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DHL DHL Global Forwarding Portland Oregon FORWARDING 101 Greetings Please

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DHL DHL Global Forwarding Portland Oregon FORWARDING 101 Greetings Please Powered By Docstoc
					DHL Global Forwarding
Portland, Oregon




                FORWARDING 101
Greetings


 Please advise:

 Your Name

 Career Aspirations

Logistics / work experience



Question – Protocol



Ask me about the guarantee !!!



What is the most important issue
pertaining to cargo transportation on
Earth today?


Forwarding 101                          Page   2
What are we going to talk about?


 This Forwarding 101 course is designed as a general, high level overview of
the transportation industry.
 - Differences between Couriers and Forwarders
 - Factors that Impact Transit and Cost
 - Air Export (Market information, Rating structures, Documentation, etc.)
 - Ocean Export (Market information, General guidelines, etc.)
 - Other necessary documentation (C of O, L/C, etc.)
 - Insurance
 - Incoterms
 - Importing and Customs Brokerage
 - Domestic transportation


Forwarding 101                                                                 Page   3
Differences between Small Pack Courier & Freight Forwarder


DHL Express                           DHL Global Forwarding




• Customer facing people often wear   • Customer facing people typically
yellow and red.                       wear anything but yellow and red.

• Vehicles are also yellow and red    • Vehicles are contracted to meet
and well branded                      the needs of our customers and
                                      often not company owned


Forwarding 101                                                             Page   4
    Courier vs. Forwarder
 If the van driver can’t pick up your freight (without getting a hernia), then it’s most
likely freight more appropriate for DHL Global Forwarding.

 If the value is over $2000, DHL Express cannot do a manifest (bulk) entry through
customs.

Things to look for:

• Account numbers that are numeric such as: 854288888 (or starting with ’96’) would be
  for DHL Express. DGF International account numbers are 5 digits (alpha/numeric) and
  7 or less for domestic (all numeric).

• The size of your freight. Typically small packages, up to 50lbs, are cheaper if sent via
  DHL Express (or any courier for that matter).

  – DHL Express should be considered for time sensitive small packages

  – Whereas DHL Global Forwarding’s strength is heavyweight air, ocean freight and
    heavyweight domestic transportation.

  – Questions? Give us a call and we’ll help you out.


    Forwarding 101                                                                           Page   5
Freight Forwarders versus (Direct) Carriers


 Freight Forwarder    DGF             Airline (Integrator) DHL Express

Uses multitude of carriers for best
option
                                      Closed system with one routing
 Formal
                                      Informal
 Variety of destinations
                                      Set destinations
 Destination offices arrange
                                      Facilities at destination
clearance and delivery

Security between shipper and
 carrier                              Can refuse service to unknowns

 Buying power to destination

 Can offer consolidation pricing      Published tariff for customers
Forwarding 101                                                         Page   6
What is a Freight Forwarder?


 DHL Global Forwarding (a.k.a. DGF) is a non-asset based supply chain
company.

 In layman’s terms this means that we don’t own the boats, planes or trucks that
your freight moves on.



 The benefits to being a non-asset based forwarder are:

 - No set schedules to operate under

 - Multiple service offerings

 - No size/weight limitations




Forwarding 101                                                                Page   7
International Market Conditions


  - Devaluation of the US Dollar equals greater US exports. When the US Dollar
is higher against other world currencies, there are fewer US exports.

 - Oil prices based on US Dollar. To purchase oil using a favorable currency
(Euro) forces the price upwards for people using the US Dollar

- From 2007-2009 there has been a market shift from Air Freight to Ocean
Freight.

- Carriers (air & ocean) seek the most profitable market lanes. Formerly these
were to/from the U.S., they remain to/from Europe and Asia.

 - An estimated 450 container vessels are idle, world-wide due to poor
trade/market conditions. >1 million TEU – Twenty foot equivalents.




Forwarding 101                                                                 Page   8
OCEAN MARKET STATEMENTS


During 2nd half of 2008 dramatic slump of exports from Far East. Followed by
a substantial deterioration of volume and rates in all markets



Considerable capacity was withdrawn from the market


Almost all major carriers have announced rate increases in several steps for
all major tradelanes. However, the implementation of the rate restoration
program starting April 1st was so far disappointing

Container shipping is facing cut-throat competition
Vital need to reverse present market development in the short term to ensure
sustainable service levels (carrier view)


Forwarding 101                                                                  Page   9
PDX Market for Airfreight & Ocean freight

Portland is not considered a large market and only has a few direct cargo flights
overseas, therefore it is very likely that your freight will move to Vancouver,
Seattle,      San Francisco or LA for the international flight        ( Gateway )

• Likewise for imports, your freight will likely come into another airport first, then
  transferred to PDX.

Ocean carriers also typically call another port of call, rather than Portland direct.
This means that your freight is then either trucked or railed from that port to
Portland.

• Direct call carriers vary by year. Give us a call and we can let you know who’s currently
  calling direct. (Currently Hanjin & Yang Ming Lines – but they use the same vessel).

 The size of the aircraft is important as the specs will change based on the type.
The height of the cargo door, the types of aircraft containers that can be loaded,
the types of cargo that are accepted, can all vary.




Forwarding 101                                                                           Page 10
Factors that Impact Transit and Cost

Peak Season: During the period from August through December, things get really
busy as retailers and others prepare for the holiday season.

