submitted to Customs at the MS where the Authorised Holder is located, regardless of whether the goods are submitted to Customs at another MS (Participating MS (PMS) - Submitting Customs). To do this, economic operators must obtain central clearing authorization.

Access to the filer's record (UCC s. 182)

The authorised holder may submit a customs declaration in the form of access to the declarant's record, provided that the details of the declaration are processed by customs at the time of submission. The way to enter the declarant's record can be by submitting the goods or not. For the latter additional conditions, must be satisfied.

This type of declaration is not suitable for all customs procedures (eg exclusion of transit).

Drafting customs declarations for goods belonging to different tariff subheadings (UCC Art. 177)

This simplification allows one customs declaration to be drawn up for goods under different tariff subheadings.
In this case, import or export duties must be levied according to the tariff subheading of the goods for which the highest duty is imposed.

Self-assessment (UCC Article 185)

This enables economic operators to perform certain customs formalities normally performed by customs, such as calculating customs duties, and to perform certain controls under customs supervision

/ By tjchinafreight ivy / Shipping

Do I need a license to export from the US?

Do I need a license to export from the US?
Do I need a license to export from the US?

What is an export license?

An export license is a government document authorizing or permitting certain export transactions, including technology exports. Export licenses are issued by the appropriate licensing agency after careful review of the facts regarding a particular export transaction.

Most U.S. export transactions do not require special approval from the U.S. government in the form of a license. In fact, only a small percentage of all U.S. export transactions require permission from the U.S. government. It is up to the exporter to decide whether the product requires a license and to study the end use of the product, in other words, to conduct "due diligence" on the transaction.

For most U.S. exports, the Bureau of Industry and Security or the U.S. Department of State's Defense Trade Controls Agency is the licensing agency.

Exporters should understand which federal department or agency has jurisdiction over the items they plan to export to determine whether a license is required.

Do I need a license?

This is one of the most frequently asked questions by trade experts in the U.S. Commerce Service Office network. The answer is usually no, as approximately 95% of all items exported from the United States do not require an export license. As a result, only a small percentage of U.S. export transactions require permission from the U.S. government.

These laws and regulations determine whether you can sell your product to international buyers, to which countries you can export it, and to which buyers you can sell. However, just because your product is among the 95% that don't require a license, doesn't mean you can sell it to anyone, anywhere.

It is up to the exporter to decide whether the product requires a license and to study the end use of the product, in other words, to conduct "due diligence" on the transaction.

For most U.S. exports, the Bureau of Industry and Security or the U.S. Department of State's Defense Trade Controls Agency is the licensing agency. Exporters should understand which federal department or agency has jurisdiction over the items they plan to export to determine whether a license is required.

Export Administration Regulations and Bureau of Industrial Security

Most U.S. procured items and some internationally procured items deemed dual-use (those with commercial and military or proliferation applications), as well as some purely commercial or purely munitions items, are subject to the Export Administration Regulations (EAR) and are and Security Bureau (Bank for International Settlements). The EAR controls exports for reasons of national security, foreign policy, supply shortages, nuclear non-proliferation, missile technology, chemical and biological weapons, regional stability, crime control, and counterterrorism.

Items within the U.S., certain items located outside the U.S., and certain U.S. activities are subject to the EAR. To determine if your item (commodity, software, or technology) is subject to the EAR, see the EAR's Commerce Control List (CCL) to see if it has an Export Control Classification Number (ECCN). If your item falls under the jurisdiction of the U.S. Department of Commerce and is not listed on the CCL, designate it as EAR99. Most EAR99 commercial products do not require a license to be exported. However, even EAR99 items may require a BIS export license depending on the item's destination, end user or end use.

/ By tjchinafreight ivy / Shipping

Insurance Policy vs. Insurance Certificate

Insurance Policy vs. Insurance Certificate
Insurance Policy vs. Insurance Certificate

The international marine cargo insurance market offers 3 types of cargo insurance documents.
These are the insurance policy, certificate of insurance and declaration of insurance.
In contrast to the other two insurance document types, opening statements are not often used in day-to-day practice.
Therefore, knowing the details of insurance policies and insurance certificates is very important not only for exporters and importers but also for other foreign trade participants.

