FREIGHT FORWARDING INTRODUCTION

FREIGHT FORWARDING INTRODUCTION

I. INTRODUCTION

Following the rules of the FIATA, Freight Forwarding Services are services of any kind relating to the carriage, consolidation, storage, handling, packing or distribution of the goods as well as ancillary and advisory services in connection therewith, including but not limited to customs and fiscal matters, declaring the goods for official purposes, procuring insurance of the goods and collecting or procuring payment or documents relating to the goods.

According to Article 163 of the Commerce Law 1997, Freight Forwarding is an act of commerce, under which the Freight Forwarder

-Receipt of goods from the Shipper,

-Transport organizations,

-Warehousing, Yard storage

-Do the paperwork and

-Other services related to the delivery of goods to the Consignee in accordance with the mandate of the cargo owner, of the carrier or of other Freight Forwarders.

In a nutshell, Freight Forwarding is a set of professionals, procedures related to transport processes in order to implement the movement of goods from the place of receipt (shipper) to the destination (consignee ). Freight Forwarder can do, either directly or through an agent and hire the services of a third party.

Who is Freight Forwarder?

Initially, Freight Forwarder is a trustee on behalf of Importer-Exporter to perform routine tasks such as: loading and unloading of goods, warehousing, arranging inland transport, payment on its customers behal etc.

The services offered by Freight Forwrader can include the ordinary and simple tasks such as transport booking or customs procedures to make full service for the whole process of transportation & distribution of goods.

In many different countries, Freight Forwarder is called with different names such as "Customs Agent", "Customs Clearance Agents", "Customs Brokers", "Shipping & Transportation Agents" & in first few case is "the transportation trustee" (the Contracting Carrier), which is the  carrier Principal. But in general business activity is selling services only.

In this lesson, we will outline the different activities within the Freight Forwarding service, Freight Forwarder’s relationship with the parties in the process of serving the customer.

II.RELATIONSHIP TO THE PARTIES:

In addition to the shipper & consignee, Freight Forwarder needs to transact with third parties in the course of serving its customers.

1.Government & other local authorities:

In the field of authorities, Freight Forwarder to dealing with the following agencies:

-Customs Dept: to declare with Customs.

-Port Authority: to arrange handling procedure at Port.

-Central Bank: to be allowed to exchange.

- Ministry of Health: to apply for medical licenses.

-Consular officials: to apply for Certificate of Origin (C/O).

-Trade Ministry: Import-export permit.

-Traffic-Transport Ministry: transport license.

2.Private parties:

In the private sector, Freight Forwarder transacts with parties:

The carrier or other agents, such as:

-Shipowners.

-The business of road transport, railways, aviation

-The inland water transport business in terms of scheduled freight transportation & storage.

-The warehouse management & storage of goods.

-The insurer for cargo insurance.

-Organization of packaging to packaging.

-Commercial banks to make credit vouchers.

III.SCOPE OF FREIGHT FORWARDING SERVICES

Unless shipper / consignee itself want to become personally involved at any stage of the procedure & certain documents, usually on their behalf, Freight Forwarder takes care of the transport of goods through the segments. Freight Forwarder can provide services directly or through sub-contractors or the agents they hire. Freight Forwarder also use their overseas agents. These services include:

1. On behalf of the shipper (Exporter)

Follow the instructions of the shipper, Freight Forwarder will:

-Select the route and mode of transport & the appropriate carrier.

-Make Booking with carrier selected ..

-Pick up cargo & issue appropriate documents such as: Forwarder’s Certificate of Receipt (FCR), Forwarder’s Certificate of Transport (FCT) etc. (These documents will be discussed in more detail in the "Freight Forwarding Documents").

-Look at the terms of the L/C & all government rules apply to the delivery of goods in the exporting country (exports), importing country (imports) as well as any transit country & prepare all the necessary documents.

-Packing goods (unless this done by the shipper before releasing shipment to Freight Forwarder) taking into account the route and mode of transport, the nature of the goods & applicable laws, if any, in the export country, transit country also importing country.

-Arrange storage of goods if required.

-Weigh/ Measure the goods.

-Note that the shipper needs to buy cargo insurance if the insurance requirements for goods.

-Transport the cargo to Port, take care of the customs declaration, care procedures related documents & delivery to the carrier.

-Arrange foreign exchange transactions (if any).

-Pay fees & other costs including freight.

-Pick up signed bill of lading and deliver to the shipper.

-Arrange transhipment within voyage if necessary.

-Supervising the freight throughout voyage leading to the consignee through the relationship with the carrier & Freight Forwarding agents in foreign countries.

-Acknowledge the loss/ damage of the goods, if any.

-Help shipper conduct complaint with the carrier for loss/ damage of goods, if any.

 2. On behalf of the consignee (Importer):

According to his delivery instructions, Freight Forwarder will:

-On behalf of the consignee to observe the movement of goods if consignee arrange transportation.

-Check & inspect all documents relating to the carriage of goods.

-Take delivery of goods from the carrier & pay freight charge if necessary.

-Arranging Customs declaration and pay fees, taxes & other charges for Customs & other concerned agencies.

-Arranging transit storage if needed.

-Deliver goods after Customes clearance to consignee.

-If necessary, help the consignee to conduct complaint against the carrier for loss/ damage cargo, if any.

-Help the consignee in the warehousing & distribution of goods, if necessary.

3. Other services:

In addition to these services, depending on customer requirements, Freight Forwarder can also do other services arising during transportation & all special services such as consolidation, related to project, turnkey projects, providing equipment, workshops, etc. 

Freight Forwarder can also inform their customers about consumer demand, new markets, the competitive situation, export strategy, the appropriate provisions to be included in the foreign trade contracts & in short, all issues related to the customer business.

SERVICES OF FREIGHT FORWARDER

 Consulting / Advising

-Packing

-Selection of materials used for production

-Routes

-Choose route & means of transportation

-Insurance

-Type of insurance needs for goods

-Customs clearance

-Customs declaration for imp-exp goods

-Transportation documents

-The accompanying documents (the carrier)

-The provisions of the L/

-Bank Request

Organizing

-The import-export & transit shipments

-Heavy weight cargo transport, Consolidation & project cargo.

Imports

-Discharge from the means of transport

-De-consolidation

-Customs Declaration

Exports

-Pick up

-Packing & Marking

-Booking with carrier

-Delivery of goods to the carrier

-Issue transport documents – freight invoice  accompanied

-Monitor delivery

-Send Arrival Notice to customers

-Customs Declaration

Transit

-Pick up sample

-Repackaging

-Customs-Storage (under the control of Customs)

-Arrange on-carriage

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