• Imports from Asia: Both air and ocean carriers are very full. They typically impose a
  PSS (peak season surcharge). Backlogs are common causing delays that can
  sometimes last weeks.

• Domestic: Ramping up to Christmas, trucks and domestic planes are full due to US
  Mail, Christmas Trees and a variety of other commodities.

 Other Peaks

• Chinese New Year: The lead up period to Chinese New Year gets busy as everyone
  tries to beat the one week shut down.

• Produce season: Cherries and other produce will dominate the domestic market during
  key seasons.

How to minimize potential delays in transit

• Make advance bookings, provide your shipping
  company with forecasts.
Forwarding 101                                                                            Page 11
Factors that Impact Transit and Cost


 Customs Clearance – impacts total transit time

• Remember that when you are quoted a transit time, it is to destination port/airport. You
  have to factor in an additional days for customs clearance (depending on the
  destination country).

 The Trade Lane – not all rates are created equal

• Import and Export rates are not going to be the same, even if the trade lane is the
  same.

   – Example: Import ocean rate of $3000.00 from Shanghai to Portland. But the export
     rate may be as low as $1000.00 from Portland to Shanghai. These are not exact
     numbers, but the spread can be huge depending on the lane, the trade imbalance,
     the mix of freight the carrier needs, etc.

   – For domestic shipments, if all factors are kept static, rates should be the same both
     ways, with the exception of full truckloads.



Forwarding 101                                                                           Page 12
Transit versus Cost (direct or consolidation)


 If you need your shipment urgently, then transit time is going to be the most
important factor.

• You will want a “direct” service if available.

• This applies to imports, exports and domestic.

 If achieving the lowest cost is the most important, then we’ll want to find a
consolidation service, which will have a longer transit time, and lower cost.

• Domestically, ground versus air is not always clear cut, but tell us your needs and we’ll
  make sure we meet them.

 Not sure? We have a variety of options.

• Day definite, direct consol, etc.

 In all cases, tell us what your requirements are, and we’ll

 give you some options.



Forwarding 101                                                                           Page 13
AIR EXPORTS AND GENERAL INFORMATION




Forwarding 101                        Page 14
Dimensional Weight in Airfreight

  Air: You will be charged the greater of the actual or volume weight

 • International: Dimensional weight = Length x Width x Height divided by 166 for lbs
   and by 366 for kg.

  Dimensional weight calculations are mainly used for airfreight shipments to
 determine the density. Airlines, like truck lines, use weight to determine their pricing.
 But unlike truck lines, airplanes have more restrictive space issues due to the shape of
 the fuselage (round not square) and much of the freight also has to be shared with
 passengers. That makes the aircraft space a very valuable commodity.

  This is the reason for dimensional weight calculations. It applies to things that take up
 space, but don’t have a corresponding weight for something that size. For domestic
 airfreight, the dim factor is normally 194. That means 194 cubic inches equals one
 pound. For international shipments, the dimensional weight factor is usually 166 or 166
 cubic inches equals one pound.

   Keep the dimensional factor in mind when thinking about airfreight transportation. The
      airfreight charge can be greatly effected if you are shipping voluminous cargo.


Forwarding 101                                                                               Page 15
Air Containers Examples


 LD3
• Internal Volume: 153 cuft

• Max Weight: 3500 lbs



 LD9
• Internal Volume: 375 cuft

• Max Weight: 13,300 lbs



 10ft Maindeck
• Internal Volume: 619 cuft

• Max Weight: 15,000 lbs


Forwarding 101                Page 16
OCEAN CARGO AND GENERAL INFORMATION




Forwarding 101                        Page 17
Ocean Transportation, Weights and Dimensions


 Ocean

• CBM = Cubic Meter

• 1,000 kilos = 1 CBM

• Less Than Container (LCL) is rated per weight or measure

     – W/M = weight/measure (1,000 kilos or 1 cbm, whichever is greater)

• Full Container Load (FCL) is rated by container

     – TEU = Twenty Foot Equivalent (33 cbm’s)

     – FEU = Forty Foot Equivalent (67.3 cbm’s)

     – HC = Forty Foot High Cube Container (76 cbm’s)

 -     Bulk Vessels


Forwarding 101                                                             Page 18
Ocean Containers Examples


 General Purpose Container
• AKA Standard or Dry Container

• 20’, 40’, 40’HC (high cube), 45’

• High cube is just higher than a standard, with a
  height of 9’6”, whereas a standard is 8’6”.



 Special Containers
• Open Top – used for over-height cargo, loading
  from the top, etc.

• Flat Rack – for heavy loads and over-width
  cargo




Forwarding 101                                       Page 19
                 DOCUMENTATION




Forwarding 101                   Page 20
Export Documentation


In order to effect an export shipment, you will need to have the following
documentation:

• SLI, Shippers Letter of Instruction: Your instructions on how and where to send the
  shipment.

• Commercial Invoice, which is the primary accounting document describing the
  transaction between the buyer and seller.

• Packing List: details the description and quantities of the goods being shipped.

In some cases, you will need additional documentation to meet the requirements
of the importing country:

• Certificate of Origin: Clearly stating where the goods originated (in some cases this is
  notarized or legalized).

• NAFTA Certificate of Origin: As above, but to comply with the regulations surrounding
  NAFTA, to qualify for the preferential treatment.


