CPT-Carriage Paid To

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CPT or Carriage Paid To, is one of the trade terms, which condition seller arrange the carriage. On other word, seller pay the transportation. The transportation should seller pay is from seller's warehouse until port destination. Regarding the insurance, buyer will arrange and pay the cost.

Buyers who place order in Indonesia, basically they always take FOB trade term. If the cargo readiness couldn't meets buyer requested, shipper will ask for extend shipment date, if it's really deadline, buyer will ask shipper to air the goods by prepaid. Means, shipper should pays the freight cost.

Buyers form Europe, such as France, determine the forwarder for collect or prepaid, called nominated forwarder. So that shipper and seller couldn't find out the forwarder the best, for their shipment. This condition is not good for seller because seller couldn't be freely to choose a forwarder who has a low freight rate, of course then, the freight charge or transportation will be high than expectation.

CPT is most commonly used in shipment by air. On the HAWB marked freight Prepaid.

Changing FOB to CPT like a monster for seller. Many companies couldn't survived forward or kept stand exists because of many shipment were changed from collect to prepaid, especially for a company who had a product heavy enough, such as shoes.

So that keep your production rush to meet buyer requirement in product and productivity. Avoid CPT or prepaid.

CFR Trade Term in Business Practice

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CFR stands for Cost and Freight. This is one of trade terms can seller or buyer use on their international trade. This trade term means seller arranges the carriage, and the risk transfer when the goods were loaded onto the ship. The cost from seller to port destination under seller's responsibility.

So that buyer has to arrange the Insurance. But, it depends on buyer definitely, if they do not worry about the risk of the goods during the shipment, maybe they will not think the insurance.

Both CIF and CFR are well know in business nature, means when a seller or buyer talk about CIF or CFR they usually know the term and condition.

So that don't worry to take CFR term.

If you ask me about "which one is popular between CFR and C&F ?" My answer is C&F is the word most common in business practice. My boss also knows about C&F well, and doesn't for CFR instead.

On billing from a courier company stated C&F instead of CFR. So that I think the C&F is more famous than CFR here. But, in fact both C&F and CFR have the same term and condition.

Which one you will use on your business, CFR or C&F?

Ex Work Trade Term in Business Nature

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When an international trade is using Ex Work trade term, buyer arranges carriage from seller's premises. Both seller and buyer should understand about this condition.

But, in business practice, sometimes there is a little bit different from. One shipment is called Ex Work, but, why forwarder ask a shipper to send the goods to their warehouse? It's really happened.

Ex Work as like as door to door service usually a courier use. All the cost and risk is to be buyer's responsibility. Seller provides the goods in seller's warehouse only, make sure the cargo ready at a certain time promised or agreed.

So that in this term shipper or seller provides only Bill of Lading, Invoice, and Packing List, the Insurance for the goods is not seller's responsibility. If the goods is loss, or is damage in an accident, for instance, all those risk is not seller's responsibility. All the risks are to be buyer's responsibility, instead.

When buyer and shipper are preparing a sales contract, both parties have to understand well the term and condition.

The Ex Work term in Italy is commonly use. When seller are willing to pay the freight cost, it means Ex Work trade term, instead of FOB. I have ever handled a shipment from Italy at the first time. Usually I decide FOB term for by sea shipment mode with a little volume. I didn't know at that time the business nature there. I choose a forwarder, and asked them to check all conditions and all the costs would be. The forwarder reported to me that the trade term was Ex Work. So that you should be careful and understand the business nature, too.    

Choosing FOB Trade Term.

When we have a shipment from around the globe, we have to check first all the costs of shipment comprehensive. Not all shipment with any trade term is cheaper than other. It all depends on the port of loading and the quantity of our shipment, and the shipment mode, too.

Sometimes, FOB term is more expensive than CIF when the shipment is by air.

I want to put here my experience regarding shipment from China by sea with the CIF trade term. When we don't mention the trade term in our order sheet, they will automatically decide the term is CIF. The sound is so great, means shipper will pay the shipment cost until port of discharge, and the Insurance fee is included.

It's several years ago. The time was coming to us to clear the goods here, in Indonesia port. It's not a big volume, was arranged by LCL. We were so shocked watching the invoice unusual and maybe unreasonable. The local charges in Jakarta port were very expensive.

I tried to check to the forwarder and warehouse why did the cost so high. I got the information from them that, they got an offer to handle our shipment with the high price, too. They advised us to check directly to the origin. After I checked to the shipper, they didn't know too, why the cost was  so high.

I asked the forwarder to give us a discount. They then were willing to give us a discount with a requirement, that we had to make a contract with them, would use their service.