What is a cargo insurance policy?

An insurance policy is a legally binding written document issued by an insurance company or underwriter to the policyholder or the insured/insured.
Just like a bill of lading (which has the terms and conditions of carriage as a shipping document), an insurance policy defines the terms and conditions of an insurance contract and serves as legal evidence for an insurance agreement.

What is a cargo insurance certificate?

In some cases, exporters or importers do not like to insure each shipment individually, but they will sign the insurance for a certain period of time, such as 1 year.
During the insurance period, 1 year as shown in the example above, all goods of the exporter will be covered by cargo insurance. Term insurance contracts are also known as open-ended insurance.
If an exporter using open insurance requires insurance documents for a specific shipment, the insurance company issues a certificate of insurance.

Document content

Both the insurance policy and the insurance certificate should be issued by the insurance company or underwriter.

Both documents should state the same information, such as:

  • Insurance terms and additional risks covered
  • Premium amount
  • Shipment details such as port of shipment, port of discharge, vessel name and voyage, cargo description.
  • Insured currency
  • Insurance amount
  • Agent of insurance company at destination port
  • Claims Procedure and Required Documents

What is the difference between an insurance policy and a certificate of insurance?

Probably the only difference between an insurance policy and a certificate of insurance occurs under a letter of credit payment. Under the rules of the letter of credit, an insurance policy may be accepted in lieu of a certificate of insurance or a statement under the cover. But the opposite is invalid.

So if you are not dealing with letters of credit, there is no difference between an insurance policy and a certificate of insurance.

If you are going to present the documents under the letter of credit then you should keep in mind that you can present the insurance policy and not the insurance certificate. But you cannot present a certificate of insurance instead of an insurance policy under a letter of credit.

/ By tjchinafreight ivy / Shipping

Cargo insurance certificate

What is a certificate of cargo insurance?
What is a certificate of cargo insurance?

What is a certificate of cargo insurance?

A document indicating the type and amount of insurance in force for a particular shipment. Used to assure the consignee that insurance is provided to cover loss or damage to goods in transit. In some cases, the shipper may issue a document certifying that the goods are insured under a given open policy, and this certificate represents and supersedes such an open policy, the provisions of which are governing. Since objecting to such an instrument does not constitute a "policy" within the scope of the credit requirements, it has become common practice to use a special marine policy. A special marine policy is indistinguishable from an open policy and exists independently as an obligation of the underwriting company. Also known as Certificate of Insurance and Special Cargo Policy.

The importance of managing cargo insurance certificates

Cargo insurance certificates are one of the most important documents in the shipping industry as they carry the greatest risks inherent in them. A cargo insurance certificate is a document that indicates the type and amount of insurance coverage that is valid for a given item. It is used to assure the consignee that insurance is provided to cover loss or damage to the goods in transit.

Certificates of insurance typically include the following information:

  • Conditions of Insurance Coverage
  • Transport information
  • Additional/Special Coverage Conditions
  • Instructions or Actions to Take in the Case of Loss or Damage of Goods
  • Billing agent contact information
  • Liability of Carrier, Trustee or Other Third Party

Mistake

Proper management of insurance documents is essential to understand the financial requirements of the shipping company and the consignee. Proper management of insurance documents can help detect errors on documents and help companies correct errors during shipping transactions.

Penalty or fine

Errors in insurance documentation may result in penalties and fines under the terms of the agreement. Effective management of insurance certificates helps avoid these consequences, making business transactions smoother.

/ By tjchinafreight ivy / Shipping

Simple guide to Warehouse receipt

Shot of a young man using a digital tablet while working in a warehouse
Shot of a young man using a digital tablet while working in a warehouse

Meaning of warehouse receipt

A warehouse receipt is a form of document used in the futures market to ensure the quality and quantity of a specific commodity stored in an approved facility. Warehouse receipts are part of the processing of business transactions involving physically delivered futures contracts.