Forwarding 101                                                                               Page 21
Shipper’s Letter of Instruction

 The SLI is the exporter’s instructions to the transportation provider on how to
transact their shipment.
Information includes:
• Name and address of the seller and buyer
• Service type (air or ocean, consolidated or direct)
• EIN number (company tax ID number)
• Country of origin of the goods
• Schedule B Number: This is the official schedule of commodity classifications to be
  used by shippers in reporting export shipments from the United States.
• Piece count, weight and dimensions
• Shipping marks
• Payment terms (prepaid, collect or third party billed)
• Insurance essentials
• Value
• Validated license number
• Special instructions

Forwarding 101                                                                          Page 22
SLI – Most Common Mistakes


 Exporter neglects to specify or include:
• Prepaid or collect

• Service type (air or ocean, consolidated or direct)

• Insurance requirement (Dollar amount or percent of value)

• EIN or IRS Number

• Pieces, weight and dimensions

• Special Instructions

• Correct tariff classification (Schedule B Number)

• Licensing information, including ECCN

• Signature



Forwarding 101                                                Page 23
The Commercial Invoice

 The commercial invoice is the key accounting document describing the
commercial transaction between the buyer and the seller.
• Key Elements of a commercial invoice include:
   – Name and address of the seller and buyer, the ship-to address
   – Date of issuance
   – Invoice number
   – Order or contract number
   – Quantity and detailed description of the goods
   – Unit price, total price, other agreed upon charges, and total invoice amount stated in
     the currency of the contract or letter of credit.
   – Shipping details including: weight of goods, number of packages, and shipping
     marks and numbers.
   – Country of origin of the goods
   – Terms of delivery and payment, INCO term (INCO 2000)
   – Any other information as required in the sales contract or letter of credit



Forwarding 101                                                                           Page 24
The Commercial Invoice – Common Mistakes


•Product description does not adequately describe goods – this is especially
important for customs clearance and proper classification for duty purposes.

•Payment term is incorrectly stated or omitted

•Parties to the transaction are not properly marked

•Invoice does not conform to the letter of credit requirements

•Exporter fails to add destination control statement

•Invoice is not signed (preferably in blue ink)




Forwarding 101                                                                 Page 25
Forwarding 101   Page 26
Packing List

A packing list is a document prepared by the shipper listing the kinds and
quantities of merchandise in a particular shipment.
 The packing list should include the following elements:
• Name and address of exporter and buyer
• Date of issuance
• Invoice number
• Order or contract number
• Quantity and description of goods
• Shipping details including: weight of goods, number of packages, dimensions, and
  shipping marks and numbers
• Quantity and description of contents of each package, carton, crate or container
• Any other information as required in the sales contract or letter of credit


 A copy of the packing list is often attached to the shipment itself and another copy is sent
            to the consignee to assist in checking the shipment when received.



Forwarding 101                                                                             Page 27
Certificate of Origin


 The certificate of origin is a document issued by a certifying authority stating the
country of origin of the goods.

 A certificate of origin should include the following elements:

• Key details (exporter, consignee, description of goods) regarding the shipment.

• A statement of origin of the goods

• The name, signature and/or stamp of the certifying authorities

   – Notary Public

   – Chamber of Commerce




Forwarding 101                                                                      Page 28
Exporting from the U.S. - “Case Study”

 Why B.I.S. export training is critical to the health of a U.S. exporter.
Suntek Microwave, Inc. and
Company President Settle Charges of Illegal Exports
The U.S. Department of Commerce announced that it will settle charges of illegal exports in violation
of the Export Administration Regulations (EAR). Suntek Microwave, Inc. (Suntek) of Newark,
California, agreed to a $275,000 civil penalty and a 20-year denial of export privileges, and that Charlie
Kuan (Kuan), former President of Suntek, agreed to a $187,000 civil penalty and a 20-year denial of
export privileges.
 In related criminal cases, on April 26, 2004, Suntek pled guilty in the Northern District of California to
violating the EAR and was fined over $339,000. This settlement represents the first criminal
conviction of a deemed export case. The “deemed export” provision of the EAR states that an
export license is required to release technology to a foreign national in the United States if a
license would be required to export that technology to his/her home country. Assistant Secretary
for Export Enforcement Julie L. Myers stated: “The first criminal conviction in a technology transfer
context is a significant milestone in focusing and educating exporters on deemed export issues.”
 The Commerce Department’s Bureau of Industry and Security (BIS) charged that, between 1996 and
2000, Suntek, under the direction of Mr. Kuan, failed to obtain the required export licenses for
shipments of detector log video amplifiers (DLVA) to the People’s Republic of China (PRC). DLVA’s
have military applications that include radar, missile, and satellite communications. BIS charged that,
in 1997, Suntek knowingly made false statements to BIS on a license application by supplying false
end-user information in order to obtain export authorization to ship DLVAs to the PRC, and that Kuan
falsely certified to the truth of these statements.


Forwarding 101                                                                                          Page 29
AES – Automated Export System


• The Automated Export System (AES) is a joint venture between the U.S. Customs
  service, the Foreign Trade Division of the Bureau of Census, the Bureau of Export
  Administration, the Office of Defense Trade Controls, other Federal agencies, and the
  export trade community. It is the central point through which export shipment data
  required by multiple agencies is filed electronically to Customs, using the efficiencies of
  EDI. AES provides an alternative to filing paper Shippers Export Declarations. Export
  information is collected electronically and edited immediately, and errors are detected
  and corrected at the time of filing. AES is a nationwide system operational at all ports
  and for all methods of transportation. It was designed to assure compliance with and
  enforcement of laws relating to exporting, improve trade statistics, reduce duplicate
  reporting to multiple agencies, and improve customer service.

