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01.transport Handbook V3 6 0
01.transport Handbook V3 6 0
Notes:
Table of contents:
1. General information..............................................................................................................3
1.1. Domestic Transport: Main steps...................................................................................4
1.2. International Transport: Main steps..............................................................................4
1.3. In -Kind Donations........................................................................................................4
1.4. Packing..........................................................................................................................4
2. National Transport................................................................................................................5
2.1. The Delivery note..........................................................................................................5
2.2. Shipping........................................................................................................................6
2.3. Reception.......................................................................................................................6
3. International transportation...................................................................................................6
3.1. Choosing between air, sea or road freight.....................................................................7
3.2. International freight documents....................................................................................7
3.3. Exporting.....................................................................................................................10
3.4. Importing.....................................................................................................................10
3.5. Common problems......................................................................................................12
3.6. In case of damages or definitive loss..........................................................................13
3.7. Storage.........................................................................................................................14
4. Transportation contracts......................................................................................................14
4.1. Criteria used to select a carrier or forwarding agent...................................................14
4.2. Transportation contract...............................................................................................15
4.3. Insurance.....................................................................................................................15
4.4. Shipping costs.............................................................................................................16
5. Cold Chain..........................................................................................................................17
5.1. Products requiring cold chain......................................................................................17
1. General information
Freight may be shipped either domestically or internationally, either of which can be carried
out through a variety of methods – road, air, sea, rail, etc., or any combination thereof. When
planning, the logistician must foresee and organize various phases of the shipment.
In Action Against Hunger’s work, time is frequently a crucial aspect of the process. However,
it is equally important to define other relevant criteria: security, quantity, cost, particular type
of product, and others. This information will help determine the transportation mode and the
most advantageous conditions for shipment.
In conflict areas it is often necessary that Action Against Hunger or the forwarder
inform/obtain authorisation from authorities (civil, military, armed groups/militias, etc..)
before the arrival of the shipment.. And, of course informing the consignee is essential.
The INCOTERMS (INternational COmmercial TERMS) are the thirteen terms of sale accepted
worldwide in assignment of costs and responsibilities between the buyer and the seller.1.
Incoterms are essential to consider when you organise an international shipment and must be
part of the negotiation with the supplier. You will find a detailed explanation of Incoterms in
Additional Tools: Incoterms 2000 explanation
1
http://www.businessdictionary.com/definition/INCOTERMS.html
1.1. Domestic Transport: Main steps
Action Against
Supplier or
Loading Transportation Un loading Hunger warehouse /
warehouse
Program site
Customs
International
Customs
freight:
Air
Sea
Road
Action
Supplier or Pre Post Against
Loading Unloading Loading Unloading
warehouse Transport Transport Hunger
warehouse
Occasionally Action Against Hunger has access to transportation services provided by donors
or other NGOs. Depending on HQ, these services may be considered in-kind donations and
need to be recorded. Please check with your Log Coordinator/Log Mission on applicable In-
Kind Donations procedures.
1.4. Packing
Packing is an important part of the shipping process, as it will ensure protection of the goods.
Regardless of the selected Incoterms, the packaging and stacking are ALWAYS
under the responsibility of the seller/sender.
Make sure the packages are properly marked with relevant stickers (f. ex. Fragile, Handle with
care, Keep away from heat (solar radiation), etc). It is also helpful to include a document
detailing the content and relevant codes which can be put in a plastic sheet glued to the box.
See Appendix for Pictures
For air shipment of particular goods (hazardous items, animals, vaccines, etc), specific warning
notices should be available at the air freight company.
For international shipments, the most common packing are palettes and containers.
See Annex for detailed figures on shipping size, volume, and capacities..
When packing, bear in mind that there are two different options:
- An FCL container is Full Load Container, which means that you are sending a
container complete with your own goods.
- A LCL container is a Less Container Load, indicating a collective shipment. It entails
the process of consolidating and unconsolidating.
Goods can also be sent in bulk. With this option, goods are loaded without packing and/or
jumbled. This option may be suitable for raw materials.
