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FAQ's
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What is the importance of a freight forwarder?A freight forwarder is a specialist in designing the best logistics solution for transporting a cargo from one point to another, e.g. from a factory in the exporting country to the point of reception in the importing country. A good freight forwarder knows every detail and specific regulation, both at origin and destination of the cargo transit route. Three types of entities perform maritime logistics in the industry. These are ocean carriers (VOCC, which means Vessel Operator Common Carrier), plus those who carry out freight forwarding activities, i.e. the NVOCC (which means Non-Vessel Operator Common Carrier) and the Freight Forwarders. Everyone must have a license from the FMC (Federal Maritime Commission). It is very important to verify that the entity you work with have their license in order, as many freight forwarders operate without the required license. To verify that an entity is FMC-licensed, go to https://www2.fmc.gov/oti/An FAQ section can be used to quickly answer common questions about your business like "Where do you ship to?", "What are your opening hours?", or "How can I book a service?".
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Why is a NVOCC (Non-Vessel Operator Common Carrier)?An NVOCC is an entity that conducts freight forwarding activity upon receiving a Federal Maritime Commission license. An ocean carrier (VOCC) can offer its own routes or routes agreed upon with other VOCCs. This obviously limits its route offer. An NVOCC can contract with as many VOCCs it wishes. Of course, it can offer multiple options on the same route according to the convenience of the end customer and offer specific routes run by VOCC only. Further, the NVOCC issues its own Bill of Ladings and can do load consolidations. A licensed freight forwarder is trained to carry out logistics operations, however, it cannot sign contracts with the VOCCs and NVOCCs. Further, it is only authorized to invoice fees for its activity as a broker and cannot profit from ocean shipment. Undoubtedly, the NVOCC is the most versatile entity to carry out freight forwarding.
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Are Freight180 a NVOCC?Yes, as a freight forwarder, we operate as an NVOCC (Non-Vessel Operating Common Carrier) under a License issued by the Federal Maritime Commission. This means we act as a carrier to the shipper and as a shipper to the actual carrier, allowing us to issue our own House Bill of Lading (HBL) and offer competitive rates and services without directly operating our own vessels. Here’s what it entails: Issuing Documentation: As an NVOCC, we issue our own Bills of Lading, which provide flexibility and control over shipments for our clients. Consolidating Shipments: We can consolidate smaller shipments from multiple customers into a single container, optimizing space and cost. Negotiating with Carriers: NVOCC status allows us to negotiate favorable rates and terms with ocean carriers, which we pass on to our customers. Offering Flexible Services: We provide a wide range of services, including customs brokerage, cargo insurance, and door-to-door delivery, tailoring solutions to your needs. As an NVOCC, we combine the personalized service of a forwarder with the operational capabilities of a carrier, giving you more options and competitive pricing for your ocean freight needs.
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How to select a freight forwarder?Thousands of freight forwarders offer their services. Many of them offer services on "any route," work "worldwide," and are true "lions" of the industry. Beware of them. Your best option is among those with the necessary experience on the routes where you need to move your cargo. Check how long they have been carrying out the activity and what infrastructure they rely on both at origin and destination. This is the collaboration that makes the operation economical, fast, and, above all, safe. It is also important to consider what services they offer to add value to your logistics operation: export procedures with the U.S. Customs, maritime cargo insurance, packaging services, and others. Also, it is relevant that they can offer an intermodal service from anywhere in the U.S. to the required destinations in any maritime transport mode: Full Container Load (FCL), Less Than Container Load (LCL), Roll on Roll off (machinery and self-propelled vehicles or towable) and break bulk (cargo that cannot or is not convenient to load in maritime containers).
