The Mechanics of Going Global Delivering the Goods

1. The Mechanics of Going Global Delivering the Goods

2. 1. Determine Shipping Method • Select Mode of Transportation • Ocean • Shipments usually carried on container ships, which are extremely large and hold thousands of products for thousands of different companies. • Air • By far the fastest and most expensive mode of transportation. • Usually used for emergency shipments or for the transportation of goods that are very valuable. • Airfreight usage has increased dramatically over the years, but still only accounts for one percent of the total volume of international shipments and 20 percent of the total value. • Truck • Rail •  Before shipping, the U.S. firm should be sure to check with the foreign buyer about the destination of the goods. Buyers often want the goods to be shipped to a free-trade zone or a free port where they are exempt from import duties (see Chapter 9 of the Basic Guide to Exporting).

3. How To Select Mode of Transportation • Transit Time: Boat takes a lot longer than air but is cheaper. • Predictability: The estimated transit time and the actual transit time can vary. Receiving a product before the expected arrival date can be as bas as receiving it late. Airfreight is generally more predictable and less variable. • Cost of Transportation: Airfreight is the most expensive mode of transportation but may be justified when products are critical or perishable. • Non-economic factors: Foreign governments might give preferential treatment to certain national transportation company or limit the amount of usage for a certain mode of transportation. Customers may demand specific mode.

4. 2 a. Specify Type of Container • Container types http://www.export911.com/e911/ship/practice.htm#xClass • ISO Freight Container (International Organization for Standardization) complies with ISO container standards in existence at the time of its manufacture; Ocean Or • Unit Load Device (ULD) Air equivalent of ocean container. • ISO Ocean Container Classifications • General purpose (dry cargo) container • Specific purpose container(e.g. Open top ) • Specific Cargo Container (e.g. refrigerated) Or • IATA Type        • 8   lower deck container, 60.4" x  61.5“ x  64"   • 5   lower deck container, 88“ x  125“ x  64" • 3   main deck container, 88“ x  125“ x  86"

5. 2 b. Specify Size of Container • Discussion of Container dimensions and capacity • http://www.export911.com/e911/ship/dimen.htm • The 20 feet (20') and 40 feet (40') containers are very popular in ocean freight. The 8.5 feet (8.5') high container---8 feet 6 inches (8' 6") high container---is often referred to as standard container. • Rating is the maximum gross mass (or weight), that is, the maximum permissible weight of a container plus its contents. The rating of a 20' dry cargo container is 24,000 kgs. (52,900 lbs.), and a 40', including the high cube container, is 30,480 kgs. (67,200 lbs.). • IATA Type        • 8   lower deck container,    60.4" x  61.5“ x  64"   • 5   lower deck container, 88“ x  125“ x  64" • 3   main deck container, 88“ x  125“ x  86"

6. 3. Determine how many units will be shipped in the order and the weight of your shipment. • Draw diagram to show units being shipped • http://www.shipping-worldwide.com/ go to shipping tools • www.pac-usa.com/calculator.htm • www.shipamerican.com/frvol.htm • Express weight and size in English and metric units.

7. 4. Calculate the shipping/freight charges • Consult freight forwarder • Other sources: • http://www.shipping-worldwide.com/ • www.homeshipping.com/ • Consult airline online or air shipping company • http://www.dhl.com/publish/g0/en/tools/conversion.high.html • www.fedex.com/us/freightportal/

8. Information for Obtaining Export Rate • What you are shipping • Where it is going • How much it weights • The dimensions • The value • The type of service (air, ocean, ground) • Any special requirements

9. Door to Door vs. Port to Port (LCL) Service • Half a container costs about the same as full container • Benefit of CL is door to door service • LCL goods from several shippers combined by freight forwarder; delivery port to port.

10. 5. Select Shipping Carrier • Choosing the Carrier • Unless the importer specifies a carrier, the exporter is free to choose a shipping company or airline which offers a competitive rate and can meet the latest date for shipment. • Certain importing countries may prohibit the use of flag vessels of a hostile country and any vessels that would make a stopover in a hostile country en route to their territory.

11. Air Freight Charges • H” X W” X L” 366 Cubic Volume versus Weight Pay which ever is greater • If shipping y air, contact air freight forwarder (e.g. DHL, Fedex); cannot go on passenger airline directly; Most air cargo shipped on passenger planes

12. 6. Select the Port of Origin and the Port of Destination; Identify Shipping Schedule • Specifying the Seaport • For a list of seaports go to http://www.export911.com/e911/ship/seaport.htm • Checking the Ocean Shipping Schedules • In many countries, the ocean shipping schedules (both outbound and inbound) are published in a major newspaper. • www.schednet.com/home/index.asp • Otherwise contact the carrier, customs broker or forwarder for shipping information. The information is also available from private publishers of shipping schedules. Consult: www.cargolaw.com/ocean&nvocc.html.htm and scroll to Ocean Forwarder NVOCC Index section and click on websites found in the Shipping Schedules and Vessel Tracking or World Vessel Schedules sections e.g. www.shipco.com/website/home.php

13. Carrier - Voyage/Flight No. • The phrase "carrier - voyage/flight no." refers to the name of the carrier and its voyage number (in the case of ocean and land freight) or flight number (in the case of air freight). In ocean freight, the name of a carrier usually is preceded by letters S/S, SS, S.S., M/V, MV or M.V.. The S/S, SS or S.S. stands for steamship, while M/V, MV or M.V. for merchant vessel. The term steamship is still widely used despite the fact that modern ships are not propelled by steam.

14. ETD (ETS) and ETA • When booking shipping space, the exporter should know the ETD (ETS) and ETA of the shipment. • ETD is the estimated or expected time of departure from the port or point of origin; it applies to all modes of transportation. ETD is shipment on or about. • ETS is the estimated or expected time of sailing from the port of origin; it applies to ocean freight. ETS is sailing on or about. • ETA is the estimated or expected time of arrival at the port or point of destination; it applies to all modes of transportation.

15. 7. Calculate the total value of the shipment based on INCO Terms • Multiply the price X the number of units being shipped. • Add charges depending on INCO terms

16. Shipping Order/Permit • Issued by the shipping company to a shipper with a confirmed space booking, authorizing the receiving clerk (cargo checker) at the container terminal or dock to receive a specified amount of goods from the named shipper. • A shipping order (S/O) typically contains the space booking number, names and addresses of the shipper and customs broker or forwarder, vessel and voyage number, sailing time, delivery date and location, customs closing date, and number and type of packages.

17. Tariffs - truckers, steamship lines and airlines all publish rates in documents called tariffs