How the Shipping Process Works, Step-By-

Step (+ Flow Chart)

Shipping internationally can be complicated and sometimes confusing. With many obstacles to
overcome and hoops to step through along the way, working with a qualified freight forwarder is
the best way to ensure the shipping process is as smooth as possible.

If you’re looking to understand the shipping process step by step, you’re in the right place.
Following this guide will help to ensure your goods are shipped properly, efficiently and without
hassle. Read on until the end for a bonus chart

Step #1: Importer requests quotes and orders goods

The first step in the shipping process is when an importer (also known as the consignee) orders
goods from a supplier (also known as the consignor).

In a usual import, buyers will generally ask suppliers for a quote when looking at goods to
purchase. The quote can often be accompanied by, or be in the form of, a proforma invoice. A
proforma invoice is effectively an invoice that is used to provide an estimate and can be subject
to change. This differs from a commercial invoice which is a final and official invoice used for
customs clearance declarations.

Pro forma invoice sample download

Once the quote has been approved, the consignee will often create a purchase order. A
purchase order is simply a contract outlining the details of the order and cost of the goods.
Depending on the business, a comprehensive purchase order will also contain projected shipping
date, origin and destination addresses as well as the freight dimensions.

Agreeing on shipping incoterms

When a buyer issues a purchase order to a supplier, the contract should be governed by one of
the many incoterms. Prior to reading on, you should familiarise yourself with the incoterms
which were updated for 2020.

Incoterms are essentially the terms that allocate the costs and the risks between the buyer and
seller when shipping. Essentially, they determine who is responsible for what whilst the goods
are moving from Point A to Point B.

It is critical to select the set of Incoterms that are most appropriate for the transaction. Failure to
allocate the correct incoterm could cost a buyer much more money than originally anticipated. 

The incoterms will also determine which party needs to engage a freight forwarder for the
individual stages of the shipping process. For the purpose of this process overview, we assume
our importer has purchased the goods on EXW terms and will be responsible for all stages of the
shipping journey.

Incoterm 2020 Ref Chart

Engaging a freight forwarder

Once the purchase has been agreed and the incoterms selected (in this case EXW), the importer
can then arrange for a freight forwarder to manage the transportation of the goods from Point A
to Point B. 

Obtaining a Letter of Credit

When an order is made, a common way to pay the supplier is to obtain a letter of credit. Many
buyers use this because it’s one of the most secure payment methods in international shipping.
It’s essentially a binding legal agreement issued by a financial institution (such as a bank)
guaranteeing payment for the goods.

A buyer will typically apply for a letter of credit with a bank, outlining everything in their order.
When the bank finalises the letter, they will submit it to the supplier’s bank, who will then check
it off to ensure the supplier agrees with the terms and conditions before manufacturing of the
goods commences.

Issuing of Commercial Invoice

Following this, the supplier will provide the importer with an order confirmation and a
commercial invoice. This invoice is a key document, detailing the price and quantity of the sold
goods. It will also contain the incoterm used.

Click here to download: Commercial Invoice Sample

It is vital for an importer to keep the commercial invoice in a safe place, as it provides evidence
of proof of sale and is required for customs clearance purposes.

Step #2: Freight forwarder arranges export

If you are working with an independent forwarder, the agent you have been dealing with will
then contact their overseas partner to arrange collection of the goods.

The overseas representative will in turn contact the relevant supplier and arrange for the export
of the buyer’s goods. This will involve the preparation of several key documents used in the
international shipping process which are required for customs purposes.

Documents that need to be prepared by the supplier

 A Packing List: a supplier will prepare a packing list which will be used by a freight forwarder to
highlight all the information regarding the freight being transported. It will include information
such as the contact details of the exporter and the buyer and how the goods are packed.
 A Certificate of Origin: a supplier will also prepare this certificate if they are exporting to a free-
trade country. This will be used to certify the location in which the goods were produced so that
the buyer may benefit from local free trade agreements and avoid duty payments.

Certificate of origin sample

  A Shipper’s Letter of Instruction (SLI): a supplier may be required to prepare an SLI, to provide
the local shipping agent with a written record of the shipping information.

 An Australian Packing Declaration (if shipping to Australia): this is only required for freight
shipped by sea and will be prepared by a supplier and sent to the buyer. It will be used by
customs to identify the packing material of the goods. Packing declarations can either be one-
off (for one shipment) or annual, lasting for 12 months. If a buyer imports regularly to Australia
from the same supplier, obtaining an Annual Packing Declaration will mean less paperwork
throughout the year.

 A Manufacturer’s Declaration: This is typically a declaration created by a manufacturer for

customs purposes. It declares information such as whether or not the goods are toxic or
hazardous and also declares what materials the goods contain; and

 Dangerous Goods Forms: If a supplier is shipping dangerous goods as classified by the

International Air Transport Association (IATA) or the International Maritime Organisation (IMO),
they will be required to fill out and include relevant dangerous goods forms.

Dangerous goods classes

Documents that need to be prepared by the buyer

Each country has different requirements for export customs clearance. However, in order to
prepare a shipment for export from Australia, generally the following documents are required:

 An Export Declaration: When exporting from Australia, a supplier will typically be required to
make an export declaration if the goods exported are over AUD$2,000 in value or if an export
permit is required. Some goods are exempt from this requirement such as pets, mail, domestic
cargo, military goods and personal effects; and

 A permit to export/import prohibited goods: If a supplier or a buyer is importing or exporting

prohibited goods, they may require a special type of licence depending on what goods they
decide to import or export.

The buyer in Australia may also be required to obtain certain declarations and permits, such as:

 An Import Declaration: Importers may be required to fill out an import declaration. There are
few types of declarations that can be requested depending on the circumstances, including:

 An N10 Declaration: This will need to be completed if the goods have a value of over
$AUD1,000. Importers will also need to pay the relevant taxes, charges and duties;

 A Self-Assessed Clearance (SAC) Declaration: If a buyer’s goods arrive by sea or air and have a
value of equal to or less than AUD $1,000, they’ll be required to fill out a SAC declaration. There
are several types of SAC declarations, and which one a buyer needs to fill out depends on the
circumstances (such if the goods they are importing require an import permit);

 An N20 Warehouse Declaration: If a buyer intends to place their imported goods in a

warehouse before clearing them from customs (and their value exceeds AUD$1,000), they’ll
require a Warehouse Declaration.

 An Import Permit/Permission: Importers may also be required to obtain an import permit

depending on the type of goods they are importing into Australia. A Biosecurity Import
Conditions (BICON) permit may be required if the goods present a threat of diseases or pests.
Permission is also required from the Australian Border Force to import goods such as prohibited
weapons.
All of the above can be handled on your behalf by a licensed customs broker and freight
forwarder

Step #3: Booking of freight

Once the required documentation is in order, the supplier must make a booking for the export
shipment.

It is critical for freight to be booked early to avoid disappointment, especially if the goods are
going to be transported in peak shipping season.

Step #4: Goods to travel to international depot/port

Once the goods are packed and ready, they will be transported to a depot or port for export.
Depending on the shipping incoterms, this will either be arranged by the supplier or by the
consignee through their freight forwarder. Export clearance can then commence.

The Bill of Lading

When a carrier arrives to pick up the goods, a bill of lading is issued (also known as a waybill
or an air waybill in the United States). A bill of lading confirms that the goods were received by
the carrier in an acceptable condition.

This is an extremely valuable document, as it acts as proof of legal title over goods.

Several bills of lading may be involved in a shipment. For instance, a supplier may require an
‘inland’ bill of lading if goods are being moved from a warehouse to a seaport (for the goods to
travel via international transit).  A separate bill of lading may then be issued by an ocean carrier
to a supplier if the next leg of the journey is by sea.

The supplier will then need to provide the bill of lading to the consignee (i.e. the buyer). The
buyer will be required to present the bill of lading in order to secure the release of the shipment
and claim ownership over the goods. Again, this can all be coordinated through a freight
forwarding company.

Bill of lading sample

Step #5: Goods processed through export customs clearance and

placed in transit
Prior to departure, the goods will be processed through export customs clearance. This is where
all documentation is reviewed and checked by government agencies.

As mentioned above, suppliers will typically be required to complete an Export Declaration.

If the export is cleared, those goods will then be placed in international transit (where, as
mentioned, a separate bill of lading may be issued).
There are several modes of transport a buyer can select to transport their freight when shipping
by sea, including:

 Full Container Load (FCL): this is where the shipment of one buyer takes up a full
container;

 Lesser Container Load (LCL): where a buyer’s goods don’t take up the whole
container (instead, the goods take up less of the container) and are stored with other
buyers’ goods;
 Reefer: A reefer is essentially a large fridge used to refrigerate goods while in transit –
reefers are normally used to transport goods like fruits, meat, vegetables, dairy and fish

Out of Gauge (OOG): also known as break bulk, these are loads that are basically too big to
fit into a container (and usually come with an extra surcharge)

Flat Racks: As opposed to using standard shipping containers, buyers can instead choose flat
racks – these are great for goods that do not fit in normal shipping containers (like break and
OOG loads)

Step #6: Goods arrive in buyer’s country for import clearance

Once a buyer’s goods arrive in the country of destination, the goods undergo an import
clearance.

In Australia, all imported goods must be cleared through the border by the Australian Border
Force. There are several regulations you must follow depending on the goods you are importing,
whether they are motor vehicles, animals, human remains or even intellectual property.

Imported goods may be subject to certain taxes, tariffs and/or charges.

Depending on the commodity the goods may also be subject to quarantine inspection on arrival.
For example, if you are importing plants, animals, certain minerals or human products such as
human remains, the Australian Department of Agriculture and Water Resources will inspect
and/or treat your goods for diseases and/or pests.

Step #7: Goods are transported from the port to the buyer
Once the goods pass through customs and are good to go, they will then be delivered to the
buyer or agreed delivery point. Once, again, the incoterms on the shipment will determine who
arranges this.

Depending on the shipment type (air or sea freight, FCL or LCL) a range of transport options
will be available. This can include delivering loose on a truck, delivering a container with a
sideloader and dropping the goods on the ground, or delivering to a roller door for live unload

The receiver should discuss with the transport company or forwarder beforehand how they
would like to receive the cargo for ease of delivery.

In A Nutshell – Your Shipping Timeline

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The 7 steps Process of Sea (Ocean) Freight Forwarding
Part of the Freight Forwarding Basics series, in this blog post, we are covering the 7 steps of
international freight forwarding (shipping)

 Shipper: a person/company dealing with shipment at supplier end.

 Consignee: a person/company dealing with shipment at receiving end.
 Freight Forwarder: the logistics provider (for road, ship or air transportation).
 Shipping Line: company carrying product related cargo.

Step 1. Export haulage:

The first step involves the movement of the products’ cargo from shipper’s to forwarder’s
premises. Products usually get transported by road or railways or a combination of both.