This case gave us a warning to use CIF trade term for sea shipment from China especially for LCL shipment.

I don't now until know, to whom should I blame on. Is it forwarder or shipper? 

FOB Term is Common Uses

There are several trade terms could buyer taken for their shipment besides FOB. But, why do they choose only FOB?

FOB is one of the trade terms, which buyer or shipper will covers the cost of shipment from on board at the port of loading until they receive the goods at their warehouse. Shipper or beneficiary only has the obligation to send the goods to the port and pays all the cost until, the clearance cost included.

There are two reasons why does they always choose FOB:

1. Getting the fixed cost.
When the shipment term is FOB, buyers will freely finding the forwarder out and compare one to each other. They make an agreement for a certain period. They also will get the fixed warehouse during clearance process, then, of course, by this condition, they will get lower cost because they promise to place all their goods in a certain warehouse. Usually they are getting a special rate because all the party can get the fixed job.

2. Getting the fixed lead time.
Deadline is the second major factors that shipper has to keep in time. Because buyer has prepared the market, the distribution, and the time of the goods on sale. Buyer wants to control all the things to make all are going smoothly. By taking FOB trade term, buyer will be able to control whether the goods has been on boarded or not.

3. Checking the cargo readiness.
Buyer could also checks the goods via forwarder for schedule agreed. Sometimes buyers in doubt when they received an information about cargo readiness. Buyer usually ask forwarder to check the goods with shipper. Forwarder will ask the shipment booking for a certain on board date. By doing so, buyer could get the the fixed schedule. 

Finding Details HS Code, Customs Tariff, and Rule in INSW

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Thousands HS code will cover all products or goods in the world. One goods has different customs tariff, duty tariff, from another. Sometimes one goods has different rule from another, that is caused taking different treatment in customs process to. Or there is a goods has to be inspected when it will be sent to Indonesia. Some of goods need certain document for clearance process.

Many changes has happened last years here, in Indonesia. In some cases, companies did not know a rule has launched, then when their goods came to Indonesia, they were headache because of it, and of course some extra charges will be arise. All that happened because of they didn't check firstly the rule to their importation.

On be half of government, actually has made a website for public information, it's called INSW, Indonesia Nasional Single Window. Through this website, everyone can check the HS code, duty, and the rule to each HS code or goods. Government also splits the rule for export and import.

So that the first I should do when I will handle an importation to Indonesia, is drive myself to visit www.eservice.insw.go.id, from that site I know what I have to do all.

For you, may be a shipper from broad, you may check easily by visiting that website, checking the rule to the goods based on HS code you have. Or maybe you only want to find the HS code for your goods.

Customs has recommended INSW as reference for all company in Indonesia, so that we all, in Indonesia, have the same knowledge and information regarding customs and clearance process.   
 

How to Find Out The FSC Certificate Code of A company

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FSC is an international certification organization regarding forest. A legal company that wood or product made from wood is their product must have a legal wood certificate. One of an organization could gives the certification is FSC.

Certificate legal wood is one of required document that has to be provided for each importation of wood or product made from wood to Indonesia.  Sometime some shippers or manufacturers say they don't have such any document. But, actually they have it. Whereas the consignee or receiver in Indonesia should get the license for clearance process, and the certificate is a must to be uploaded into the system.

Fortunately, FSC has provided a page for checking or finding a company that has a certificate from them.

I just visit this link www.marketplace.fsc.org, put the company name I want to search the certificate for, then all the companies with the keyword I place in will be shown.

I also can check the validity and expire date of  the certificate from.

To check all details of certificate of a company visit this link www.info.fsc.org. I can find all the details by certificate code I have gotten.  

Notice For The Importation From Italy

I have ever many times importing yarns for knitting from Italy. This is we do according to buyer request for their order that were putted to our factory.  I thought our buyer from Japan like a luxury yarn with having a high price. The sweater usually has a hang tag that shows the composition and the yarn’s manufacturer.
 

We are not directly order the yarn to yarn’s factory in Italy, but buyer order the yarn to their agent in Japan, then the agent will order to Italy . I thought they have inserted the commission to the yarns price.
 

The yarn’s company we’ll send us the proforma invoice as their confirmation after we sent our purchase order (PO) to them. This proforma invoice isn’t the final quantity we will receive.
 

After the goods are being ready, they issue the packing list and invoice to be forwarded to us for our checking and payment settlement.
 

One thing made us surprise is the condition weight. The condition weight is around five percent from the net weight. So, we have to pay the additional weight for nothing. For example, the quantity or net weight on invoice is 2000 kilograms, but we have to pay 2050 kilograms. The 50 kilograms is the condition weight which we will never receive the goods.
 