 Why do you care?

• You are required to comply with U.S. exporting requirements and this
  process will ensure your compliance (refer to section 24 of your SLI).

• WWW.CENSUS.GOV/FOREIGN-TRADE/SCHEDULES/B... OR CALL US.

Forwarding 101                                                                             Page 30
Export – Bureau of Industry & Security


  BIS –
 WWW.BIS.DOC.GOV

Bureau of Industry & Security

   – Mission Statement
   WWW.BIS.DOC.GOV/ABOUT/INDEX.HTM

   – Policies Regulations, Key Regulatory Areas
   WWW.BIS.DOC.GOV/POICIESANDREGULATIONS/INDEX.HTM




Forwarding 101                                       Page 31
Export Controls and Statistics

 Export Control Classification Number (ECCN)
• Every Product has an export control classification number within the Commerce Control list.
• The ECCN consists of a five character number that identifies categories, product groups, strategic
  level of control, and country groups.
• Go to www.bis.doc.gov for ECCN assistance
 Embargoes, Denied Parties and Anti-Boycott Laws
• Embargoes: A prohibition upon exports or imports, either with respect to specific products or
  specific countries
   - www.treas.gov/ofac/index.html
• Denied Parties: Companies and/or people who are denied the privilege of importing and/or
  exporting.
   – www.bis.doc.gov./dpl
• Anti-Boycott Laws: Laws adopted to encourage, and in specified cases, require U.S. firms to
  refuse to participate in foreign boycotts that the U.S. does not sanction.
   – www.bis.doc.gov./anitboycottcompliance


Forwarding 101                                                                                         Page 32
Letters of Credit

 Definition: A letter of credit is a binding document that a buyer can request from his
bank in order to guarantee that the payment for goods will be transferred to the seller.
Basically, a letter of credit gives the seller reassurance that he will receive the payment
for the goods. In order for payment to occur, the seller has to present the bank with the
necessary shipping documents confirming the delivery of goods within a given time
frame. It is often used in international trade to eliminate risks such as unfamiliarity with
the foreign country, customs or political instability.

 Benefits

• Security that the seller will receive money, and the buyer will receive the goods.

• The bank acts as the guarantee party for both entities.

 Negatives

• Can add unnecessary complexity and cost to the transaction.

• Can reduce flexibility in shipping, in making any changes to the order.
 Want more info? Let us know and we’ll give you all of the specifics you need, as detailed as you need.

Forwarding 101                                                                                      Page 33
Insurance, Claims and Liability


 On DHL Global Forwarding airfreight shipments, we agree to pay $9.07 per pound if
international, or $0.50 per pound if domestic, or actual value, whichever is less, for each
pound lost or damaged in our care, custody and control, subject to the claimant's proper
following of our applicable claims procedures.

 Ocean Services shipments, we agree to pay a maximum of $500.00 per package or per
customary freight unit, which ever is applicable, or the actual value of the contents of the
package, which ever is less. DHL Global Forwarding retains all extended rights as per the
Carriage of Goods by Sea Act, and where applicable the Hague rules, which are
incorporated in DHL Global Forwarding Ocean Bill of lading.

 Customers have the option of increasing DHL Global
Forwarding liability by either declaring in writing a value
for carriage or requesting in writing to insure the cargo
under a special cargo insurance policy.




Forwarding 101                                                                            Page 34
The Key is Prevention


 Make sure the piece count and markings are identical on the freight and
 documentation.

  Packaging must be such that no damage will occur through normal
 transportation handling.

 Shrink-wrapped skids must show shipper and consignee information and
 markings on the exterior. Do not conceal this information under the shrink-wrap.

  If the driver can not accurately count the number of pieces contained within a
 shrink-wrapped skid, have them sign the air waybill or SLI “Shrink-wrapped skid
 said to contain _XX_ pieces as per the shipper’s count”.




Forwarding 101                                                                     Page 35
INCOTERMS – WHY THEY‘RE IMPORTANT




Forwarding 101                  Page 36
Purpose of Incoterms


  Sets international rules for commonly used terms in foreign trade

  Identifies obligations of both parties and determines the distribution and
 transfer of risks

  Implements contract of sale and the direction of the invoicing



  Incoterms are useful, with limitations. If you use them incorrectly, your contract
 may be ambiguous, if not impossible to perform. Therefore it is important to
 understand the scope and purpose of Incoterms before you rely on them to
 define such important issues as mode of delivery, customs clearance and
 transfer of risk.