Some goods, such as vaccines, must be transported according to Cold Chain requirements.
2. National Transport
When shipping domestically or regionally, the logistician must explicitly state the breakdown
of responsibilities (cost and risk) between Action Against Hunger and the carrier. These
liabilities must be formalized in the Transport contract.
The delivery note is the basic tool used in transportation; it defines the transportation details,
the goods, and the breakdown of responsibilities. A standard Delivery Note is prepared in
triplicate.
The Delivery Note is an internal document which has official value; potential reductions in
final payment are based upon the information stated on the Delivery Note.
Correct use of the Delivery Note
Shipping:
The sender prepares the Delivery Note and signs it.
The carrier then signs the Delivery Note at this point, he/she takes responsibility for the goods.
The sender keeps the white (top) copy ()
The carrier keeps the blue and green sheets (2nd and 3rd copies).
Reception:
The consignee verifies the quantity and quality of all the goods. In the case of a shortage or
damaged goods, the consignee must note his findings before signing the document and
before splitting copies 2 and 3. Any notes must be indicated on both the 2nd and 3rd copies.
Once the consignee signs the delivery note, he/she becomes responsible for the goods.
The consignee keeps the blue copy (2nd).
The green copy (3rd) goes back to the sender to provide him status of the reception (all clear,
or any notes?).
If the supplier / partner /Forwarder does not have Delivery note forms, a Reception Note must
be issued.
2.2. Shipping
Before actual shipment takes place, the sender must ensure that the packing is sturdy enough to
endure shipping and handling.
The sender must prepare all necessary documentation before loading, and both sender and
carrier (or representatives) must be present during the loading process.
For contracted transport, the sender must carefully verify the ID of the carrier and registration
of the vehicle. All this information must be mentioned on the Delivery Note
2.3. Reception
In cases of damaged goods, Action Against Hunger is entitled to refuse acceptance of the
shipment. In such cases, notes must be made on the delivery order/receipt. If the refusal is not
formally indicated, Action Against Hunger is considered to be in receipt of the goods and can
make no further claims against them.
3. International transportation
When the freight is transported across borders, all international rules should be followed, and
relevant documents (Bill of Lading, Air Waybill, Manifest….) should be prepared, in addition
to those required by Action Against Hunger rules.
The three main ways to organise an International shipment are by road, by sea, and by air. To
choose between these three it is necessary to balance the timing, fees, and security of the
shipment.
Planes can reach any airport within a few days, but costs are high. On the other hand, a boat
will take a few months to deliver yet costs will be low. Either of these two options ultimately
needs to be combined with a road transport in order to reach your departure point or final
destination, which thus implies a consideration of pre- and post- transport.
Road transport offers flexibility (door to door service) and low costs, but risks are higher as the
truck may need to pass several different frontiers, road conditions may be difficult (access,
security…), and the possibilities of transhipments are higher. One way to reduce risk is to seal
the truck (possible only when sending a full truck).
When calculating the timing of a shipment, make sure you think “door to door”, including all
the different steps involved (transit, waiting time, loading, unloading, post- and pre- transport,
customs clearance, delays due to collective shipment…)
Further, you will need to know or define other important information about shipping and
receiving such as:
The capabilities required of the selected transportation method >> Capabilities of air
containers, capabilities of sea containers, caracteristics of main air cargo
The Incoterms as described in chapter 1 – General information >> incoterms 2000
ICC, and incoterms explanations
Another way Action Against Hunger uses to transport goods is to have the freight carried by
field staff, HQ staff, consultants, and national staff. This option permits goods to be shipped in
a very safe way, with a minimum of administrative procedures in a minimum amount of time.
However, depending upon the size/weight of the shipment and the type of airplane ticket held
by the staff member, this may turn out to be a costly way of transporting. If the traveller
already has some luggage, the airline will charge for overweight baggage. Customs in some
countries checks personal luggage thoroughly. It is strongly recommended that you check each
country’s customs regulations in advance; be sure to prepare all relevant documents and
declare the goods at the customs in cases of purchases without VAT.
