Chapter 12: SHIPPING YOUR PRODUCT

In This Chapter
• • • •
How international freight forwarders can help you How your product should be packed and labeled What documentation and insurance you may need International shipping companies and what services they offer

The hurdles you have to clear don’t end with the sale and the Web site. You still have to get the goods to the buyer, who is often located thousands of miles away where different rules may apply. When shipping a product overseas, you must be aware of packing, labeling, documentation, and insurance requirements and regulations. Make sure that the merchandise is
• • • •
Packed correctly so that it arrives in good condition Labeled correctly to ensure that the goods are handled properly and arrive on time at the right place Documented correctly to meet U.S. and foreign government requirements, as well as proper collection standards nsured against damage, loss, pilferage, and delay

!ecause of the multitude of considerations involved in physically e"porting goods, e"porters often receive assistance from their air carrier or freight forwarder to perform those services.

FREIGHT FORWARDERS
#n international freight forwarder is an agent for moving cargo to an overseas destination. These agents are familiar with the import rules and regulations of foreign countries, the e"port regulations of the $.%. government, the methods of shipping, and the documents related to foreign trade. &reight forwarders are licensed by the 'nternational #ir Transport #ssociation ('#T#) to handle air freight and the &ederal Maritime *ommission to handle ocean freight. &reight forwarders assist e"porters in preparing price quotations by advising on freight costs, port charges, consular fees, costs of special documentation, insurance costs, and the freight forwarders’ own handling fees. They recommend the packing methods that will protect the merchandise during transit, or they can arrange to have the merchandise packed at the port or put in containers. 'f the e"porter prefers, freight forwarders can reserve the necessary space on a vessel, aircraft, train, or truck. The cost for their services is a factor that should be included in the price charged to the customer.

its classification and valuation. &erify compliance with wood#packaging documentation and markings for fumigation and chemical treatment.and the refund. $o avoid pilferage. ta"es. PACKING Your company should be aware of the demands that international shipping puts on packaged goods. avoid writing contents or brand names on packages. regardless of si"e. #lso. %ome containers are no more than semitrailers lifted off their wheels. &reight forwarders may also prepare the bill of lading and any special required documentation. standard domestic packing is acceptable if the product is durable and . They accommodate most cargo but are best suited for standard package si/es and shapes. *ustoms business is limited to those activities involving transactions related to the entry and admissibility of merchandise. &reight forwarders can also make arrangements with customs brokers overseas to ensure that the goods comply with customs import documentation regulations. # customs broker is an individual or company that is licensed to transact customs business on behalf of others. . &or more information. credit payment terms. be sure the goods are prepared using these guidelines • • • • • • • • Pack in strong containers that are adequately sealed and filled when possible. especially if they are likely to attract pilferage. or other charges assessed or collected. and e"cess weight. +ne popular method of shipment is to use containers obtained from carriers or private leasing companies. !uyers are often familiar with the port systems overseas. they can route the documents to the seller. Put goods on pallets and. though they should still be adequately protected.+nce the order is ready for shipment. This review is of particular importance with letter. These containers vary in si/e.ational *ustoms !rokers and &reight &orwarders #ssociation of #merica at http://ncbfaa. rebate. visit the . air shipments require less heavy packing than ocean shipments. material. or drawback of those charges. and construction. !ake sure the weight is evenly distributed to provide proper bracing in the container. Use straps.of. when possible. or a paying bank. freight forwarders should review all documents to ensure that everything is in order. so they will sometimes specify packaging requirements. #fter shipment. the buyer. seals. You should also keep four potential problems in mind when designing an e"port shipping crate breakage.bulk containers are usually readily available. %bserve any product#specific ha"ardous materials packing requirements.the payment of duties. !ake packages and packing filler out of moisture#resistant material. pilferage. moisture. refrigerated and liquid. 'n many instances. placed on a vessel at the port of e"port. 'f the buyer does not provide such specifications. place them in containers. and shrink#wrap to safeguard goods.org.ormally. and then transferred to another set of wheels at the port of import.

