Shipping Terms Every International Importer and Exporter Should Know

Shipping Terms Every International Importer and Exporter Should Know

If you’ve been managing a business for quite some time now, you might’ve experienced some difficulties when it comes shipping your goods from one place to another. Aside from ensuring the safety and timely arrival of your cargo, you also need to familiarize yourself to several jargons associated with the shipping industry. Most business owners nowadays ended up getting confused about some of the technical terms used in shipping. While you don’t really have to be a pure expert when it comes in dealing with these terms, your knowledge about them could prove to be pretty handy in the future indeed.

So, to help you avoid unnecessary misunderstandings and minimize errors while you communicate with your shipping company, here are some of the most common terminology used in international shipping:

Bill of Lading (BoL)

Bill of Lading, also known as BoL is a document given by a carrier to a shipper. This document is issued on a receipt form with the sign of the vessel’s representative and acts as a written proof of contract that a transportation has been made. 

This document is very important as many ports do not allow anyone to claim their goods without presenting their BoL. Unfortunately, some notorious freight forwarding scammers use BoL as a way to steal money from the others. Know more about the other freight forwarding scams through this infographic here.

Carrier

Carriers can be an individual or legal entity that offers transporting services for passengers and goods. Examples of carriers are airlines, shipping lines, railroad and trucking companies.

Backhaul

If a driver takes a cargo during the return trip of a commercial vehicle, it’s technically referred to as a backhaul. Cargo vehicles do this practice as a way to maximize the productivity of their trips.

Customs Broker

Customs Brokers are private individual or firms that works as a guide for both importers and exporters in meeting the necessary requirements given by the customs authorities. Many people usually mistook customs brokers to freight forwarders, but both professions have several distinctions with each other.

Freight Forwarder

These are persons or company that specializes in logistics and organizing shipping processes in place of an individual or company to transport their goods.

Hazmat

A shortened term for “hazardous materials,” hazmat is a material that could pose safety risks to anyone that it comes in contact with. Unlike other forms of cargo, shipping hazmat requires special endorsements from all involved parties.

Intermodal

Cargo can be considered as an intermodal once it was shipped using multiple forms of transportation, like a cargo truck and rail transport.

Less Than Truckload (LTL)

When the weight of a shipment ended up being less than the required weight of the truckload rate, that is described as Less Than Truckload or LTL.

Tender

Tender is a fixed cost to move a cargo.

Transportation Management System (TMS)

Transportation Management Systems or TMS is a software designed to help businesses and even some freight forwarding companies to optimize their planning and execution in the physical movement of the goods. There are several benefits that can be obtained by investing in this kind of system.

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Reasons Why You Should Invest in a Transportation Management System (TMS)

Reasons Why You Should Invest in a Transportation Management System (TMS)

As a business owner, it is your duty to maintain the stability of your supply chain in order to ensure that your company is steadily growing on its way to success. Most distribution companies today implement a so-called Transportation Management System or TMS to accomplish such a goal.

What is a Transportation Management System?

Transportation Management System is defined as a subset of supply chain management that involves efficient planning, execution, and optimization of the physical movement of goods. This logistics platform can basically give you information that allows you to lower your expenses on shipping, saving you a lot of time and money in the long run. But the benefits don’t end there, though.

Here are five other reasons why you should invest in a Transport Management System or TMS:

  • It improves your cash flow

Your cash flow is an important factor that keeps your business up and running. Without it, you will find yourself unable to buy inventory or even pay your employees. In fact, studies have shown that 82% of businesses today fail due to poor cash flow management. Fortunately enough, a transportation management system can help you improve your cash flow. Through centralized billing support and freight bill audit and payment features, you can save more money and keep it flowing in your business without experiencing too much difficulty. You can also standardize your payment terms for your shipments so you can easily budget and manage your cash flow since you have a more accurate picture of all those payables, receivables, and freight invoices.

  • Better warehouse management

Maximizing your warehouse duties is very important. With a transportation management system, you don’t have to spend a lot of time on managing freight tasks as you already have a thorough and optimized plan to do that. This way, you can focus more on other important aspects of the business because you have a greater overall supply chain visibility that helps you to make better decisions when dealing with any financial issues.