Instead of immediately moving the actual goods under the contract, the warehouse receipt is used to settle the futures contract. In the case of precious metals, a warehouse receipt can also be called a vault receipt.

Warehouse receipts can be transferable or non-transferable.

Negotiable warehouse receipt

Negotiable warehouse receipts specify that the goods can be delivered to the document holder, which means they can be used as collateral for a loan. If the borrower defaults, the lender takes over the warehouse receipt and can sell the goods for payment of the loan.

Non-negotiable warehouse receipt

A non-negotiable warehouse receipt specifies to whom the goods should be delivered.

How to use warehouse receipt?

Stored goods cannot be delivered without a receipt.

Warehouse receipts are used to settle futures contracts. A vault receipt is an example of a warehouse receipt, but it is for metal. Vault receipts show ownership of precious metals stored in warehouses, banks and other approved facilities.

Warehouse receipts are used for stored goods that will be delivered or used at a later date. They are called physically delivered commodities. Physically delivered commodities are used in the production and manufacture of many commodities.

Tracking physical inventory is a critical process for future contracts. Inventory of goods must be registered with the designated authority and must be inspected and certified before it can be used in the future market.

When to use warehouse receipts?

Warehouse receipts are typically used when a seller signs a contract with a manufacturer to purchase some item that is not in stock, and then uses the warehouse receipt to collect the product at the warehouse.

/ By tjchinafreight ivy / Shipping

What is the sea waybill in sea freight?

A container ship passes beneath a suspension bridge as it departs for Europe.
A container ship passes beneath a suspension bridge as it departs for Europe.

Sea ​​waybill

A sea waybill is a contract of carriage and proof of receipt of the goods for carriage. It is used when the exporter decides to release title to the goods. The goods can be delivered to the claimant identified in the documents. It is also known as the "Express Release Bill of Lading" or "Straight Bill of Lading".
The sea waybill is only for proof and does not confer title to the goods (non-transferable). After loading, the exporter will receive a sea waybill for reference. No other documentation was presented to the carrier; the cargo was released as soon as it arrived at the port.

Negotiable V Non-Negotiable Documents

A negotiable document or instrument allows the holder to transfer title to the goods to a third party. Usually, there are two parties to this assignment - the indorser and the endorsee.
The original bill of lading can be changed hands by endorsement, and the endorser (the original owner of the goods) transfers the ownership of the goods to the endorsee (the new owner of the goods agreed by both parties).
Goods are shipped and delivered to the party holding the original, endorsed bill of lading.
A non-negotiable instrument specifies a single party as the owner, and that ownership cannot be endorsed to a third party. In this case, the goods are shipped to the party originally designated.
An endorsement must be signed by the endorser or bearer on the front or back of the bill to be valid. The transaction is complete when the instrument is delivered to the endorsee in whose name it transfers title.

Inspections at commercial transport dock
Inspections at commercial transport dock

Issue a sea waybill

Ocean bills of lading are usually made in triplicate - the original and the second to the shipper or consignor and the third to the consignee. The consignor sends the original to the consignee for customs clearance and receives the goods to his warehouse.

A sea waybill is a non-negotiable document that is released by telex or courier for easy and fast customs clearance of goods.

How to apply for ocean bill of lading?

If you want to ship your products immediately by ocean service, then it is recommended that you use a sea waybill.
You need to apply for the ocean bill of lading by writing an application.
Some important information must be placed on the app.

Vessel/Container Information
Shipping Port/Unloading Information
cargo description
Shipper Name
Consignee name

You can request a sea waybill by filling in the correct information in the application form.
You need to mention that you understand the terms and conditions of the ocean bill of lading.
You must abide by the terms and conditions.
The most important thing is that Seaway bill is not the title of the file, so you can't transfer the bill to a third
The best thing is that the consignee does not need any documentation at the port of discharge.
The carrier is responsible for customs clearance.

/ By tjchinafreight ivy / Shipping

Packing list – Simple Guide

Aerial view of an International port, Business logistics concept, Cargo Container ship in import export and business logistics, Shipping harbor.
Aerial view of an International port, Business logistics concept, Cargo Container ship in import export and business logistics, Shipping harbor.