such as ..%. ..S. 'n other instances.. government and the government of the importing country . &or e"ample.U. +in 'nglish and in the language of the destination country/ Port of entry Labels for ha"ardous materials +i. 3roducts may require many markings for shipment. You should hire a professional firm to pack the products if you are not equipped to do so. but which of them are necessary in a particular transaction depends on the requirements of the $. This labeling • • • • • !eets shipping regulations 'nsures proper handling (onceals the identity of the contents )elps receivers identify shipments 'nsures compliance with environmental and safety standards The overseas buyer usually specifies which e"port marks should appear on the cargo for easy identification by receivers. universal symbols adopted by the nternational -ir $ransport -ssociation and the nternational !aritime %rgani"ation/ ngredients +if applicable. &inally. &orwarders are specialists in this process. %pecially reinforced and lightweight packing materials have been developed for e"porting to minimi/e volume and weight while reinforcing the packaging. or .e.test (at least 012 pounds per square inch) cardboard or tri. transportation costs are determined by volume and weight. A!E ING %pecific marking and labeling are used on e"port shipping cartons and containers. also included in the language of the destination country/ DOCU"ENTATION Your company should seriously consider having the freight forwarder handle the documentation that e"porting requires.there is no concern for display packaging. international pictorial symbols/ A BASIC G I!" #$ "%&$'#I(G (autionary markings.Use 1o )ooks.e. The following documents are commonly used in e"porting.-. This service is usually provided at a moderate cost.wall construction bo"es are preferable. e"porters need to put the following markings on cartons to be shipped • • • • • • • • • Shipper*s mark (ountry of origin +in your case./ 0eight marking +in pounds and kilograms/ 1umber of packages and si"e of cases +in inches and centimeters/ )andling marks +i.$his Side Up. high. The proper materials may save money as well as ensure that the goods are properly packed.

destination control statement appears on the commercial invoice and on the air waybill or bill of lading to notify the carrier and all foreign parties that the item can be e5ported only to certain destinations. the shipper*s letter of instructions.> is an e5ample of the reformatted S'D. which can never be made in negotiable form. the post office. or traded while the goods are in transit. (ustoms Service at the port of e5port. e5port statistics. a required document in some countries. or shipper*s order.. e5tension to the si5#digit code under the )armoni"ed $ariff System9see 6o5 78. $he bureau made electronic filing of the S'D mandatory on September 7. Sample 2orm 78. .S. -n inspection certification is required by some purchasers and countries to attest to the specifications of the goods shipped.shipper’s export declaration +S'D/ is used to control e5ports and is a source document for official U. $he e5porting carrier will present the required number of copies to the U.qualified and the importer is claiming "ero#duty preference under 1-2$-..S. content. and other characteristics. Bou can obtain more information on registering as an -'SDirect filer and all filing options at www. regardless of value.aesdirect. e5ceeds :8. language to be used. are required for shipments when the value of the commodities. (ensus 6ureau*s 2oreign $rade Division is the controlling agency for this document. $his document may be required . $he U. or vessel line/. . is a signed statement as to the origin of the e5port item. $he customer usually needs an original bill of lading as proof of ownership to take possession of the goods. and number of copies. whose use became mandatory on ?uly 7@.certificate of origin.NAFTA certificate of origin is required for products traded among the signatory countries of the 1orth -merican 2ree $rade -greement +(anada. . . 8<<@.7 for more information about certificates of origin. classified under any single Schedule 6 number +the four#digit U. 2or shipment by vessel.consular invoice.8/. . . (ertified by the consular official of the foreign country. 4overnments that use the commercial invoice to control imports will often specify the invoice*s form. the S'D is prepared as a by#product of another document. See 6o5 78. !e5ico. such as a local chamber of commerce. and a negotiable. -'SDirect is a 0eb#based application that is available to e5porters free of charge. or their electronic equivalent. that require an e5port license or are destined for countries restricted by the '5port -dministration =egulations +see (hapter 7</. $he inspection is usually performed by a third party. S'Ds are prepared by the e5porter or the e5porter*s agent and are delivered to the e5porting carrier +e. bill of lading. $he latter can be bought. %ften. !any governments use commercial invoices to determine the true value of goods when assessing customs duties. often an independent testing organi"ation. . -n export license is a government document that authori"es the e5port of specific goods in specific quantities to a particular destination. sold.S. quantity. it is used by the country*s customs officials to verify the value.<<. consignee.bill of lading is a contract between the owner of the goods and the carrier +as with domestic shipments/.gov. and the United States/ if the goods are 1-2$. also a required document in certain nations. airline.g.• • • • • • • • • • • -ir freight shipments are covered by air waybills. S'Ds. certificate may be required even if the commercial invoice contains the same information. (ertificates of origin are usually validated by a semiofficial organi"ation.commercial invoice is a bill for the goods from the seller to the buyer.S. describes the shipment of goods and shows information such as the consignor. S'Ds must be prepared and submitted for all shipments. t permits the S'D to be filed electronically. and value of the shipment. . which is not negotiable and does not give title to the goods. 8<<A.dock receipt and a warehouse receipt are used to transfer accountability when the domestic carrier moves the e5port item to the port of embarkation and leaves it with the shipping line for e5port. using -'SDirect. there are two types3 a straight bill of lading. and nature of the shipment.

