FREIGHT FORWARDING &

LOGISTICS PRESENTED BY IMESH CHANDIKA GUNATILAKA

FREIGHT FORWARDING

WHAT IS

FREIGHT FORWARDING Freight forwarding is the coordination and shipment of

goods from one place to another via a single or multiple carriers via air, marine, rail or highway.

WHO ARE FREIGHT

FORWARDERS Freight forwarder is also known as a non-vessel operating common carrier (NVOCC) Freight forwarder is a person or company that organize

shipment for Individual or Corporation to get good from the manufacture or producer to a market , customer or final point of distribution. Undertakes the process of movements of good through the

various stags involved. Provide these services directly or through sub-contractors

WHAT IS OCEAN FREIGHT

Sea freight is the term used in the world transportation industry. We can call ocean freight as well. Sea freight is one of the transportation modules to carry cargo from one country to another via sea by ship/vessel.

WHAT IS AIR FREIGHT

Air freight parcel delivery is the transfer and shipment of goods via an air carrier, which may be charter or commercial. Such shipments travel out of commercial and passenger aviation gateways to anywhere planes can fly and land.

LOGISTICS

Logistics is generally the detailed organization and implementation

of a complex operation.

The Resources managed in Logistics could include physical items such

as food , materials, animals, equipment and liquids as well as abstract

items, such as time and information.

This is the commercial activity of transporting goods to the customer

STANDARD OPERATING PROCEDURE SOP

A standard operating procedure, or SOP, is a set of step-by-step instructions created by a

business to help workers carry out routine operations. Their purpose is to achieve

efficiency, quality output and uniformity of performance, while reducing miscommunication

and failure to comply to industry regulations.

DOCUMENTS USED IN FREIGHT FORWARDING

House Air Waybills(AWB)

House Bill of Lading B/L

Master Bill of Lading

Commercial Invoice

Certificate of Origin

Packing List

Shipping Order

HOUSE BILL OF LADING

A House Bill of Lading is a transportation contract which takes place between a customer and a forwarder. This legal document is issued by a freight or cargo forwarder to each exporter, for goods to be shipped or transported in a group. Hence, a HBL is also referred to as a group age document or certificate.

MASTER BILL OF LADING

A Master Bill of Lading (MBL) is a document created for shipping companies by their carriers as a receipt of transfer. A MBL summarizes the contents of a shipment including the bill of lading numbers assigned to the various items within the shipment, as well as a description of the freight under each bill of lading. The document also includes the terms for transporting the freight and the name and address of the consignor, or the shipper, and the consignee, the person whom possess the goods.

SHIPPING ORDER

Shipping order is a copy of the shipper’s instruction issued by the shipping company to a shipper regarding the disposition of goods to be transported. It is an inventory control document that identifies the confirmed space booking, the goods to be shipped from the warehouse, and the place to which the goods must be shipped.A shipping order generally contains the order number and date, names and addresses of the shipper, customs broker, or forwarder, shipping and receipt dates, a customer purchase order number, vessel and voyage number, sailing time, delivery date and location, customs closing date, and number and type of packages. The shipping order also includes a space for the recipient's signature. Therefore, the shipping order accompanies the shipment, so that the recipient can verify and sign that the items listed were received.

COMMERICAL INVOICE A commercial invoice is a document used in foreign trade. It is used as a

customs declaration provided by the person or corporation that is exporting an item across international borders. Although there is no standard format, the document must include a few specific pieces of information such as the parties involved in the shipping transaction, the goods being transported, the country of manufacture, and the Harmonized System codes for those goods. A commercial invoice must also include a statement certifying that the invoice is true, and a signature. A commercial invoice is used to calculate tariffs, international commercial terms (like the Cost in a CIF) and is commonly used for customs purposes. Commercial invoices are in European countries not normally for payment. The definitive invoice for payment usually has only the words "invoice". This invoice can also be used as a commercial invoice if additional information is disclosed.

CERTIFICATE OF ORIGIN

A certificate of origin (often abbreviated to C/O, COO or CoO) is a document used in international trade. In a printed form or as an electronic document, it is completed by the exporter and certified by an recognized issuing body, attesting that the goods in a particular export shipment have been produced, manufactured or processed in a particular country.

PACKING LIST

A packing list is a document that includes details about the contents of a package. The packing list is intended to let transport agencies, government authorities, and customers know the contents of the package. These details help each of these parties handle the package accordingly.

INternational COmmercial TERMS 11terms of shipment and delivery created by the International Chamber of Commerce (ICC), for use in sales contracts Provide an Internationally accepted definition of : The responsibilities of Buyer and Seller The allocation of delivery costs The assumption of delivery risks Periodically updated to reflect trade practice Should be referred to as “rules’ Translated into different Languages

INCOTERMS “DO”

Divide costs, risk and responsibilities between seller and buyer Guide one or the other contracting party into subsidiary contracts

necessary to fulfill designated Incoterms Tasks, Such as Contracts of carriage and insurance

Provide useful shorthand Reduce potential misunderstanding between buyer and seller “Reflect” rather than dictate trade practices.