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What documents are required for international shipping?International shipping requires several key documents to ensure smooth customs clearance, compliance with regulations, and proper handling of goods. Here are the most commonly required documents: Commercial Invoice A detailed invoice from the seller to the buyer, listing product descriptions, quantities, and values. It’s essential for customs to assess duties and taxes. Packing List An itemized list of goods in the shipment, including weight, dimensions, and packaging details. This document helps customs and the freight forwarder understand the contents of the shipment. Bill of Lading (BOL) or Airway Bill (AWB) Issued by the carrier, this document serves as a receipt for the shipment and provides details of the contract for carriage. The Bill of Lading is used for ocean and land shipments, while the Airway Bill is for air cargo. Certificate of Origin Indicates the country where the goods were manufactured. Some countries require this document to determine the correct duties and ensure compliance with trade agreements. Export and Import Licenses Certain goods require special licenses to be exported or imported. For instance, restricted or regulated items like chemicals, electronics, or medical equipment may need additional permits. Customs Declaration Required by the customs authorities in the destination country, this document declares the nature and value of goods for assessing duties and taxes. Letter of Credit (if applicable) A payment guarantee issued by the buyer’s bank to the seller, commonly used in high-value transactions to reduce financial risk. Dangerous Goods Declaration (DGD) Required for hazardous materials, this document provides details on handling, packaging, and transporting dangerous goods in compliance with regulations. Insurance Certificate Proof of insurance coverage for the shipment, often required by the buyer or destination country to ensure coverage in case of damage or loss. Importer's Security Filing (ISF) For shipments to the U.S., an ISF must be filed before cargo is loaded for departure to meet U.S. Customs requirements. Additional Documents (as needed) Proforma Invoice: An initial quote sent before the final commercial invoice. Inspection Certificate: Required for certain goods to confirm quality and quantity, often by third parties. Health or Sanitary Certificate: Required for agricultural products, foods, and pharmaceuticals. These documents ensure compliance, minimize delays, and facilitate the smooth movement of goods across borders. We can assist with preparing and managing all necessary documents to make your international shipments hassle-free.
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What documentation does a shipment require?International shipments require the following basic documentation: SLI (Shipper Letter of Instructions) Commercial Invoice, Packing List If applicable, and an Export License In specific cases, a Phytosanitary Certificate and a Certificate of Origin are also required. Freight180 will help you determine and obtain the required documentation.
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Why is a well-prepared packing list important?Many shippers issue poor quality packing lists. They simply list the products to be shipped as they appear in the commercial invoice minus the price, specifying only the weight and total volume. In fact, the packing list should refer to the packaging not to the products to be shipped. A proper packing list specifies the detailed content of each product per package and the total weight and volume of each package. Obviously, a good packing list must mention the mark references of each package. For example, if 7 pallets are being shipped, it is customary to mark each pallet with the label 1/7, 2/7... until 7/7. Accordingly, the packing list should indicate that it contains the pallet 1/7 and provide for its measures and weight. The same indication must be given for the rest of the pallets. In the same way, the total weight and volume should appear. This will facilitate the work of the freight forwarder and any insurance claim in the occurrence of accident or damage.
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Why is it very important to obtain cargo insurance?By law, all carriers are required to offer a minimum amount of insurance. Usually, they are responsible for only $500 per unit of transportation and, of course, with limited coverage. Most of the time, carriers do a good job and their shipment reaches its destination undamaged and on time. However, accidents and robberies frequently occur. SensiGuard reported 649 cargo thefts in the United States in 2017, for an average value of $146,063 per theft, while an average of 568 containers (not counting catastrophic events) were lost at sea each year between 2008 and 2016. If catastrophic events (such as a shipwreck) are included, the resulting average is 1,582 lost containers each year. Statistically, that may not sound disastrous. However, what happens when it comes to your cargo and your business has to contend with losses that are potentially worth millions of dollars? This is where cargo insurance is necessary, let alone essential, especially when considering that the costs are not significant. A freight forwarder can provide you with cargo insurance and adequate coverage for your shipment, and you will be protected from any financial loss in the event of an accident, theft, and other risks.