3.2. International freight documents
The logistician must pay close attention to all information stated in the documents. An
incorrect transit point or consignee name will have consequences in terms of shipping delays
and delivery fees. .
When NGOs/IOs, other agencies, embassies and so on are grouping their shipments it is
advised that only one of them is mentioned on the transport documents to avoid difficulties
at the custom.
In many countries the NGO can request customs exemption status. The Log Coordinator is
responsible for investigating, obtaining and maintaining customs exemption for the respective
country. Customs exemptions may be temporary, or limited to a certain type of goods.
3.2.2. Manifest
A manifest mentions the type of goods sent their origin and their destination.
3.2.3. Waybill
Each different mode of transportation requires the carrier to create official paperwork;
documents have different names depending on the type of freight. These documents play an
important role in the transfer of property, and also act as delivery orders for the goods:
When transporting (fresh) food items, a Sanitary Certificate is required when crossing a border.
The Veterinary Department of the origin country of the goods should deliver the certificate.
A Phyto-sanitary Certificate is necessary for food made from vegetables (canned food, pasta,
…) and must be delivered by the Anti Fraud Unit or the Ministry of Agriculture. This
document proves that the goods are produced by and may be sold in the country of origin, and
they are free of parasites and disease.
The Certificate of Origin, while not always necessary, can ease customs clearance. It is a Proof
of Origin of the goods and may be requested from the relevant Ministry (according to type of
goods). The Certificate of Conformity and Certificate of Analysis are two other frequently
requested documents. Generally, the Mission must check with the relevant customs authorities
as to what the required entry documents are, and inform the sender before the shipment leaves
the country of origin.
3.3. Exporting
Action Against Hunger mission may need to export goods. The transfer of equipment and
purchases to another country is done by the capital office.
Items purchased for export are typically exempt from VAT. In some countries NGO’s are duty
free for import but not for export.
Export procedures are complex, and the use of a clearing or forwarding agent is helpful. The
clearing agent can estimate the cost of his/her services by consulting the packing list and
invoice indicating the weight and size of the package.
It is important to request quotes and background references from several agents.
When exporting, the logistician must coordinate the arrival of the shipment. He/she must
prepare the necessary documents according to the needs of the import country. (Name and
address, additional paperwork, special marking on parcels.) Effective communication between
exporter and importer is essential.
The physical packing and the volume/weight of items must take into consideration the mode of
transportation. If the forwarding agent needs to re-pack or fasten packages together, he/she
should inform Action Against Hunger. Careful attention must be given to packing.
When storing shipments in the import/export zone, the first 72 hours are commonly free of
charge; after that, the airport will charge per day and per ton or square meter used.
As soon as the shipment has been handed over to the carrier and the documentation is ready, all
the original documents are sent to the consignee through express mail (DHL, TNT, Forex, etc.).
When there is a choice between various express mail companies, the decision is based only
upon the presence of an office in the consignee country.
A freight notice must be sent to inform the consignee of all shipment details.
3.4. Importing
- Determine any need for specific authorizations. The importation of certain goods can
be subject to authorization by a specific, relevant administration: Ministry of health for
drugs and RUTF, ministry of telecommunications for radio and satellite equipment, etc.
- Identify a competent employee for the clearing process or contact a clearing agent.
Usually a clearing agent will not take responsibility for the cargo, and will request that a
consignee representative take possession of the goods once they are released from
customs.
Normally the consignee should have received all the freight documentation prior to the arrival
of the shipment. In this way the clearing process - often a lengthy one - can be initiated. The
actual transfer of responsibility to Action Against Hunger is the critical moment, and depends
on the adopted Incoterm. The consignee must keep the sender informed of the freight status:
arrived, in clearing process and received.
Quality and quantity control must take place (whenever possible) while the shipment is in
customs. If the packing is damaged, the contents must be verified. Any discrepancies must be
noted immediately on the waybill in the presence of the shipping agent and the customs officer,
both of whom should sign the waybill.