Step 2. Export customs clearance:

It is a type of official regulatory formality involving submission of valid and required documents
to the concerned authorities.

Step 3. Origin handling:

This step covers all physical handling, inspection, and loading of the cargo; at the supplier End’s
warehouse. This is coordinated by the freight forwarder.

Step 4. Ocean freight: 

To meet the required timeline for shipments, freight forwarder schedules shipping line for
transportation. This step not only covers costs involved in shipping from port-to-port but also the
levied surcharges like currency adjustment factor, exchange rates, etc.

Step 5. Import customs clearance:

This process can begin even before the arrival of cargo at the US. This clearance is performed
by customs house broker appointed by the consignee.

Step 6. Destination handling:

This involves transportation and unloading of cargo from port to destination warehouse.

Step 7. Import haulage:

The final step of actual delivery of the product to the consignee and ultimately to the consumer

==========================================================

Actual Weight, Volumetric Weight, and Chargeable Weight

Often in freight forwarding the terms actual weight, gross weight, chargeable weight, can be
used and quite often are confused with each other's meaning. In this blog post we go through the
differences between these terms to help you prepare for your next shipment.
More often than not, importers/exporters approach freight forwarders and couriers about quotes
on cargo that weighs XYZ. What they often forget to also provide in order for the quote to
reflect the chargeable amount, is the dimensions of the cargo, which plays an important factor in
determining the final charges.

Actual weight, or gross weight, is the weight in kgs of the cargo, including packaging and
pallets. Another just as important metric is the Dimensional or Volumetric weight of the cargo,
which is the amount of space your cargo occupies, converted into weight equivalent. Once these
two variables are known, your freight forwarder will then be able to quote you on the
Chargeable weight, which is the greater of the previous two.

The conversion of 'space', or volume to weight, varies by mode of transport and sometimes also
by trade lane. The below table shows how various carriers may calculate volumetric weight.

Source: Flexport

Therefore, when submitting information for a quote, you should provide as much information as
you can, in order to receive an accurate chargeable weight figure. At the minimum, you should
know how much it weighs in gross kgs, as well as the total dimensions (W x L x H) of the cargo,
including any packaging or pallets provided by the shipper. Your freight forwarder will then
convert your dimensional weight to kg equivalent, and take the higher figure based on the
conversion and the actual weight, to give you a quote on the chargeable weight

===================================================

3 Lessons from Top Global Freight Forwarders

Top global freight forwarders of the world are starting to adjust to the changes in the industry. Here are
3 lessons to learn from these global logistics trends.

The Rail, Air and Sea Freight Forwarding industry has grown over the past five years.
Industry operators are middlemen in supply chains, connecting customers with freight transport
providers and consolidating loads to achieve lower rates. Supply chains have become more
sophisticated over the period, as clients have been matching their inventory with real-time
demand.
  More frequent but smaller deliveries have allowed industry operators to continue
providing load consolidation services in the supply chains of major markets.
 Continued growth in consumer expenditure and international trade are expected to
increase industry revenue by an annualised 2.6% over the five years through 2016-17, to
reach $9.1 billion.

Source: IBISWorld; Logistics Management

In this series, we try to equip you with the basic knowledge necessary to successfully manage
your freight and supply chain. Being able to understand what the key players are doing and how
to respond to global freight forwarding trends is one of them.

Technology

“The world’s major forwarders are way ahead of the curve on compliance and technology,” says
consulting firm Armstrong and Associates. “That’s a big reason why they are so successful,”
adding that this trend will only gain more momentum.

We at Whale Logistics Australia know that technology can transform processes and customer
experience as it is a key pillar in our operations. Key issues such as being able to anticipate
logistics plans and have information transparency across multiple silos is slowly becoming the
norm for global freight forwarders.

For these three leading players in the rankings, “anticipatory logistics” has become a new part of
their strategic plans. Forwarders, irrespective of size, will have to prepare for these
changes or be left behind

Compliance

Global freight forwarders of all sizes are increasingly challenged to align compliance with
logistics operations. Shippers themselves are also concerned with the heightened security
requirements of different countries. And still, the freight transportation value chain is still slow
to see changes in reducing inefficiencies in this area.

The key to reducing these inefficiencies is having the expertise there to help your organisation
resolve road blocks and flow through the value chain quickly and efficiently. The years of
experience of our experts allow Whale Logistics to be customer-focused and tailored to every
business' needs. To succeed in the global freight forwarding market, compliance is crucial as it
can cost clients valuable time and money when this is not delivered

Rates

At the end of the day, rates are one of the most important aspects of any global freight
forwarding market. And while sea freight is on the rise and air freight is seeing a decline due to
overcapacity, rising fuel prices, and other operational costs; erratic rates for ocean freight still
remain a top concern for many shippers.

“Many assume that a shift to ocean shipping is strictly a decision based on financial savings, but
this is not always the case,” says Brandon Fried, executive director of the Washington, D.C.-
based Airforwarders Association. “Changing from air to ocean can also be a function of demand
and inventory space constraints where customers depend on ships as virtual warehouses
constantly feeding distribution centers on arrival.”

Again, being aware of these changes ahead of time, and planning for such rates spikes is crucial
for global shippers. In this case, time is also money, so visibility and communication with your
freight forwarder is important so you do not waste unnecessary money to resolve problems that
were not foreseen

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The Difference between a Freight Forwarder and a 3rd

Party Logistics Provider (3PL)
In this post part of the 'Basics to Freight Forwarding' series, we are uncovering the key
differences between a freight forwarder and a 3rd Party Logistics Provider (3PL).

Freight forwarders and 3PL add crucial value to the modern supply chain - but did you know
that these terms are used interchangeably, while these two services are different in nature? In
this blog post, we uncover 3 aspects in which freight forwarders and 3PLs play different roles in
supply chain management

Transportation

Both freight forwarders and 3PL have common knowledge of being able to arrange, retrieve,
and deliver freight from A to B. Where these two differ is that forwarders specialise in this area,
whereas a 3PL may include this as part of its full supply-chain solution package. If you think of
a McDonald's store supply chain, the freight forwarders are the patties and buns while a 3PL
may also include the lettuce, tomato and sauce. The difference is highly dependent on
concentration of expertise, and whether it is depth or breadth of services you're looking for.

Costs

Where these two differ the most and where people get the most confused is whether a 3PL
provides extra value from providing a full-benefit, whole supply chain solution. The answer
may depend on your company; what you need, and what you're able to afford. To determine if
they are getting real value, shippers should ask their 3PLs some hard and straight questions
about the transportation part of their services. For instance:

 Are your transportation charges less expensive than freight forwarders?

 Will a shipment under your supervision arrive at its destination any faster than utilizing a
freight forwarder?
 Once a shipment arrives, will it clear Customs more quickly than using a freight
forwarder?
 Because you are non-asset-based and rely on air carriers and shipping lines to move your
customers' freight, can you obtain lower rates and more reliable service than forwarders?
 Administrative effort
 So a 3PL sounds like it will take care of your business' supply chain from A to Z - does it
mean that with freight forwarders, there is more administrative effort for your company?
 The answer is Yes and No.
 Yes, because often you will need to take ownership of certain parts of the supply chain.
Where freight forwarders come in value is transporting your freight from A to B with the
least cost and hassle to you - but beyond points A and B, you are responsible.
 No, because often 3PLs will charge more for the full service package that they offer, like
stockpiling, picking and pressing, and offering a distribution centre.
  Summary
 So in summary, forwarders are specialists that focus on the cost and logistics of
transportation. Third-party logistics providers are usually generalists who expect to be
compensated for providing a 'one-stop-shop' service. This compensation may or may not
be cost-effectiv e, and it is helpful to research all options suitable for your organisation
before deciding to commit to a relationship with either one.
 Traditional freight forwarders continue to play a dominant role in international trade,
controlling 90 percent of all heavyweight international air shipments.
 This percentage has remained remarkably constant during the past 30 years, despite all
the technical and operational changes during that time. For ocean freight, traditional
forwarders control 75 percent of less-than-containerload revenues.
 Yes, there are differences between 3PLs and freight forwarders. Increasingly,
however, these services are blending.
 To remain successful in today's fiercely competitive logistics market, both freight
forwarders and third-party logistics providers must never forget that despite all the
technical advances and innovations, logistics remains a people business

==================================================================================

Five physical and two documentation steps in International

Shipping
In the movement of goods from shipper to consignee, there are five physical steps and two
documentation steps, which must all take place for every single shipment. With each step there
is a cost associated which must be settled by someone, typically the shipper or the consignee. If
you want to avoid cost surprises and unnecessary delays in your supply chain, make sure you
have clear agreement of who exactly pays for each of these 7 steps every time you book a
shipment.

The seven steps of international shipping: Export Haulage, Origin Handling, Export Customs
Clearance, Ocean Freight, Import Customs Clearance, Destination Handling and Import
Haulage.
Export haulage
The first part of the transportation is export haulage. This relates to the movement of the cargo
from the shipper’s to the forwarder’s premises. The forwarder’s premises in the case of less than
container load shipments is always an export consolidation centre (an origin warehouse) where
the forwarder either has their own people or nominated agents in their control. The goods would
typically move on road (by truck), rail or a combination. If it were agreed that the shipper is
responsible for this part of the transportation, it would typically be arranged through a local
transportation company. If, however, the consignee is responsible, it often makes most sense to
use a freight forwarder who can offer export haulage as part of the international transportation.

Handling of the cargo (loading onto a truck) at the shipper’s premises is not considered part of
export haulage, as off loading of the truck at the forwarder’s premises is normally not part of
export haulage.

Export customs clearance

For every shipment leaving a country, customs formalities must take place to meet regulatory
requirements. Customs clearance is a transaction whereby a declaration is developed and
required documents are submitted to authorities, and can only be performed by companies
holding valid customs licenses, so-called customs house brokers.

Export customs clearance can either be performed by a freight forwarder with a valid license or
an agent appointed by the freight forwarder. Alternatively, it can be performed by a customs
house broker appointed directly by the shipper, who does not necessarily take any other part in
the shipping process. The export customs clearance step must be completed before the cargo can
leave the country of origin, and if not performed by the freight forwarder, often required to be
completed before the cargo enters the forwarders origin warehouse

Origin handling
Origin handling 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, or an agent appointed by the freight forwarder. In short, when the cargo is
received, it is inspected (tallied), planned for loading, consolidated with other cargo, stuffed into
a container and moved to the port where it is loaded onto a ship.

While it is always ultimately the freight forwarder performing origin handling, it can be paid by
either shipper or consignee, regardless of who actually buy the freight forwarding. For example,
if a consignee has decided to user Forwarder A for their import shipments, and agreed with the
shipper that the shipper must pay for origin charges, automatically the shipper will buy origin
charges from Forwarder A too. This situation can create some friction in case a shipper believes
the price for origin handling is not at market levels, as they are forced to user Forwarder A in
this case.