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What are the differences between FCL (Full Container Load) and LCL (Less than Container Load) shipments?FCL (Full Container Load) and LCL (Less than Container Load) are two shipping options for ocean freight, each suited to different cargo volumes and needs. Here’s a breakdown of their differences: Full Container Load (FCL) Definition: FCL means that a single shipment fills an entire container, either a 20-foot or 40-foot container, exclusively used by one shipper. Cost Structure: You pay a flat rate for the entire container, regardless of how full it is. FCL is generally more cost-effective for large shipments. Handling and Security: Since only one shipper’s goods occupy the container, handling is minimal, reducing the risk of damage or contamination. Transit Time: FCL typically has faster transit times because the container doesn’t need to be consolidated or deconsolidated with other shipments. Best For: Large or high-value shipments that fill most of a container, or when you need a high degree of control and security over your goods. Less than Container Load (LCL) Definition: LCL involves sharing container space with other shippers. Multiple smaller shipments are consolidated into one container, making it more cost-effective for low-volume cargo. Cost Structure: You pay only for the space your goods occupy, based on volume (cubic meters or CBM). This is more economical for smaller shipments that don’t justify a full container. Handling and Security: Goods are handled more frequently during consolidation and deconsolidation, which may slightly increase the risk of damage. Transit Time: LCL can be slower than FCL, as it requires time to consolidate multiple shipments and deconsolidate at the destination. Best For: Small shipments that don’t require a full container and have a flexible delivery timeline. Key Differences Summary FCL: Full container, better for large shipments, less handling, faster transit, higher security. LCL: Shared container, economical for small shipments, more handling, potentially slower, and suited for lower-volume cargo. Choosing between FCL and LCL depends on shipment size, budget, timing, and your preference for control and security.
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How to calculate the freight price of a LCL (Less Than Container Load) shipment?The freight price of an LCL cargo is generally offered based on its weight and size, taking the highest value. In some cases, it is quoted for example $60 w/m (weight/measure). In other cases, it is quoted by weight and or volume, for example $80 by weight and $40 by volume, always taking the highest value. The metric system is almost always used. So the weight is expressed in tons (1,000 kg) and the volume in cubic meters (cu m). If we take the first example ($60 w/m) for, let's say, a pallet that measures 48' x 40' x 60' and weighs 300 lbs, then we obtain that the volume is 1.89 cu m and the weight 0.14 ton. In this example, obviously the freight cost would be $60 x 1.89 cu m = $113.40 since, by weight, the value would be lower ($60 x 0.14 ton = $8.40). In some cases, the consolidators establish minimums. For example, in the previous case, if the minimum is $150, then the value obtained by measure does not exceed it. Therefore, it is assumed that the value of the freight corresponds to the minimum, that is, $150.
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What is the EEI (former SED, Shipper Export Declaration)?The United States government requires that every time you export a single product that has an HTS Code / Annex B Number of more than $2,500 in value, you must register the EEI with the US Customs and Border Protection. To determine if you need to register your shipment, you must know the HTS Code (previously called the Harmonized Code, as well as an Annex B Number). If the total value of the products that share an HTS Code totals more than $2500, then you need to do an EEI registration. If no product that shares an HTS code totals more than $2,500, then the EEI registration is not required (this, even if the total value of what you are shipping is greater than $2,500). The freight forwarder can do this for you if authorized by a Power of Attorney or if you specify it in an SLI (Shipper Letter of Instructions) Individuals who intentionally fail to file or knowingly submit false EEI may face criminal fines up to $10,000, imprisonment for up to five years, or both, for each violation. Penalties may be mitigated based on factors such as the nature of the violation, the violator's compliance history, and corrective actions taken. To avoid these penalties, ensure that all EEI filings are accurate, complete, and submitted within the required timeframes.
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What is the Importer Security Filing (ISF), also known as "10+2"?The Importer Security Filing (ISF), also known as "10+2", is a U.S. Customs and Border Protection (CBP) requirement for ocean shipments arriving in the United States. It mandates that importers or their agents submit specific information electronically to CBP at least 24 hours before the cargo is loaded onto a vessel bound for the U.S. The purpose of ISF is to enhance cargo security and prevent terrorism by allowing CBP to identify high-risk shipments before they reach U.S. ports. Failure to comply with ISF requirements can lead to fines, shipment delays, and inspections. The penalties can be as high as $5,000 per violation, making compliance essential for importers.