Another thing that made us surprise is the term of shipment. For by sea shipment we usually prefer to take the FOB as the shipment term due to the local charges will be cheaper then CIF term. FOB is mean importer or buyer pay all transport charges starting from origin’s port. For example, if we agree the price is in FOB Genoa, the freight charges and the destination local charges will go to us. But, in fact, the last result is all charges starting from the factory will be going to importer.  In this case we may call the FOB Italy is the Ex-work.
 

The difficulty for asking them to provide the complete customs document is also happened. This is my experience, I have reminded them many times to provide all documents for the customs process, but, when the package comes, I found one of documents required is missing. Or sometimes we asking forwarder to send us the Bill of Lading, because shipper didn’t, then they only send another one. Of course, the courier fees for sending original Bill of Lading will be born to us.
 

The yarn’s supplier is also doesn’t cooperate concerning the type of move, I mean whether the shipment is using FCL or LCL. If you work in export and import world, you will learn what the volume is has to be FCL or LCL. I have twice reminded them for the cargo which having the volume or the CBM more than nine or ten, it should be arranged by FCL, otherwise we have to pay extra cost or high cost for the local charges at destination. But in fact, even we have the goods with the CBM around thirty eight, they do the shipment by LCL, then as the result we have to provide the additional cost for the local charges at destination.    
 

As the conclusion, we have to give extra effort when we order any goods from Italy. All things we need should be informed far away from the shipment and we have to remind them many times till we get what we want from them.

Notice of Arrival ( NOA )

When the goods close to arrival at destination the notice of arrival or NOA will be performed by forwarding agent to be forwarded to importer. This notice of arrival containing the details of shipment and importer has to check strictly the contents till importer feels in no doubt.

The valid data on NOA is a must to ensure the customs clearance to be going easy and smoothly. For especially in description of goods and the consignee and shipper name. Better importer making the description of goods with the same description on all shipping documents, for instance, importer has a description " Yarns, 100 % Linen ", then shipper should mentions it on the invoice, packing list, bill of lading or house air waybill, and others documents are requested. This way to do is protecting to any possibility customs problems coming up. Not only the description of goods in uniform, the other data shown on documents should be uniformed, too.

Forwarding agent will follow the NOA to submit the data manifest to customs. It's mean that if the data in NOA is wrong this will leads to customs problem due to there are discrepancies between the goods and the data manifest.

We have ever got a problems concerning the difference data of consignee name. Forwarding agent did not sent us the NOA or the draft of data, we did not check the data manifest prior to submitted. Unfortunately, between data manifest and data on bill of lading is not uniform.The difference is only one letter. On the bill of lading wrote "GARMEN", contrary manifest showed "GARMENT". This difference is only on "T" letter, then this leaded to the customs process longer than common done. This took one week additional times for clearance and of course, this leaded to the additional warehouse fee or charges and such additional handling fee came to our account. So that the correction before the data submitted to the system is a must to do to avoid the additional times and charges happened.

Additionally, at the same time our production having very short time to the delivery date. Because the row material  came late, we should took overtime to finish the goods in time or to reach the delivery date buyer decided. Then the result is a higher production cost came up. Moreover, we had to air parts quantity left because this parts was not finish and can be delivered in time then buyer had decided the part of quantity left to be going aired. Unfortunately, the cost of air freight was came to our account or the term shipment was on prepaid.

This case gives us experience that we should extra strictly to follow up our importation and proactively keep in touch with forwarding agent and we have to get all the drafts of shipping documents before all the documents are issued up and prior to the shipper  ship out the goods.

The Advantages of Letter of Credit

L/C is abbreviation from Letter of Credit that is issued by a bank based on applicant or importer request to be passed to exporter in abroad as their business relation. The exporter has an authorize to take the money through issue a draft ( a command for paying indebtedness ) to the importer for some amount of money as stated on the L/C. The issuing bank can accepts and can releases the payment as long as all requires as mentioned on the L/C could be followed by exporter or all terms and conditions are complying to the letter of credit.

