Longistics PPT

1. Krieger Worldwide
Exporting
Click to edit Process Overview & Role of thestyle & Broker
Master subtitle Forwarder

2. Export Seminar Series
Export Transportation & Logistics

3. Shipping in America
•
No Customs regulations between
states
•
Goods are moved easily from origin to
destination
•
Our experience leads us to believe
shipping outside the USA is the same

4. American Image of Shipping

5. International Shipping
•
There are more than 100 countries in
the world
•
Each has its own export procedures
•
Each has its own import procedures
•
Despite the advertisements there is no
simple quick-fix solutions

6. Quick Overview
•
Lets look at international shipping as a
series of related steps
•
This is a simplified view and covers the
basic process only

7. Origin to Port
FACTORY
INLAND
TRANSPORT
FORWARDER
WAREHOUSE

8. Export
FORWARDER
WAREHOUSE CUSTOMS
EXPORT
CLEARANCE PORT OF
LOADING

9. International Shipping
ORIGIN
PORT CARRIAGE
DESTINATION
PORT

10. Ocean Freight Options
•
FCL - Full Container Load
•
Also flat racks even those out of gauge
•
LCL - Less-than-Container Load also
known as NVOCC
•
Bulk - like ores, grains, or oil
•
RORO – roll on roll off such as autos
•
Breakbulk – tractors, yachts, etc.

11. Containerized Ocean Freight
FCL LCL
Shipper loads & seals container transferred to carrier
Container
CFS receives and loads Container for NVOCC carrier truck for CFS
container transferred to loads
Shipper

12. Airfreight Options
•
Consolidation (HAWB)
•
Direct airfreight (MAWB)
•
Tendered as pieces
•
Tendered as shipping pallets
•
Tendered as ULD’s

13. Airfreight Rates
•
By weight
•
Generally the greater the weight the lower
the rate per weight unit (LB/KG).
•
By size
•
Size is converted to weight on the basis of
165 cu.in. = 1 pound.
•
The consolidator or carrier will charge
whichever yields the greater cost.

14. Advantages of Consolidation
•
The consolidator has lower costs based
on contracts or on higher volumes
•
The consolidator is obtaining a lower
rate per weight unit based on all the
cargo moving on one MAWB.
•
The consolidator shares part of these
benefits in the form of lower rates than
direct shipments.

15. Role of Freight Forwarder
•
Usually arranges pickup from factory
•
Often acts as agent to file export
clearance paperwork for seller
•
Selects carrier and makes booking
•
In airfreight freight forwarders are
generally consolidators as well
•
Controls largest portion of costs

16. Additional Forwarder
Services
•
Packing & labeling
•
Letter of credit or draft negotiation
•
Export documentation
•
Cargo Insurance

17. Arrival
DESTINATION
PORT (CFS)
CONTAINER
FREIGHT
STATION

18. Import
CFS CUSTOMS
CLEARANCE DELIVERY

19. Broker as Coordinator
Carrier
Pier
Customs
Importer
CFS
Cashier
Trucker
Customs
Broker
Exam Inland
Site Carrier

20. Role of the Customs Broker
•
Assist importer in classification (how
duty rates are determined)
•
Prepare and file Customs documents
•
Coordinate paperwork between carrier,
CFS, and delivery trucker
•
Arrange Bonds & Insurance
•
Delivery and more

21. Other Broker Services
•
Arrange inland delivery
•
Provide warehouse and distribution
services
•
Assist with Customs compliance

22. Overview
Freight Forwarder Broker
Origin Carriage Destination
Factory Origin Import
Port Customs
Warehouse
Carrier Exam
Export
Destination
Customs Port Inland Move
Loading CFS Warehouse

23. Export Order Process Flow
•
Determine export controls for product
•
Determine transport requirements.
•
Quote.
•
Review/Process Order.
•
Book shipment.
•
Prepare documents.
•
Ship goods & file customs formalities.
•
Process banking documents L/C S/D.