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What is an intermodal shipment?An intermodal shipment refers to the transportation of goods using multiple modes of transportation—such as truck, rail, ship, or air—without handling the cargo itself when changing modes. The goods are typically packed in standardized containers that can easily transfer across different transportation modes, making the process seamless and efficient. Intermodal transport is often more economical for long-haul shipments, as it leverages the strengths of each transportation mode. For example, rail is cost-effective for long distances, while trucks are ideal for short, flexible delivery routes. Intermodal shipping is commonly used for international logistics, enabling companies to reach global markets efficiently by combining different modes of transport.
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Can a shipment be withheld if the customer violates credit terms?Yes, a shipment can be withheld if the customer violates credit terms. Many companies include credit terms in their contracts, which specify that shipments may not be released until outstanding payments are made or credit terms are met. Withholding the shipment serves as leverage to ensure payment and protect the supplier's financial interests.
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Hoy many trucking companies are there in the USA?As of June 2023, the United States had approximately 1.86 million trucking companies operating vehicles such as tractor-trailers, straight trucks, or hazmat trucks. Of these, about 1.1 million were for-hire motor carriers, with the remainder being private carriers or classified as "other" by the Federal Motor Carrier Safety Administration. The trucking industry is predominantly composed of small businesses; among for-hire carriers, 70% operate just one power unit, and 97% have ten or fewer. This structure highlights the industry's reliance on small operators to meet the nation's freight transportation needs.
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Who are the largest ocean carriers in the world?As of November 2024, the world's largest ocean carriers by container capacity are: Mediterranean Shipping Company (MSC): Headquartered in Switzerland, MSC operates a fleet with a capacity of approximately 5.7 million TEUs (Twenty-foot Equivalent Units), making it the largest container shipping company globally Maersk: Based in Denmark, Maersk has a fleet capacity of around 4.2 million TEUs, maintaining its position as a leading player in the shipping industry. CMA CGM Group: This French company operates a fleet with a capacity of about 3.6 million TEUs, ranking third among global carriers. COSCO Shipping Lines: A Chinese state-owned enterprise, COSCO has a fleet capacity of approximately 3.1 million TEUs. Hapag-Lloyd: Based in Germany, Hapag-Lloyd's fleet capacity is around 2 million TEUs, placing it among the top five global carriers.
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Who are the largest cargo airlines in the world?As of 2024, the world's largest cargo airlines, measured by scheduled freight ton-kilometers (FTK), are: FedEx Express: A U.S.-based carrier, FedEx Express leads with approximately 17.9 billion FTK. Atlas Air: Also based in the U.S., Atlas Air has significantly expanded its operations, reaching around 14.8 billion FTK. Qatar Airways Cargo: The cargo division of Qatar Airways, it operates a substantial fleet, contributing to about 14.4 billion FTK. UPS Airlines: Another major U.S. carrier, UPS Airlines handles approximately 14.2 billion FTK. Emirates SkyCargo: Based in the UAE, Emirates SkyCargo manages around 10.6 billion FTK.
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How do I choose between air, sea, and land freight?Choosing between air, sea, and land freight depends on factors like speed, cost, shipment size, distance, and the nature of your cargo. Here’s a guide to help you decide: Air Freight Speed: Fastest option, ideal for time-sensitive shipments. Cost: Most expensive, especially for heavy or bulky items. Best For: High-value, perishable, or urgent goods like electronics, pharmaceuticals, and luxury items. Considerations: Limited space and strict regulations for hazardous or restricted items. Sea Freight Speed: Slower than air but suitable for non-urgent shipments. Cost: More cost-effective for large and heavy shipments. Best For: Bulk shipments, oversized cargo, and international trade of items like machinery, textiles, and raw materials. Considerations: Longer transit times, so best for goods with a flexible delivery timeline. Land Freight (Truck/Rail) Speed: Moderate to fast for short to medium distances; trucks are faster than rail for direct routes. Cost: Generally more affordable for regional shipments; less cost-effective for long distances compared to sea. Best For: Domestic or cross-border shipments, especially within the same continent; goods like consumer products, industrial equipment, and agricultural items. Considerations: Limited by geographical reach; not ideal for long international routes unless combined with other modes (e.g., intermodal shipping). Decision Factors: Budget: Air is the most costly, sea is budget-friendly for large shipments, and land is cost-effective for regional moves. Delivery Time: Choose air for speed, land for moderate delivery, and sea for non-urgent needs. Cargo Size and Weight: Sea freight is ideal for large or bulky shipments, while air is suitable for lighter, high-value items. Destination: Land is ideal for regional routes, while sea and air are best for international deliveries. Cargo Type: Perishable or high-value items are better suited to air; non-perishable, oversized cargo fits well with sea; and regional or intercontinental goods can be moved by land. By considering these factors, you can select the mode of transport that aligns with your shipment’s unique requirements and your business priorities.
