INTERNATIONAL LOGISTICS

Delivering The Goods

The Importance of a Logistics Partner…

A “Logistics Partner” can simplify your export program by allowing you to concentrate on your business.

We’ve listed a few options… Do it Yourself? (Time consuming –

knowledge and experience required) Not recommended unless you have experience

The Importance of a Logistics Partner…

Freight Forwarder (Also known as “Ocean Transport Intermediary” ‘OTI’) Federal Maritime Commission Licensed Bonded as a licensed requirement Background checked by FMC Coordinates movement of cargo, complete

documentation including Letters of Credit, Export regulations assistance

Provides complete transport cost analysis in advance. Also does Air Freight.

The Importance of a Logistics Provider…

NVOCC (Non Vessel Operating Common Carrier)“The Shipless Shipline” FMC licensed and bonded

(may also be an OTI) Acts as a Common Carrier

(issues own Bill of Lading) BL has same standing as vessel operator

(most cases)

The Importance of a Logistics Provider…

NVOCC (Non Vessel Operating Common Carrier)“The Shipless Shipline”also… Contracts for space on vessels and

guarantees volume to carrier in return for discount (buys wholesale)

Re-sells space to customers at a charge somewhat more than cost but usually less than if customer went directly to carrier

The Integrator (FedEx, UPS, DHL, etc…)

Integrator (FedEx, UPS, DHL, etc…)

Usually a larger company with significant capital investment

Multiple offices and terminals Depends upon large volumes of freight to

support network Acts as Common carrier, Forwarder,

Trucker, Airline, Customs Broker, and Delivery Agent

Forwarder vs. Integrator…

How do I choose? All of these different models have advantages to the exporter depending upon needs and requirements!!! Be flexible… Generally speaking, the services offered by integrators

have evolved from the business model which was based upon courier services for documents and small package shipments. Recently, as is evidenced by advertising, integrators are offering “large package” services both by air and ocean

The Freight Forwarder (MFC Licensed) has been doing this from the outset

Forwarder vs. Integrator

The major difference between utilization of an integrator and/or a licensed freight forwarder really boils down to size vs. personal service Integrator = Big, good for large quantity of small

shipments. Freight Forwarder = Usually smaller, maybe

family-owned, provides more personal service level. Better for complicated needs, Letters of Credit, etc…where quick access to experience is desirable.

The Contract of CarriageThe Ocean Bill of Lading…

Contract between the shipper (You) and the Carrier Read the back – (Most are very similar) Ignorance is not an excuse or defense Read the front…Especially the “Declared

Value” portion If you fill this in, you will be charged an

additional fee It is cheaper to buy cargo insurance

The Contract of CarriageThe Ocean Bill of Lading

Carriage of goods by Sea (COGSA) Limitation of Liability $500 per piece, package, or customary freight

unit If you tender a full container, sealed at origin,

the entire container maybe a single freight unit!!!

The Contract of CarriageThe Airway Bill

Airway Bill Read the back – Limits of Liability

IMPORTANT Ignorance is not an excuse or defense Read the front … “Declared Value” Total Liability … USD $20.00 per Kg

(Approximate) Cheaper to insure…

Export Documentation…

It has been said that “the fuel of international trade is paper”

A typical export transaction from the U.S. will have: Commercial Invoice (it must include a

Destination Control Statement “These commodities, technology, or software were exported from the United States in accordance with the Export Administration Regulations. Diversion contrary to U.S. law is prohibited.”)

Export Documentation…

Certificate of Origin Export Declaration Insurance Certificate Bill of Lading or Airway bill Packing List “Certificate of Free Sale” (not always but

possible)

Export Documentation

If a Letter of Credit is involved, there could be any number of additional documentary requirements that add to the package

Additionally, export licenses may be required for certain items

Export Compliance with Target Market Regulations Drugs, Medicines, Pharmaceuticals… Radiation Emitting Appliances Labeling Country of Origin Marking Electrical Foods Packing Materials Language Phytosanitary Fumigation

Export Control and Licensing

Certain products and merchandise are subject to export controls. Military products, munitions, “precursor items”, Crime Control, things that hurt people, help an enemy or go bang!

Your Responsibility as an exporter to know your product

Forwarder can help Penalties can be mind-boggling!!!

Freight Insurance: Why Insure?

Carrier’s limit of liability (COGSA & Warsaw Convention)

Filing claims is problematic and can be complicated Insurance pays the claim and then files with the

carrier You may have to file suit against the Carrier to get

its attention Carrier will try to keep you talking until is “Time

Barred”

Freight Insurance: Why Insure?

Irritation, heartburn, frustration Use “declared value” to increase carrier

liability? Expensive and insurance is cheaper and easier to

use

Usually required with Letters of Credit Cost is usually less than 2% of value of

shipment… (1.25% is average)

In Conclusion…

So, you can “do-it-yourself”, or…

Select a logistics partner that will allow you to concentrate on the marketing of your product!!!

Papa Omar DiopInternational Trade & Assistance Center

Columbus State Community College

Tel: 614-287-3850 Fax: 614-287-6311

E-mail: pdiop@cscc.edu

sbdcfreeadvice.ning.com