The international shipping process is a complex operation that involves many steps, from booking and documentation to transportation and final delivery. Every stage must be carefully managed to avoid delays, unexpected costs, or compliance issues. Understanding this process in great detail is a vital step towards success in logistics.
In this article, we break down the entire shipping process, explaining each key element and how they fit together. Whether you’re new to shipping or looking to optimise your logistics strategy, this guide will help you navigate the process efficiently.
The key stakeholders in the shipping process
To understand the key elements of the shipping process, you need to learn the critical stakeholders in the shipping chain. Below we list the six businesses specialisms that form part of the shipping process:
Freight forwarders
Freight forwarders are responsible for arranging and managing the transportation of goods across the world. They connect and guide businesses with the tools, documents and arrangements to ship their goods.
While forwarders don't carry the goods themselves, with the combined volume of many shippers, they are able to access better rates than businesses would get alone.
Additionally they offer a wealth of knowledge and a broad network of partners, to help businesses with their transportation. These days, the best forwarders offer visibility tools, such as the WTA Platform, and other digital integrations to assist in the management of freight.
Forwarders also serve to guide and simplify any documentation requirements involved in international trade. Regulations and laws can vary from destination to destination, making it difficult to establish exactly what you need without the expertise of a forwarder.
Carriers
The actual transport is what comes to mind when most people think of international trade. Carriers are responsible for physically transporting the goods, by air, sea or land. Carrier companies own ships, planes and trucks that travel from port to port. Carriers sell bookings on their vessels, where forwarders would look to secure a place for their clients.
The biggest sea freight carriers include MSC, Maersk, CMA CGM and Hapag-Lloyd. Whilst the biggest air freight carriers are the biggest airlines, such as Lufthansa, British Airways and Turkish Airlines.
Customs brokers
Customs brokers take responsibility for the clearance of your goods. They can also act as a consultant to guide you through the customs process of each country.
The most capable freight forwarders have an in-house customs teams, to help the shipping process and save you having to involve additional parties.
They can be a valuable part of the process, as failure to comply with the right customs procedures would result in cargo being denied entry into a country.
"By far the biggest cause of customs delays that we see is incorrect or incomplete documentation. We are always advising customers to ensure product descriptions are thorough and the tariff code being used can be justified."
Jamie Craig, WTA Customs Specialist
Third-party logistics providers
A 3PL (third-party logistics provider) is a company that handles logistics operations for businesses so they don’t have to manage everything themselves. Think of it like outsourcing your shipping and warehousing. Instead of a business storing, packing, and delivering its own products, a 3PL takes care of these tasks.
The role of a 3PL is more substantial than a simple freight forwarder, who simply manages the movement of freight between destinations. 3PL providers can use their expertise and volumes to save businesses time and money, whilst allowing you to scale without having to take on logistical assets or staff.
Consignor
The consignor is the individual or business which is sending goods from one destination to another. This can be either as a part of the company's internal supply lines, or as part of a sale. The consignor is also often referred to as the shipper or exporter.
Consignee
The consignee is the individual or business who is receiving the goods in a transaction. This could be the party responsible for customs clearance of the goods on entry into the destination country, depending on the incoterms in use. On official shipping documents, the receiver of the goods will be labelled as the consignee, but they can also be called the importer.
The key steps in the shipping process
Now that we know the critical players in the international logistics process, we can outline the 7 steps in the process below.
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1. Consignee requests quotes and orders goods
A consignee ordering goods initiates the entire shipping process. This usually involves them requesting a quote for the items and the shipper supplying a Proforma Invoice with their quote. At this stage, the incoterms are agreed upon, determining who is responsible for various costs and risks during transit.
2. Freight forwarder organises export
If you partner with a freight forwarder, they'll arrange the shipment and collection of your goods. This involves preparing several essential documents required for shipping and customs clearance, including commercial invoice and packing list.
3. Booking of freight through a carrier
With the essential documents prepared, the forwarder can book a slot with a carrier to send the shipment. Forwarders such as WTA, have experts in arranging this transportation. Through their relationships and volume agreements with major carriers, the consignor receives a better rate than if looking to book themselves.
4. Customs clearance for export
With a booking and documents in place, the goods are ready to be picked up and begin their journey by road, sea, air or a multi-modal combination. Once picked up, the cargo will be taken to the border where export clearance procedures must be completed.
In most cases, but depending on the incoterms, the exporter (or their customs broker) will submit the necessary documents to the relevant customs authority. If duties or taxes are due, they must be paid before clearance is granted. Customs officers may inspect the shipment to verify compliance with regulations.
5. Goods are in transit
Once cleared for export, the goods are handed over to the carrier for international transport. Once the shipment has been collected, the shipping line or airline will issue a Bill of Lading. During transit, shipments may go through multiple checkpoints or transfer between carriers.
6. Goods arrive in the country of destination for import clearance
The goods will then need to undergo an import clearance when they arrive at the country of destination. Again, you should already have the documents in place to support the clearance of your goods. Imported goods may be subject to particular tariffs and taxes when entering a country.
7. Goods are transported from the port to the final destination
Once customs clearance is complete, the goods are released and transported to their final destination, usually via road transportation. This could be a warehouse, distribution centre, or the consignee’s location. The consignee will obviously inspect the goods to ensure they match the order and are in good condition.
Complete synchronisation between the key players is required to complete the exporting process successfully. Thorough organisation and knowledge of the procedure can make for a smooth export process that meets the demands of your business.
To ensure you have everything you need for shipping internationally, download our international shipping checklist.