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How do air cargo airlines calculate chargeable weight?Air cargo airlines calculate chargeable weight based on either the actual gross weight or the volumetric (dimensional) weight of the shipment, depending on which is higher. This method ensures fair pricing by considering both the size and the mass of the cargo. Here’s how it works: Actual Gross Weight This is the total weight of the shipment, including packaging, in kilograms or pounds. It's measured using a scale. Volumetric (Dimensional) Weight Since lightweight items can take up a lot of space, airlines use volumetric weight to account for the volume a package occupies. Formula for Volumetric Weight: Volumetric Weight (kg)=Length (cm) × Width (cm) × Height (cm)6,000\text{Volumetric Weight (kg)} = \frac{\text{Length (cm) × Width (cm) × Height (cm)}}{6,000}Volumetric Weight (kg)=6,000Length (cm) × Width (cm) × Height (cm) The divisor (6,000) may vary by carrier (sometimes 5,000 for certain services). Determining Chargeable Weight The airline compares the actual gross weight and the calculated volumetric weight, charging based on the higher of the two. This method, often referred to as "dimensional weight pricing," helps airlines maximize efficiency by balancing both weight and volume.
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What is the difference between Demurrage and Detention?Demurrage and Detention are both fees imposed by carriers or terminals, but they apply to different stages of cargo handling: Demurrage fees are charged when cargo remains at the port or terminal beyond the allotted free time (usually a few days after unloading). This fee compensates the port or carrier for the use of their space while the cargo is stored. Example: If a container is unloaded but not picked up by the consignee within the free time, demurrage fees start accruing for each additional day the container stays at the terminal. Detention fees are charged when a shipper or consignee keeps the container outside the terminal (e.g., at their facility or warehouse) beyond the free period. This fee covers the cost of the container being unavailable for other shipments. Example: If a consignee takes a container to unload it but doesn’t return it within the agreed free time, detention fees are charged for each extra day it is held. Summary Demurrage = Fee for keeping the container at the port/terminal too long. Detention = Fee for keeping the container off-site (outside the port) beyond the allowed period.
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Do you handle hazardous or restricted goods?Yes, we handle hazardous or restricted goods, but with additional care and compliance measures to ensure safe and legal transport. Here’s how we manage these types of shipments: Regulatory Compliance: We strictly follow local and international regulations, such as IMDG (International Maritime Dangerous Goods), IATA (International Air Transport Association), and DOT (Department of Transportation) standards, ensuring all necessary permits and documentation are in place. Specialized Packaging and Labeling: Hazardous materials require specific packaging and labeling to meet safety standards. We work with trusted partners to ensure that your shipment is packaged and labeled correctly, reducing risks and ensuring compliance. Carrier Selection: Not all carriers accept hazardous or restricted goods, so we select carriers experienced and authorized to handle such shipments. This helps ensure the safe handling of materials throughout the journey. Documentation and Customs Clearance: Hazardous shipments often involve extra documentation, like Material Safety Data Sheets (MSDS) and Dangerous Goods Declarations. We assist with preparing and submitting these documents for smooth customs clearance. Risk Management and Insurance: We recommend additional insurance for hazardous or restricted shipments and take steps to mitigate risks, protecting your cargo and those handling it. Transparent Communication: Our team will guide you through each step of the process, from identifying necessary compliance steps to coordinating with carriers, ensuring your shipment moves safely and efficiently. By following these procedures, we ensure your hazardous or restricted goods are handled with the utmost care and professionalism.