Customs and tax authorities can request documents or proof of shipping years after
shipping, so it is very important to keep all documents well archived.
When the Capital Logistician hands over to another logistician, it is important to provide a
complete briefing on customs procedures as well as an introduction to, or information
regarding, several clearing agents.
Standard procedures
As soon as goods arrive within the borders of the importing country, they are consigned to
“customs custody.” Authorities will then proceed to verify that:
Actual goods match the supporting documents
Declared value of the goods matches the purchase value as indicated on the invoice
Goods conform to local standards and regulations, and that relevant importation permits
have been obtained for particular items such as medications. Based upon these
assessments, customs will calculate the amount of duties due, and will release the goods
once this amount has been paid (as well as storage costs, administrative costs and other
related charges).
These procedures are frequently lengthy and may take weeks or even months in some cases,
particularly if the goods have to be cleared by the ministry or other relevant government
agency.
Failure to properly prepare the goods for arrival is a common source of delay and
complications.
B. Pre-customs clearance
In most cases, the administrative paperwork can be set in motion before the arrival of the
shipment by presenting the relevant documents to the appropriate government authorities. This
process can considerably reduce the amount of time that goods remain in customs custody,
storage costs, (usually very high) and risk of theft. The documents can be airmailed to the
mission as soon as the freight is loaded.
As pre-customs clearance can reduce costs, it is best that the goods remain in the
exporting country until the importing mission is prepared to accept them.
C. Accelerated procedure
With the cooperation of Action Against Hunger partners such as various ministries and
authorities that Action Against Hunger coordinates its work with, it is often possible to adopt
accelerated procedures. Such procedures allow for a more rapid release of goods and
subsequent customs clearance.
In some countries, this procedure is automatically authorised when importing perishable goods
requiring special storage conditions - especially if customs cannot guarantee appropriate
storage conditions. Typically this is the case for medicines which require a cold chain.
It is essential to ensure that you will have all equipment needed for the unloading process:
tarmac access, trucks, loaders, forklift (for planes without ramps), containers, palettes, etc.
Both workforce needs and mode of transportation need to be foreseen.
Freight from a 25T airplane cannot be transferred into 5*5T trucks, you have to think in
terms of volume. Check the packing list to see if there are items with particular size or
weight that cannot be lifted by human power and make sure it fits into your transport.
3.5. Common problems
The airway bill has not been completed properly. Example: the final destination is
indicated as Nairobi when it is in fact Bujumbura.
The packing of items is poor and parcels or bags have been damaged or have come
open.
Some clearance documents are missing.
Notes about damage have not been made on the waybill while the goods are in customs;
this means the carrier is no longer liable for any damages incurred during transit.
Only one part of the freight has arrived. Sometimes shipments go through several transit
points and can be split up because of lack of space on the transport vehicle. In this case
it is frequently possible to do a partial clearing of the goods (customs and carrier
representatives will indicate on the waybill which portion has arrived and when the
balance of goods is expected.)
More items than those indicated on the waybill show up in the shipment. In this case
the consignee must immediately instruct the carrier to inspect the cargo and prepare a
new waybill.
The freight does not arrive on the date expected. This frequently happens because the
carrier is obligated by international shipping conventions to deliver the cargo within
three months. Thus the carrier may indicate that the shipment is arriving on a particular
flight, but deliver on this same flight in a different week than expected.
If upon the receipt of goods you notice or have any suspicion that
parcels, palettes, or boxes are missing or damaged, or
the contents do not match the packing list,
it is essential to immediately note these details on the Delivery Note and obtain the signature of
the carrier.
A comprehensive letter acknowledging receipt should be sent to the sender of freight as soon as
possible, including all information about the shipment, a detailed explanation of the damages or
discrepancies in goods, and a copy of the Delivery Note. Without proper documentation, the
claim will be inadmissible for insurance.
Ideally the initial report should be made while the shipment is still in customs or when the
clearing agent is handing over the goods to the Action Against Hunger representative. The
procedure would be:
1. Indicate on the waybill any visible damage or loss and obtain customs and shipping
agent signatures.