24. Export Requirements
•
Is your commodity controlled—does it
require a license?
•
ITAR
•
BIS (Bureau of Industry & Security)
•
Are you able to ship to that consignee
or that country?
•
BIS
•
AES (Automated Export System)—filing
your export declarations

25. Transport Requirements
•
Dangerous goods?
•
Refrigerated?
•
Oversize or
overweight?
•
Perishable or
fragile?

26. Transportation Control
•
If the seller has products with special
conditions such as refrigerated,
oversized, perishable, or dangerous
goods the transportation arrangements
will normally be more successful if the
seller arranges them rather than the
buyer’s freight forwarder.

27. Quote
•
Determine the applicable INCOTERM
•
Always ask for packing and document
requirements to be specified by the
buyer (this is your insurance card).
•
Always stipulate your conditions for
payment.

28. Review/Process Order
•
Have payment conditions been met?
•
Can shipping terms/conditions be met?
•
Can document requirements be met?
•
Process order.
•
Ensure order and documents meet
conditions set by the parties.

29. Book Shipment
•
Make sure all requirements/conditions
are passed to carrier and confirmed.
•
Ensure special conditions such as
temperature control, dangerous goods,
etc. are passed and confirmed.

30. Documentation
•
Standard documents are:
•
Commercial invoice stating INCOTERM
with detailed description of goods.
•
Packing list showing cartons by number
and contents of each numbered carton.
•
Shipper’s letter of instruction and/or
Export Declaration (to forwarder only).
•
Other documents as specified by the
buyer.

31. Shipping
•
Ensure that the goods are ready and
meet the conditions of the order and
the booking.
•
Follow up with the carrier to ensure
they are picked up.
•
Ensure that the forwarder or carrier is
filing AES (Automated Export System)
on your behalf and obtain a copy.

32. Banking Documents
•
If you are using your own forwarder it
is more expeditious to have them file
your letter of credit or sight draft
documents.
•
If you are using the client’s forwarder
it is recommended that you complete
the drafts and present them to the
bank.

33. Export Issues
•
Duty Drawback
•
Goods imported then re-exported
•
Fungible items
•
Complex—may not be worth the effort
•
Export Controls
•
Controversial Export
•
Difficult to understand Licenses

34. Carnet
•
Avoids duties and taxes in each
country goods pass through
•
Covers many major countries
•
Covers:
•
Tools of the trade
•
Demonstration equipment
•
Samples not for sale or distribution

35. FTZ Benefits
•
Goods outside Customs Territory of US
•
Tariff shifts possible
•
Delays duty payment
•
Export without drawback headaches
•
Fix problematic goods
•
Reduce MPF

36. Who Arranges All This?
•
The INCOTERMS agreed to between
the buyer and seller specifies which
party is responsible for each step
•
Choosing the appropriate INCOTERM
has very important benefits
FO CF
DD CI EX
B R W
U F

37. INCOTERMS 2000
•
Spells out obligations of seller for each
term of sale
•
Spells out obligations of buyer for each
term of sale

38. INCOTERMS in Export
•
EXW (ex-works)
•
FOB is commonly misused
•
FCA (free carrier)
•
CFR (cost and freight to)
•
CIF (cost, insurance, & freight to)
•
DDU (delivered, duty & taxes unpaid)
•
DDP (delivered duty paid—taxes to be
specified

39. FOB – Free On Board
•
Applies only to ocean or inland cargo
•
Seller:
•
Obtains licenses to export
•
Performs export customs formalities
•
Takes risk until good pass ships rail
•
Pays all costs up to goods passing ships
rail

40. FOB Challenges
•
Loading costs are difficult to control.
•
The hand-off of goods from buyer to
seller is complicated.
•
Typically applies to large cargo with
special loading requirements such as
yachts and large construction
equipment.

41. EXW – Ex Works
•
Exporter places goods at their
premises for buyer to pick up. Buyer
takes all risks, performs all customs
formalities, obtains all licenses,
provides labor to load goods, etc.

42. EXW Challenges
•
Often conflicts with US export customs
regulations as seller is the PPI.
•
Impractical loading as seller normally
cannot permit buyers contractor on
property to load without waivers.
•
Buyer is free to sell the merchandise
anywhere—even in seller’s own
market.

43. FCA – Free Carrier
•
Seller has the obligation to deliver the
goods and documents to carrier
selected by buyer with the appropriate
licenses and customs formalities for
export.