The advantages of letter of credit :

• International transaction can be more easy.
• Funds that are provided by importer for their order putted in exporter will be safety. This because exporter can not takes the funds if there is discrepancy on the shipping documents presented by exporter even found one discrepancy. For instance, the description of the goods are not same with the L/C required.
• To ensure exporter provides the shipping documents completely. Exporters will give their efforts to provide the shipping document completely and comply to the letter of credit.
• Ensuring on keeping the delivery date in time. If exporter did not shipped out the goods in time, this will leads to discrepancy condition, then the importer may be did not release the payment.
• Ensuring fully quantity of the goods required are filling up. The quantity of the goods usually must be in tollerant range, sometimes importer can allow the quantities that are shipped out in more and less five percents. Exporter has to ship out the goods with the full quantities as the L/C mentioned up.
• To ensure the payment to order that is putted in exporter. Both exporter and importer sometimes don't know well to each others or occasionally they just have a business relation through an buying agent or importer never met with exporter. Of course, it's a big risk for exporter, what if importer did not release the payment while the goods have been received by them? Through this letter of credit buyer has a compulsory to pay or release the payment to exporter for the goods that have been exported as long as exporter has provided the shipping document with no discrepancy founded on the documents. Then bank will release the payment to the account of exporter. So that the L/C should be issued before the production are starting up.

To get the above advantages both exporter and importer have to check the L/C draft before the L/C is issued to avoid any discrepancies come up. Exporter has to check whether the L/C's terms and conditions are comply with rules in their country or not. And exporter has to check all documents format in its practice. If there is a content that is can not be followed by exporter they may ask importer to revise the L/C draft till exporter confidence in providing the shipping documents.

Protect Using L/C on Shipment by Air

L/C or Letter of Credit of course, this is very important in export and import any goods for especially in international trade. Using an letter of credit the funds of any order that is provided by importer are keeping on safety, because bank ensures will not ever release the payment to exporter or beneficiary till the shipping documents are perfectly presented which are having the correct contents as importer request that are mentioned on the L/C. In the other hand the goods that are provided by shipper will be paid by importer through bank if the documents require is perfectly fulfilled and all those documents comply to the L/C.

But, practically starting vessel departure till buyer or applicant received the documents require will be needed so much times to spending up. I have an experience about this matter, view moths ago we have a buyer that requested us to order a type of yarn that we could not found in our country to a company in Italy. This buyer came from Japan. The yarns is quite heavy and so expensive. Because they gave us a short time to finish the order they decided to air the yarns or the shipment mode to become by air prepaid.

Because the yarns supplier may be consider that we are new buyer for them they insisted to issue a letter of credit prior the production were running up. We were understand with this situation. At the time we didn't realize the effect of taking an L/C to this trade. At the event that exporter have finished the production and the yarns were already to ship out, they send us the shipping documents for our reference. When the goods arrived at the Jakarta airport I was shocked, because the shipping documents were still in buyer's hand and they did not sent the documents to bank. Then after view days buyer sent the documents to bank and then bank checked the documents to ensure the documents comply to the L/C. After the checking was finished then bank sent them to negotiating bank. The process needs twelve days starting the on boarding date till the documents were passed to our office. It's means that we have to pay the additional storage fee for the twelve days. If the shipment is not using L/C this additional storage fee can be avoided.

Based on above experience we decided that if we are willing to import any goods we will chose the T/T payment term is becoming our choice to protect the additional storage coming up. The L/C are applying to our import of sea shipment mode only. We choose the T/T payment with a note the shipper are perfectly credible and trusted. Or at least our buyer guaranties in which the goods will be exported to us.

However, if buyer insists on using an letter of credit to each international trade, the extra costs of storage should be included to the production cost when the price are being calculating. So that this matter should be decided whether shipper prefers to chose an L/C or not prior to the purchase order is created up by buyer.

Safeguard Measures for Cotton Yarn Importation.

In Indonesia, safeguard measures for cotton yarn other than sewing thread do by giving additional duty to the yarn imported from another country beside commonly duty applied to. This regulations release after the importation value and quantity highly increase in big amount and this taking effect to the industries in Indonesia were disturbed in the market share. In the other hand the yarn industries report to Trade Ministry concerning this condition and ask them to apply the additional duty for safeguard measures.

This condition is dilemma. The additional duty of the safeguard is a benefit for yarn industries, of course, this will taking effect to the market share for another country will decrease and the opportunity will comes to local yarn industries. Contrary, for manufacturer industry that its row material is decided by importing from another country, this is will be an additional production charges that will inflict to the higher price to offer to buyer. In the other hand buyer will reconsider to compare with others suppliers in different countries if the price is too higher for their customers.  

The rule has been applied since 6^Th in June 2011 and the validity of this rule will apply for three years onward since this rule is stated. Indonesia's government stated IDR 40,687 for each one kilogram to be an additional duty beside the common one on the first year. For the second year they stated IDR 38,144 for each kilogram, and the last year IDR 35.601 per kilogram to be going applied. I think those additional charges are big enough to limit the importation of the cotton yarn.

