The international shipping process involves many more tasks than freight transport and starts much earlier than when the ship leaves the dock. Business owners that trade internationally can gain visibility of where their goods are at any given time when they understand the key elements in the shipping process. The export process requires you to book suitable carriers, complete essential documents and synchronise all parties involved.
The process can be complex and involves multiple sections that all need to come together. If there's a problem, this sectored system means you can identify what part needs to change quickly. World Transport Agency (WTA) helps businesses understand this process to implement exporting into their operations easily. In this article, we outline the key elements of the shipping process that you can apply to any route worldwide.
The links in the chain
To understand the key elements of the shipping process, you need to learn the critical links in the shipping chain. Below we list the six businesses and individuals that make up the shipping process:
Freight forwarders connect and guide businesses with the tools, documents and arrangements to export their goods. While forwarders don't carry the goods themselves, they have a wealth of knowledge and a broad network that makes shipping possible for new exporters. The regulations and laws that vary from destination to destination can require you to meet strict documentation for clearing your goods. These regulations and other shipping requirements are simplified when you use a forwarder.
The actual transport is what comes to mind when most people think of exporting. Carriers are responsible for physically transporting the goods, by air, sea or land. Carrier companies can 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.
Customs brokers act as a consultant to guide you through the customs process of each country. They specialise in customs documentation and the clearance of your goods. They can be a valuable part of the process to almost guarantee the entrance of goods into the country of destination. Generally, freight forwarders work with a customs broker when planning the journey, or customs brokers can work for a forwarder company in-house.
Third-party logistics providersThird-party logistics providers, also known as 3PLs, can manage the distribution and fulfilment of your company's orders. When you use a 3PL, you outsource your tasks involved in the shipping process. These can include inventory management, packing boxes and sending goods to the 3PL fulfilment centre. Your inventory can remain at the fulfilment centre, and when a customer places the order, the 3PL picks and ships the order to your customer straight from their warehouse.
You, as the shipper, are one of the essential elements of the shipping process. The process needs you to have an order and send a shipment for the other elements to get to work. Shippers, or exporters, are the words used within the industry for businesses that are exporting goods.
Importers are buyers or your customers. Importers can be:
- Actual users (who uses the imported goods for themselves)
- Established importers (that import on a continued and agreed basis)
- Registered importers (that import under government schemes)
Steps in the shipping process
Now that we know the critical players in the exporting process, we have enough background to understand the seven steps in the shipping process listed below:
1. Importer requests quotes and orders goods
An importer ordering goods initiates the entire shipping process. This usually involves the importer requesting a quote and the shipper supplying a Proforma Invoice with their quote.
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.
3. Booking of freight through a carrier
With the essential documents prepared, the forwarder can book a slot with a carrier to export the shipment. Forwarders such as WTA are experts in booking the correct routes early enough in advance to secure transport for your export.
4. Goods are transported by freight
With a booking in place, your goods are ready to travel to their destination by road, sea or air. Depending on the Incoterms of your shipment, either you or your buyer's forwarder will arrange this.
5. Goods are processed in customs and placed in transit
To leave the country of origin, your goods must be cleared through the country's customs at the border. You should already have the necessary documents in place for them to be approved after completing step two. After the goods are cleared, they're free to leave the country.
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 importer
The last step is to deliver the goods to the customer. Again, the incoterms will explain who's responsible for this step.
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.