Forwarding 101                                                                     Page 37
Two Key Points of Incoterms

 Focusing on the Seller’s obligation to deliver
the goods, Incoterms establish…

• At what point the risk of loss or damage to the
  goods shifts from seller to buyer

• At what point responsibility for
  transportation/customs related costs shifts from
  seller to buyer




Forwarding 101                                       Page 38
How Incoterms are Organized


  Incoterms are grouped into four different categories:

 • “E” Terms: Seller/exporter makes the goods available to the buyer at the seller’s own
   premises.         Freight - Collect

 • “F” Terms: Seller/exporter is responsible to deliver the goods to a carrier named by
   the buyer.        Freight – Collect

 • “C” Terms: Seller/exporter is responsible for contracting and paying for carriage of
   the goods, but not responsible for additional costs or risks of loss or damage to the
   goods once they have shipped.          Freight - Prepaid

 • “D” Terms: Seller/exporter is responsible for all costs and risks associated with
   bringing the goods to the place of destination. Freight - Prepaid




Forwarding 101                                                                             Page 39
Incoterm Overview

 Group E         EXW   Ex Works                         All modes of transport
 Departure             (…named place)
 Group F         FCA   Free Carrier (…named place)      All modes of transport
 Main            FAS   Free Alongside Ship              Ocean transport only
 Carriage              (…named port of shipment)
 Unpaid          FOB   Free On Board                    Ocean transport only
                       (…named port of shipment)
 Group C         CFR   Cost and Freight                 Ocean transport only
 Main                  (…named port of destination)
 Carriage        CIF   Cost, Insurance and Freight      Ocean transport only
 Paid                  (…named port of destination)
                 CPT   Carriage Paid To                 All modes of transport
                       (…named place of destination)
                 CIP   Carriage and Insurance Paid To   All modes of transport
                       (…named place of destination)
 Group D         DAF   Delivered At Frontier            All modes of transport
 Arrival               (…named place)
                 DES   Delivered Ex Ship                Ocean transport only
                       (…named port of destination)
                 DEQ   Delivered Ex Quay                Ocean transport only
                       (…named port of destination)
                 DDU   Delivered Duty Unpaid            All modes of transport
                       (…named place of destination)
                 DDP   Delivered Duty Paid              All modes of transport
                       (…named place of destination)

Forwarding 101                                                                   Page 40
Incoterms



       EXW Ex Works (named place)       CIP Carriage & Insurance Paid To
                                        (named place of destination)
       FCA Free Carrier (named place)
                                        DAF Delivered At Frontier
       FAS Free Alongside Ship
                                        (named place)
       (named port of shipment)
                                        DES Delivered Ex Ship
       FOB Free On Board
                                        (named port of destination)
       (named port of shipment)
                                        DEQ Delivered Ex Quay
       CFR Cost & Freight
                                        (named port of destination)
       (named port of destination)
                                        DDU Delivered Duty Unpaid
       CIF Cost, Insurance & Freight
                                        (named place of destination)
       (named port of destination)
                                        DDP Delivered Duty Paid
       CPT Carriage Paid To
                                        (named place of destination)
       (named place of destination)


Forwarding 101                                                             Page 41
Shipping Terms - Incoterms


 EXW - Ex Works (named place)
• The supplier fulfills her obligation the moment the product is made available to the
  buyer in the warehouse ( Could also be a factory)
• The supplier is not responsible for loading the product into the truck chosen by the
  buyer nor for getting the goods cleared for export
• From the warehouse on, the buyer assumes all risk and cost for transportation up until
  its final destination.
• Applies to any kind of transportation
• The seller’s risks and obligations are minimal




Forwarding 101                                                                           Page 42
Shipping Terms - Incoterms


 FCA – Free Carrier (named place)
• The supplier fulfills his/her obligation when the goods, already cleared for export, are
  handed over to the transportation company named by the buyer, at the previously
  agreed place (could be the truck, the transporter’s warehouse, or even the
  plane/vessel)
• The seller keeps the risk and cost up until the cargo has been handed over at the
  named place.
• Further to the hand over point, all risk and costs are transferred to the buyer
• FCA can be used with every kind of transportation or combination of modes (multi-
  modal shipments)




Forwarding 101                                                                               Page 43
Shipping Terms - Incoterms


 FOB - Free on Board (named port of shipment)

• The supplier fulfills her obligation when the goods have crossed the rail of the ship at
  the previously mentioned port (Port of export)

• The seller is responsible for the export customs clearance of the goods.

• Further than the vessel’s rail, the buyer assumes all risk and costs.

• It was designed to be used only in ocean shipments or shipments using internal
  waterways




Forwarding 101                                                                               Page 44
Forwarding 101   Page 45
Shipping Terms - Incoterms


 CFR - Cost and Freight (… named port of destination)
• The supplier assumes all responsibility for damage or loss up until the merchandise is
  over the rail of the shipment at the port of EXPORT
• The supplier assumes all costs until arrival of the good to the FINAL port of destination
• The supplier is responsible for the export clearance of the goods if required
• CFR was designed to be used only in ocean shipments or shipments using internal
  waterways




Forwarding 101                                                                           Page 46
Shipping Terms - Incoterms


 CIF - Cost, Insurance and Freight (… named port of destination)

• The supplier has the same obligations than under CFR terms with the exception that
  under this term, she must obtain an insurance policy to cover the merchandise during
  its transportation.