. U. 2oreign government embassies and consulates in the United States9go online to www. the e"porter must be careful to provide all proper documentation. Most documentation is routine for freight forwarders and customs brokers. These marks show the name of the e"porting carrier and the latest allowed arrival date at the port of e"port. such as a bo5.asp. This reservation is called the booking contract. or may even result in the sei/ure of the e"porter’s goods by $. drum.• • for most or all e5ports to some countries. The multimodal transit operator (frequently one of the transporters) takes charge of and responsibility for the entire movement from factory to final destination. t also shows the individual net. 'nternational shipments are increasingly made on a bill of lading under a multimodal contract. 6"port marks are added to the standard information on a domestic bill of lading. crate.gov eac. $he shipper or forwarding agent uses the list to determine the total shipment weight and volume and whether the correct cargo is being shipped. -n export packing list is considerably more detailed and informative than a standard domestic packing list. !ecause each country has different import regulations. and gross weights and measurements for each package +in both U. tare. or carton. and metric systems/. SHIPPING The handling of transportation is similar for domestic and e"port orders.export. The following sources also provide information pertaining to foreign import restrictions • • • '5port -ssistance (enters9find listings for offices in -ppendi5 6 and at www. t itemi"es the material in each package and indicates the type of package.gov. you are ultimately responsible for the accuracy of the necessary documents.%. 'nstructions for the inland carrier to notify the international freight forwarder by telephone on arrival should also be included. 4ocumentation must be precise because slight discrepancies or omissions may prevent merchandise from being e"ported. but as the e"porter. You may find it useful to consult with a freight forwarder to determine the method of international shipping.payment. or foreign customs officials. it may be required only under special circumstances.S.gov exportbasics ticredirect. *ollection documents are sub5ect to precise time limits and may not be honored by a bank if the time has e"pired. $rade nformation (enter9call +@<</ US-#$=-D' +@<<#@C8#@C8A/ or visit www.export. !ecause carriers are often used for large and bulky shipments. Package markings should be shown along with references to identify the shipment. you can reserve space on the carrier well before actual shipment date. n addition. and foreign customs officials may use the list to check the cargo. may result in non.state. 2or other countries. The number and kinds of documents that the e"porter must deal with vary according to the destination of the shipment. -n insurance certificate is used to assure the consignee that insurance will cover the loss of or damage to the cargo during transit.S.

damage. 'f the buyer neglects to obtain ad equate coverage. "A#OR SHIPPERS 'nternational shipping companies have become an e"cellent resource for e"porters. 'f the terms of sale make the foreign buyer responsible. e"porters. INSURANCE 4amaging weather conditions. damage to the cargo may cause a ma5or financial loss to your company. delivery schedule. port handling fees. these costs will influence how much the buyer is willing to pay for your product. #rrangements for insurance may be made by either the buyer or the seller in accordance with the terms of sale. and delay in transit. #lthough air carriers may be more e"pensive. their cost may be offset by lower domestic shipping costs (e. Typically. using a local airport instead of a coastal seaport) and quicker delivery times. e"porter an edge over other competitors.g. and ta"es can be high. #dditionally. These factors may give the $. rough handling by carriers. and other common ha/ards to cargo make insurance an important protection for $. the importer pays the tariffs. #ir shipments may also be covered by marine cargo insurance. TARIFFS !ecause tariffs. and accessibility to the shipped product by the foreign buyer are all factors to consider when determining the method of international shipping.evertheless. %hipments by sea are covered by marine cargo insurance. 6"port shipments are usually covered by cargo insurance against loss..%. 'f the terms of sale make you responsible for insurance. it is very important for you to consider their effects on your product’s final cost. 6"porters are advised to consult with international insurance carriers or freight forwarders for more information. !uyers may want the goods to be shipped to a free trade /one or a free port. 'n addition to transporting bulk freight. or insurance may be purchased from the air carrier. !efore shipping. they now offer assistance with shipping . where they are e"empt from import duties (see *hapter 72). the coverage is substantially different from domestic coverage. #lthough sellers and buyers can agree to different components. you should not assume (or even take the buyer’s word) that adequate insurance has been obtained. your firm should check with the foreign buyer about the destination of the goods. coverage is usually placed at 772 percent of the *'& (cost.The cost of the shipment. freight) or *'3 (carriage and insurance paid to) value. .%. insurance. 'nternational agreements often limit carrier liability. your company should either obtain its own policy or insure the cargo under a freight forwarder’s policy for a fee.

