Shipping goods overseas can be a difficult and time-consuming task if carried out without careful preparation. International laws and customs barriers, as well the as improper handling and tracking of goods, can result in a stalled shipment or financial losses. However, the process of shipping goods internationally can be simplified, and carried out effectively, by ocean freight forwarders.
Transport of Goods
When goods are properly packaged, the ocean freight forwarder will arrange for ground transport to pick them up for delivery to a warehouse usually located near the departure port. The cargo is then transferred to the warehouse where it will be loaded into sealed containers manufactured specially for ocean transport. Containers are available in several different lengths ranging from 20 feet to 53 feet. The standard container lengths are 20 feet and 40 feet with a nominal width of 8.5 feet and height of 8 feet. Forwarders offer both full container load (FCL) and less than full container load (LCL) packing. Occasionally, however, containers will be packed by the shipper at its own facility and then brought directly to the shipping dock for loading. This step eliminates the need for additional warehousing and can result in considerable savings for the shipper.
Forwarder Responsibilities
Typically, ocean freight forwarders provide the following services:
▪ Quotations for the total cost of shipping cargo based on a pro-forma invoice
▪ Preparation of necessary documentation for carriers, warehousing, ocean freight and customs clearance
▪ Arranging carrier transportation from point of origin to nearest or cheapest ocean port
▪Obtaining adequate insurance covering the goods through each step of the process
▪Organizing warehousing and containerizing of the cargo in preparation for loading
▪ Contracting with dockside facilities to physically load containers
▪ Maintaining an agency at the destination port to assist the consignee with customs clearance and receipt of goods
Insurance
One of the most important aspects of the forwarders’ duties is risk management.
Marine cargo insurance, while being the oldest form of insurance, is also the most complicated. While ocean freight forwarders do not usually directly sell insurance, they are in a particularly good position to help the shipper procure the most advantageous policy. This is primarily due to the fact that marine insurance is offered as a list of clauses stating the specific risks for which a shipper can select coverage. A few examples of the many clauses that can be selected are those covering:
▪Fire
▪ Explosion
▪ Acts of war
▪ Warehouse theft
▪ Loss resulting from boiler and pipe leaks
▪ Piracy
▪ Strikes at warehouses and docks
And, of course, no two shipping lanes present identical risks, as is evident from the many recent incidences of piracy.
Businesses needing to arrange ocean shipping will normally contact several forwarders in order to obtain the most satisfactory quote. When a satisfactory price is determined the forwarder will prepare a bill of lading, which is essentially a copy of the shipper’s packing list of goods, showing the quantity, weight and value of each item. Additionally, it is the responsibility of the forwarder to ensure that each item on the bill of lading is identified by a special code designated by the International Harmonized Trade Codes. These codes are necessary for customs clearance and the calculation of duties at the destination port.
In many instances, however, the shipper does not have sufficient cargo to fill a container. In that case the forwarder arranges for LCL packing at the dockside warehouse, and provides documentation enabling the goods to be properly sorted and delivered to the consignee at the destination.
Given the multitude of responsibilities assumed by the ocean freight forwarder, it becomes clear how this seemingly obscure occupation has evolved into such a necessary function. It is all the more remarkable when we consider that the forwarder rarely, if ever, actually sees or has physical contact with the goods for which he is ultimately responsible.