However, the additional duty of the safeguard didn't apply to all country in the word. There are 105 counties stated to be exception from this additional duty, those are Albania, Angola, Antigua and Barbuda,  Argentina, Armenia, Bahrain, Bangladesh, Barbados, Belize, Benin, Bolivia, Botswana, Brazil, Brunei Darussalam, Egypt, El Salvador, Fiji, Former Yugoslav Republic of Macedonia, Gabon, Georgia, Ghana, Grenada, Guatemala, Guinea, Guinea Bissau, Guyana, Haiti, Honduras, Burkina Faso, Burundi, Cambodia, Cameroon, Cape Verde, Central African Republic, Chad, Chile, Colombia, Congo, Costa Rica, Cote d'Ivoire, Croatia, Cuba, Democratic Republic of Congo, Djibouti, Dominica, Dominican Republic, Ecuador, Jamaica, Jordan, Kenya, Korea - Republic of, Kuwait, Kirghiz Republic, Lesotho, Macao - China, Madagascar, Malawi, Maldives, Mali, Mauritania, Mauritius, Mexico, Moldova, Mongolia, Morocco, Mozambique, Myanmar, Namibia, Nepal, Nicaragua, Niger, Solomon Islands, South Africa, Sri Lanka, Suriname, Swaziland, Nigeria, Oman, Panama, Papua New Guinea, Paraguay, Peru, Philippines, Qatar, Rwanda, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Saudi Arabia, Sierra Leone, Tanzania, The Gambia, Togo, Tonga, Trinidad and Tobago, Tunisia, Uganda, Ukraine, United Arab Emirates, Uruguay, Venezuela, Vietnam, Zambia, and Zimbabwe.

The HS codes of the goods that are applied additional duty of safeguard measures consisting from number 5205.11.0000 till 5206.45.0000. When the goods came to Indonesia and importer submitted the importation data then the customs will automatically checked by their system according to data submitted by importer to customs system. System will check the HS code of the goods whether there are any regulations to be applied to or not. The goods under HS code range number from 5205.11.0000 to 5206.45.0000 will be checked by customs according to status given by system, the status system of the goods usually in yellow line or red line. In case yellow line is given to an importation the customs are checking the shipping documents only, then finally after additional duty paid up the customs will approve the goods to be shipped out to shipper and the customs process was finished. In order to the customs given the red line, this means that the goods should be checked in both checking documents and physically checking, then finally the goods are allowed to be picked up based on customs approval.

For especially manufacturer in Indonesia that has an order which is the materials would be imported from another country has to check the HS code and the rules to be applied to, for example this additional duty for safeguard measures rule. So that all charges of the importation can be added to the price offer to their buyer, this way will protects their benefits to be lost. 

Additional duty for safeguard is not only apply to the cotton yarn other than sewing thread, this is also has applied to some commodities for instance cotton fabric, so that the importer should consults or check with customs regarding any goods will be imported, or at least they have to check to the web provided by customs.     

Learning International Trade Process

1. Sales Contract Process

Promotion

Firstly before exporters or manufacturer export their product to another country they usually make some promotion through any media such as advertisements in newspapers, magazine, or through online by putting the ads in website that well know and having high traffic like Google, Facebook and so on. Occasionally the promotions do by exhibition or by governments directly in an expo or sometimes through the embassy.

Letter of Inquiry.

After one or more buyers interest to the product can be produced by exporter then they send a letter of inquiry which having the contents price and any specification of the goods involves the styling, the quantity will be ordered, delivery time, and the details of transport line. But the most shippers do in getting an order is though a third party or a buying agent. Buying agent will proactively looks for some manufacturers who can provide or produce the products buyers want to. Buying agent usually takes some sample to show to some manufacturers or shippers and ask them whether they can produce the same product or not. Then manufacturers will try to make the same product as the sample to show buyer to get their comment to the sample.

Offering the price

After buyer has approved the sample made by a manufacturer, manufacturer or exporter will automatically sends their price offer base on the sample made up. Manufacturer will calculates based on row material consumption, transportation fee or all importation charges in case the row material will be imported from another supplier from another country, and production charges. Buyer or sometimes traders will directly review shipper's price offer and will compare to the bottom price buyer decided. Occasionally, buyers or traders will compare with another shipper who sent the same sample in considering best quality and the lowest price offering. Some years ago, we have ever made a business relation with a buyer, they always sent their design to many manufacturers who can make the same sample that sent by the buyer or their agent. Then they took the lowest price from various manufacturers offering or mostly they done this by like a tender, they putted a very low price then manufacturers sent or submitted their reasonable price they could offer. This buyer type doesn't pay our goods quality, they always think a high benefit.

Order Sheet.

Order sheet or sometimes called purchase order. The contents consists style number, purchase order number, row material, description of the goods, quantity, price, payment term, shipment mode, destination or port destination, and final destination.