  • It improves customer service

Investing in a transportation management system enables you to have access to analytics and reports that show how your decisions affect customer service. These reports can make you aware of what carriers you use to ship your goods, how much their service costs, and if whether they often deliver on time or not. This way, you can improve your customer service by determining the best carrier for your business. TMS can also make you inform your customers about the current state of their order, giving them adequate tracking information and experience.

  • Better inventory management

TMS can also provide you some updates about the condition of orders and shipments in real time. By monitoring each step of the process, you can be aware of how much inventory you left and therefore, identify your future needs.

  • It can reduce invoice errors

Errors in invoices, particularly on freight payment and audit processes, can be quite common on manual procedures. TMS can negate these errors by using computerized or automated procedures.

 

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5 Important Tips for New Importers

5 Important Tips for New Importers

Importing basically refers to the act of buying goods and services from abroad in order for it to be sold for the customers of the home country. Many business owners nowadays prefer to sell imported products due to its ability to increase profit margins. Moreover, an importer can provide higher quality goods that can potentially surpass those produced by local competitors. If done in moderation, importing can help bolster the national economy as well as widen up the global market.

Despite the benefits of this practice, importing can be a pretty risky option especially for those who are still establishing their foothold in the world of commerce. Purchasing goods from a foreign land requires a specific set of knowledge and skills and a deeper understanding of complex processes of importation.

If you’re starting to think that importing is the next big step for your business, here are some of the most important tips you should be aware of before making any move:

  • Make sure you are legible to do the importing

Speaking about legibility, it means that you have to be legally allowed to bring those imported goods to your home country. Before you can spend any time, money, and effort into something such as importing, you’ll need thorough research about the laws especially the restrictions of items that you are going to import. Some chemicals and medicines, in particular, are examples of products that could have certain restrictions. Check the legality of the products that you wanted to import first.

  • Assess all the possible expenses

Planning your budget ahead of time is very important if you wanted to be a successful importer. Be mindful of all the possible expenses before you can place an order to a company abroad. These charges can range from the transport and insurance costs, as well as other legal documents that you need to go through. A good way to limit or minimize these expenses is by hiring freight forwarders and customs brokers since they have the expertise to guide you through the process and find all the best deals for shipping available.

  • Pay attention to sudden exchange rate fluctuations

One notable example of risks that every importer should know is sudden fluctuations in the exchange rate. Remember that you are buying goods from another country with prices that are not the same as your local currency. So be mindful of the current exchange rate as it greatly affects the final amount that you will need to pay. The rate could either become beneficial or detrimental to your success.

  • Learn to interact with your foreign suppliers

It’s not easy to deal with suppliers from another country. Language and culture barriers are some of the challenges an importer has to face. Miscommunication could become pretty common in these areas, so better study a lot about the business industry of their country as much as possible.

  • Determine if there is a local market for the goods you wanted to import

It is your responsibility as the importer to know if there is a growing demand for the goods that you are opting to resale. Determining your potential customers in the local market can help you identify the profitability of that imported product. Conducting some surveys is also a good way for you to come up with a decision on whether importation is definitely the right choice or not.

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The Impact of Natural Disasters on Freight Shipping

The Impact of Natural Disasters on Freight Shipping

In terms of economy, any country will always rely on the continuous transportation of goods and materials that keeps the relationship between suppliers and manufacturers in harmony. This process is very critical for maintaining economic growth because any moment of disruption could bring serious adverse effects. Some of these disruptions are caused by certain deregulations in the financial industry that are to some extent, quite avoidable. However, another thing that can affect a country’s economy is freight shipping, which can sometimes depend on several factors that unfortunately are beyond our control: natural disasters.

Speaking about natural disasters in the Philippines, the likes of floods, typhoons, and earthquakes, are quite common. These calamities typically leave most of the routes that are essential for freight shipping operations unsafe such as roads and seas. This reason is also why you should also be aware of the following ways of how nature can make a significant impact on freight shipping:

The Price of Fuel

One of the most critical prices to look out for when there’s a natural calamity going on is the price of fuel in the world market. Since the cost of most goods and other services are very much dependent on the value of fuel as the source of transportation, your chosen carrier can charge you more than usual. The worst-case scenario in this situation is when there’s a typhoon going on oil refineries strong enough to make it temporarily shut down due to damages.

