Module V - Shipment of Export Cargo

A. Role of intermediaries in exports

INTERMEDIARIES:- Export Management companies , International Trading Companies , Manufacturer/s agents

,Manufacturers export agents , Export and import brokers , Freight forwarders.

ROLE: In international trade, an individual or firm that brings together buyers and sellers for a fee without taking
part in actual sales transactions. Typically prepares the documentation, suggests shipping methods, navigates trade
regulations, and assists with details like packing and labeling. At the foreign port, the freight forwarder arranges to
have the exported goods clear customs and be shipped to the buyer

B. Packing, marking, labeling for exports

PACKING: The primary role of packaging is to contain, protect and preserve a product as well as aid in its handling
and final presentation. Packaging also refers to the process of design, evaluation, and production of packages.The
packaging can be done within the export company or the job can be assigned to an outside packaging company.
● Physical Protection – Packaging provides protection against shock, vibration, temperature, moisture and dust.
● Containment or agglomeration – Packaging provides agglomeration of small objects into one package for
efficiency and cost factors. For example it is better to put 1000 pencils in one box rather than putting each
pencil in separate 1000 boxes.
● Marketing: Proper and attractive packaging play an important role in encouraging a potential buyer.
● Convenience - Packages can have features which add convenience in distribution, handling, display, sale,
opening, use, and reuse.
● Security - Packaging can play an important role in reducing the security risks of shipment. It also provides
authentication seals to indicate that the package and contents are not counterfeit.

MARKING: Marking means to mark the address, number of packages etc. on the packets.It is essential for
identification purpose and should provide information on exporters' mark, importers' mark, port of destination and
place of destination, order number and date, gross, net and tare weight and handling instructions. It should also be
ensured that while putting marks, the law of buyer’s country is duly complied with.

LABELING: Like packaging, labeling should also be done with extra care. It is also important for an exporter to be
familiar with all kinds of signs and symbols and should also maintain all the nationally and internationally standards
while using these symbols.
Labeling should be in English, and words indicating country of origin should be as large and as prominent as any
other English wording on the package or label.Labelling on product provides the following important information:
Shipper's mark, Country of origin, Weight marking (in pounds and in kilograms), Number of packages and size of
cases (in inches and centimeters), Handling marks (international pictorial symbols), Cautionary markings, such as
"This Side Up.", Port of entry, Labels for hazardous material
C. Modes of transport of export cargo

The mode of transport depends on the terms specified in the contract entered between the exporter and importer.
These are the following modes of transport that are normally mentioned in the contract.

1. Sea Transport : Sea transport involves carriage of goods by the ship from the point of shipment to the port of
discharge.Sea Transport advantages include:• possibility to ship large volumes at low costs • Shipping containers can
also be used for further transportation by road or rail. However, there are also risks for sea transport: • shipping by
sea can be slower than other transport systems and bad weather can add further delays • routes and timetables are
usually inflexible • tracking the goods’ progress is difficult • port duties and taxes • further transportation overland
might be needed to reach the final destination • basic freight rates are subject to fuel and currency surcharges

2. Air Transport; Air transport offers numerous advantages for international trade, depending on the requirements. It
can: • deliver items quickly over long distances • give high levels of security for sensitive items • be used for a wide
range of goods. However, there are the following risks: • air transport can involve higher costs than other options, and
is not suitable for all goods • flights are subject to delay or cancellation • there are taxes to be paid in each airport •
fuel and currency surcharges will usually be added to freight costs • further transportation may be needed from the
airport to the final destination

3. Multi Modal Transport : Multimodal is a combination of different modes of transportation such as rail, road, and
sea which allows the customer to cost-effectively manage shipments from start to end, ensuring optimum care and
efficiency every step of the way.

4. Road Transport. Road transport advantages:Low cost ,Extensive road networks ,Possibility to schedule transport
and tracking the location of goods ,Safe and private delivery ,Risks for road transport: long distances overland can
take more time,there can be traffic delays and breakdowns,there is the risk of goods being damaged, especially over
long distances,toll charges are high in some countries,different road and traffic regulations on some countries

D. Containerization and Role of Inland Container Depots

Containerization is the practice of carrying goods in containers of uniform shape and size for shipping.Containers are
the facilitators of inter modal transportation, i.e. movement of goods from one mode to another without the necessity
of unloading and reloading. Exporters need not go to the seaport for export of goods. Instead, the goods can be sent to
Inland Container Depot/Container Freight Station for sending goods to the destination

While shipping services play an important role in driving the logistics industry and facilitating global trade, ancillary
infrastructure such as Inland Container Depots have an important role to play in facilitating the entire shipping
process. An Inland Container Depot is essentially a physical premise close to the ports.Customers are allowed to store
containers, cargo, empty or full, on a temporary basis until they are ready for transportation. Typically, all the
required documents and clearance is available to store cargo at such facilities.Apart from this, they also perform
functions such as: Receiving and dispatching of cargo,Customs And document clearance,Temporary storage of
cargo,Servicing and Repair facilities of containers
E. Indian major & minor ports

According to the Ministry of Shipping, around 95% of India’s trading by volume and 70% by value is done through
maritime transport. India has 13 major ports and more than 200 notified minor and intermediate ports. The Union
Government has allowed Foreign Direct Investment (FDI) of up to 100% under the automatic route for port and
harbor construction and maintenance projects. Government has also facilitated a 10-year tax holiday to enterprises
that develop, maintain and operate ports, inland waterways and inland ports.

F. Need for Marine Insurance

1. Cargo theft is rising: There has been a rise in cargo theft, especially through identity theft and fictitious pickups. If
you have marine insurance, the insurer may compensate you for any loss or damage, arising due to cargo theft. Most
marine insurance companies offer add-on covers to include losses or damages that may arise due to strikes, riots and
commotion.
2. Containers lost at sea: Every year, more and more containers are lost at sea. As per the World Shipping Council
surveys in 2011, 2012, and 2013 estimates, there were nearly 733 containers lost at sea on average.
3. Natural events occur: Natural disasters are beyond one’s control and therefore, they can strike anytime and cause
you a multi-billion-dollar loss. Such incidents hamper the financial health of a company that has no marine insurance
policy.
4. Cargo damages happen:Even if your ship is equipped with all the safety measures, reasons like wrong selection of
container, poor condition of the container, overloading, inadequate ventilation, ineffective sealing arrangements,
overloading, etc. can damage
5. Legal requirement: In most situations, shippers’ sale contract also obligates them to purchase a marine insurance
policy to protect the interests of buyers.
6. Carriers do not give complete coverage: By law, carriers are not responsible for all losses or damages like natural
calamities, low average, etc. It means that in those situations where carriers are responsible, there will be a restriction
on the liability.
7. Better control over the policy terms: If shippers leave the cargo insurance to the whims of the other party when
importing or exporting goods, they are exposing themselves to the risk of underinsurance. Above this, if a claim
arises that involves dealing with a foreign insurance company. Perhaps in a foreign language, it can be both
time-consuming and frustrating. So, it is good to buy a marine insurance policy on your own.