Sales Contract Process.

Sales contracts made by exporter based on order sheet and offer sheet, all important things that are mentioned on both offer sheet and purchase order or order sheet are should be mention on sales contract, too. You may put the additional conditions if any on the sales contract. Such the additional condition commonly put down, the tolerance of over and short quantity, insurance, transshipment, and many other you need to put down on the order sheet. Both buyer and shipper have to put their authorize signs on the order sheet. However, in business practice, with using email they only send and receive order sheet to be agreed by both side without sending the original order sheet and sometimes they did not put down their signs anymore. In the other hand, in our business practice with one of our buyer this is enough by sending the importer Proforma Invoice to check and confirm and buyer has assumed that this is same as sales contract.

2. Letter of Credit Opening

After both parties exporter and importer agreed to all conditions and importer is no doubt to put the order to importer, then the next step is applying a Letter of Credit to any bank trusted in case both exporter and importer choose L/C to becomes payment term. The applying is made by importer to any bank or called Opening Bank, Importer has provide some funds equal to amount of the goods to be exported by exporter or called beneficiary, then the bank can issue the L/C after all requirement for applying an L/C. Before an L/C to be issued and transferred to Advising bank better applicant pass its draft to beneficiary to check and makes sure the term and condition the L/C is correct, this way is to avoid some discrepancies conditions.  

3. Cargo Shipment

After exporter received the L/C from advising bank, as beneficiary they has obligation to provide the goods to be ready to export, this called ready to export if the goods is has been inspected by buyer's agent and the inspection result is in good condition and of course ready to export.

Shipping company will receive shipper's booking for shipment and they will coordinate with their agent at destination to get buyer green light for shipment process. And they have to provide transport documents such as Bill of lading, shipment advice, and FCR for shipper. The shipping company also responsible to arrange the shipment till importer or consignee received the goods in a good condition.

4. Negotiation or presenting documents

Beneficiary or exporter send all documents required to advising bank and advising bank will check the documents presented whether the documents comply with L/C or they found any discrepancies. In order to Advising Bank found any discrepancies conditions they will ask shipper whether they will make the correction or send the documents with discrepant condition to Issuing bank.

After all documents have been arrived at Issuing Bank, they will scrupulously check all term and condition of the documents presented. If all documents comply with the L/C in term and condition Issuing bank has an obligation to fulfill the payment within four days since they received the documents. But if the documents didn't comply with the L/C, they will ask importer to give their approval or acceptance then the payment can be fulfilled.

  

    

FCL Versus LCL in Efficiency

FCL is abbreviation from Full Container Load, when the shipment with using FCL term there are only the goods to be loaded only from one shipper. When a shipper has some goods to be shipped out to another country he or she has to calculate its CBM or volume to decide what size container will be suitable and used up. Various container size you can use for your goods commonly consisting 20 feet, 40 feet, 40 feet in high cube, and 45 feet. The following list you will find out the details interior measurements for each container:

• Container with the size 20 feet : the length 6.058 meters, width 2.438 meter and the height 2.591 meters.
• Container with the size 40 feet : the length 12.192 meters, width 2.438 meter and the height 2.591 meter.
• Container with the size 40 feet HC: the length 12.192 meters, width 2.438 meter and the height 2.896 meters.
• Container with the size 45 feet : the length 13.716 meters, width 2.438 meter and the height 2.896 meters. 

The thing has to be considered is you have to check your package measurements of the length, wide, and its height. Then calculate how many cartons can fill in a container in width line , length line and height line. By this way you can easily decide a container to be used up with no doubt anymore.

LCL is abbreviation from Less Container Load is choosing when the total volume of the goods to be loaded to a container is in low amount. Some goods from different shipper are combined  into one container . The loading or stuffing will do at consolidator warehouse. Shippers usually send their goods or cargos to the consolidator warehouse by their selves or using a third party or trucking company. Therefore, they has to calculate all costs will coming up involve transportation to the consolidator warehouse and some handling charges at the consolidator warehouse to be considered.

Meanwhile, a shipper has to compare between FCL and LCL when they are willing to export their goods. By this way they will decide what is the cheaper between LCL and FCL to protect the costs safety.

You can compare between FCL and LCL by calculating the CBM or volume and each cost in using both FCL and LCL. The FCL shipment of export has costs THC or terminal handling cost, B/L fee, trucking or transport to terminal container, and sea freight in case freight paid by shipper or in C&F term shipment. LCL has costs that usually involves trucking or transport to consolidator warehouse, CFS or container freight station charges that calculated each volume. B/L fee, and sea freight cost or fee which the rate is calculated per volume or CBM.