The Expected Arrival of your Goods

Time is more than just gold in the world of business. Importing your goods in a faraway place requires a definite amount of time to keep up against competitors that are nearer than your target customer. Moreover, if you sell something that thrives on punctuality to retain its usefulness such as food, you should know by now that delayed delivery can ruin its condition. So, if you just shipped your goods during a storm, you better expect for the worse. Carriers tend to choose longer routes over the shorter ones if they find the latter impassable due to the dangers involved.

Refusal of Carriers to take your Cargo

Natural disasters will always make most carriers to be more vigilant to take anyone’s goods. Denial of your goods directly gives detrimental effects on your supply chain, eventually losing considerable revenues in the long run. Just imagine all of your business operations being halted in such a significant amount of time.

Freight Shipping Rates

Rates for freight shipping is always flexible especially on the event of calamities. A domino-effect will most likely happen until it makes its way for you. From the impassable roads making the fuel much more expensive to the delayed accomplishment of shipping service, most financial burdens will be passed into you.

Conclusion

As a business owner looking to ship your goods, anticipating natural disasters is a key for preventing any financial loses that can delay your company’s growth. Always take heed of the weather updates and recent news before making any move.

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Indications of a Reliable and Trustworthy Freight Forwarding Company

Indications of a Reliable and Trustworthy Freight Forwarding Company

A freight forwarding company is a firm that offers the arrangement of shipping goods in place of an individual client or company. Many businesses today prefer hiring the service of freight forwarders in order to sustain their competence in the world market.

While there can be a wide variety of companies to choose from, finding the most reliable and trustworthy freight forwarder can become quite tricky since there are indeed some risks involved concerning the safety and timely arrival of your products from one place to another.

So, without further ado, here are the telltale qualities that can easily help you determine a reliable and trustworthy freight forwarding company:

Possesses good credentials

One of the most easily identifiable signs of a competitive freight forwarding company is a list of credentials. These can be awards, testimonials from former and existing clients, and specific accreditations from the government. Knowing this can almost guarantee that a freight forwarder is capable of providing the best quality of services available.

Strong and wide network of contacts

A strong and wide network of contacts is an essential tool of a reliable freight forwarder, especially when conducting international shipments. The company must utilize their contacts with carriers to move the goods. They should also maintain friendly relations with several custom brokers as well as other forwarding agents in foreign countries. This will help them establish effective communication when they are trying to request for any updates about the status of the package, which can prevent possible delays on the arrival of goods.

A range of quality services

A trustworthy freight forwarding company usually doesn’t only provide one kind of service. Instead, aside from product shipping, they also specialize in an extensive range of services such as trucking, assistance in the requirements of importing and exporting, breakbulk agency, among others. Having a range of services is a testament to a company’s ability in singlehandedly managing a set of complicated but important business requirements.

Excellent knowledge in document processes

Being an expert in the nuts and bolts of running the documentation procedures of shipping is a perk of a trustworthy freight forwarding company. This enables them to do their job efficiently by properly guiding and assisting the clients in the step-by-step process that can prevent them from spending too much money as well as precious time due to utter confusion.

Customer Service

Most experienced clients prefer a freight forwarding company that grants them information regarding their best rates and options. Moreover, having an active website, email, or contact number that regularly interacts with the customers looking for inquiries makes that kind of company a highly sought-after one.

A decent packaging service

Another trait of a trustworthy freight forwarding company is its skill in sustaining the safety of the products through a proper and foolproof packaging service. Packaging serves as the main protection of goods during the shipping time, so it is most vital for the company to have the proper kind of packaging regardless of what kind of goods they’re transporting.

Excelsior Worldwide Freight Logistics conduct free orientation for those who are willing to learn more about importation and exportation. It is our advocacy to share our knowledge & experience for 17 years in the business. Visit our website today at www.excelsior.ph to learn more about our service.

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Freight Forwarding in the Philippines: Tips to Achieve Competitive Cost Saving When Importing From China?

Freight Forwarding in the Philippines How to Achieve Competitive Cost Saving When Importing From China

One of the most critical success factors of an import business is learning how to minimize shipping costs. Whether you’re just new in the international trading industry or have already established a big company, managing shipping cost is an aspect that warrants extreme scrutiny and judgement as it can impact your business’ bottom line really hard.

