When shipping a product overseas, the exporter must be aware of packing, labeling, documentation, and insurance requirements. It is important that exporters ensure that the merchandise is:
- Packed correctly so that it arrives in good condition;
- Labeled correctly to ensure that the goods are handled properly and arrive on time at the right place;
- Documented correctly to meet U.S. and foreign government requirements, as well as proper collection standards;
- Insured against damage, loss, pilferage and delay.
Most exporters rely on an international freight forwarder to perform these services because of the multitude of considerations involved in physically exporting goods.
An international freight forwarder is an agent for the exporter in moving cargo to an overseas destination. These agents are familiar with the import rules and regulations of foreign countries, the export regulations of the U.S. government, the methods of shipping, and the documents related to foreign trade. Export freight forwarders are licensed by the International Air Transport Association (IATA) to handle air freight and the Federal Maritime Commission to handle ocean freight.
Freight forwarders aid exporters by advising on pricing, including freight costs, port charges, and documentation fees. They can also recommend packing methods or handle packing at the port. Additionally, they arrange space reservation on various transport modes. Their services’ cost is a legitimate export expense.
Exporters should be aware of the demands that international shipping puts on packaged goods. Exporters should jeep four potential problems in mind when designing an export shipping crate: breakage, moisture, pilferage and excess weight.
Generally, cargo is carried in containers, but sometimes it is still shipped as breakbulk cargo. Besides the normal handling encountered in domestic transportation, a breakbulk shipment transported by ocean freight may be loaded aboard vessels in a net or by a sling, conveyor, or chute, that puts an added strain on the package. During the voyage, goods may be stacked on top of or come into violent contact with other goods. Overseas, handling facilities may be less sophisticated than in the United States and the cargo could be dragged, pushed, rolled, or dropped during unloading, while moving through customs, or in transit to the final destination.
Specific marking and labeling is used on export shipping cartons and containers to:
- Meet shipping regulations;
- Ensure proper handling;
- Conceal the identity of the contents;
- Help receivers identify shipments;
- Insure compliance with environmental and safety standards.
The overseas buyer usually specifies which export marks should appear on the cargo for easy identification by receivers. Products can require many markings for shipment. For example, exporters need to put the following markings on cartons to be shipped:
Exporters should seriously consider having the freight forwarder handle the formidable amount of documentation that exporting requires as forwarders are specialists in this process. The following documents are commonly used in exporting; but which of them are necessary in a particular transaction depends on the requirements of the U.S. government and the government of the importing country.
- Air freight shipments are handled by air waybills, which can never be made in negotiable form.
- A NAFTA certificate of origin is required for products traded among the NAFTA countries (Canada, the United States, and Mexico).
The handling of transportation is similar for domestic and export orders. Export marks are added to the standard information on a domestic bill of lading. These marks show the name of the exporting carrier and the latest allowed arrival date at the port of export. Instructions for the inland carrier to notify the international freight forwarder by telephone upon arrival should also be included.
Exporters may find it useful to consult with a freight forwarder when determining the method of international shipping. Since carriers are often used for large and bulky shipments, the exporter should reserve space on the carrier well before actual shipment date. This reservation is called the booking contract.
Damaging weather conditions, rough handling by carriers, and other common hazards to cargo make insurance an important protection for U.S. exporters. If the terms of sale make the exporter responsible for insurance, the exporter should either obtain its own policy or insure the cargo under a freight forwarder’s policy for a fee. If the terms of sale make the foreign buyer responsible, the exporter should not assume (or even take the buyer’s word) that adequate insurance has been obtained. If the buyer neglects to obtain adequate coverage, damage to the cargo may cause a major financial loss to the exporter.
Shipments by sea are covered by marine cargo insurance.