Some importers who putted their orders to us has decided if a shipment has the CBM or volume 12 over it should be arranged on FCL, of course, after they have compared the costs between FCL and LCL. There are also some buyers want firstly to know the volume of their shipment prior to shipment arranging, then they will send us their approval of details shipping instruction to be followed.

In my country LCL shipment only available on the last day in every week or the boarding date it commonly  on Sunday or Monday. Unlike LCL , the FCL shipment schedule is always provided on mid week or end week vessel schedule.

Occasionally, there are some buyers insist to ask us to arrange their shipment by using FCL although the volume of the cargo is less then ten cubic meters. This is because they want the container opened in their warehouse or at a specific place instead of  in forwarder or customs place. Hopefully, their goods will protect from any damage while handling. 

How to Prepare an Exportation

How to export some goods to another country? You might be have aver asked yourself in a time. I also have ever asked me the same question many years ago when I didn't have a knowledge yet about export and import world. How to begin and what is the last step to export a goods in a big amount? If you unusual or never do the exportation to another country you will confuse, because many factor and rules have to be learned in export and import some goods by using a forwarder. Additionally, rules concerning export- import are different for each country. And the export-import is not only a knowledge, but this is a skill that needs much exercises and long experience to become an expert.

However, in this posting I will try to tell you a lists preparations to export some goods to another country in around the globe I have ever done.

1.  Goods details to be shipped out. The first thing to realize in exporting a goods is knowing goods description in details. For instance, you will export some sweaters to USA by using a forwarder services, you have to know such as who will wear those sweaters?, what is the row material?, what is the composition of the material?. Those goods specifications will be mentioned on export documents or shipping documents.
2. Categories and HS code or harmonise system of the goods you will export. Category of the goods is refer to the age segmentation and style of the goods. Each goods will have a specific HS code which is consisting six digits number for example cardigan, jerseys and sweater which is the row material in synthetic like 100% acrylic will having the HS code 6110.30.0000 in Indonesia and 6110.30.9900 in France. Sometime the last four digits is different in a country to each others. You may check all HS code lists to customs in each country or you will find out in their webpage.  
3. Rules in both country of origin and destination. After you got the HS code of your goods, you have to check what rules to be applied to the kind of your goods. In my country we can easily check out the rules applied to any goods after we knew its HS code. Our government has created a webpage that have a feature or a page for checking all HS code with description of goods in details and the rules to be applied. We can easily anytime check out by online the rules for each HS code we have got.
4. Term of shipment. Various terms of any shipment we can use up. The term shipment commonly I have ever used involved ex-work, FOB or free on board, CIF or cost insurance freight, C&F or cost and freight. The ex-work is all charges transportation from shipper's factory till to be arrived at destination or receiver born to buyer. If we use FOB, the cost transport from usually port of loading until the goods received by buyer is obligated to buyer. CIF term shipment is all charges from factory to port at destination including the insurance is has to pay by shipper. Likely CIF, the C&F term is all charges till the goods arrived at port destination has to pay by shipper except the insurance charge it will be invoiced to buyer.
5. Term of payment. Before a purchase order to be issued, the payment term has to be decided. Some of them I ever used are T/T payment, DAP or Document Against Payment, Documents Against Acceptance, Advance payment, Payment after done the inspection, and payment under L/C or letter of credits. All those payment terms will be explained in details in a specific posting.
6. The port of discharge and destination.
7. B/L or bill of lading type. Those are Original Bill of lading, Sea Waybill, Surrendered B/L, FCR, Full set of B/L. Those Bill of lading type are different to each others.
8. Consignee and notify party.
9. Packaging details and the shipping mark.The packaging has to follow buyer requirement. Buyer usually send a guide of the goods delivery to be followed by shipper. The purpose of managing  the packaging is to make easy in distributing to many store or to some the customers. So that the packaging should be managed by a guidance  from buyer then the manufacturer follow that guidance is a must. Marking of each packaging is commonly showing the identity which are usually having the contents buyer or consignee name, manufacturer, style or item number, purchase order number , quantity, gross and nett weight, port name, destination, and packing method. The shipping mark will be noted on surface of the cardboard. 
10. Various tests and inspection before shipment. The tests I mean are testing for goods including the raw material, and each parts accompanied the goods such as the accessories, poly bag, and its cardboard box. In some countries I found they have many laws to be complied in avoiding some substances come to those countries. So that buyer ask us to do some tests of the goods contents and even of part of the packaging. Regarding the inspection, after the goods were ready and all tests have been done, now the time for final inspection by inspector that is pointed by buyer. In order the inspector didn't found a major defect or the inspection result is under the tolerant then the inspector issue the inspection certificate that will note on the inspection certificate a pass inspection, it's mean that the goods can then be exported to destination as agreed.
11. Document required and its specimen. The shipping document commonly requested are packing list and weight list, invoice, Bill of lading, House Air waybill in order the shipment by air, and inspection certificate. Additionally some buyer requests certificate of origin, shipping advice, manufacturer certificate, single country of origin declaration and so on. If buyer wants the same format for each documents you may ask to buyer directly. However, if buyer can not provides the specimens you may create the documents required and send the drafts to buyer to get their approval.
12. Forwarder and the shipping line or airline. You will send the shipping booking to forwarder that pointed by buyer in case the shipment is in collect term, means the sea freight or air freight will be invoiced to buyer or consignee as agreed. Sometimes buyer also requests to use a specific shipping line to handle their shipment, so that we have to mention the shipping line will use up when we send the shipping instruction to the forwarder.