With that being said, here are some tips that can help you ship from China to the Philippines in a cost-effective way:

1. Choose a Reputable Chinese Supplier

The first step to ensure you get a competitive cost-saving when importing from China is to choose a supplier that is reliable and trustworthy enough to cater to your needs.

If your supplier doesn’t comply with regulations and doesn’t have any certifications, it can lead you to serious legal problems once your cargoes arrive at the port destination, which can ultimately result in delays, additional logistical headaches and shipping costs.

2. Hire a Freight Forwarder in the Philippines

Most freight forwarders in the Philippines are affiliated with numerous international transport organizations and companies worldwide, including local Chinese logistic companies. Hence, you should choose a freight forwarder that can and will use its connections to negotiate for better prices on your behalf.   

Furthermore, your chosen Philippine freight forwarder should also be knowledgeable about the freight peak seasons in China (e.g., Chinese New Year) because during peak seasons, importing can become complicated due to high demand, high prices, and a probability of container shortage. 

3. Choose Incoterms Wisely

 

Incoterms are international commercial terms that serve as the basis of agreement between the supplier and the buyer that trades internationally. There numerous Incoterms to choose from, so selecting the most competitive one can be quite challenging.

In general, Incoterms often used to import from China, such as EXW, FOB, and CIF, are the most ideal as they put you in charge of choosing a freight forwarder, shipping routes and times, and other details that allow you to balance all costs so you can stay competitive. However, keep in mind that your negotiation skills and the type and value of goods could also affect the type of Incoterms you should choose.

If you’re unsure of which Incoterm to choose, do read our post on how to select a competitive and safe Incoterm.

These are the steps to follow in order to achieve significant cost saving when you import goods from China to the Philippines.

Here at Excelsior Worldwide Freight Logistics, we have equipped people who are knowledgeable regarding import procedures and are committed to reducing your expenditures as much as you are. 


We also conduct free orientation for those who are willing to learn about importation & exportation. It is our advocacy to share our knowledge & experience for 17 years in the business.  

Contact us today at (063) 525-9775 or email us at wecare@excelsior.ph

Steps to Get An Accurate Freight Rate Quote

Steps to Get An Accurate Freight Rate Quote

There is a famous proverb that says, ‘There is nothing certain, but the uncertain.’ Yes, this statement is true and evident in our daily lives but in doing business and transactions, it’s better to dip your toes first into the water before taking the plunge ̶ you need to know what to expect before closing a deal and that is what a freight rate quote can provide you.

Through these steps, you will be able to have an accurate information on your total shipping expenses and obtain the best freight rate:

Decide where to get a freight quote

Deciding where to get a freight quote can be quite tricky because of the number of options available. To make it easier for you, here are some details on shipping partners that you can choose from:

• Freight Forwarders

If you’re looking for a “one stop shop” that can provide you brokerage, carrier, and international freight forwarding services, then freight forwarders are your best pick.

Be specific with your shipment details

In order for your freight forwarder provide you with an accurate freight quote, you must provide them with the following details:

  • What are you shipping?
  • What is the value of your shipment?
  • What is the size and weight of your shipment?
  • Where is your shipment going?
  • When does it need to arrive?

Prepare an RFQ (Request For Quotation)

Once you’ve prepared all the details above, the next step to provide them to your chosen shipping provider. Depending on the services they provide, you may receive just one quote or several to choose from. After you pick a price and service, review all the details to make sure it’s accurate and in order.

Here at Excelsior Worldwide Freight Logistics, we treat our clients as partners. We also conduct free orientation for those who are willing to learn about importation and exportation. It is our advocacy to share our knowledge and experience for 17 years in the business.

Contact us today (063) 525-9775 or visit our website www.excelsior.ph

Sources:

https://fitsmallbusiness.com/how-to-get-a-freight-quote/
https://learn.org/articles/What_Does_a_Freight_Broker_Do.html

5 Steps To Save When Importing From China

5 Steps To Save When Importing From China

In 2017, China replaced Japan as the top bilateral trading partner of the Philippines with a 20.7% increase in imports from 2010.