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What is Incoterms, and which Incoterm should I choose?Incoterms (International Commercial Terms) are a set of standardized rules established by the International Chamber of Commerce (ICC) to define the responsibilities of buyers and sellers in international transactions. They clarify who is responsible for shipping, insurance, customs clearance, and handling costs, as well as when risk transfers from seller to buyer. Key Factors in Choosing the Right Incoterm Choosing the appropriate Incoterm depends on factors like your level of control over the shipment, the degree of risk you're willing to assume, and who is responsible for specific parts of the logistics. Here are some commonly used Incoterms and when they might be suitable: Commonly Used Incoterms EXW (Ex Works): Seller makes goods available at their location. Buyer handles all shipping, insurance, and customs responsibilities. Best For: Buyers who want maximum control and have experience managing logistics and customs. FOB (Free on Board): Seller is responsible until the goods are loaded onto the vessel at the port of origin. Buyer takes over all costs and risks from there. Best For: Balanced option for both parties, common in sea freight; suitable if the buyer can handle international shipping. CIF (Cost, Insurance, and Freight): Seller covers the cost and freight to the destination port and provides insurance. Risk transfers to the buyer once goods are loaded onto the vessel. Best For: Buyers who want delivery to the destination port with minimal involvement in insurance and freight. DAP (Delivered at Place): Seller is responsible for delivery to the buyer’s location, excluding import duties. Buyer handles import customs clearance. Best For: Buyers seeking simplicity, where the seller arranges shipping but the buyer manages import duties. DDP (Delivered Duty Paid): Seller takes on all responsibilities, including import duties, until delivery at the buyer’s specified location. Best For: Buyers who prefer minimal responsibility, ideal for door-to-door delivery without customs complications. Tips for Choosing the Right Incoterm Consider Control: EXW and FOB allow more buyer control, while CIF, DAP, and DDP place more responsibility on the seller. Assess Risk Tolerance: Buyers wanting less risk and responsibility may opt for DDP or CIF, where the seller handles more of the process. Shipping Mode: Some Incoterms, like FOB and CIF, are tailored to sea freight. For other modes, consider terms like EXW, DAP, and DDP. Selecting the right Incoterm depends on your shipping needs, expertise in logistics, and how much control and risk you’re willing to assume.
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What is the difference between FOB and EXW terms?FOB (Free on Board) and EXW (Ex Works) are two common Incoterms that define the responsibilities and risks of the buyer and seller in an international transaction. Here’s the difference: EXW (Ex Works) Seller’s Responsibility: The seller fulfills their responsibility by making the goods available at their premises (e.g., factory or warehouse). The seller is not responsible for loading the goods onto the transport vehicle or handling export customs clearance. Buyer’s Responsibility: The buyer bears all costs and risks from the seller’s premises onward, including transportation, export and import duties, insurance, and delivery to the final destination. Ideal For: Buyers who want maximum control over the shipping process or have their own logistics network. FOB (Free on Board) Seller’s Responsibility: The seller is responsible for all costs and risks up to the point when the goods are loaded onto the vessel at the designated port. This includes export customs clearance, loading the goods onto the ship, and any costs incurred up to that point. Buyer’s Responsibility: The buyer takes over responsibility once the goods are on board the vessel, bearing all risks and costs from that point forward, including sea freight, insurance, and import duties. Ideal For: Buyers and sellers who prefer a balanced sharing of responsibilities, with the seller handling the goods until they are loaded and the buyer managing the rest. Summary EXW (Ex Works): Buyer assumes responsibility from the seller’s premises. FOB (Free on Board): Seller is responsible up to loading onto the vessel; buyer assumes responsibility once on board. These terms help clarify the point at which risk and responsibility shift, ensuring both parties are aware of their obligations in the shipping process.