Ocean freight
The freight forwarder decides on a shipping line to perform the ocean freight from origin to
destination in order to meet the required timeline for the shipments. The freight forwarder and
the shipping line has a contract of carriage for the container, and the shipper or consignee in this
case is not subject to any direct interaction with the shipping line
The cost of the ocean freight will ultimately be charged to the shipper or the consignee. Ocean
freight, however, is never the entire costs of shipping from port to port. There are multiple
surcharges levied in the industry, such as bunker adjustment factor and currency adjustment
factor, which will all be passed to the shipper or the consignee.

Import customs clearance

Import customs clearance can typically begin before the cargo arrives at its destination country.
As for export customs clearance, it is a formality where a declaration is developed and submitted
together with relevant documents enabling authorities to register and levy any customs duty on
the shipment. Import customs clearance is performed by the freight forwarder or an agent of the
freight forwarder, or by a customs house broker appointed by the consignee.

The import customs clearance process must be completed prior to the cargo leaving a customs
bonded area in the country of destination. Typically, that means before the cargo leaves the
destination warehouse of the forwarder or the forwarders agent

Destination handling
As for the origin, cargo handling is also required in the destination before it can be released to a
consignee. In short, destination handling includes transfer of the container from the ship to shore
and from the port to the forwarder’s destination warehouse. It also includes un-stuffing of the
container and preparing the cargo for the consignee to collect.

Truck for haulage of LCL consignments

Destination handling is covered by multiple destination charges and always performed by the
freight forwarder or an agent appointed by the freight forwarder. It can be charged to the shipper
or consignee, but will always need to be paid in full before the cargo can be surrendered to the
consignee. Again, if the agreement is that the shipper pay for ocean freight, and the consignee
pay for destination charges, it is in fact the shipper deciding on who the consignee must buy
destination handling from. As discussed for origin charges, that can create some friction or
surprises for the consignee who has not planned for it

Import haulage
The last leg of the transportation is the actual delivery of the cargo to the consignee. It can either
be performed by the freight forwarder or a local transportation company appointed by the
consignee. If this part of the transportation is being arranged by the shipper, it would normally
make sense to use a freight forwarder which can also arrange for import haulage. The import
haulage typically covers transportation to a specific address, but not unloading from the truck,
which is the responsibility of the consignee.

Using Transporteca

Although the shipping process can be cumbersome and tedious at times, we have tried to
simplify the journey from A to B when people buy transportation services. If you are familiar
with search engines for flights and hotel booking sites, you should feel quite at home using our
portal

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What freight forwarder means? Is it the same with freight
forwarding officer?
A “freight forwarder” term has a lot of synonyms, such as “forwarding agent”, “forwarder”, etc.

All of them describe a person or company that organizes product shipments from the supplier.

Freight forwarding officer is yet the same as the freight forwarder.

The only difference is that a freight forwarding officer is a person in all cases, while the “freight
forwarder” concept can mean both human beings and businesses

How does freight forwarding work?

Freight forwarding is a wide-spread method of international transportation both for corporate
and personal use.

Freight forwarders coordinate the shipment of goods from one destination to another using
various carriers (such as air, sea, road, and railway freight).

To do so, the complex of methods is used.

Below you can see the main services freight forwarder can offer:

1. Customs clearance.
2. Packing.

3. Insurance.

4. Import and export paperwork.

5. Storage.

6. Inventory management.

This list is not exhaustive; there can be other actions performed by the freight forwarding entity.

Due to such services, the whole process of importing and exporting of products becomes less
stressful

What are the main duties and responsibilities of a freight

forwarder?
The freight forwarder uses the best routes and methods for moving big freights to the destination
point.

The forwarding agent has to be sure that goods can reach the buyer in the shortest time.

So, the forwarder has to utilize several modes of transport most efficiently.

The freight forwarder has to conduct researches while planning routes.

He takes into account:

  the kind of transported products;
 the distance to the final destination;

 any specific customer requirements with regards to the final delivery time.

The forwarding agent also has responsibilities connected with:

 packing process;
 insurance procedures;

 customs documentation and other regulatory requirements.

A good forwarder has to have high organizational skills.

S/he has always keep an eye on under control freight, using satellite technologies and software
apps.

Finally, such a person (company) has to communicate with its clients and make payments on
their behalf.

Please, also check this helpful Youtube guide for a freight forwarder.

Why is it profitable to use freight forwarder services?

We can see 5 key factors which make freight forwarder services helpful:

Flexibility. Using forwarder services, you can easily change your choices about shipping
companies or transportation modes without any troubles.

Versatility. Good forwarder knows how to quickly react and solve problems the moment they
arise (like rerouted sea freight shipments or air freight delays).

Cost-effective. Freight forwarding services can help you to save a lot of money. Shipping
companies work with bulk freights, which makes lower rates possible.

No customs hassle. The customs rules and regulations can make your delivery confusing and
complicated. The freight forwarder will make sure that you can avoid all these troubles.

Additional services. Such options include purchase tracking, packaging, and on-demand
reporting. When choosing a freight forwarder, it is a good choice to pick the company with
helpful extra services.

If you are interested in international shipping from China, you don’t have to continue your
search of trustful freight forwarder: Bansar specialists are always here to perform all the needed
logistic tasks

How much does freight forwarding cost? What is a freight

forwarding additional charges?
The freight forwarding process requires various costs and fees.

They can be separated into two groups: common and non-standard charges.

There are 3 general charges which have to paid practically in any case:
Air/road/sea shipping fee. This is the most obvious one. It depends on the dimensions of your
cargo, country of origin, and the delivery distance.

Some forwarders might include additional fees here:

1. Cargo screening charge.

2. Airline security fee.

3. Fuel surcharge.

Pickup charge. These are the fees connected with pick up of goods from a warehouse.

Forwarder handling charge. This type of fee is connected with different paperwork, including
copying documents and preparing the bill of lading. This charge might range from $35 to $75.

The non-standard (additional) fees might refer to:

1. Certificate of origin. In some countries, you may need this document to verify the manufacturer
of the products.
2. Hazardous materials. Dealing with hazardous materials always require additional costs and fees.

3. Legalization procedures. In the vast majority of countries, the legalization procedure is

connected with verifying documents by a consulate or embassy.

Remember that there are additional charges in the case of each country.

For example, the US government presumes extra export fees, such as TSA Security and AES
charges.

How do freight forwarder and carrier differ?

Freight agents provide forwarder services and organize delivery through a carrier.

In some cases, a forwarder can be a carrier as well.

The main difference is that the carrier uses its transport, while the forwarder relies on a third
party in this matter

Is it possible to ship a container directly without using

freight forwarders?
Yes, it is possible, choosing between the next two options:

 by applying for a long term contract with some shipping line;

 by using extra agents (such as transporter, customs house agent) as well as shipping lines.

Note: shipping lines work works only with full load orders. It is impossible to order a small
number of goods in this situation.

Also, it is recommended to use forwarder services if any challenges occur.

Such persons (companies) have huge expertise and worldwide partners, so they can deal with all
kind of issues.
Which documentation is needed for the fast-forwarding
process?
A lot of documentation is needed for freight forwarding process, especially in the case of
international shipping.

Such papers include the next ones:

1. Export license, packing list, and declaration.

2. Commercial invoice.

3. Inspection certificate.

4. Certificate of origin.

5. Bill of lading.

How is freight forwarding different from transportation?

Transportation of goods is connected with the delivery process only, while the forwarding
services cover products movement, handling, storage, packing, and so on.

What is the step by step process of freight forwarding?

There are 6 basic steps of freight forwarding process.

Step 1: Pick up Delivery

This stage is also called export haulage.

It presumes the movement of items from a supplier’s location to the freight forwarders
warehouse.

It requires the use of a truck or train to move goods.

The timeline of this step depends on the huge amount of factors, including distance,
geographical location and the type of goods.
Step 2: Goods inspection

Right after the export hauling ends, the forwarder begins to inspect the goods and prepare them
for departure.

This step starts by checking of goods quantity and quality.

It is also important to figure out the legal status of goods.

If there are some kind of issues, the forwarder can contact the buyer to fix them before the goods
can be banned at customs.

Also, at this step, the forwarding agent can perform packaging if the supplier hasn’t made
enough to secure the products.

Step 3: Export customs clearance

Before items can be shipped to the country of destination, it is required to clear them at customs.

On this stage, the freight forwarder can work with a customs broker or perform customs
procedures himself.

Customs require to submit details about the cargo and provide them any supporting documents.

Usually, the supplier and buyer agree on who is responsible for this process.

If a freight forwarding agent can’t provide such services, it is required to find a third party with a
customs brokers.

Step 4: Import customs clearance

In general, this step is similar to the export clearance.

When the cargo arrives at the final destination country, its authorities have to check such goods
and all the connected import customs documents.

This step, like the previous one, can be conducted with the help of freight forwarder or a third
party with a customs brokers.

Note: a good forwarder starts to process this stage even before the cargo arrives at the
destination country. This helps to save a lot of precious time.

Step 5: Destination arrival and handling

After clearing goods, the forwarder gathers all the documents and pick up the freight.

At this step, the freight forwarding agent receives all documents for the cargo, including
outstanding documentation, carrier bills and so on.

This stage is always processed by the freight forwarding company itself.

Step 6: Delivery to the recipient

This step is also called the import haulage and it is quite similar to the export haulage.
The forwarding agent transport goods to the buyer and transfer them with all papers.

Also, the buyers (receivers) can decide to collect the cargo themselves from the freight
forwarder warehouse.

The freight forwarding process includes selecting the most appropriate routes and travel options
for you as a buyer.

Do I need a freight forwarder for my e-commerce store?

This is kind of a picky question which mainly depends on the type of e-commerce store,
targeting audience, and quantity of the shipping goods.

When you transport a lot of products inside the country, using carrier services can be a good
idea.

However, the amount of shipments needs to be huge in this case (like dozens of shipments a
day).

But this will guarantee you the best rates.

It is also recommended to hire 3-5 carriers if you want to speed up the process.

If you transfer goods internationally and need storage services, the freight forwarder should be
the best option.

Such a company can act as a carrier and deals with complicated customs clearance procedures.

Finally, forwarders are fully responsible for any loss or damage to the products, so they store
and transport them with extreme accuracy.

If you ship worldwide but do not need to store your goods, you can look for a 3PL (third-party
logistics company).

Such entities are similar to freight forwarders and we’ll talk about the difference between them
in the next questions.

Freight forwarding and 3PL: how are these two correlate

with each other?
As we said previously in this article, 3PL (third party logistic) providers and freight forwarders
have quite similar roles.

The differences between them become more obvious after reading about each service.

Freight forwarders allow companies to get the best rates and combination of carriers figured out
on their behalf.

They coordinate almost everything from booking cargo space to filing insurance claims.

Their services end at organizing how your products will get from point A to point B.
3PL providers can take care of your entire supply chain.