This 2018, the imports shoot up to 51.2%, which is more than twice as it was last year. The said imports include electronics and machinery, mineral fuels, iron and steel, plastics, vehicles, ceramic products, furniture and lighting, and paper among others. No wonder why many businesses, whether big or small, import from China. If you’re one of them, here are five steps to help you reduce your expenses:

Plan ahead of time

China is 3,096 kilometers away from the Philippines, which means that the importation of your goods will likely take five days or more, depending on the mode of transportation. Although you can request for faster transportation, you will be asked to pay for a rush fee.

If you want your goods to arrive on-time without the extra charges, it’s better to plan it in advance. Moreover, it will also give you more time to find a local freight forwarder that will assist you throughout the importation procedure.

Find a local freight forwarder

Most freight forwarders in the Philippines are affiliated with numerous international transport organizations and companies worldwide, including local Chinese logistic companies. Hence, you should choose a freight forwarder that can and will use its connections to negotiate for better prices on your behalf.  

Furthermore, your chosen freight forwarder should also be knowledgeable about the freight peak seasons in China (e.g., Chinese New Year) because during peak seasons, importing can become complicated due to high demand, high prices, and a probability of container shortage.

If this is a no-brainer for your local freight forwarder, you’re in the right hands. Knowing the peak seasons beforehand will help you save by importing non-urgent goods during regular seasons and avoid struggling to find a container spot during peak seasons.

Choose a suitable transportation method

You can import either by sea or by air. Sea freight is ideal for large shipments that aren’t urgently needed. On the other hand, air freight is suitable for smaller and lighter shipments that are time-sensitive.

Importing by air is more expensive than importing by sea because it’s faster and more secure. It goes through fewer hands, therefore minimizing the risk of damages and theft. To cut back on expenses, use air freight only if its necessary.

Another option that you could try is splitting your shipments. For instance, if you have one hundred boxes of imports wherein thirty boxes need to be delivered immediately, and the other seventy aren’t, consider putting the thirty on a plane and the rest on a cargo ship.

Although split shipments might seem inconvenient because it involves preparing two invoices, packing lists and handling charges among others, once you already have a local freight forwarder, it will be hassle-free because they will assist you in accomplishing the necessary paperwork.

A friendly tip: When importing by air, it is best to book six to seven days in advance of the Cargo Ready Date (CRD) while when importing by sea, consider booking three to four weeks ahead of the CRD.

Ensure proper product packaging and insurance

Proper packaging reduces the risk of product damage and loss while in transit (especially fragile and perishable products), whereas cargo insurances can be converted into cash claims in case of damage and loss.

Although the proper packaging and cargo insurances might seem more like spending than saving, neglecting them will cost you a fortune in case your goods get damaged or lost. Better safe than sorry, right?

Obtain rates with the lowest GRI (General Rate Increase) possible

General Rate Increase is the adjustment of container shipping rates and is only applicable when importing by sea.

General Rate Increase and demand are directly correlated. When the demand is high, the GRI also goes up and vice versa, which means that GRIs go up during peak seasons.

The good news is, if you followed the first four steps mentioned earlier, especially planning ahead of time, you will be able to choose between multiple ocean freight rates and obtain the lowest GRI even during a peak season because as the saying goes ‘the early bird catches the worm.’

These five steps only prove that there are always ways to save when you are determined to look for them.

Here at Excelsior Worldwide Freight Logistics, we have equipped people who are knowledgeable regarding import procedures and are committed to reducing your expenditures as much as you are.

We also conduct free orientation for those who are willing to learn about importation & exportation. It is our advocacy to share our knowledge & experience for 17 years in the business. 

Contact us today at (063) 525-9775 or email us at wecare@excelsior.ph

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Importer Tips: Tips to Effectively Manage Your Import Supply Chain

Importer Tips Tips to Effectively Manage Your Import Supply Chain

Most importers will testify that managing shipments – from proper documentation to clearing cargos at the docks – is not a simple task. The import process involves a plethora of interactions and complying with dozens of regulations. These requisites can have a significant impact on your supply chain. Therefore, careful planning and fluid supply chain execution are required to minimize the uncertainties throughout the whole process.

Here are some tips that you can implement to optimize imports supply chain and speed up cycle time while complying with increased regulatory requirements in the industry.

1. Identify All Potential Pain Points

To optimize your supply chain, you must identify all the potential pain points that may cause hiccups in your operations along the way. Knowing these disruptions before they arise will enable you to create a proactive strategy with your service providers.