• The amount of coverage is usually of 110% over the CFR value of the merchandise

• CIF was designed to be used only in ocean shipments or shipments using internal
  waterways




Forwarding 101                                                                       Page 47
Shipping Terms - Incoterms


 CPT - Cost, Insurance and Freight (… named port/airport of destination)

• The seller assumes all cost up to the named place of destination
• The seller is responsible for export customs clearance
• The risk for damages or losses goes from the supplier to the buyer when the goods
  have been handed over to the first transportation provider
• The main difference between CPT and CFR is that CPT can be used with every kind of
  transportation or combination of modes (multi-modal shipments)




Forwarding 101                                                                        Page 48
Shipping Terms - Incoterms


 CIP – Carriage & Insurance Paid to (… named port of destination)
• The seller assumes all cost up to the named place of destination
• The seller is responsible for export customs clearance
• The risk for damages or losses goes from the supplier to the buyer when the goods
  have been handed over to the first transportation provider
• The shipper is in charge of purchasing insurance for the goods
• Insurance is included in the price of the goods
• The amount of coverage is usually of 110% over the CFR value of the
  merchandise
• CIP can be used with every kind of transportation or combination of modes
  (multi-modal shipments)




Forwarding 101                                                                        Page 49
Shipping Terms - Incoterms


 DDU - Delivered Duty Unpaid (… named place of destination)
• The seller assumes all cost up to the agreed point at the country of destination (Not
  including official country charges, duties or taxes)
• The supplier fulfills her responsibility when the merchandise arrives the agreed point at
  the country of destination
• The buyer is responsible for any cost or risk of demurrages during the customs process
• DDU can be used with every kind of transportation




Forwarding 101                                                                            Page 50
Shipping Terms - Incoterms


 DDP - Delivered Duty Paid (… named place of destination)

• The supplier fulfills her responsibility when the merchandise arrives to the agreed point
  at the country of destination already cleared from customs

• The seller assumes all cost and risk up to the agreed point at the country of destination
  including official country charges, duties and taxes

• DDP can be used with every kind of transportation




Forwarding 101                                                                           Page 51
Incoterm Overview

 Group E         EXW   Ex Works                         All modes of transport
 Departure             (…named place)
 Group F         FCA   Free Carrier (…named place)      All modes of transport
 Main            FAS   Free Alongside Ship              Ocean transport only
 Carriage              (…named port of shipment)
 Unpaid          FOB   Free On Board                    Ocean transport only
                       (…named port of shipment)
 Group C         CFR   Cost and Freight                 Ocean transport only
 Main                  (…named port of destination)
 Carriage        CIF   Cost, Insurance and Freight      Ocean transport only
 Paid                  (…named port of destination)
                 CPT   Carriage Paid To                 All modes of transport
                       (…named place of destination)
                 CIP   Carriage and Insurance Paid To   All modes of transport
                       (…named place of destination)
 Group D         DAF   Delivered At Frontier            All modes of transport
 Arrival               (…named place)
                 DES   Delivered Ex Ship                Ocean transport only
                       (…named port of destination)
                 DEQ   Delivered Ex Quay                Ocean transport only
                       (…named port of destination)
                 DDU   Delivered Duty Unpaid            All modes of transport
                       (…named place of destination)
                 DDP   Delivered Duty Paid              All modes of transport
                       (…named place of destination)

Forwarding 101                                                                   Page 52
                 IMPORTS




Forwarding 101             Page 53
The Importer and How to Start Importing

 Importer (AKA Importer of Record)
• The importer is sometimes called the “buyer”. The importer must register with Customs and Border
  Protection (CBP) and must get an importer bond, which is a form of insurance that CBP can use to
  recover possible damages or penalties. You can also pay for a SEB (single entry bond) for each
  shipment, but there are drawbacks to that strategy.

• The importer is legally responsible to meet all CBP regulations.

• The importer bond is the guarantee that the importer will pay any fines and penalties issued for
  failure to meet CBP requirements.

• The importer is legally responsible and in charge of the shipment, but often hires a broker to handle
  the complex requirements of CBP.

To start importing, in addition to the bond, you need a POA* and Credit
Application
• The Power of Attorney is an official authorization from you allowing a broker to act on your behalf for
  the processing of entries. This must be on file with the broker prior to any entries being effected.
  This must be signed by a corporate officer.


* For DDP terms, the POA is required from the shipper
Forwarding 101                                                                                        Page 54
More on Customs

 U.S. Customs and Border Protection Agency is the unified border agency within
the Department of Homeland Security.
• It is the governing agency for import activities in the United States.
• CBP enforces import and export laws and regulations of the U.S. Federal Government.
• They review documentation and physically inspect and examine goods.
• CBP enforces Customs laws, collects and protects the revenue and guards against
  terrorists, drugs, contraband and copyright violators.
 The Harmonized Tariff Schedule of the United States (HTSUS) is the official
classification book of CBP.
• When properly used, it sets the duty rates, fees and taxes due on imported goods.
• The first six digits are used by signatory countries and have been set by International
  agreement.
• You will need to provide us with the HTSUS numbers for all of your goods.
   – We can also assist with this process on a project basis.




Forwarding 101                                                                              Page 55
C-TPAT


 - Customs – Trade Partnership Against Terrorism program is U.S. the CBP
premier trade security program.

 - The purpose is to partner with the trade community to secure the U.S. and
International supply chains from intrusion by terrorist organizations.

 - C-TPAT requires participants to document and validate their supply chain
security procedures.

- Through a self assessment submittal and guidelines set forth by U.S. CBP a
U.S. company (importer) outlines their security Best Practices to obtain C-TPAT
membership.

 - There are differing qualifications for importers, ocean carriers, air carriers and
truckers.

 - www.cbp.gov; search on C-TPAT

Forwarding 101                                                                     Page 56
Documents Necessary for Importing


 Commercial Invoice: Detailing the transaction between a seller and a buyer.