This includes warehouse storage, picking, and packing, as well as shipping.

Third-party logistics services offer some flexibility as well since companies can pick and choose
which services they’d like.

What is freight forwarding insurance?

Freight forwarding process presumes billion dollars in cash flow, so the insurance is an obvious
option.

Good insurance coverage from the forwarding agent liability includes:

1. Bill of lading liability.

2. Errors & Omissions (E&O).

3. Bailee liability for warehouse and trucking operations.

4. Packing and container filling liability.

5. Container and transportation equipment coverage.

6. Customs liability.

7. Third-party liability (mostly in the case of 3PL companies)

How does a freight forwarder handle missing freight?

In this matter, everything depends on a contract which you sign with a freight forwarder.

The forwarding agent also signs similar liability contracts with shipping lines and carriers.

In general, such agreements specify the course of action when the loss or damage of goods
happens.

Once the freight forwarder signs the contracts he’ll try to ensure that there would be no such
troubles.

If they still arise, the forwarding agent will take care of such losses himself or with the help of
the insurance company.

What are the general problems of freight forwarding

process?
The freight forwarding process is facing a lot of challenges.

The following are the most common problems.

Unclear rules of the competition

The freight forwarding depends on the economics of various countries, as well as on

international regulation rules.

It makes the process quite complicated and uneven, due to different rates, fees, and charges.
Customs clearance complications

Following the previous topic, here is another problem of freight forwarding process: uneven
customs regulation worldwide.

This has limited the scope of operations of a freight forwarder. Which means that most of the
freight forwarders will venture on the local market.

Digitalization

We’ll describe this problem more precise later in this FAQ.

Let’s just mention that in the modern environment it becomes easier for buyers to process their
shipments directly.

So the freight forwarders have to find new ways on how to help their customers.

What is the difference between freight forwarding and

export house?
Export house is a company which is mostly located in the supplier’s country.

It is involved in the export of the products through their agents and distributors in the destination
country.

Freight forwarding process covers a lot of stages, including exporting goods.

Please, head back to the previous question about 6 steps of freight forwarding

What is the difference between freight forwarding and

customs brokerage services?
Freight forwarder provides a wide range of services, while a customs broker helps to get through
customs clearance.

Customs brokers focus on the import side of transportation.

For exporters, the customs broker is a foreign country deal, which can be handled by a
forwarding agent.

The freight forwarder deals with the logistics of moving your products from A to B.

The customs broker, on the other hand, deals with the bureaucratic side, document completion,
of getting your goods into the country.

Freight forwarders are always working together with customs brokers to help with export
procedures.

What is a freight forwarder bond?

The Federal Motor Carrier Safety Administration (FMCSA) obliges all forwarders and freight
brokers to hold such a bond (BMC-84).
The main task of this bond is to guarantee that you will be performing your job duties in full
accordance with federal and state rules.

A bond protects the entities you work with (such as other shippers, motor carriers, etc).

If the freight forwarder can’t fulfill the law rules or contact terms, someone can claim his bond.

Note: freight forwarder bond is a rule which arises for US forwarding agents only.

How to start a freight forwarding business?

Starting a freight forwarding business consists of several key steps.

First of all, you have to conduct comprehensive market research.

You will save a lot of time and resources if you answer two main questions at this stage:

 What is your target audience?

 What volumes of cargo do you plan to work with?

Based on this information, you can purchase/rent only the necessary equipment.

Your market research will narrow down to a specific type of consumer.

Having studied a niche, you need to decide: whether to create a business from scratch or buy a
franchise?

Buying a franchise, you get a ready-made business model and support.

But keep in mind that you will work according to the rules of the franchise owner.

Creating your own freight forwarding business is more difficult, but in the long run, it will bring
big profits.

Also, business processes remain under your complete control.

Finally, you should clearly understand what services to provide and decide what equipment you
need for it.

Most startups in this niche begin with the purchase/rental of vehicles and a warehouse.

The warehouse should be in a convenient location for vehicles access.

Also, the amount of start-up capital should allow you to purchase logistics software.

Without it, effective work in the freight market is impossible.

Hint: choose a narrow specialty (transportation of a certain type of goods or by certain transport
means).

This will help to avoid competition with strong market players

What is the biggest freight forwarding company in

China/worldwide?
The biggest freight forwarding company in China is CNXtrans.

Company is based in Shenzhen – the main logistics hub in China.

Worldwide leader of freight forwarding business is DHL.

Currently, it is a part of the Deutsche Post DHL Business Group.

The company headquarters are located in Bonn.

How digitalization affects freight forwarding business?

Would it still be actual in the future?
Digitalization of the economy leads to rapid and large-scale globalization.

For carriers, this means a growing burden on transport networks and a greater demand for
services.

Today, the effective work of a freight forwarding company is impossible without the use of IT
products.

This creates new challenges for the business:

1. Creating own data warehouses.

2. Development of software for freight movement tracking.

3. Creating a support service capable of instantly responding to a customer request at any time.

4. Hiring IT specialists who are into the nuances of the freight market.

In general, the digitalization of the freight market has led to improved communication within
transport systems and between the carrier and the client.

Also, thanks to the analytics of large databases, it has become easier to form a favorable price
and interact with a specific target audience.

What is a container type? How many types are used in

freight forwarding?
There are four main container types for cargo transportation:

 dry storage container;

 rigid Intermediate Bulk Containers;

 intermodal Tank Containers (ISOs);

 flexible Intermediate Bulk Containers (FIBCs).

In general, there are 16+ container types, that are used in freight forwarding.

Freight forwarding KPI: what is it?

KPI is short for key performance indicators. It is a bunch of analytical tools which can help you
to calculate your activity.
The main KPIs for the freight forwarder is the next:

Order accuracy

This KPI shows the number of various incidents from the placement of the order to the delivery
of a shipment.

Using it, any freight forwarder can identify patterns and correct errors to make the transportation
process safer.

On-time in full

This logistics KPI is also known as OTIF.

It is used to measure the percentage of orders delivered within the stipulated time (without any
problems or documentation issues).

It is an ideal KPI which show how punctual and safe the services of a freight forwarder are.

Lead time

Lead time is a KPI that tracks how long your company’s processes different stages of freight
forwarding process.

It is good to know the exact amount of time spent in each stage of the supply chain and optimize
this time.

Warehousing costs

This KPI is used by the freight forwarders that offer warehousing services.

It monitors the expenses involved in the management of your warehouse facilities.

Truck turning

This KPI shows the average time spent between the exit for collect/delivery and the return of the
vehicle to your warehouse.

It is widely used by road transportation companies.

Container capacity utilization

This indicator shows how you use the load capacity of a vehicle during road transport or a
container during sea freight.

If you are always making full-loaded deliveries, then this KPI will be higher.

Productivity

This KPI displays the forwarding company employees’ production rate (workforce/labor
hours/productivity).

Transportation costs

It means all charges related to each logistics operation developed by your company.
A number of shipments

Evaluates the average of cargoes handled by your company at a stipulated time

(weekly/monthly/yearly).

This list of freight forwarding KPIs can be continued with other values.

Bansar can guarantee the highest performance regarding all the above-mentioned KPIs.

Our comprehensive experience and worldwide net of trustful partners are making us the best
deal when it comes to shipping from China

How can I choose the right freight forwarder?

The best freight forwarding agent has to have the next key features.

Great expertise

Experience is the most important factor when it comes to shipping issues (like dockworker
strikes, port shutdowns, cargo reroutes, customs problems, warehousing organization).

An experienced freight forwarder always has an answer for even the most complicated issues.

A widespread network

The best forwarding agent is the one that has the full-fledged net of agents worldwide.

When choosing a forwarder, make sure it has connections in the destination country.

Competitive services

When choosing a freight forwarding company, confirm that it has all the services you need.

This helps all your international shipments go smoothly.

Certification and licenses

Always ask the freight forwarder about their certificates and other credentials.

They show if a freight forwarder has the specialized training and security requirements to
correctly handle shipments.

Customer support

A forwarding agent with excellent clients service can provide support for effective international
trading.

Bansar is proud to be among the most reliable and fast-growing freight forwarding companies in
China.

We provide extremely competitive shipping rates and can timely deliver any type of product
worldwide.

Choosing us as your trustful partner you can be sure that it will be a win-win situation.
========================================================

What is the commercial invoice?

A certain set of documents is always required for customs clearance of all kind of goods.

One of the most important of these documents is the commercial invoice.

A commercial invoice is a paper that the exporter (seller/supplier) must send to the buyer along
with the goods being shipped.

When is the commercial invoice required?

Commercial invoice plays an important role not only in buying and selling goods.

It is also one of the indispensable documents for passing customs control at the borders of many
countries as well as for individual territorial units with special trade legislation, like some US
states.

The invoice is used as a declaration and is provided by the person or corporation that is
exporting the item.

The key to smooth and fast customs clearance is a complete and correct commercial invoice

Does the commercial invoice somehow relate to commercial

documents?
Commercial document definition includes the next significant trading documents:

1. Commercial invoice.
2. Shipping or transport document.
3. Certificate of origin.
4. Order.

How a proforma invoice and commercial invoice differ

between each other?
A proforma invoice is a document that contains preliminary data on the goods which would be
delivered in the future (for example, its quantity or price).

A proforma invoice is a basis for issuing a final invoice or a commercial invoice.

Also, a proforma invoice is usually written out if the goods are delivered on a partial prepayment
or free of charge (humanitarian aid, promotion goods, etc.).

The difference between the proforma invoice and the commercial invoice is that some of the
data in the first document is not final and can still be changed before the final agreement on the
delivery.

For example, this may relate to the number of goods or types of models.
Can the commercial invoice be handwritten?
According to the general international rules, commercial invoices have to be typed and not
handwritten so the inside information is not confused by anyone because of illiteracy or bad
handwriting skills.

How do I create a commercial invoice?

The use of various formats of commercial invoice is allowed.

The most common is the corporate invoice of the seller on its letterhead.

If the sender does not have a corporate invoice on letterhead, he can print the information on a
regular sheet of paper.

When creating the corporate invoice, first of all, you have to build up the right form, which will
contain all the needed information fields.

We will discuss all the obligatory parts of the commercial invoice later in this FAQ.
Which obligatory details should the commercial invoice
contain?
The seller (supplier) has to prepare the commercial invoice which must contain the following
information:

 date of issue and invoice number;

 personal info (name, address) about the supplier;
 details of the consignee (buyer, recipient);
 information about the contract (number and date of conclusion);
 the product name, description of each type (model, article);
 the number of units;
 price per unit of cargo;
 the total cost of goods;
 HS code of cargo;
 weight of products;
 the currency which was used while buying goods;
 the total value of the entire batch of goods sent;
 information about the country of origin, the country of export (if it is not a
manufacturer);
 recipient country;
 the purpose of exporting the goods;
 VAT (may not be mentioned if the tax is zero);
 terms of delivery according to Incoterms 2010.