Aside from factors such as weather and catastrophic events, planning for the following common pain points in the supply chain will help ensure seamless import operations in the long run:

  • Port congestion and labor disputes
  • An unexpected change in vessel route
  • In-transit capacity crunches
  • Holidays, especially Chinese New Year.

2. Weigh the Benefits of LCL vs. FCL Shipping

When importing from overseas, you will likely choose between less than container load (LCL) and full container load (FCL) as a means of shipping your cargo. Each method has its own advantages and drawbacks. For instance, LCL will help you save on cost since the shipping price is shared among other importers. One of the drawbacks of this shipping method, however, is that the arrival schedule of shipments is often inconsistent. Nonetheless, there are services providers that offer regularly scheduled LCL services.

3. Hire a Trustworthy Customs Broker

Auditing your customs documents consistently is must to protect the operations and the namesake of your import business. If time is an issue, you can hire a trustworthy customs broker who will look over your records and will make sure everything matches up. In doing so, you will not only be able to ensure legitimate import operations, but you will also be able to focus on other important aspects of your growing business.

4. Ensure All Your Logistics Service Providers are Linked

Finally, a streamlined import-based supply chain will ultimately depend on the ability of your transportation and logistics partners to communicate with you and one another.

Since there are so many moving parts within international logistics, failures tend to occur in the spaces between each parties. If your service providers are communicating well with you, but you are still encountering issues, you may want to ensure that they are on the same page with each other.

It is very easy to get overwhelmed by the nuts and bolts of the complex import-based supply chain management. Being well-informed and asking your trusted customs broker and freight forwarder the right questions can significantly help you avoid costly surprises.

Excelsior Worldwide Freight Logistics conduct free orientation for those who are willing to learn about importation & exportation. It is our advocacy to share our knowledge & experience for 17 years in the business. Contact us today to learn more about our service.

Is Your Customs Broker Helping You Save Money from Import Cost?

Is Your Customs Broker Helping You Save Money from Import Cost?

When getting your goods into a country as an importer, passing through customs is an inevitable hurdle. As with any situation, you can either decide to whether or not you should do all the legwork alone or use a local customs broker to help you steer through often-rough seas of customs compliance.

Another question to be answered when looking at using customs broker is whether the price of doing so affects total import cost.

An Honest Customs Broker Can Impact Your Total Import Cost

If you to clear their goods at customs alone, you’re going to have to be at points of entry to receive goods, handle the tariffs, taxes and documentation and get the goods warehoused and/or moving into the supply chain themselves. Working with an honest customs broker that are experienced with all of the above is the best way to stay compliant and up to date with the importing process.

As a business owner, it is very important to work with someone who understands your unique requirements and delivers the level of service you need to succeed in your marketplace. And most importantly, you only want to work with a broker that will help your business save money in a legal and ethical manner in all your import dealings.

To know if your customs brokers are helping you save money from import cost, you must ask yourself if they are providing you with the following benefits:

  • Saving time on paperwork

The customs clearing process can be an extremely laborious task. If your customs broker is still giving you tons of paperwork to fill out, you may be missing precious time from other aspects of your business. Your customs broker should take care of all the necessary documentation for you, which will help you save time, which in the business world, equates to money.

  • Reduce errors on customs documentation

In relation to previous point, all the documentation that your customs broker has done on you behalf must be free from any mistakes or issues. If your current broker filled out the forms and made a mistake, your goods may be held up at the customs yard.

Ultimately, that can slow order processing down significantly. It can also make clients unhappy, which can tarnish your business reputation. Finally, it may result in product returns. All of that can cost your business but turning to a trusted and reliable customs broker can help you avoid costly documentation mistakes.

  • Handling duty payments

Lastly, an honest customs broker should help you create a reasonable appraisal of your items. If necessary, they should also be able to negotiate with the customs officials to keep the valuation relatively low, and subsequently, keep the duties low as well. These negotiations are another way that a customs broker helps to save your business money.

Excelsior Worldwide conduct free orientation for those who are willing to learn about importation & exportation. It is our advocacy to share our knowledge & experienced for 17 years in the business. Visit our website today at www.excelsior.ph to learn more about our service.

Excelsior Worldwide Logistics Corp.