Those are the basic preparations you have to obtain when you are willing to export some goods using a forwarder service. Each country has specific lows in international trade that you have to realize when you will export to, beside rules in your country. If you didn't have enough knowledge of laws in a country keep in touch with your buyer an ask proactively to them.  

Choose Best Courier Services

When you have goods or package will send to any place in around the world you might consider what is the best courier will send your package to destination you want to. There are many various couriers companies you will find in your region may be, or you have ever got some offerings about courier services through some media such as emails, sales letters, social media, or marketer call you directly to give clearly explanation of their services.

However, you have to realize that all most marketers will always give you the good of their company or service to get your worth attention then hopefully you consider to use their service or buy their product. The actually you have to give more attention is what the expertise they have to ensure your package to be going to destination with a good condition, in time delivery, and easy to track your package alert while your package in the way.

Here I will give the list of things that you may consider when you willing to send a package for especially to abroad destination:

1. The agent for each city or country. Credibility agent of each country is sometimes different with the head office. This based on my experience in last time ago. Our buyer sent a package through a courier, our buyer then informed us these shipment when the package already in the way and they also informed us its Air waybill. Then I tried to track the package status, surprisingly I didn't find out the branch office in my country and even person in charge in handling the package until somebody called me to inform the notice of arrival of the package. In that time I asked to them " where is actually their office in this country or our city?" Then they only gave us a personal phone number to follow up the package or shipment. Therefore, you have to chose a courier with a fixed agent that having a clearly address.
2. Tracking online system. The tracking online system is part of the most important things to provide by any courier company to make easy for both customers or shippers and courier company on tracking and manage various of shipments. By this tracking online system a customer or sender or receiver can easily follow up the status shipment any time and any where by real. He or she doesn't needs to contact the customer service for just knowing where her or his package is to be, just type the web address and put the Air Waybill number to get the last update of the package.
3. Proactive in giving information. Proactively give any information about our shipment and anything happened that will impact to our package is one factor in making our trust. I have ever used various couriers to arrange various shipment to another countries in the globe. There is a courier that provides a service that when our package already in delivered status or has received by consignee they will automatically send me a notice concerning these receiving. Additionally, they always let me know of any news that impact to a shipment such as government regulation of both from origin and destination, a typhoon and various news that useful for me and of course, for my shipment.
4. Helping. This is one thing that you may consider for choosing a courier to arrange your shipment. If we regularly send package to around the world, might be you have ever  faced an unsatisfying condition to one of your shipment, for instance, the shipping documents was not complete that impacted you could not received you package until you fulfilled the documents required. A good customer service will assists you to solve these problem till everything to be clear and finally you can receive the package smoothly. If your package is in a big amount or weight this will takes to a high storage fee on you. The storage rate is counting per charge weight per day. Therefore, the short time in clearance a package is will be better in saving your money.
5. Customer satisfied. The short way to know what is the credibility of any courier is by asking to anyone that ever used its service. This way mostly that I ever done to look for a courier to ensure I prefer a courier service that will makes me confidence to arrange my shipment. You may ask to your friends or you clients of their experiences to their shipments. The information usually consisting the name, its service, the delivery time, and also the price or rate.
6. The best price and discount. After you consider those five things listed then you may also consider the price offer and the discount. The best price and the discount will be given to a customer when he or she can be a member or after had an account for her or his shipment on both export and import. By giving your permission to be a member of any courier they assumed you has a regular shipment for each period of time or monthly.

As a conclusion, before you decide a courier company that will arrange your shipment better you check their expertise and experiences in handling various shipments that ever handled. Those six things listed above is quite enough to check a courier company that will makes you confidence on giving your package to them.