• It minimally should give the name and address of both the seller and buyer, the date of
  the sale, a description of the goods sold, the quantity, unit price, the terms of sale,
  country of origin, currency and the total amount due.

 Transport Document

• Bill of Lading: the document issued by a carrier which is evidence of receipt of the
  goods and is a contract of carriage. If it is issued in negotiable form (i.e. “to order”), it
  becomes documentary evidence of title to the goods.

• Airwaybill: the shipping document used for air freight. It includes conditions, limitations
  of liability, shipping instructions, description of the commodity, charges. It is used for
  purposes similar to those of Automated Manifest System -- AMS & AMS Declaration

 Packing List: a detailed list of contents of the shipment, including quantities,
items, model numbers, dimensions and net and gross weights.



Forwarding 101                                                                                    Page 57
 Other Documents

 Delivery Order

• Every customs clearance transaction will require the production and printing of a delivery order.
  Delivery orders are to be issued on every shipment, with a file copy maintained on every shipment.

• The delivery order will identify:

   – The location of the goods, pending customs clearance

   – The name of the carrier authorized to make delivery

   – The delivery to (consignee) party’s name and address

   – The delivery terms (prepaid or collect)

   – The broker’s reference number

   – Delivery instructions (appointment needed, delivery hours, etc.)

 AMS (Automated Manifest System)

• As of 4 March 2004, the carrier must ensure that all declarations relating to incoming cargo are
  submitted to CBP via the AMS. Depending on the type of cargo, an AMS Declaration is to be made
  either 24 hours before loading or at least 4 hours before arrival at the first U.S. port.


Forwarding 101                                                                                     Page 58
Import Entries


Merchandise arriving in the United States by commercial carrier must be entered
by the owner, purchaser, his authorized regular employee, or by the licensed
Customs broker designated by the owner, purchaser, or consignee.

• U.S. Customs officers and employees are not authorized to act as agents for importers
  or forwarders of imported merchandise, although they may give all reasonable advice
  and assistance to inexperienced importers.

 The only persons who are authorized by the tariff laws of the United States to act as
agents for importers in the transaction of their customs business are customs brokers
who are private individuals or firms licensed by the U.S. Customs Service.

 Customs brokers perform all necessary duties to effect the release of the goods

• They will prepare and file the necessary customs entries

• Arrange for the payment of the duties found due

• They will represent their principals in customs matters.


Forwarding 101                                                                           Page 59
Import Entries


 Formal Entries

• U.S. Customs requires formal entry, using a customs broker, for any shipment valued
  at more than US$2000.00. It also requires a broker for a shipment of any value if it
  consists of controlled goods (that is, goods requiring either Canadian or U.S. permits or
  licenses to cross the border).

 Informal Entries

• Your goods are considered an informal entry if their value is less than US$2,000.00,
  and provided they aren't controlled goods. Informal entry doesn't require a broker if the
  shipment is accompanied by the exporter, or if the consignee comes to the port of entry
  to collect it.

 Note: There are exceptions to the under and over $2000.00 mark when it comes to
certain customers and commodities.




Forwarding 101                                                                           Page 60
Import Entries (cont.)

 Temporary Import Bond (TIB)

• A temporary import bond is required when goods are brought into the United States or Canada
  without payment of duty, by posting a bond to guarantee that they will be exported. The amount of
  the bond is usually double the estimated duties. Goods imported under a temporary import bond can
  remain in either country without the payment of duty for up to a year.

 Warehouse

• An importer might want to import goods and defer the payment of import duties to a later date. The
  procedure that is used is a bonded warehouse entry. An importer can obtain authorization from the
  U.S. Customs Service to place imported goods in a warehouse to be withdrawn for use or
  consumption at a later date.

• No customs duty is owed during the initial time of entry if warehoused. When the time arrives to
  withdraw the goods from the warehouse, duties will be required to be paid on the value of the goods
  at the time of withdrawal rather than the time of entry into the bonded warehouse.

 In-Bond

• In-bond entry is a procedure under which goods are transported, stored, or handled, prior to
  clearance and release by customs, and the government's interest is secured by indemnity bonds.


Forwarding 101                                                                                     Page 61
Types of Customs Releases


 Paperless

• The result of an entry submission through Automated Broker Interface (ABI) that
  indicates the merchandise is low risk from a compliant importer. The merchandise is
  released without a Customs official ever looking at the documents or physically
  inspecting the cargo.

 Pre-Clearance

• U.S. Customs and Border Protection currently allow release when freight has left the
  point of shipping for the U.S.A. on the following timelines:

• Air Freight: At point of Wheels Up -- flight has departed origin, if it’s a direct flight

• Ocean Freight: 5 days prior to the vessel arrival at the first U.S. arrival port

• Truck & Rail: One hour prior to arriving at U.S. arrival port

 Import Note: The critical factor is that we must have received complete and accurate
documents in order to process Pre-Clearance.


Forwarding 101                                                                                Page 62
Customs Forms


 Form 3461 Entry Immediate Delivery

• U.S. Customs Form 3461, Entry/Immediate Delivery, allows for the immediate release
  of imported goods to the importer or customs broker. While the imported goods may be
  removed from the port of entry, they are still considered to be in the custody of the
  Customs Service until the entry package has been filed. Issued by the Customs Service
  district director, Form 3461 provides proof of release to the importer, customs broker,
  carrier and the Customs Service. This form is also known as the "Release Document,"
  the "Permit" and the "Delivery Authorization Document.“

 Form 7501

• CBP Form 7501 Entry is used by the U.S. Customs Service to collect duties and taxes
  on imported merchandise. It is also used to record statistical data on imports and to
   provide an accurate summary of the import transaction by classification and
   value.