Who can issue the commercial invoice?

A commercial invoice should be created by the seller, supplier or exporter.

In general, commercial invoices are printed on a company letterhead paper of the supplier.

It is also should be stamped and signed by the same company.

Any alteration or correction on any of the shipping document must be authenticated by the issuer
of the document (in the vast majority of cases it is a supplier or an exporter company).
Commercial invoice and tax invoice: what is the difference?
As it was said earlier in this FAQ, a commercial invoice is the supplier’s bill of sale for the
goods, specifying their type, price, and quantity, as well as other terms of sale.

Tax invoice is a document issued by a supplier which stipulates the amount charged for goods or
services as well as the number of Goods and Services on which tax payable.
In the better part of countries, a commercial invoice can be raised by any supplier meanwhile a
tax invoice could be given by a registered dealer may be service tax provider.

How many commercial invoice copies are allowed?

In practice, the supplier has to create two copies of the commercial invoice and store one of
them inside the package.

The other copy has to be placed outside the package, in some kind of transparent envelope to
protect the paper from tearing and ripping.

On the supplier’s desire or buyer’s demand, the commercial invoice can be translated into the
national language of the destination country but the copy in the supplier’s national language
should be also added to the package.

Also, some shipping companies can require more copies of the commercial invoice, especially in
the case of multiple packages.

What is consignee in the case of the commercial invoice?

Consignee is a private person or a company (named in the commercial invoice) to whom goods
are shipped.

What is the HS number on a commercial invoice?

HS stands for Harmonised Commodity Description and Coding System.

It’s a list of digits used by customs in various countries to classify goods.

It is mainly used to determine the taxes and duties which has to be paid.

An HS code can be also named as a harmonized, tariff or commodity code. You can check this
FAQ Guide on HS Code.

How to figure out the commercial invoice number? Why do

I need it?
In general, you can see the field with the commercial invoice number at the top of the paper.

This number can be used by suppliers to sort orders from their clients and add this info in their
accounting documents

Are there some general rules on how to fill the commercial

invoice?
Even though the form of the commercial invoice can’t be found in any legal documents, there
are still certain requirements that must be followed.

If there are doubts about the correctness of filling out the invoice, it is better not to rely on your
strength and turn to the services of a specialist in this matter.
 1. The commercial invoice is issued on a standard A4 sheet, but preferably on a special
letterhead of the supplier: this is more convenient since such sheets already contain all
the necessary details of the seller.
2. The document has to be filled in printed form.
3. The invoice is certified only by the personal signature of the person responsible for
sending the goods.
4. The invoice costs are usually expressed in the currency specified in the contract.
Otherwise, it is obligatory to indicate at what rate (indicate the date of transfer) the
conversion will be carried out.
5. The document is filled in a language understandable for both parties to the transaction,
most often in English. The practice of bilingual filling of the document is now
successfully used (in the languages of the supplier and the recipient, divided into two
columns).
6. If the goods are not sent for commercial purposes, the reason for their movement must be
indicated. For example, “This product is not for commerce. Payment is not required” or
“Replacement of defects. Cost is indicated only for customs clearance”, etc.
7. If insurance and transportation are paid by the sender, their cost is indicated in the
invoice in a separate field.

You can also check this definitive guide if you want to find out more about how to correctly fill
the commercial invoice. Or, check this Youtube video with the same topic.

Where do you put a commercial invoice?

Copies of the commercial invoice have to be placed both inside and outside the package.

Where can I get commercial invoice templates?

There are tons of commercial invoice templates on the Internet.

You can find good examples of visiting this and this page.

Where can I find legal requirements for the commercial

invoice?
There are no general international requirements in the case of commercial invoice form.

However, you can contact your state customs authorities and ask them about this kind of
document (in some countries the form of the commercial invoice could be found in customs
legal acts).

Commercial invoice vs packing list: how are these two

differ?
A commercial invoice and a packing list are both documents which describe transactions in
which some goods and products change the owner.
However, there is still a slight difference: the packing list is needed to describe the goods
themselves, while the commercial invoice shows details about the financial transaction which
stands behind the transfer of such goods.

So, the main reason why the seller can use a packing list is to describe the goods, so that the
supplier can show what exactly he has been sending and the buyer can check that all those goods
have been received later in full.

The commercial invoice is simply needed to show the buyer how much and when he has to pay
for desired products.

A commercial invoice contains information about the payment process, e.g. prices and terms,
such as whether payment has to be issued immediately or in 30 days

Do I need a commercial invoice to ship documents?

A document can be defined as a typed, handwritten, or printed communication which has no
commercial value.

When you ship international documents you only need to complete a shipping label.

In general, the commercial invoice is not required for documents shipping.

Are there some special commercial invoice requirements for

China/USA/UK/Canada/other countries?
Yes, the special requirements for the commercial invoice form can slightly vary from one
country to another.

The main difference lies in the HS Code, which is not the same in the US, Europe, and Canada.

Also, some states may have a special requirement in the case of the commercial invoice form,
which has to be completed following special rules of customs authorities.

Such invoices are known as Customs’ invoices and may be provided instead of or in addition to
the standard commercial invoices.

What kind of product description should the commercial

invoice contain?
The description of each product must include a specific list of information, the completeness of
which determines the time for the cargo to pass through customs control and, as a result, the
possibility to meet delivery deadlines.

In this part of the invoice you need to specify:

 product name;
 the scope of the product;
 serial numbers, tariff number (if available);
 production material;
  the number of units of production;
 type of product packaging;
 weight and volume;
 units of measure (kg, pieces, etc.);
 price for one unit;
 the total value of cargo.

A complete description of the cargo is the main requirement for its successful delivery to the
destination.

Do I need a commercial invoice for personal items?

If you are sending personal items or a gift, a pro forma invoice, rather than a commercial invoice
will be needed, because there is no purchase happening in such cases.

Is a commercial invoice the same as a bill of lading?

A bill of lading is not an accounting document.

It is a document which shows how the title to goods is passing from the shipper to the consignee

Can one commercial invoice be used for multiple exporting

products?
Yes, you can use a single commercial invoice if all the products are needed to be sent to the
same destination.

Don’t forget to place a copy of a commercial invoice on each package.

How the commercial invoice and bill differ between each

other?
In practice, commercial invoices are sent to customers after the goods are shipped.

Nowadays, original paper-based invoices can be replaced by electronic ones.

Bills are received from vendors.

They record expenses (or costs or inventory), and they record that the business owes the vendor
the amount of money that appears on the bill.

Speaking of the difference between the commercial invoice and the bill, it lies in the fact of the
shipment: commercial invoices contain a lot of shipping info while bills describe only goods and
their cost.

How to get the commercial invoice from Aliexpress sellers?

Not all Aliexpress sellers provide their buyers with commercial invoices.
However, you might need such documents while importing goods from China.

So what to do in such a situation?

First of all, you can always try to ask Aliexpress seller about the possibility of sending you an
invoice.

If this method hasn’t helped you, you can use some side Web programs for this.

For example, you can try to use the Aliexpress invoice generator.

Does the commercial invoice have to contain payment

terms?
Yes, the commercial invoice has to contain payment terms and it is the main difference between
this type and other types of invoices.

Do I have to use the commercial invoice for returned goods?

Just like in the case of personal items or gifts, for the goods return process, you have to use a pro
forma invoice because there is no need of paying for such products.

What is the difference between the commercial invoice and

the shipping invoice?
A shipping invoice shows how the goods are moved to their final destination, while a
commercial invoice allows the supplier to bill the buyer for such goods.

Is the commercial invoice also used when dropshipping?

Yes, you have to use commercial invoices for dropshipping as well

Can one commercial invoice be used for multiple exporting

products?
Yes, you can use a single commercial invoice if all the products are needed to be sent to the
same destination.

Don’t forget to place a copy of a commercial invoice on each package.

How the commercial invoice and bill differ between each

other?
In practice, commercial invoices are sent to customers after the goods are shipped.

Nowadays, original paper-based invoices can be replaced by electronic ones.

Bills are received from vendors.

They record expenses (or costs or inventory), and they record that the business owes the vendor
the amount of money that appears on the bill.

Speaking of the difference between the commercial invoice and the bill, it lies in the fact of the
shipment: commercial invoices contain a lot of shipping info while bills describe only goods and
their cost.

How to get the commercial invoice from Aliexpress sellers?

Not all Aliexpress sellers provide their buyers with commercial invoices.

However, you might need such documents while importing goods from China.

So what to do in such a situation?

First of all, you can always try to ask Aliexpress seller about the possibility of sending you an
invoice.

If this method hasn’t helped you, you can use some side Web programs for this.

For example, you can try to use the Aliexpress invoice generator.

Does the commercial invoice have to contain payment

terms?
Yes, the commercial invoice has to contain payment terms and it is the main difference between
this type and other types of invoices.

Do I have to use the commercial invoice for returned goods?

Just like in the case of personal items or gifts, for the goods return process, you have to use a pro
forma invoice because there is no need of paying for such products.

What is the difference between the commercial invoice and

the shipping invoice?
A shipping invoice shows how the goods are moved to their final destination, while a
commercial invoice allows the supplier to bill the buyer for such goods.

Is the commercial invoice also used when dropshipping?

Yes, you have to use commercial invoices for dropshipping as well

Why do some Chinese suppliers under-declare the total

value in the commercial invoice during export?
The main reason why Chinese suppliers can under-declare the total value of goods is to reduce
buyers cost.

Between the US and China, the general tariff was 0 until in 2019 Donald Trump changed it.
So in the case of US buyers, it is totally unnecessary to under-declare value from the recent time.

As a rule, the better part of Chinese suppliers will follow the instructions from foreign buyers to
make documents for passing through the customs clearance process only.

In some cases, foreign buyers can even prepare the customs documents with lower cost by
themselves and send them to Chinese supplier to print, stamp and send to shipping entity.

What are the consequences of having a commercial invoice

and normal invoice with different totals due to free of
charge items shipped?
None that we can think of.

In accounting terms, the only document which matters is the commercial invoice because it
shows the money that was paid as a result of the foreign purchase.

In the case of logistics, a commercial invoice is a customs declaration paper which is used to
calculate customs and duty charges when transporting goods across international borders.

Outside this use, it serves no other purpose

===================================================================

What is an Inspection Certificate?

An inspection certificate refers to a trade document that certifies the conformity of goods to
terms stated in a sales contract.

It ensures that the quality, quantity, import eligibility, price of goods for customs purposes, and
tariff classifications are appropriately met.

An inspection certificate is mainly issued by an inspection company and does not apply to all
types of goods.