44. FCA Challenges
•
Seller must train multiple buyer’s
carriers.
•
Multiple truck pickups.
•
Buyer staff must learn multiple
carrier’s documents.
•
Scapegoating.
•
Buyer bears risk of refused shipment.

45. CFR – Cost & Freight
•
Seller’s invoice includes cost and
freight to destination.
•
Seller arranges transportation.
•
Seller obtains export licenses and
performs customs formalities.
•
Buyer takes all risks of transportation.

46. CFR Points
•
Seller uses forwarder who knows
product and keeps shipping simple.
•
Seller can use forwarder to file
customs formalities with confidence.
•
Seller is still at risk if buyer refuses
shipment.

47. CIF – Cost, Ins. & Freight
•
Similar to CFR except that seller takes
the risk and obtains insurance to cover
the shipment to destination.

48. CIF Points
•
Seller uses forwarder who knows
product and keeps shipping simple.
•
Seller can use forwarder to file
customs formalities with confidence.
•
Seller’s risk for loss, except refusal, is
covered by insurance.

49. DDU – Delivered Duty Unpaid
•
Seller is responsible for transportation
arrangements and costs to the named
place including export customs
formalities.
•
Buyer is responsible for customs
clearance arrangements and costs as
well as unloading costs at destination.

50. DDU Points
•
Seller is at risk for storage charges
resulting from buyer’s agent speed of
customs clearance.
•
As the hand off is overseas from
seller’s agents to buyers agents then
back to seller’s agents and finally to
buyer there are many opportunities for
failure, cost, and liability

51. DDP – Delivered Duty Paid
•
Seller is responsible to deliver the
goods to the named place customs
cleared without risk to the buyer.
•
Seller arranges for export formalities
•
Seller arranges transportation
•
Seller arranges insurance
•
Seller arranges import clearance and
pays duties

52. DDP Challenges
•
Seller must be able to legally file entry
in seller’s name in a foreign country. If
seller is unable to do so then buyer
may insist on using their broker but
seller still remains liable for service
and costs.
•
Seller must have assets in place to
comply with the foreign country’s
import regulations.

53. More DDP Challenges
•
Seller is at risk for changes in duty and
import requirements.

54. Can I Import? A DDP Issue
•
Trade sanctions
Iran
•
Special limitations
•
Other government agencies FDA
•
Additional documents
DO
T
VISAS USD EP
A A

55. Forwarders – Who Benefits?
For The Exporter For The Importer
•
Reduces workload • Controls carrier
•
Helps reduce selection – cost
inland costs and transit time
•
Can assist in •
Provides
preparing and information about
filing documents the location of
•
Familiarity with the goods
product & special

56. Brokers – Who Benefits?
For Exporters For Importers
•
Exporters •
Legally liable for
generally derive the documents
no services or filed by brokers
benefits from •
Plays a vital role
brokers in coordinating all
parties at arrival

57. How Do Forwarders Profit?
•
Largest revenue source is freight
profits
•
Trucking and insurance provides some
additional revenue
•
Small amounts of revenue are from
service fees

58. How to Brokers Profit?
•
Charges fees based on work performed
•
Make additional profit from providing
insurance, trucking, or warehousing
services

59. Typical Order of Costs
1. Cost of goods
2. Transportation cost
3. Warehousing & distribution
4. Duties
5. Insurance & bonds
6. Customs broker fees

60. Do The Math
•
Importers use Landed Cost Analysis to
calculate the true cost
•
Exporters use only that portion of the
Landed Cost Analysis that applies to
their INCOTERM

61. Planning Is Key
•
Know the transport needs of your
goods
•
Is export permitted?
•
Is import permitted?
•
Know the documentation requirements
for your goods

62. Where Do I Get Advice?
•
Customs brokers
•
Freight forwarders
•
Government Export Promotion
Agencies
•
Logistics consultants

63. Customs-Trade Partnership Against
Terrorism (C-TPAT)

64. Brief History
In 1965, Mr. Norman Krieger
opened his first Customs brokerage
office in downtown Los Angeles. Over
the years, the company has grown
from two employees to over 100.
Today, his son Robert, is the President
of Krieger Worldwide.

65. Thank You
Click to edit Master subtitle style
Gary Stratton