2. Inform the carrier representative or agent by registered mail.
3. File a claim for rapid reimbursement from the insurers by sending a complete record of
shipping including:
- The original insurance certificate
- A statement of damages or loss
- Photos of damaged goods
- A copy of the registered letter sent to the carrier
- Any correspondence with carrier
- The original invoice
- The transportation documents
- Any other documents relevant to the claim
If the damages are not apparent and discovered only after clearing customs, the consignee has
three days from to file a complaint to the shipping agent. Reimbursement for a claim filed after
the clearing process is over is exceptional.
If the shipment has come from HQ, you should quickly send them a report with pictures and a
detailed narrative so that they can get in touch with their agent. HQ will conduct the follow up.
3.7. Storage
The transfer of ownership of the goods is a precarious phase, especially in some countries
where rules are not clear, corruption exists, and so on. It is recommended that Action Against
Hunger use its own storage facilities to increase security.
Making less frequent shipments with larger quantities will reduce shipping and administrative
costs, and enable Action Against Hunger to maintain better control over the movement of
goods.
4. Transportation contracts
The logistician can contract either a freight forwarder or directly a freight carrier. Freight
Forwarder provides logistics services as an intermediary between the shipper and the carrier by
organizing all transportation formalities: export documentation, shipping, storage if needed and
customs clearance if required. A freight carrier is only responsible for the organization the
shipment. Customs clearance, insurance, and so on are the responsibility of the seller or the
buyer according to the adopted Incoterm.
Organising international transport requires particular skills that are not always available within
the team. If shipping or receiving is infrequent, it is advantageous to subcontract to a
professional because he is specialized in these services and will therefore be able to conduct the
process more quickly, often at less cost. For Air or Sea freight it is very difficult establish
direct contact with the carriers, who usually work only with professional shipping companies.
The forwarding agent frequently groups services together (shipment, customs clearance, pre
/post transport). To do so he will be subcontracting some of the tasks, which will increase
certain costs but save time and energy, therefore decreasing costs overall
Criteria for the selection of such a supplier may include the cost (see quotation 4.4.4), the
connections in supplier has in the country of destination and/or origin, and the quality and
reliability of his services. It is important to get references from other NGOs.
Other criteria include:
- Reliability, references, bank guarantees, expertise in track of vehicles
- Ability to organise (or subcontract) the transport services from the departure point to
the delivery point. Contracting with several successive carriers increases the chances for
complications.
- Vehicle features (containerised, air-conditioned, full wheel drive etc.)
- Cost per weight/volume per km, or cost per vehicle/km
- Insurance and liability
Performance
Please note that these criteria are only examples and may change if the donor funding the
transport services requires otherwise.
A general principle for handling transportation is never to pay for services in advance; payment
is made when the freight has arrived and the contents have been inspected. However, in many
cases freight forwarders / carriers require a prepayment. Any transportation services requiring
advance payment of more than 50% as pre-payment should not be accepted
4.3. Insurance
Usually, insurance is included in the transport contract. You should request a detailed quote
from the carrier in order to determine the cost of insurance. Cost will depend upon the
destination, the goods, the packaging, and so on. Most insurance offered is standard, and
reimbursement is quite low.
For Donation or Second hand goods: It is very difficult to get reimbursed as there is not
original of invoice to prove the value.
Therefore, you must always attempt to obtain an invoice for donation or second hand
goods. Alternatively, the estimation of the freight cost can be done through external
and costly services.
Without a proper estimate of the freight value before the shipment, there is no reason
to subscribe for insurance.
See 3.6 In case of damages or definitive loss in this handbook
In case of complete loss of a shipment you must obtain a loss certificate within 30 days from
the carrier.
For sea freight, an official report made by the appropriate department of the port is
necessary.
If damages, missing goods and/or other problems are noticed after the shipment has been
accepted:
Road freight: you have 7 working days to officially declare them.
Air freight: you have 14 calendar days to officially declare them.