=When you think about the documentation required and other areas where we needed assistance. . =We recogni/ed that by not e"porting. in #sia. %elling health.documentation. *ertified Worldwide ::* (*W) has made health and nutrition its business. To supplement his marketing strategy.related products. %elim tracked down specific information on health industries in 6urope. 6ach market has its own consumer tastes and ways of doing business.> says %elim. people might want 5oint pain and muscle relief. vitamins.al %elim.222 products and 122 lines of over.com). we were not tapping our full sales potential8sort of like leaving money on the table.medicalprovisions. THE CHA ENGE 6quipped with freight forwarders and potential overseas buyers. :ocated in Moorpark. supplements. people might have heart. whereas in other countries. =!ut we knew through our business acquaintances that we could count on the $. the Middle 6ast.related products in the international market also requires e"tensive market and economic research. the &ar 6ast. #ddressing these issues was key to navigating the e"port process. says his company’s success doesn’t 5ust hinge on the more than 72. counter medicines.e soon began learning the ins and outs of import regulations for foreign countries and &ood and 4rug #dministration (&4#) e"port certification issues.related needs. . *alifornia. it was sort of daunting as to where we would begin.it also depends on great worldwide customer service.commerce Web site (www. *W started in 7<<< with sales to distributors and to online customers in the $nited %tates through its e. &or e"ample. and sports nutrition. such as obtaining the health certificates that many foreign countries require for health.> . CASE STUDY: Certi$ie% W&r'%(i%e THE CO"PANY C 4id you have a strenuous and tiring work week9 Then maybe you could use some nutritional supplements. and8in some cases8payment collection from the foreign buyer.the.%. %elim focused his attention on making e"port sales a reality. and other regions.> %elim says. *ommercial %ervice to help. warehousing in the foreign market. *W then began to pursue international opportunities by identifying overseas distributors who could help streamline the selling process abroad. director of business development for *W.

=The better the rate.%. @aughn then introduced %elim to the *ommercial %ervice’s *ountry *ommercial ?uides. *W learned that the best way to build a good business is to get background information on potential distributors beforehand. =depending on the si/e of the shipment.> %elim advises. ?erald @aughn. #irlines are a great source for finding freight forwarders. the more valuable you become. see if your freight forwarder can match it. *ommercial %ervice. you can shop for competitive rates. director of the $. we would not be as well positioned in international markets as we are today. =#lso. thus laying the foundation for obtaining the required health documents. 6"port #ssistance *enter in @entura.> %elim says. %hortly thereafter. # typical scenario is to receive a B2 percent deposit when the customer places the order and the remaining C2 percent balance before shipping the order.is efforts have resulted in great air and ocean rates for customers. and unless a company has the right payment policies in place. . *W receives payment up front in the form of bank wire transfer or letter of credit.ennessy were familiar with &4# and could connect with the right people.> The more business you give your freight forwarder.ealth *are Technologies Team. =. contact and interview different freight forwarders. &irst. Tony Michalski and Aulieanne . . @aughn contacted key *ommercial %ervice trade specialists on the .ground support of the $. @aughn gained insight into the &4# approval process. you can set up agreements to obtain better rates. set up a plan to assist *W. =Without the e"perience and on. =%eek out your local *ommercial %ervice office. the better the savings for your customer. 'f you find a better rate than what you already have. %elim has worked e"tensively on building key relationships with freight forwarders. . and remember that the company chosen will be responsible for shipping your product. @aughn contacted the *ommercial %ervice’s health care trade specialists overseas and discussed certificate issues.ad we tried this on our own. freight damage and theft insurance is vital.%.THE SO UTION 4uring his initial meeting with %elim. that company is more likely to be sub5ected to payment scams. which provide detailed market research on different industries and countries. Their cargo departments work directly with freight forwarders and can recommend which ones to use for the product line. *W also learned that the cost of freight can make or break a deal. we would not have surpassed the e"port challenges that we met early on when we began e"porting.> ESSONS EARNED 6arly on. Your customer overseas may also be able to find a better rate. *W’s freight forwarders can ship almost anywhere.> says %elim.> says %elim.e"t.the. which translates into more business in the future. =?etting paid is a key part to running a business. #s shipments grow.> says %elim. #lso.

• . financing. %rders will increase as your company progresses. competition. customs. Selim advises. regulations.ere are some tips • • Build rapport with your customers) Smaller orders will build rapport and give you a feel for the market. market growth. #ake advantage of seminars) Selim says that seminars are where businesses can learn the rules.. &articipate in trade shows) $rade shows are one of the best ways to generate trade leads. When conducting the study. 6"porting overseas has introduced *W to many different cultures.0alk the show floor and observe e5hibitors and buyers9and after attending a few shows. address factors such as market si/e. business practices. ACTION #re you ready to promote your product in other countries9 . business practices. and other issues. and economic stability. accessibility.%elim says the following elements are crucial in an e"port operation • • • • • • • • Large selection of competitively priced products 2resh products with a long e5piration date (ontinuous promotions and discounts (ompetitive freight charges Duick lead time for shipments $horough product inspection before shipping Duick response to customer demands for additional documentation Duick response to new customer inquiries and follow#up after delivery &easibility studies are vital as you develop overseas markets. . and policies associated with e5port controls. you might be ready to set up an e5hibit of your own and pursue new market opportunities. and legal systems and has made *W’s management team more fle"ible and creative.

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