Some of the goods that might need an inspection certificate include perishable items and
industrial equipment among others.
Sample of inspection certificate

What is the Importance of Inspection Certificate in Import-

Export Business?
An inspection certificate otherwise referred to as pre-shipment inspection certificate is important
in the import-export business in the sense that;

 Guarantees quality of goods – All goods are thoroughly inspected to meet the desired
quality expected not only by the importer but also by the consumer.
 Ensures that the quantity of the goods is as stated in the sales contract.
 An inspection certificate serves as a piece of evidence for any future claims by a 3rd
party.
 Reduces risks associated with imports and exports such as frauds.
 An inspection certificate prevents the use of fake transport documents such as the Bill of
lading.
Who Issues Certificate of Inspection when Importing from
China?
An inspection certificate is issued by a general inspection company. Some of the inspection
companies that issue inspection certificates in China include;

 The General Administration of Quality Supervisions, Inspections and Quarantine of

P.R.C (AQSIQ)
 China Council for the Promotion of International Trade (CCPIT)

What Details should Inspection Certificate have?

Some of the contents that an inspection certificate has are not limited to;

 Date of issue
 Date of inspection
 Place of inspection
 Applicant contact details
 The country of origin
 The description of the goods
 Number and date of the pro forma invoice
 The insurance policy number
 Number of packages
 The number and date of the bill of lading
 The gross weight
 Port of discharge
 Contact details of the supplier
 The code number of the custom tariff
 Type of packing
 Place of issue
 The name and signature of the authorized person

How do you Know the Authenticity of Inspection

Certificate?
Before purchasing your products, making sure that they are certified is a key factor.

However, when importing from China, you should beware of fake certificates.

This includes fake inspection certificates.

For you to authenticate your inspection certificate here are some tips you might consider;
A real certificate will be issued in PDF format.

 Any other certificate issued as .doc, .jpeg, .png, or scanned document should be an
alarming factor.
 Do your research – By this, I mean contact your inspection company and request to
verify the certificate from their online database. Note; not all companies will agree to
participate in this. Therefore it’s also crucial to wisely choose the inspection company
you are working with.
 Alternatively, you can easily do your research on Google and confirm if your inspection
company is certified.

As the buyer, most of the responsibility is inclined to you.

Therefore, make sure that you have the right documents to avoid any risks afterward.

What is the need of Pre-shipment Inspection?

Pre-shipment inspection refers to inspecting goods before the actual shipment begins.

It confirms that the goods in question have met the terms as stated in the sales contract.

Here are some reasons why pre-shipment inspection might be of great importance to you

 A pre-shipment inspection confirms that the products are in good condition and without any
malfunctions.
 Ensures that your goods have met the expected quality as well as quantity.

 A pre-shipment inspection also issues reports for billing as well as import.

 Your product safety should be one of the most important factors to consider. A pre-shipment
inspection will ensure that your goods have met the required safety standards for the market.

What Types of Inspection do you need when Importing from

China?
When importing from China, there are several inspections that you need to conduct.

Investing some little cash in the inspection procedures might save you from risks as well as
inconveniences later on.

Quality and safety inspections are one of the most important types of inspections for any
importer to invest in.

Here are four main types of quality inspections you will need when importing from China;

· Pre-shipment Inspection (PSI)

As the name implies, pre-shipment inspection is conducted after the production process has been
completed.
· Pre-Production Inspection (PPI)

Pre-production inspection otherwise referred to as Initial Pre-production Checks is carried out

before the production process commences.

The materials, as well as components used in the production of your goods, are tested to ensure
that they meet your requirements.

· Container Loading Check (CLC)

Soon after your goods have been produced and loaded into containers, a container loading check
will be conducted.

Its main purpose is to check that the packaging materials, barcodes as well as labeling are as per
your requirements.

· During Production Check (DUPRO)

Performing early checks on your goods are important as such will prevent you from
experiencing delays and other inconveniences later.

For this, you will need to perform a During Production Check (DUPRO).

As compared to other inspections, during production check inspection is carried out while goods
are still in the manufacturing process.

For this to be carried out, 10% to 50% of your goods should be completed and packaged.

Components are then picked randomly and tested to ascertain if they meet your product
specifications.

Is there a Specific Inspection Certificate Format for Export

in China?
Yes, there is.

Inspection certificates for export in China have a specific format as they are also different from
other export documents.

When should you Request for Third-Party Inspection

Certificate in Import-Export Business?
SGS Inspection certificate

You can request for a third party Inspection during the production stages or before packaging of
goods.

A third party inspection is carried out by an inspection company to ensure that the quality, safety
as well as performance standards are complied to.

This is an ideal option if you want a thorough inspection without having to travel to China.

However, most if not all inspection companies request upfront payment.

Your inspection company will either provide you with a “pass, fail, or pending answer after
conducting the inspection.

There are several third-party inspection companies in China and making use of them might save
you big time from the unforeseen risks.

What is included in the Report after a Third Party

Inspection?
After the inspection is finalized, the inspection company will submit a report regarding the
inspection conducted.

The report should include the following;

  The number of shortcomings found in inspected components.
 The type of defects found in the inspected units

 The total amount of the finished and packed goods in the factory. This will ensure that your
order quantities, as well as production timelines, are met.

 Photos of the inspected goods, test results together with any other findings

 Safety, performance, and functionality results for any on-site testing.

Third-party inspectors are there to represent you when visiting the factory and should not have
any form of relationship with the staff.

Failure to this might result in integrity issues.

Is there a Validity Period for Certificate of Inspection?

Yes, there is.

The validity period of a certificate of inspection is 5 years after which you will be required to
apply for a new one.

Keep in mind that you might be denied the certificate of inspection if by chance your products
fail to have maintained the required standards.

Are there Countries that don’t Require a Pre-Shipment

Inspection Certificate?
Yes, there are.

However, most if not all countries advocate for a pre-shipment inspection certificate.

Some of the countries that require a pre-shipment inspection certificate include;

Cambodia, Kenya, Iran, India, Indonesia, Congo (Brazzaville), Niger, Senegal, Togo, Mexico,
Mauritania, Ethiopia, Kuwait, Sierra Leone, Malawi, Mali, Central African Republic,
Bangladesh, Benin, Guinea, Mozambique, Cameroon and Comoros among many others.

Are all Certificate of Inspection the Same?

Not all certificates of inspection are the same.

There are different types of inspections available and therefore the tests and reports vary from
one inspection to the other.

Some of these inspections include;

 Pre-production inspection
 Pre-shipment inspection

 Container Loading Supervision

 Post shipment inspection

 During production inspection

When is Inspection Certificate Issued?
An inspection certificate is issued after completion of a related inspection certifying that the
goods meet the stated requirements.

In addition to that, the inspectors also take part in the signing of the inspection certificate.

Which Inspection Companies should you Hire when

Importing from China?
There are several inspection companies you could choose to hire from China.

Therefore, coming up with your ideal choice might seem quite challenging.

Nevertheless, here are some inspection companies from China that you might consider;

 Quazoom
 SGS

 Bureau Veritas InSpec

 Bay Source Global

 KRT Audits

 V-Trust

 Asia Quality Focus

 InTouch Manufacturing Services

 QUIMA

 Sofeast Limited

How do you Control Quality when Importing from China?

Importing from China does not guarantee you quality products.

China is a massive manufacturing hub and you shouldn’t be surprised encountering both quality
and fake products.

The existence of fake products is one of the main issues that discourage most first time
importers.

Quality issues can range from;

 Substandard products
 Damaged products

 Wrong color of items

 Substandard packaging

 Cosmetic defects
To avoid falling into such, here are some ways you could control the quality when importing
from China

Quality control elemtnts

 Conduct Quality Inspection –Use quality inspecting agents to ensure that your products
meet your required quality standards.
 Work with a certified and reputable manufacturer – With a certified manufacturer, you
are guaranteed of quality products as compared to dealing with an uncertified
manufacturer.

Most if not all reputable companies will always focus on maintaining their clients.

Therefore, to match this, they ensure that the products manufactured are of high quality as
expected.

 Work with sourcing agents and freight forwarders –This mostly comes through for
newbies in the import/export industry.

Sourcing agents and freight forwarders know the best manufacturers and suppliers in the market.

Therefore, working with them will not only lower risks associated with fake products but also
scammers.

 Inform your manufacturer that you work with quality inspection agents –This will ensure
that your manufacturer doesn’t compromise with the quality of your products.
 Purchase products under a contract –By so doing, your manufacturer will be geared
towards maintaining the required quality standards without failure.
 Specify your product requirements –Never assume that the manufacturer knows what
they’re doing.

Always make sure that you specify each of your requirements such as color, sizes, and materials
to avoid disappointments later.

What other Document do you need alongside Inspection

Certificate in Export-Import Business?
In the Export-import business, you should be prepared to have proper documentation for your
goods.

Apart from an inspection certificate, other shipping documents that will be crucial are not
limited to

 Bill of lading –A bill of lading is a trade document that described the quantity,
destination, and type of goods. Additionally, it is used as a shipment receipt once the
goods arrive at the destination.
 Insurance Certificate –An insurance certificate confirms that the goods are protected
against loss or damage. All information regarding the insurance coverage of goods is
stated in the insurance certificate.
 Import/export license – These two documents confirm that your goods have been granted
permission to be imported or exported into and out of a country.
  Test report – A test report approves that your goods have been tested and they meet the
required standards.

How can you Solve Quality Inspection and Certification

Disputes?
First, you can solve quality inspection and certification disputes by submitting the product
samples to a third party.

This method shall be unbiased for both the importer and the exporter.

The third-party method could involve conducting a third party inspection or simply through
mediation.

Quality inspection and certification disputes can also be solved through arbitration and litigation.

Arbitration involves the disputing parties choosing an arbitrator who will decide on their fate in
a binding, unbiased, and confidential manner.

If the disputes get out of hand, another way to solve it would be through a court (Litigation).

With this method, the judge will listen to both parties and decide on the case.

What is the Cost of the Inspection Certificate in China?

You are bound to spend from $268 onwards per single man day of work.

Remember, additional costs such as transport costs might be incurred.

Therefore, the prices might fluctuate due to a couple of factors including the type of product.

A product with a complex production process would require extensive inspection and therefore
you are likely to spend more.

However, if this seems out of your budget, you can choose the easy and cheaper way;

Request your supplier to send you as many photos and live videos. Also, request them to send
you a product sample.

Also, when making your purchases, ensure that your risks are minimized.

Is Certificate of Conformity the same as Inspection

Certificate?
Yes, it is. Both certificates are issued to certify that the goods in question meet the required
terms stated on the sales contract.

Which kind of Check does a Quality Inspector do?

A quality inspector is expected to do all kinds of tests and checks on the product.

The types of tests done will vary depending on the type of product. Some of the tests include;
  Packaging test
 Drop test
 Water pressure test
 Labeling test
 Function tests
 Wear and tear tests
 Visually look for any damage or defect on the product
 Material test

Is there a Process for Arranging a Quality Inspection in

China?
Yes, there is. After identifying your preferred inspection company all you have to do is inform
them of your requirements.

Here are some of the important items to highlight.