Sea freight: you have 3 calendar days to officially declare them.
Volume is estimated as 1 Metric Tonne = 1 M3 (cubic meter); the greater of these two figures
will be the number of units you will pay for (there are special procedures for items like cars,
animals…).
For example, if you send 9T of BP5 and the volume for this shipment is 10 M3, you will pay
for 10 Units. Afterwards, you will need to ascertain the price of local transport for a unit.
In some cases when sending a complete container, there may be a “box rate”. In addition, you
will need to estimate any additional charges such as leasing the container, handling, and so on.
It also important to know whether the freight fees have been negotiated as “Free In and Out”
(FIO). If the price is not FIO, it means that additional fees may be added according to the terms
of the Liner (positioning the goods on the dock, loading-unloading from the boat, and so on....).
In the appendix you will find an “International transport price examples” with a fee
comparison grid for the different modes of transportation. These fees were estimated in early
2009, and are provided to give you an approximate idea of costs (for your cash forecast, when
preparing a proposal…). You will still need to confirm the costs locally.
4.4.2. Air Freight
Volume is estimated as 1 Metric Tonne = 6 M3; the greater of these two figures will be the
number of units you will pay for (there are special procedures for items like cars, animals…).
For example, in case of a shipment of 0.1 MT for a volume of 0.9M3, the theoretical weight is
0.9/6 = 0.15 MT. You will use the highest figure: 0.15 MT.
Typically, there is a price scale per ranges of weight; the rule is to select the range that is most
advantageous for the sender, including using the next higher category if it is advantageous. The
transport price does not include insurance, the LTA creation, loading, etc.
For example, from 45 kg to 99 kg the price is 55€/kg and from 100kg to 500kg the price is
40kg. If your shipment is 90 kg, you have 2 choices: 90x55=4950€ or 100x40=4000€.
Therefore, the second option should be selected.
In the appendix you will find an “International transport price examples” with a fee
comparison grid for the different types of freight. These fees were estimated in early 2009, and
are provided to give you an approximate idea costs (for your cash forecast, when preparing a
proposal…). You will still need to confirm costs locally.
There are no international fee rules for road freight; this should be negotiated locally.
The quotation is an estimate detailing the different steps & fees for the services provided by the
carrier or the forwarding agent. The requested terms and criteria for carrier selection must be
included on the written RFQ to the carrier / forwarding agent, and the response must be in
writing. More information about the Request for Quotation, types of Quotations, and
procedures used for selecting transport services can be found in the Procurement chapter. The
information on the RFQ particularly relevant to transportation includes at least the following:
Transit time
Frequency of departures
Pre transport/Post transport
Grouping
Loading
Mode of transport
Taxes
Insurance
The procedure for selecting these services is the procedure for service market as mentioned in
the Procurement Chapter.
5. Cold Chain
5.1. Products requiring cold chain
The shipping of products requiring a cold chain entails extra care and attention. The products
must be maintained at a constant temperature throughout the journey. They must therefore be
packed in cold boxes with ice packs.
The cold accumulators to be used are those filled with water. Blocks of ice may be used if the
constant temperature can be maintained. Eutectic mixtures (for camping) and Glycol mixtures
(green or blue) are not suitable for vaccines.
It is important to thaw them out properly in order for them to be fully effective.
There are various different types of cold boxes. A selection should be made based upon:
- Capacity – interior volume of the packaging compared with the volume of the cold
accumulators.
- Autonomy – the number of hours for which the temperature remains below 8ºC inside
the box.
- Sturdiness
- Weight of the cold box when empty
- Color - the cold box should be clear.
- Place the cold accumulators in the cold box when their temperature reaches 0ºC.
- Place an LCD thermometer inside.
- Place the vaccines and diluting agents (if vaccines are in powder form) that
tolerate freezing into the bottom of the cold box. Some vaccines are unusable
once they have been frozen (DPT, DT, Td, TT, Hep A and B, Hib). Ensure no
contact with the accumulators.
- To avoid damage in transit, fill in the empty space to stabilise the contents.