Get All Export Related Answers Here

Question

The question: What comes under export logistics?

Answer

An international transportation of goods, must be done by considering correct documentation, packing and labeling. Also the products should be insured against loss, damage and delay. So an exporter must understand these shipping terms.

Shipping terms to know

Exporters must be aware with the basic principles of air and sea cargo. Rates of both of these cargo may vary as per the market and routes. For a new exporter, starting point to learn cab be international commercial terms (INCO terms). INCO terms were introduced in 1936, and are very important in the consignment and payment of products transported.

Another important term is letters of credit (L/C). It's established by the buyer and ensure the payment to the seller through documentary terms. The bankers can provide the required background information of L/C.

Freight forwarders

Many exporters use international freight forwarders for handling import export procedure. Other options include using shippers' associations, express delivery etc.

Freight forwarders are expert in freight rate negotiations, export import documentation, export regulation, regulations of other countries etc. Also they help in finding the most economical way for transaction. They work as agents. They consult exporters with freight costs, consular fees, insulrance costs etc which is helpful in the preperation of price quotations. They are provided with the commercial invoices, letter of credit, packing list etc. Frieght forwarders make all arrangments when cargo arrives at port. Also they may prepare the bill of lading (B/L) and other documents.

Packing

The packing of products must be followed by keeping problems in mind, which may occur like moisture, breakage, pilferage etc. Most often, buyer specifies the requirements related to packing. In case, if there's no specifications from buyer following things could be considered for export standard packing-

  • Products should be sealed and packed in containers
  • Proper bracing, weight evenly distributed.
  • Use moisture-resistant material for packing filler and packages.

Containers used for shipment vary in sizes and construction and suited for standard package sizes and shapes. Air shipments uses less heavy packing than ocean shipments but must be well protected. If product is durable, domestic packing is acceptable. Most often carriers, freight forwarders and marine insurance companies give proper advise on the standard packaging.

Labeling

Labeling includes the marking on shipping cartons and boxes for tracking, identification of shipment and meeting shipping regulations. Usually buyer specifies such marks so that receiver can easily identify the cargo. Labeling may contain-

  • Shipper's mark
  • Exporters' country
  • Weight
  • Number of packages
  • Handling marks
  • Port of entry

Shipping

A bill of lading should show the export marks, name of exporting carrier and the arrival date along with the standard information. Exporter should book the contract before the actual shipment date. These days most of the international shipping are done under multimodal contract. Cost of shipment, product accessibility and delivery should be considered by the exporter.

Insurance

There are many factors which can cause the damage of cargo, like weather, rough handling etc. Thus, insurance of shipment against damage, loss and any type of delay is important. This cargo insurance is arranged by either seller or buyer. Freight forwarder or international insurance carriers may consult on this. If exporter is responsible for insurance, it can use either a freight forwarder's policy or can obtain its own policy.