 Your supplier’s or manufacturer’s contact and location details

 Description of your products. You may send them photos as well as videos for extra
clarification.
 Describe the quantities that are being produced.
 Description of the packaging and labeling
 Outline your quality standards.

While doing this, it’s advisable to provide a physical sample as it will enhance the accuracy of
the entire process

============================================================

What is the bill of lading: The Ultimate

Guide (2020 updated)
A Bill of Lading is a very important piece of Paper in the shipping industry.

If you want to ship your products then check what you need to know about the Bill of Lading for
shipping

What’s the Most Applicable Bill Of Lading types?

Two types of Bills are practically used for shipping Sea bill of lading and the airway bill of
lading.

If you want to transfer your products in short transit time and you have a rigid deadline then
choose airway Bill of Lading.
Airway BOL is a little bit expensive but meets your deadline.

Another option is Sea/Ocean Bill Of Lading.

Sea BOL is a cost-effective and secure way of shipping.

Ocean Bill of loading is issued exactly at the time of loading products in the ship and right after
signature done by the shipmaster.

Keep one thing in mind, Bill Of Lading delivered when payment released under the conditions
on the letter of credit.

This type of ocean bill of lading is delivering when payment is conditional on a letter of credit

What is a notify party on Bill of Lading?

Name and address of a specific person are notified who should be updated with the arrival of
freight on destination

When am I tracking my cargo, why Bill Of Lading not

found?
There could be some reasons

Maybe you have not enteredBill of Lading Number

If you are using public access tracking service then verify your account number is correct or not

What is the difference between Bill Of Lading and Seaway

Bill?
Both are ownership documents for the shipping by the ocean, but never think BOL and Seaway
Bill have the same functionality.

A Seaway Bill is the confirmation proof of shipping products and receipt of transferred goods.

In another side, BOL is ownership document, contract of shipping while also used as a
document of title

1. The meaning of the bill of lading

What is the bill of lading?

The short name is B/L when you start shipping your products transport department give a
certificate to the consigner.

The interesting thing is, the word “lading” comes from the word “loading”

In foreign trade, the piece of document (certificate) is called Bill of Lading.

Another name certificate of ownership of the freight which allows shipping of your products.

The person has the bill of lading allowed to receive & exchange goods.

Bill of lading is the contract which allows the carrier to transfer goods from the loading port to
the destination port.

Most important and worthy document in the shipping journey but also the most misused
document.
  The contract of carriage
 Receipt of loading products

 Title of goods

The contract of carriage

To transfer freight required details about loading port, destination port, and regulations
mentioned in this paper.

The Bill of lading is a simple contract between buyer and seller.

BOL is a negotiable instrument and can be endorsed to the third party without any restriction.

Receipt of carriage

Details, number of loaded products & cost on freight services.

Title of goods

Required names for receiving party mentioned on the bill of lading.

This allows the holder to further transfer the products to someone else.

Who issues a bill of lading?

The bill of lading issued by the freight forwarder or shipping agent after properly
acknowledging the freight receipt.

Carrier or agent is responsible for the loss & profit during cargo transfer & consignee is the
other party mentioned on air waybill for which shipment is committed.
But keep one thing in mind authorization of carrier or shipping agent must be crystal clear.

When is a Bill Of Lading issued?

Bill of lading is issued at loading time. In case of ocean freight, BOL issued when ocean
container loaded.

But there’s another case at the time of rail freight multimodal Bill of Lading issued by the
freight forwarder.

2. The contents and filling of the bill of lading

1. The Bill of Lading NO
2. Shipper

3. Consignee

4. Notify party

5. Name of vessel or container

6. Place of receipt

7. Port of loading

8. Port of Discharge

9. Place of Delivery

10. Description of goods

11. Number and kind of package

12. Shipping marks

13. Gross weight

14. Freight & Charges Detail

15. Temperature Control

16. Freight forwarder or agent signature

17. Terms and conditions of

The Bill of Lading Number

Check the upper right corner of BOL.

When consigner starts shipping process he should provide ship name & Bill of Lading number
to the consignee.

Shipper

Shipper name and address is recommended to fill out in BOL, the code is also necessary.

Shipper detail is mandatory to proceed the process.

Consignee

All the information relevant to consignee is mandatory to fill.

Credentials required to contact the consignee phone number, fax number, and address.

Notify Party

This is about the receiving end, shipping company notify after reaching the destination port.

This section may have the same information Name, detail address, and phone number.

If you provide a wrong address or phone number, then how a company contact consignee to
inform about the freight status.

Name of The vessel/Container

Filling the name of shipment, container, and voyage.

Container name is required when the Bill of Lading shipped.

Actual time of loading cargo Fill onto the Bill of Lading.

Place of Receipt

This column is specified for the multimodal transport.

It indicates the location where freight forwarder receives the freight.

Port of Loading

This column should be filled by the name of the port from where cargo is loaded.

Port of Discharge

The column should be filled with the specific name of the destination port.

Port of discharge where all the products unloaded from the container.

You should pay keen attention when you fill this column.

You need to have the exact name of port for smooth shipping process.

Place of Delivery

This column indicates where the freight forwarder delivers the products.

Carrier fills this column under multimodal mode.

The terms of carriage involved are door to door, field-door, and station-door.
Description of Goods

The important thing is the name of products must be the same as the name on the letter or credit.

All the details about products mentioned in the Bill to make shipping process secure.

Gross Weight (Measurement)

If delivery details mentioned in the letter of credit, it should be filled according to rules and
regulations.

In another case, weight is mentioned in kilograms & volume in the cubic meter.

 Temperature Control Instructions

If you want to ship a refrigerator, the specific temperature should be mentioned in the column of
the temperature control instructions.

Two parts are included in the content of Bill of lading

1. Positive fact record

2. Back bill of B/L

Every shipping company formulated the contents approximately in the same way.

How to fill a Bill Of Lading (BOL)

BOL is the legal document of ownership used by shipping companies.

The main purpose of this document is the shipping companies or freight forwarders has received
the products

You should follow some instructions when you fill a Bill of Lading.

 Put your exact name and location in the appropriate field.

 Mention your purchase order on Bill of Lading.
 Insert the name and address of shipment receiver.
 Include some guidelines for the freight forwarder about the handling of shipment.
 If you already collect the shipping charges then mention.
 Mention the number of packages in the container & specify the type of packages.
 If you want to ship hazardous material then choose a special type of shipment & mention
on BOL to avoid any inconvenience.

Check how the BOL filled correctly by an example:

To get the better understanding to follow step by step.

1. Put the exact date

2. If necessary then fill with lading number.
3. Attach barcode to fill this field.
4. Enter pro number of freight forwarder.
5. Insert reference number for official use (optional).
6. 6 Insert Shipper and consignee’s name and proper address. ( Zip code is mandatory to
mention)
7. If a third party involved paying for shipment then mention the company name, contact
and address.
8. Some of the special notes should be marked on Bill Of Lading

 Special guidelines for delivery status

 Purchase order number
 Account number
 9. Indicate the shipment delivery date and time & mark for the proactive notification.
10. If you want your freight is collected by freight forwarder mark the BOL as COD (Collect
On Delivery)
11. Insert collect on the delivery amount, this is basically the price of the specific product.
12. Indicate verification of company for COD.
13. Mention number of shipping containers. Sometimes you don’t need to mention the
individual number of packages and items in a shipment.
14. Indicate the type of package typically package is boxes, barrels, and skids.
15. Enter the number if you ship individual pieces.
16. Mention unit of measures for weight and volume.
17. If you want to ship chemically hazardous material then first discuss with the freight
forwarder.

Special rules applied to such type of products.

Place simply X in this Column to mention products hazardous.

18. Write a proper description of products with the nature of the material. Your freight
forwarder helps you to determine the exact specification of your freight.
19. Insert item number of National Motor Freight Classification.
20. Your shipping charges based on the classification of products. Enter correct class
specification.
21. Put exact field in this field. If you want to ship different types of products then prepare
the list of things.
22. You need to mention the exact height and width of the products. If you want multiple
products to ship then list of shipment products required to attach with Bill of Lading.
23. Enter correct contact number in case of the emergency company can contact you.
24. Mention the name of the person or company who is responsible for the payment of
shipment charges.
25. Insert the declared price of products.
26. Mention the charges billed to the consignee.
27. Enter the name of Freight Forwarder Company (as the shipper) and sign the bill BOL by
the forwarder.
28. An authorized person from freight Forwarder Company sign the Bill of Lading and
mention the number of shipping containers.
29. All the details should be mentioned here who loaded the container & counted the
shipment packages.

What information must be included on the bill of lading?

 Shipper and carrier name and contact credentials.
 The date and port of shipment
 Freight Classification.
 Weight and volume of the shipment
 Types of Bill of Lading
 Description of the products according to the material and nature of goods.
 Special instructions to the freight forwarder.
3. The function of the bill of lading
Read this guide to know the functions of Bill of Lading

 Bill of Lading is the receipt of shipping products or the ownership documents to allow
the goods to be loaded into the container.
 The function of Bill of Lading is receiving goods, this is not only for loaded freight
carrier has issued the obligation to ship the bill of lading.
 Bill of lading is the proof of loading the cargo in the container, it also indicates the time
when products loaded.
 Loading goods mean seller to transfer the products to the buyer and transit time of
shipping also means the time of receiving goods.
 Bill Of Lading is the legal ownership of freight to transfer products and carrier has right
to receive goods on the destination port.
 If you transfer bill of lading to the third party it means you are transferring the right to
transfer goods.
 The freight forwarder is responsible if any product is damaged during shipping.
 After transferring the bill of lading from seller to buyer risk of damage products also
transfer to the buyers.
 The document is a legal contract to ship products by sea.

4. Issuance & correction of the bill of lading

A Bill Of Lading is the legal document issued by the carrier for the transfer of goods.

Bill of lading terms & conditions

In the year 0f 2013 The Federal Motor Carrier Safety Administration issues new regulations
about

New rules established to eliminate double brokers.

You cannot ship without brokerage license and keep one thing in mind freight breakage and
carrier responsibilities are not same.

You must follow the regulations, what is acceptable and unacceptable according to the shipper
and carrier.

If carrier finds any type of incongruity then shipper must create a new copy of Bill of Lading.

How Bill of lading works?

Bill of Lading works in a different way like:

 As receipt of products
 As a contract between carrier & shipper

 As a title of goods
Receipt of goods

Bill of Lading is a document issued as receipt of products, this is the evidence carrier receive
products in good condition.

As Contract between carrier and shipper

BOL is a contract to transport the freight from seller to buyer.

This contract is an evidence for the ownership of the carriage.

  As the title of the goods

A piece of paper is the legal proof of ownership.

The holder of the BOL has the right to claim the products to transfer to another party.

