Key Logistics Consideration for International Freight

Written by Jenny Chew Pooi Yee, DLSM

by Jenny Chew Pooi Yee, DLSM

International shipping is the term used to describe a parcel delivery or group of parcel deliveries in which the parcel is taken from one country and delivered to an address in another. Many online sellers will offer international shipping to attract an audience that goes beyond the limits of the country in which they are selling in. Because of the number of resources involved to get a parcel from one country to another country, international shipping is typically a little more expensive than domestic deliveries.

Export Haulage

The transfer of the goods from the shipper’s premises to the NVOCCs origin warehouse is called export haulage. It is typically by means of truck or a combination of truck and train (rail), and typically takes from a few hours to weeks, depending on distance and geography. The responsibility for the arranging and paying of the export haulage depends on the agreement between the shipper and the consignee. If the agreement is that the consignee has responsibility for the shipment right from the shipper’s premises, it is the consignee’s responsibility to arrange export haulage. If the agreement is that the consignee takes responsibility anytime later in the shipping process, the arrangement for export haulage is the responsibility of the shipper.

Origin Handling

The unloading, inspection and validation of the cargo against its booking documents. Covers all physical handling and inspection of the cargo from receiving it at the origin warehouse till it is loaded on a ship in a container. There are many steps carried out under origin handling by many different parties, but all that is coordinated and the responsibility of the freight forwarder. The freight forwarder performing origin handling, it can be paid by either shipper or consignee, regardless of who buy the freight forwarding.

Export Custom Clearance

The goods receive clearance to leave its country of origin. Customs clearance is a transaction whereby a declaration is developed and required documents are submitted to authorities. Can only be performed by companies holding valid customs licenses, so-called customs house brokers. The export customs clearance step must be completed before the cargo can leave the country of origin. The diagram below shows the international airfreight exporting procedures.

Ocean Freight

Vessels are used to transport large or bulky quantities of cargo. It is a comparatively cheaper and simple alternative method. However, it is time consuming and not for time sensitive shipments. There are multiple surcharges levied in the industry, such as bunker adjustment factor and currency adjustment factor. The cost of the ocean freight will ultimately be charged to the shipper or the consignee.

Air Freight

Aircrafts are used to transport cargo. This delivery method is best for goods that are required to be delivered quickly can be transported via air cargo which are not big or bulky. It is the costliest method but one of the fastest as well. Delays are common due to weather conditions playing a large role in productivity. Below diagram is the 7 steps process for air freight.

Land Freight

Land transport is movement of things from one place to another on land. Usually by rail or road. This is an inexpensive and readily available delivery method. Rail transport can be used if cargo is large and heavy enough.

Import Custom Clearance

The customs paperwork for your cargo will be checked by the authorities. Import customs clearance can typically begin before the cargo arrives at its destination country. Import customs clearance is performed by the freight forwarder or an agent of the freight forwarder. The import customs clearance process must be completed prior to the cargo leaving a customs bonded area in the country of destination. The diagram below shows the international airfreight importing procedures.

Destination Handling

Destination handling comprises several activities performed at the destination office of the freight forwarder. It starts with receiving documents from the freight forwarder’s office or agent at origin, checking the documents and submitting the original carrier bill of lading to the shipping line. The container is collected at the port and brought to the destination warehouse where it is un-stuffed, and the cargo is inspected and sorted either for onwards transportation or collection by the consignee.

Destination handling includes transfer of the container from the ship to shore and from the port to the forwarder’s destination warehouse. If the destination handling is paid by the same party who buys the ocean freight, it can either be charged together at the same time, or it can be charged any time before the cargo is being dispatched from the destination warehouse.

Import Haulage

The transfer of the cargo from the import warehouse to the consignee address and the cargo’s final destinations is referred to as import haulage. It would usually be by truck or a combination of truck and train, and can take from a few hours to many days, depending on the distance and the geography. Import haulage can either be performed by the freight forwarder anyway handling the international ocean freight or by a local trucking company. Alternatively, the consignee might decide to collect the cargo himself or herself directly at the destination warehouse and save the cost of import haulage. The import haulage typically covers transportation to a specific address, but not unloading from the truck.

Conclusion

Freight transport is the physical process of transporting commodities and merchandise goods and cargo. Within freight transport processes, transport logistics hubs gained growing empirical significance in the recent past. This implies a major relevance to consider them in demand modelling too. Transportation is critical to logistics and supply chain effectiveness. It impacts throughout the key issues of logistics effectiveness and the global supply chain. To meet the dynamic requirements of the supply chain, you must have a dynamic strategy. It must be responsive, both as to a service and cost demands of your customers and your company.


References

Abi Teh Ching Yee, DLSM. (2018). “Essential Strategies for Managing Freight Forwarding”. Retrieved from SIPMM: https://sipmm.edu.sg/essential-strategies-managing-freight-forwarding, accessed 15/12/2019.

David Noah. (2018). “Eight Documents Required for International Shipping”. Retrieved from https://www.shippingsolutions.com/blog/documents-required-for-international-shipping, accessed 15/12/2019.

Econocaribe. (2013) “Export Shipping Process”. Retrieved from http://www.econocaribe.us/relocation/ExportShippingProcess.pdf, accessed 15/12/2019.

John Stuart. (2017). “13 Things You Need To Know About Freight Forwarding”. Retrieved from https://transporteca.co.uk/international-shipping-guide, accessed 15/12/2019.

Sivalingam Munisamy, DLSM. (2018) “Ocean, Air, Land Freight”. Retrieved from SIPMM: https://sipmm.edu.sg/8-p-effective-delivery-integrated-logistics-operations, accessed 15/12/2019.

Transporteca. (2017). “The 7 steps of international shipping”. Retrieved from https://transporteca.co.uk/international-shipping-guide, accessed 15/12/2019.

VikneswaranThevar, DLM. (2017) “Ky Factors Impacting Transportation Logistics in Supply Chain Management”. Retrieved from SIPMM: https://sipmm.edu.sg/wp-content/uploads/2017/06/SIPMM-Impacting-Transportation-Logistics-in-Supply-Chain-Management-1280×720.jpg, accessed 15/12/2019.

About the Author: Jenny Chew Pooi Yee has several years of experiences in supply chain practices, and specifically in third party logistics services sector. She holds the Executive Certificate in Supply Chain Management and is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). Jenny completed the Diploma in Logistics and Supply Management (DLSM) on December 2019 at SIPMM Institute.

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