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How does customs clearance work, and can you assist with it?Customs clearance is the process that allows goods to enter or leave a country legally. It involves ensuring that all necessary documentation is provided, duties and taxes are paid, and regulations are complied with. Here’s an overview of how customs clearance works and how we can assist: Steps in Customs Clearance Documentation Submission: Key documents, such as the commercial invoice, packing list, Bill of Lading (or Airway Bill), and any required permits or certificates, are submitted to customs authorities. Customs Inspection: Customs officials may inspect shipments to verify documentation, ensure compliance with import/export regulations, and check for restricted or prohibited goods. Duties and Taxes Calculation: Customs calculates applicable import duties, taxes, and fees based on the shipment’s value, classification, and country of origin. Payment of Duties and Taxes: Importers are responsible for paying these fees before the goods are cleared. Delays in payment can result in storage charges or penalties. Release of Goods: Once duties are paid and the inspection is completed, customs releases the goods, allowing them to continue to their final destination. How We Assist with Customs Clearance Document Preparation and Compliance: We help you prepare and review all required documents, ensuring they meet customs regulations to avoid delays or rejections. Duty and Tax Calculation: Our team provides estimates of duties and taxes based on product classification (HS codes) and country-specific tariffs, helping you budget accurately. Real-Time Tracking and Updates: We keep you informed throughout the customs process, notifying you of any requirements, inspections, or additional documentation needed. Customs Brokerage: As your customs broker, we handle direct communication with customs authorities, pay duties on your behalf, and work to expedite the clearance process. Problem Resolution: If issues arise, we advocate on your behalf to resolve them quickly, minimizing disruptions to your supply chain. Our expertise in customs clearance helps ensure that your shipments move smoothly across borders, reducing risks and ensuring timely delivery.
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What is the HS Code?The HS Code (Harmonized System Code) is an internationally standardized numerical system for classifying traded products. It was developed by the World Customs Organization (WCO) and is used by customs authorities around the world to identify and assess products for import and export. Key Features of HS Codes Structure: HS Codes are typically 6 to 10 digits long, with the first 6 digits standardized globally and additional digits added by individual countries for more detailed classification. The structure is hierarchical: The first 2 digits represent the chapter (e.g., 01 for live animals). The next 2 digits indicate the heading (e.g., 0101 for live horses, donkeys). The following 2 digits specify the subheading (e.g., 010121 for live horses of purebred breeding). Purpose: Duty and Tax Calculation: Customs authorities use HS Codes to determine applicable duties, taxes, and regulations for products entering or leaving a country. Trade Compliance: Ensures compliance with international trade laws and import/export restrictions, such as embargoes or trade quotas. Trade Statistics: Governments and organizations use HS Codes to track trade data, analyze trends, and create trade policies. How to Find an HS Code: Many countries provide online tools for finding HS Codes based on product descriptions. Freight forwarders or customs brokers can assist in classifying products accurately, which is essential for avoiding delays or incorrect duty assessments. Importance of Accurate HS Code Classification Incorrect HS Codes can lead to penalties, shipment delays, or overpayment of duties. Therefore, accurately identifying the right HS Code for each product is crucial in international shipping and trade compliance.
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What is the difference between HS Code and Schedule B?The HS Code and the Schedule B code are both used in classifying goods for trade, but they serve different purposes and are used by different authorities. Here’s the difference: HS Code (Harmonized System Code) Global Standard: The HS Code is a universal system, developed by the World Customs Organization (WCO), and used by customs authorities worldwide to classify products for imports and exports. Structure: It is generally a 6-digit code, where the first 6 digits are standardized globally. Some countries add extra digits for further classification. Purpose: Primarily used for determining duties, taxes, and ensuring compliance with trade regulations when goods are imported into a country. Applicability: Both importers and exporters use HS Codes to ensure compliance with international trade regulations. Schedule B Code U.S.-Specific Export Classification: The Schedule B code is the classification system used specifically by the United States for exports. It is managed by the U.S. Census Bureau. Structure: Schedule B codes are 10 digits long. The first 6 digits align with the HS Code, while the remaining 4 digits are unique to Schedule B, providing additional detail. Purpose: Schedule B codes are used exclusively for tracking U.S. export statistics, not for assessing import duties. Applicability: Required for exporters when filing Electronic Export Information (EEI) in the Automated Export System (AES), which is mandated for certain shipments leaving the U.S. Summary of Differences HS Code: Global system for imports and exports, used for duties and compliance; standardized up to 6 digits. Schedule B Code: U.S.-specific, 10-digit code used solely for exports and statistical tracking; aligns with HS Code for the first 6 digits. Use: For U.S. exports, you would use the Schedule B code, whereas for imports or general international use, the HS Code applies.
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