Consequences of an incorrect bill of lading

There’re different things you have to face by the incorrect filing of BOL

 Freight doesn’t transfer safely to the destination

 Claims

 Loss or protection from the loading port to destination port

 Loss of the right to transfer goods to the third party

Claims and clean bills.

When the cargo transferred by the shipping company according to the specified time the receiver
sign a document (Bill Of Lading).

Bill of lading signed if they are delivered in satisfactory condition.

When products delivered without any damage and in a satisfactory condition not even late then
it is called “clean bills”.
The other condition is the late delivery of consignment and your product is damaged during the
way then customer intends to fill a claim.

You need to mention nature of your claim on the Bill Of Lading before signing them.

What is the difference between a Bill of Lading and Freight Bill?

Both documents are approximately same but freight bill cannot provide evidence for transferring
products from one party to the other.

Fright bills is an invoice with 3PLs which helps to improve costs and resolve different problems.

Bill of lading in import

How bill of lading used in international trade shipments?

 Bill of Lading helps to maintain economic, social and political stability.
 Normally shipper support to deliver products and carrier issues the Bill Of Lading.

 It contributes to improving the domestic goods on the national level.

Transferability of Bill of Lading

The Bill of Lading is ownership document of title, having precise attributes which are
commercially important.

These attributes help to improve international trading.

5. Endorsement of the bill of lading

Endorsement Charges in shipping

A legal transfer of goods between parties is called the endorsement. It can be the amendment in
contract or legal document.

Shipping Guarantee/Bill of Lading Endorsement helps to avoid high charges and fluctuation of
price.

It guarantees the products delivers before Bill of Lading arrives.

You can transfer your goods without advance payment first.

Risk of the blank endorsed bill of lading

Blank endorsement means no owner of BOL.

In this case, the carrier becomes the owner of Bill and has the right to claim the products, and
responsible for the shipping of freight.

6. Recommendations of Bill of Lading

What is the importance of creating an accurate BOL?

Bill of Lading included a lot of information, don’t you ever think why BOL is so important?

Let’s read this article to know why

Name and address of the shipper and receiver are important.

If contact is not provided accurately your consignment could be delayed by the freight
forwarder.

Date & Time of Shipment is important, you can estimate the transit time of your shipping.

The specific date mentioned on BOL help to track the products.

The number of units loaded in the container is mandatory.

This information help to claim the shipping packages in case of any inconvenience.

Freight Classification helps to find out the exact charges.

Different type of products subjected to different charges according to the nature of freight.

Packing type– another factor to estimate freight charges.

This totally depends on the packing of products (cartons, skids, and drums)

Special Instructions helps to handle all shipping activities and processes.

Things to consider before signing the BOL

Some of the points you must keep in your mind before signing the Bill of Lading.

Verify The Shipper’s Identity

Verify all the information provided by the freight forwarder first.

The shipper has to assure the transporter’s service.

So make sure your shipper name, address and contact number should be mentioned on the Bill
Of Lading.
Port and Date of Loading

The Date of loading should be mentioned on the Bill of Lading.

Port and date of loading help to calculate customs duty & transit time of shipping.

Port of Discharge

You must know about the port of discharge, it helps to avoid deviation charges.

The condition of the Goods

Confirm the conditions of the products before loading into the container.

Mention the description of the products correctly on Bill of Lading.

After arriving at the destination port you can check the freight condition accordingly.

Commercial Terms

There’s no need to include any type of commercial terms in Bill of Lading.

If you mention these terms in BOL, ideally you should remove from the Bill of Lading.

Proof Reading

Filling the form carefully is an important thing but you need to double check your bill of lading
to evaluate the mistakes and missing fields.

You should make sure you fill your loading port and destination port accurately to avoid any
type of inconvenience

Checks to be made before signing bills of lading

You must keep some of the points in your mind prior to signing the Bill Of Lading.

Bill Of Lading is the piece of the document approved by the Charterparty.

Put the exact name of the vessel or container.

Provide detail descriptions about products you want to ship, place of loading freight, destination
to unload products, cost & transit time for shipping.

Check your Bill Of Lading with the shipping company is it correct to refer to specific places.

7. Common Types of the bill of lading & When to Use Them

Straight Bill of Lading

Normally used when to start shipping to a customer.

Straight Bill of Lading assigned to the specific team and team cannot reassign to any other party.
Straight Bill of lading is for the products that have already paid for & cannot sale again.

Order Bill of Lading

Type of Bill of Lading used for shipping when no advance payment paid.

You can read two important functions of to order Bill of lading

1. To order Bill of lading helps to prevent shipping to undesired people.

2. Consignee can ship the title of products to the third party with the endorsement.

Clean Bill of Lading

This type of Bill of Lading indicates carrier receive all the products in good condition and in
proper packaging.

The condition of received goods is the same as on loading time.

Unclean Bill of Lading indicates carrier receive the products with slight damage.

Inland Bill of Lading

When freight is totally transported by road or by land then this type of BOL issued

Rail freight is also included in this type.

Ocean Bill of Landing (Port to Port BOL)

Ocean Bill of Lading is a paper issued when your shipment transfer by sea freight services.

This is the ownership letter for shipper and carrier.

Express bill of lading

Express is the type of bill of lading in which carrier is assigned to deliver products to the
specific consignee without original Bill Of Lading.

Work mechanism of Express Bill of Lading is you can ask your freight forwarder for the
issuance of “Express Bill Of Lading”.

Just right after the customs clearance process, your customs agent send BOL directions to freight
forwarders and after that, you will get a copy of Bill Of Lading to reach on the final destination.

Advantages

Consignee doesn’t require original Bill Of Lading so shipping process is speedy.

 Shipper saves the courier service cost, you can send confirmation by Email.

Disadvantage
 This’s just a receipt of shipping products, it’s not negotiable.
  Without Original Bill Of Ladingshipping isn’t secure.

Through Bill of Lading

Different distributors and mode of transport required some documentation

This type of BOL issued if your shipment transfer by different distributors & mode of transport.

Bill of Lading issued for the ocean as well as land freight.

Multimodal Bill of Lading

As according to the name BOL issued, when your shipment transfer by different modes.

Ocean freight, Rail freight, and Road freight.

Mostly industries used multimodal BOL these days

Direct Bill of Lading

Different types of BOL mentioned here but Direct Bill of Lading is the most recommended type.

Your freight is loaded into the container, the same container will deliver your cargo to the final
destination.

Stale Bill Of Lading

Bill of Lading presented to the bank administration or delivered to the carrier after safely
reached the destination port.

Received Bill of Lading

A simple form of Bill of Lading presented your freight arrived at the port and safely loaded on
the container.

You must use some temporary Bill of Lading if your shipment is delayed.

Clause Bill of Lading

“Bad Bill Of lading” or “foul Bill of Lading” in which delivery of your products is totally
opposite to the expectations regarding quality.

Bearer Bill of Lading

In this type, a bearer of the BOL is totally responsible for cargo

Consignee name is not mentioned in the Bill Of Lading.

This is the unique type, but be aware chances of misuse are also high in this kind of BOL.

Switch Bill of Lading

Most convenient option Bill of Lading can be replaced with the new one.
This document is issued at the loading time of shipment.

Seaway Bill of Lading

Seaway bill of lading is a document issued to shipper and carrier.

No original Bill of Lading is required products authentication is automatically processed & send
to the destination port.

Seaway bill is also known as express release Bill of Lading.

Original Bill of Lading

A very simple document consists of straight Bill of Lading and in order bill of lading assigned to
the shipper and carrier to precede shipment process.

8. Mistakes you need to avoid on BOL

 Description of the freight wrongly
 Be concise to write your product description. Name of freight & details should be mentioned
carefully on Bill of Lading.

 Number of freight containers wrongly mentioned

 You should mention the number of containers/ vessels and in some cases a number of products
in one container.

 Be sure how many products you order to ship and verify on the destination port.

 No precautionary measures for hazardous material

 If you want to ship dangerous material, you need to take care of safety measures.

 Label the Bill of lading appropriately and learn how to ship your hazardous products safely

 Improper communication with the freight forwarder.

 Make sure you are providing required information to the freight forwarder. If your carrier needs
to ask some questions then answer carefully to make your shipment process easy.

 Fill wrong information in the contact section

 Bill of Lading is the document which is the evidence of the carriage. Your freight forwarder may
need to contact you in any case of emergency. You must provide the correct contact
information to avoid any type of inconvenience.
Missing information in Bill of Lading

Check twice the BOL and make sure all the fields have been properly filled out.

Not Understanding Rules and Regulations on Bill Of Lading.

Understand all the terms and conditions and recognize your responsibilities.

The consequence of Not Used or Inaccurate Bill of Lading

The worst consequence of incorrect filling is you wouldn’t get your shipped products.

But there’re some other consequences which effect badly.

· Exposure to claims

If the products loaded in good condition from loading port but received in damaged condition at
the destination port.

Consignee will allow exposing a claim for the damage.

Another example will help you to understand if your shipment consists of 100 boxes but 90
arrived at destination consignee have the right to make claim against the BOL carrier.

· Criminal action

· Loss of the right of protection

Solutions to Ensure Your Bill of Lading is Correct

This’s incredible, shippers and carrier how to deal with risk factors &compete with their
opponents.

To ensure your Bill Of Lading correct follows some tips.

Use Standard Bill Of Lading

If you try to find Bill Of Lading form from the internet you can have a varietyof bills to
download.

You should choose the most suitable Bill Of Lading you are familiar with.

Triple Check before Signing Bill Of Lading

To avoid any type of inconvenience check 3 times before signing this legal document.

It’s an authorized document so it’s very important to check

Frequently Asked questions about Bill Of Lading

I have lost my original Bills of Lading. Can I obtain a new set?

If you lost your original Bill of Lading, normally you cannot get a new copy of the bill.

You need to come with the court orders for the issuance of the new document.

Court contact to the carrier and order to release shipping line & court also order to the shipper to
pay the cost of the document.

You are advised to take care of your document to avoid such type of inconvenience.

How do I fill out a Master Bill of Lading?

Master Bill Of Lading document has detail instructions on how to fill out the bill of lading just
follow step by step process.

Can I have more than three original Bills of Lading at the same time?

No worry to have more than one Bill Of Lading but three BOL is standard numbers like:

One Bill Of Lading is for Shipper, one for the career and the other is for the broker.

It’s recommended to apply for the issuance of BOL as according to your actual need.

If you applied for the multiple Bills Of Lading, the risk factor of fraud & scam increased.

Conclusion
Bill Of Lading is really important for the trade.

It’s an agreement between carrier and shipper.

Carrier sign to give permission for the shipping of products. B

ill holder has the right to transfer their goods to the third party.
This’s the contract between Consignee and consigner to transfer products by the door to door
delivery too.

Bill of Lading also helps at the time of documentation and customs clearance, in a way we can
check as shipper what is the quality of the service.

Freight forwarder helps in the issuance of Bill Of Lading and how to fill Bill of Lading correctly

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