Export – Import

Management

Chapter 2:
Transportation and freight forwarding
in international transactions

By the end of this chapter, you

will be able to

 Understand pros and cons of different ways to organize

international transportation
 Understand important transportation documents
 Explain Seller and Buyer’s obligations of each ICC terms
 Distinguish ICC terms and know how to apply ICC terms
in certain context
 Explain forwarding procedures in international
transactions

1
Modes of transportation in
international transactions

Transportation and its role in

international transactions
 Definition
The operation of vehicles in order to transfer goods
or people from one location to another location
internationally

2
Why transportation is important to
international transactions?

International transportation

As exporters or importers, would you want to

arrange transportation?

3
Types of international transportation
 Based on organization of transportation
 Uni-modal transportation
 Multi-modal transportation
 Segmented transportation
 Based on the number of countries involved
 Direct transportation
 Transit transportation
 Based on container load
 FCL - CY
 LCL - CFS

Types of cargo and packaging

Drums Gunny bags

Carton boxes

4
Types of cargo and packaging

Types of cargo and packaging

5
 Ocean transportation

Why is ocean transport popular in international trade?

Ships categorization
 Based on flags
 Normal flags
 Flags of convenience
 Based on distance
 Long distance carrier
 Short distance carrier
 Based on business operation
 Liner
 Tramp: Voyage Charter and Time Charter

6
Ship leasing
Ship
leasing

Liner Voyage Time

charter charter Charter

Single
Full boat
voyage
charter
charter
Return
Bareboat
voyage
charter charter

Consecutive
single voyage

Consecutive
return voyage

Marine transportation
Documents
 Vận đơn đường biển (Ocean Bill of Lading)

 Chỉ thị xếp hàng (Shipping Note)

 Biên lai thuyền phó (Mate’s receipt)

 Bản lược khai hàng hoá (Cargo Manifest)

 Phiếu kiểm đếm (Dock sheet and Tally sheet)

 Sơ đồ xếp hàng (Ship’s storage plan)

7
 Ocean bill of lading

 Definition
 What?
 From … to…?
 When?
 What for?
 Exporter
 Carrier
 Importer

Ocean bill of lading

 Format of Ocean B/L
 A4 size
 Title of Ocean B/Ls
 Content of Ocean B/L

8
Master bill of lading

9
Functions of Ocean B/L

 Proof of a signed contract of carriage

 Receipt of goods

 Determination of title to goods

 Major document in international payment

 Basis for customs declaration

 Basis for signing insurance contracts

10
 Ocean B/L Procedure

1. Deliver cargo, request for B/L AGENT

SHIPPER Of Shipping line
in exporting country
2. Issue original B/L
3. Send original B/L
-Directly to
consignee
- To a bank
4. Send Notice of Arrival AGENT
Of Shipping line
CONSIGNEE
5. Submit B/L In importing country
6. Issue Delivery Order (D/O)

7. Complete
Import
procedures

Categories of Ocean B/L

 Based on negotiability  Based on transport
 Named B/L OR Straight B/L organization
 To order B/L  Direct B/L

 Blank B/L OR To bearer B/L  Through B/L

 Based on remarks on B/L  Based on copies

 Clean B/L  Original B/L

 Unclean B/L  Copy

 Based on B/L issue time

 Shipped on board

 Received for shipping

11
Ocean bill of lading

Ocean bill of lading

12
Endorsed bill of lading

13
Ocean bill of lading
Disadvantages
 Goods have arrived at port of discharge but the
B/L has not arrived
 Modern media such as Fax, Telex are not
applicable
 Printing B/L is costly
 Risk of losing goods due to loss of original B/L

14
Air transportation
 Characteristics
 Speed
 Quantity
 Transportation cost
 Technical infrastructure
 Application
 Perishable goods
 High value goods
 Emergency

15
Air transportation
International Air Transport Organization

ICAO (International Civil Aviation Organization)

Tổ chức Hàng không Dân dụng Quốc tế

IATA (International Air Transport Association)

Hiệp hội Vận tải Hàng không Quốc tế

FIATA (Freight International Air Transport Association)

Hiệp hội Vận tải Giao nhận Hàng không Quốc tế

Air transportation
Airway documents

 Vận đơn hàng không (Airway Bill-AWB)

 Thư chỉ dẫn của người gửi hàng (Shipper’s
Letter of Instruction for issued AWB)
 Hoá đơn thương mại (Commercial Invoice)
 Other documents as required

16
 Air transportation
Airway Bill

 Characteristics of Airway Bill

 Non-negotiable
 Original document is not required when receiving
goods

17
Airway Bill
Categories
 Based on shippers
 VĐ hàng không chủ (Master Airway Bill – M. AWB)
 VĐ đại lý hàng không (House Airway Bill – H. AWB)
 Based on issuers
 VĐ của hãng hàng không (Airline Airway Bill – AWB)
 VĐ trung lập (Neutral AWB)

18
 Air transportation
Documents
 Airway Bill
 There are 3 original bills
 Copies: 6 to 9 copies
 Notes
 Shipper is responsible for information detailed
on AWB
 Shipper agrees on terms and condition of a
shipping contract by signing AWB

Air transportation
in comparison with Ocean B/L

19
International commercial terms

 Rules regulating the obligations of sending and

receiving goods between Sellers and Buyers,
dividing responsibilities, costs and risks.
 Responsibilities
 Costs
 Risks and damage of goods

20
International commercial terms

 Development of Incoterms
 First published in 1936 by ICC (Paris)
 Has been revised 9 times
 Why is Incoterms important in
international trade?

Incoterms 2020
Overview

21
 Incoterms 2020
Overview

Seller’s obligation Buyer’s obligation

A1. General obligations of the seller
A2. Delivery
A3. Transfer of risks
A4. Carriage
A5. Insurance
A6. Delivery / transport document
A7. Export/ import clearance
A8. Checking/ packaging/ marking
A9. Allocation of costs
A10. Notices
B1. General obligations of the buyer
B2. Taking delivery
B3. Transfer of risks
B4. Carriage
B5. Insurance
B6. Proof of delivery
B7. Export/ import clearance
B8. Checking/ packaging/ marking
B9. Allocation of costs
B10. Notices

INCOTERMS 2020

22
INCOTERMS 2020

INCOTERMS 2020

23
INCOTERMS 2020

INCOTERMS 2020

24
INCOTERMS 2020

INCOTERMS 2020

25
INCOTERMS 2020

INCOTERMS 2020

26
INCOTERMS 2020

INCOTERMS 2020

27
INCOTERMS 2020

INCOTERMS 2020

28
INCOTERMS 2020

INCOTERMS 2020

29
INCOTERMS 2020

INCOTERMS 2020

30
INCOTERMS 2020

INCOTERMS 2020

31
INCOTERMS 2020

INCOTERMS 2020

32
INCOTERMS 2020

International commercial terms

CIF = FOB + F + I
In which, F = Freight, I= Insurance premium
= FOB + F + (CIF x R)
In which, R = Insurance rate
CIF (1-R) = FOB + F
FOB = CIF (1-R) - F
CIF = (FOB + F)/ 1-R

33