Forwarding 101                                                                        Page 63
Government Agencies (OGA)


 U.S. Food and Drug Administration (FDA) - Regulates the importation of food, drugs and
certain preparation and storage items.

 U.S. Department of Transportation (DOT) - Regulates motor vehicles and parts.

 Environmental Protection Agency (EPA) - Monitors the imports on chemicals, pesticides,
hazardous waste, ozone depletion substances and motor vehicle emissions.

 U.S. Fish and Wildlife Service (FWA) - Responsibility for managing both national and
international wildlife resources. Monitors the importation of protected fish and wildlife
species.

 U.S. Department of Agriculture (USDA) - Monitors for shipments suspected to harbor
pests, seeds, or non-native plants.

 U.S. Bureau of Alcohol, Tobacco and Firearms (ATF) - Regulates and monitors distilled
spirits, wines, malt beverages, tobacco and firearms imported into the United States.




Forwarding 101                                                                              Page 64
Import Security Initiatives & Filing


 On November 25, 2008, U.S. Customs and Border Protection (CBP) published
an interim final rule entitled “Importer Security Filing and Additional Carrier
Requirements” in the Federal Register (73 FR 71730). The interim final rule
requires both importers and carriers to submit additional information pertaining
to cargo to CBP before the cargo is brought into the United States by vessel.



 Automated Manifest System (AMS) - Public

 Automated Brokerage Interface (ABI) - Private

 10 + 2 =          Twelve elements required before sailing to the U.S.
                 Ten from the importer/exporter + two from the carrier




Forwarding 101                                                                Page 65
Importer Security Filing       10 + 2 Elements

 1. U.S. Importer of Record number (EIN, Federal Tax I.D.)
 2. Consignee number (EIN, Federal Tax I.D.)
 3. Seller’s Name and Address
 4. Buyer Name and Address
 5. Ship-To Name and Address
 6. Manufacturer’s/Supplier’s Name and Address
 7. Country of Origin/Manufacture
 8. HTS number to the first six digits
 9. Container Stuffing location
 10. Consolidator Name and Address – Company providing container loading
services
 1. Vessel Stow Plan – Bill of Lading number
 2. Container Status Message (CSM)


Forwarding 101                                                             Page 66
DOMESTIC




Forwarding 101   Page 67
Domestic Freight – general information

 Domestic handles both ground and air shipments


• Domestic : Dimensional weight = Length x Width x Height divided by 194 for lbs


 Tell us your transit and budget requirements and we’ll let you know the best option


Alaska, Hawaii and Puerto Rico are considered domestic and are handled by this
group.
 Canada is international and handled by those respective groups (import/export)


 Timing and transit:
• Varies by service, but all options are possible
• For a same day pick up, we generally need to have your booking by noon


Forwarding 101                                                                         Page 68
Domestic Freight – Information Needed


 Unlike international shipments, domestic shipping is delightfully
uncomplicated. All that you need to do to ship something domestically is
fill out a bill of lading
 Information needed
• Shipper name and address
• Consignee name and address
• Pieces, weight, dimensions and description of the goods
• The service you want (see next slide)
• Any reference numbers that you want us to note
• Advise if you want freight insurance
• Sign and date the bill of lading


Forwarding 101                                                         Page 69
Domestic Trucking Terms



 LTL – Less-than-Truckload

   – Over-the-road truck hub system (Conway, Yellow, Roadway)



 FTL – Full-Truckload



   – Flat-bed – Flat deck

   – Logistics Trailer – Air-Ride trailer with tie-down hardware

   – Reefer – Refrigerated / Climate Controlled trailer/container

   – Piggy-back    - Trailer or Container loaded to a rail-car


Forwarding 101                                                      Page 70
National Motor Freight Classification (NMFC)

 US Trucking Classification System
 The cost of shipping is based on certain characteristics of a shipment. For example, how much space does it take up
and how much does it weigh? How easily can it be handled and stowed? What is the value of the shipment and what
liabilities are associated with it?

To equitably assign rates to any one shipment, most carriers refer to the National Motor Freight Classification (NMFC).


What are the classifications?
The NMFC is a pricing tool developed by the National Motor Freight Traffic Association (NMFTA). The classifications
establish groupings for virtually all commodities moving in interstate and intrastate transport. This gives both carriers
and shippers a standard when agreeing on shipping prices.

What basic shipping characteristics are used to determine classifications?
NMFC groups all commodities into 18 classes (50 through 500) according to their "transportability."
The four main characteristics used to evaluate the commodity include
1) density, 2) stow ability, 3) ease or difficulty in handling, and 4) liability.

Why is a class required?
The NMFC does not set prices, nor does it specify any rates, revenues or charges. It does establish standard
categories for pricing, allowing shippers and carriers to negotiate price based on standard shipping considerations. It
also provides uniform rules, packaging provisions and Bill of Lading formats. Correct classification allows Estes Express
Lines to offer you the best possible service and the most accurate rates.

How can I classify my shipment?
If you're not already familiar with the NMFC categories, simply call your carrier’s Traffic department.

Forwarding 101                                                                                                              Page 71
                 THANK YOU




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