MODULE 4AD
SHIPMENT PLANNING A
Main players in the shipping process
1. Importer: The importer is the buyer. He identifies the need for a
product at a specific location, searches for the best supplier globally,
and places an order for purchase. There are three types of importers:
• Actual user, who utilises the imported goods for himself. An
actual user can be industrial (uses the goods for manufacturing
in his own industrial unit) or non-industrial (utilises the goods
for his own use in a commercial unit, lab, research institute,
university, hospital, etc)
• Established importer, who, as the name suggests, is granted a
quota to import a product on the basis of past imports
• Registered exporter, who imports under the government’s
export promotion schemes
2. Exporter: The exporter is the seller. He manufactures or procures
the product required by the buyer. The various types of exporters
are:
• Merchant exporter, who procures the product from the market
or manufacturer and exports it in his name
• Manufacturer exporter, who procures raw material,
manufactures the goods and exports the finished product
• Service exporter, who exports services (software, consultancy
services, etc)
• Third-party exporter, who exports goods and services on behalf
of another exporter (manufacturer exporter)
, • Project exporter, who provides goods and services on contract
(designing, manufacturing, etc) and earns foreign exchange
3. Bank: Banks play multiple roles in international trade. They act as
financiers, providing loans and trade finance products such as Letters
of Credit and Documentary Collections. A Letter of Credit is a
promise by a bank on behalf of the importer to pay the exporter an
agreed-upon sum. A Documentary Collection is when a bank takes
charge of collecting the payment due to an exporter from the
importer’s bank. In addition, banks negotiate trade contracts and are
custodians of goods and documents. Documents are vital to the
import-export business.
4. Insurance Company: Shipping goods comes with risks, including
but not limited to lost or damaged cargo, delays and additional costs
due to factors such as natural disasters, human error, theft, piracy
and more. Insurance companies help cover these risks.
5. Freight Forwarder: Freight is the cargo carried by ships and a
freight forwarder is an agent who, on behalf of the importer or
exporter, coordinates with all the other players (port and customs
authorities, shipping company, etc) in the ocean freight business. His
responsibilities include negotiating for better routes and rates,
handling paperwork and other formalities, organising land
transportation, being an advisor to the importer/exporter, and much
more.
6. Shipping Company: The company that owns the carrier (ship) that
transports the goods from the port of loading to the port of
destination.
7. Customs House Agent (CHA): A customs house agent assists
exporters and importers in getting clearance for the cargo from
customs authorities.
, 8. Customs Authorities: In international trade, the customs
authorities of at least two countries – the country of export and
country of import – are involved. They provide clearance for goods to
leave the country of export and to enter the country of import.
9. Port Authorities: Like customs authorities, the port authorities of
at least two countries are involved in the shipping process. In the
exporting country, they provide clearance for goods to be loaded on
to the ship. In the importing country, they provide clearance for
goods to enter that country.
10. Intermodal Transport Providers: Rail and road transport
providers facilitate the movement of goods from the
factory/warehouse to the port of loading and from the port of
destination to the final destination.
From Exporter to Importer: How the Shipping Process works
Contrary to popular belief, the international shipping process does
not start when a product is loaded onto a ship. It starts much earlier,
when an importer identifies the need for that product and floats an
enquiry to procure it. As such, the shipping process covers the flow
of goods and documents from the place of origin to the place of
destination. For the process to be completed successfully, the
transfer of goods and documents from one party to another must be
highly synchronised.
This infographic is a step-by-step guide to the international shipping
process (for a shipment exported from India):
SHIPMENT PLANNING A
Main players in the shipping process
1. Importer: The importer is the buyer. He identifies the need for a
product at a specific location, searches for the best supplier globally,
and places an order for purchase. There are three types of importers:
• Actual user, who utilises the imported goods for himself. An
actual user can be industrial (uses the goods for manufacturing
in his own industrial unit) or non-industrial (utilises the goods
for his own use in a commercial unit, lab, research institute,
university, hospital, etc)
• Established importer, who, as the name suggests, is granted a
quota to import a product on the basis of past imports
• Registered exporter, who imports under the government’s
export promotion schemes
2. Exporter: The exporter is the seller. He manufactures or procures
the product required by the buyer. The various types of exporters
are:
• Merchant exporter, who procures the product from the market
or manufacturer and exports it in his name
• Manufacturer exporter, who procures raw material,
manufactures the goods and exports the finished product
• Service exporter, who exports services (software, consultancy
services, etc)
• Third-party exporter, who exports goods and services on behalf
of another exporter (manufacturer exporter)
, • Project exporter, who provides goods and services on contract
(designing, manufacturing, etc) and earns foreign exchange
3. Bank: Banks play multiple roles in international trade. They act as
financiers, providing loans and trade finance products such as Letters
of Credit and Documentary Collections. A Letter of Credit is a
promise by a bank on behalf of the importer to pay the exporter an
agreed-upon sum. A Documentary Collection is when a bank takes
charge of collecting the payment due to an exporter from the
importer’s bank. In addition, banks negotiate trade contracts and are
custodians of goods and documents. Documents are vital to the
import-export business.
4. Insurance Company: Shipping goods comes with risks, including
but not limited to lost or damaged cargo, delays and additional costs
due to factors such as natural disasters, human error, theft, piracy
and more. Insurance companies help cover these risks.
5. Freight Forwarder: Freight is the cargo carried by ships and a
freight forwarder is an agent who, on behalf of the importer or
exporter, coordinates with all the other players (port and customs
authorities, shipping company, etc) in the ocean freight business. His
responsibilities include negotiating for better routes and rates,
handling paperwork and other formalities, organising land
transportation, being an advisor to the importer/exporter, and much
more.
6. Shipping Company: The company that owns the carrier (ship) that
transports the goods from the port of loading to the port of
destination.
7. Customs House Agent (CHA): A customs house agent assists
exporters and importers in getting clearance for the cargo from
customs authorities.
, 8. Customs Authorities: In international trade, the customs
authorities of at least two countries – the country of export and
country of import – are involved. They provide clearance for goods to
leave the country of export and to enter the country of import.
9. Port Authorities: Like customs authorities, the port authorities of
at least two countries are involved in the shipping process. In the
exporting country, they provide clearance for goods to be loaded on
to the ship. In the importing country, they provide clearance for
goods to enter that country.
10. Intermodal Transport Providers: Rail and road transport
providers facilitate the movement of goods from the
factory/warehouse to the port of loading and from the port of
destination to the final destination.
From Exporter to Importer: How the Shipping Process works
Contrary to popular belief, the international shipping process does
not start when a product is loaded onto a ship. It starts much earlier,
when an importer identifies the need for that product and floats an
enquiry to procure it. As such, the shipping process covers the flow
of goods and documents from the place of origin to the place of
destination. For the process to be completed successfully, the
transfer of goods and documents from one party to another must be
highly synchronised.
This infographic is a step-by-step guide to the international shipping
process (for a shipment exported from India):