INCOTERMS “DON’T”

Convey title Address revenue recognition Include all of the duties of the Buyer/Seller in a transaction Automatically Apply (you must specify) Speak about payment disputes between buyer and seller Deal with a breach in contracts

INCORTERMS GROUPING

“E” Terms:EX WORKS…NAMED PLACE(usually the seller’s premises ) Abbreviation :EXW Transport mode: all Seller’s cost and risk end when seller place the good at the disposal

of the byer at sellers premises or another named place Loading is buyer’s responsibility Pre carriage is buyer’s responsibility Main-carriage is buyer’s responsibility

“F” TERMS

FCA :FREE CARRIER …NAMED PLACE

FREE CARRIER….NAMED PLACE(usually the seller’s Premises or a buyer appointed carrier terminal on the seller’s side ) Abbreviation: FCA Transport Mode: All Loading: truck,train,barge at seller’s facility is seller’s responsibility Pre-carriage is seller's responsibility Seller’s cost &risk end when goods are delivered to Buyer’s Carrier at

the sellers premises or another named place

FAS:FREE ALONGSIDE SHIP

FREE ALONGSIDE SHIP… NAME PORT OF SHIPMENT Abbreviation: FAS Transport Mode :Vessel Loading :Truck,Train,Barge,etc.at Seller’s facility is seller’s

responsibility Pre-carriage: seller’s responsibility Seller’s cost and risk end when goods are placed alongside the vessel

nominated by the buyer at the named port of shipment Suggestion: In case of containers delivered at a terminal, the FCA rue

is more appropriate

FOB:FREE ON BOARD

FREE ON BOARD .. NAME OF PORT OF SHIPMENT Abbreviation: FOB Transport Mode: Vessel Loading:truck,train,barge,etc.at seller’s facility is the seller’s

responsibility Pre-Carriage: seller’s responsibility Vessel Loading: seller's Responsibility Seller’s cost and risk end when the goods are delivered on board the

vessel nominated by the buyer Suggestion: for containerized shipments, consider FCA showing the

carrier’s terminal at the port as the designated place

“C”TERMS

COST AND FREIGHT …NAMED PORT OF DESTINATION

Abbreviation:CFR Transport Mode: Vessel Loading: truck,train,barge,etc.at Seller’s facility is the Seller’s responsibility Pre-Carriage: Seller’s Responsibility Vessel Loading: Seller’s Responsibility Main Carriage: Seller’s Responsibility (however, Seller is not responsible for condition of goods while they are in main carriage transit ) Seller’s risks for loss and damage end when the goods are on board the vessel The Seller must contract and pay the costs and freight necessary to bring the goods to the named

port of destination Suggestions: for containerized shipment ,consider CPT Showing the destination port or an inland

location on the buyer’s side .

COST INSURANCE AND FREIGHT …. NAME OF DESTINATION

Abbreviation:CIF Transport Mode: Vessel Loading :truck,train,barge,etc at Seller’s responsibility Pre carriage: Seller's responsibility Vessel loading: Seller's responsibility The Seller’s risks of damage or loss end when goods are on board the Vessel The seller must contract for and pay the cost and freight necessary to bring the goods

to the name port of destination Insurance: seller must effect and insurance policy on behalf of the buyer Main Carriage : the contract of main carriage and payment are the seller’s

responsibility Suggestion: for containerized shipments, consider CIP showing the destination port or

an inland location on the buyer’s side .

CARRIAGE PAID TO… NAMED PLACE OF DESTINATION

Abbreviation:CPT Transport Mode: All Loading : Seller’s responsibility Pre Carriage: Seller's responsibility Main Carriage: Seller's responsibility Seller’s risk ends when goods are delivered to the carrier or another

person nominated by the seller at and agreed place Suggestions :Ideal for containerized shipments The Seller must contract for the cost of carriage necessary to bring

the goods to the named place of destination .

CARRIAGE AND INSURANCE PAID TO … NAMED PLACE OF DESTINATION

Abbreviation: CIP Transport Mode :All Loading :truck,train,barge at Seller’s facility is Seller’s responsibility Pre-Carriage: Seller’s responsibility Insurance: Seller must provide buyer with insurance policy Seller’s risk ends when goods are delivered to the carrier or another

person nominated by the seller at an agreed place The seller must contract for the costs of carriage necessary to bring

the goods at the named place of destination .

“D”TERMS

DELIVERED AT TERMINAL (terminal on Buyer’s side)

Abbreviation: DAT Transport mode: all Seller’s risks end once goods are unloaded from the arriving means

of transport and placed at the disposal of the buyer at a named terminal at port or place of destination

The Seller must contract for the costs of carriage to the named terminal at the agreed port or place of destination

Suggestion: when using this term it is recommended to specify as clearly as possible the terminal at the agreed port or place of destination, as the risks to that point are for the account of the Seller

DELIVERED AT PLACE (on Buyer’s side)

Abbreviation: DAP Transport mode: all The seller’s risks end when goods are placed at the disposal of the

buyer on the arriving means of transport ready for unloading The Seller bears the costs for the carriage of the goods to the named

place of destination or the agreed place Suggestion: when using this term, make clear which party is

responsible for unloading and any type of on-carriage

DELIVER DUTY PAID… NAMED PLACE (on Buyer’s side)

Abbreviation: DDP Transport mode: All The Seller bears all the costs and risks involved in bringing the goods to the place of

destination and has an obligation to clear the goods not only for export but also for

import, And has to pay any duty for both export and import and Has to carry out all customs formalities The seller will also need to bear the VAT !

END OF PRESENTATION