What is a packing list?

A packing list is a document used in international trade. It provides exporters, international freight forwarders and final consignees with information about the shipment, including how the shipment was packaged, the dimensions and weight of each package, and the markings and numbers on the outside of the box.

Why do I need a packing list?

A packing slip provides you with information about your shipment and requires your signature upon receipt.

It is only required when the goods being transported are packaged into larger units (for example, containers or aircraft consoles).

packing list
packing list

What is the purpose of a packing list?

It can be said that the packing list is one of the important documents for sending or receiving shipments.
Therefore, it plays a fundamental role in achieving the efficiency of the entire transport process.
The shipping department uses this document to enable them to know the delivery details of the goods.
It allows shippers to ensure that they have included all items in the shipment.
Additionally, recipients or consignees can refer to this document to confirm that each item is included in the shipment.
Also, packing slips help with order management.
It facilitates smooth transition, processing and shipping of orders.
Order management mainly involves managing the life cycle of a product and keeping track of it until it reaches the customer's destination.
As a result, entities can easily check and track the status of product shipments, simplifying the management process.
This is also important when an order arrives in multiple packages.
In this case, what it does is keep track of what has and hasn't arrived.
As a seller, you may also consider using this document as an additional branding opportunity.
Ideally, you can create a design similar to your brand and use microcopy to express your voice.

Why is a packing list important in shipping?

  • Physical proof of the item shipped
  • Check and Cross Check
  • Identification of lost or damaged goods
  • Strengthen business relationships
  • Allow customs to estimate the value of goods
  • Express freight booking

Is there a legal requirement to provide a packing list in international shipments?

Different countries have different policies on the need for import orders.
In some countries, a packing list is a mandatory requirement for any type of imported product.
Essentially, this document is always required by the customs authorities of these countries to clear the goods
On the other hand, some countries only require packing lists for certain imported products.
Simply put, there are certain products that can only be cleared at customs after submitting a packing list.
In short, the legality of this document is based on whether it is mandatory or not, depending on the specific country.

/ By tjchinafreight ivy / International

Russia to update its strategy in WTO amid sanctions, says Putin

Russian President Vladimir Putin chairs the supervisory board meeting of the presidential forum "Russia - Land of Opportunity" at the Kremlin in Moscow, Russia April 20, 2022. 
Russian President Vladimir Putin chairs the supervisory board meeting of the presidential forum "Russia - Land of Opportunity" at the Kremlin in Moscow, Russia April 20, 2022. 

On the 20th local time, Russian President Vladimir Putin said at the Metallurgical Industry Development Conference that the illegal sanctions against Russia by the West are contrary to the principles of the WTO. Putin ordered the federal government to make an assessment of the legality of Western decisions on Russia's metallurgical industry by June 1.

Putin said that the demand for metallurgical products in the Russian domestic market needs to be stimulated, first of all, the demand for the construction industry. He said, "Europe ignores the interests of its own entrepreneurs, and the price of metallurgical products in Europe will rise, just like inflation." Putin also ordered that the update of Russia's strategy at the WTO is ready by June 1.

Putin said that Russia is one of the leaders in the world's metallurgical industry, and for foreign buyers, cooperation with Russia in this field is stable and mutually beneficial.

Putin: Russian SMEs can be more active in Russia-China joint projects

"China is our largest economic and trade partner, with (annual trade volume) more than 100 billion U.S. dollars. I will not talk about large-scale projects related to oil, natural gas, aviation, machinery manufacturing, nuclear energy, etc.," Putin said at the meeting. Under the current conditions, SMEs can participate more actively in various projects between the two parties."

TASS reported that Putin also believes that to develop cooperation with China, it is necessary for Russian entrepreneurs to master logistics and legal knowledge.

Regarding the non-profit organization "Russia - A Country Full of Opportunities", according to the organization's official website, the organization was established in 2018 under Putin's initiative. Able to develop their potential, implement business ideas or proposals related to social life. Entrepreneurs, volunteers, college students and other groups can exchange experiences through this platform.