Mode of assessment Quiz 10% Test 15% Assignment 25% Final exam 50%

Lecturer : Halil Ali 07-2271820/2088

Diploma in Port management At the successful completing of this subject, students are expected to: 1. Define the various customs regulations and

practices.

2. Relate this knowledge to the various industrial

application.

3. Describe the various customs forms and their

application.

4. Use each form in the appropriate work

requirement

Netherlands Maritime

Institute of Technology

DSM2301 – CUSTOMS AND FORWARDING

International trade

Logistics overview

Transportation

Warehousing

Port operation

Facilitators

Merchandise trade

Trade in commercial services

Trade in global value chains

The exchange of goods or services along international borders. This type of trade allows for a greater competition and more competitive pricing in the market. The competition results in more affordable products for the consumer. The exchange of goods also affects the economy of the world as dictated by supply and demand, making goods and services obtainable which may not otherwise be available to consumers globally. http://www.businessdictionary.com/definition/international-trade.html#ixzz3M2JB793d

International Transport Forum 2010, Maritime transportation: Drivers for the shipping and port industries

Logistics is the management of the flow of goods between the point of origin and the point of consumption in order to meet some requirements, of customers or corporations.

This include :

Transportation, warehousing and port operation

Documentation

Taxation and duties

90% of international trades goes

through ports

60% of trades are containerized

International relocation of businesses

Combination of two or more modes of movement of goods, such as air, road, rail, or sea. Also called

combined transport.

http://www.businessdictionary.com/definition/multimodal-transport.html#ixzz3MDuNGWOk

Another definition notes a supply chain is the network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services delivered to the ultimate consumer (Christopher 1992).

JOURNAL OF BUSINESS LOGISTICS, Vol.22, No. 2, 2001

The network created amongst different companies producing, handling and/or distributing a specific product. Specifically, the supply chain encompasses the steps it takes to get a good or service from the supplier to the customer.

Supply chain management is a crucial process for many companies, and many companies strive to have the most optimized supply chain because it usually translates to lower costs for the company.

Quite often, many people confuse the term logistics with supply chain. In general, logistics refers to the distribution process within the company whereas the supply chain includes multiple companies such as suppliers, manufacturers, and the retailers.

http://www.investopedia.com/terms/s/supplychain.asp

Supply chains include every company that comes into contact with a particular product. For example, the supply chain for most products will encompass all the companies manufacturing parts for the product, assembling it, delivering it and selling it.

Flow of goods between the point of origin and the point of consumption in order to meet some requirements, of customers or corporations.

GENERAL CARGO LOGISTIC FLOW (Outward)

Port operator

Transporter

Shipping lines

Freight forwarder

Shipping agents

Custom department

Shahbandar (harbour master)

Parties involved in these transactions are as follows:

Shippers represent the owner of goods being transported by any mode of transport, whether consignors (the traditional meaning of shipper) or consignee. The definition of shipper has changed in line with the nature of international trade and transport: in today’s global economy shippers may contract third party logistics providers or freight forwarders to procure and manage their freight shipments; they will be responsible for arranging and managing that contract. But many shippers will also seek to contract directly with the carriers whether or not they are the importer or exporter. http://www.europeanshippers.eu/shippers/what-is-a-

shipper/

Sales terms provide for shippers to take control of the shipment and the goods (and liabilities surrounding the carriage of goods) either from their source (e.g. the factory gate) or from a place of delivery; this may or may not include responsibility for payment of import

or export duties, freight charges, insurance, or requirements under various rules of international trade (e.g. security).

Invariably, however, a shipper – as owner of the goods will have ultimate responsibility for the goods in their control or in transit and compliance with the relevant national and international rules of trade and commerce.

Transportation of goods are specialized activities carried out be transporters.

Transporters can be in the form of lorries and trucks, rail services, container haulage, barges and ships.

Cost, speedy delivery, reliability and safety of the goods are a major consideration.

Any device used to move an item from one location to another. Common forms of transportation include planes, trains, automobiles, and other two-wheel devices such as bikes or motorcycles. Transportation is the process of shipping or moving an item from point A to point B.

http://www.businessdictionary.com/definition/transportation.html#ixzz3MECy4AuK

A warehouse is a commercial building for storage of goods. Warehouses are used by manufacturers, importers, exporters, wholesalers , transport businesses, customs, etc. They are usually large plain buildings in industrial areas of cities and towns and villages. They usually have loading docks to load and unload goods from trucks. Sometimes warehouses are designed for the loading and unloading of goods directly from railways, airports, or seaports.

They often have cranes and forklifts for moving goods, which are usually placed on ISO standard pallets loaded into pallet racks . Stored goods can include any raw materials, packing materials, spare parts, components, or finished goods associated with agriculture, manufacturing and production.

Warehousing is defined as the performance of administrative and physical functions associated with storage of goods and materials. These functions include receipt, identification, inspection, verification, putting away, retrieval for issue, etc. http://www.businessdictionary.com/definition/warehousing.html#ixzz3ME96cx5s

http://en.wikipedia.org/wiki/Warehouse

Port is a gateway for cargo to be exported.

It can also work as a transhipment point for shippers located in other countries or places assessable by sea.

It provides various cargo handling facilities such as general cargo, bulk cargo, and container cargo.

A port is geographical area where ships are brought alongside land to load and discharge cargo, usually a sheltered deep water area such as a bay or river mouth. Their main purpose is to provide a secure location where ships can berth and a gateway for cargo to be exported.

Maritime Economics, Martin Stopford

Government agencies Freight forwarders Ship agents Customs department Marine department Port authorities

90% of international trades goes through ports

60% of trades are containerized

International relocation of businesses

GDP : C+I+G+(X-M)

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Ports constitute an important economic activity in coastal areas. The higher the throughput of goods and passengers year-on-year, the more infrastructure, provisions and associated services are required. Ports are also important for the support of economic activities in the hinterland since they act as a crucial connection between sea and land transport

Definition of import. Importation means to bring or cause to be brought into Malaysia by land, sea

or air. It is a good brought into a jurisdiction, especially across a national border, from an external source. The party bringing in the good is called an importer.

An import in the receiving country is an export

from the sending country. Importation and exportation are the defining financial transactions of international trade.

Definition of export. Exportation is defined as to take or cause to be taken out of Malaysia by land, sea, or air, to place any goods in a vessel, conveyance or aircraft for the purpose of such goods being taken out of Malaysia.

Containerization is a system of intermodal freight transport using

intermodal containers (also called shipping containers and ISO containers) made of weathering steel. The containers have

standardized dimensions.

They can be loaded and unloaded, stacked, transported efficiently over long distances, and transferred from one mode of transport to another—container ships, rail transport flatcars , and semi-trailer trucks—without being opened. The handling system is completely mechanized so that all handling is done with cranes and special forklift trucks. All containers are numbered and tracked using computerized systems.

The system, developed after World War II, dramatically reduced transport costs, supported the post-war boom in international trade, and was a major element in globalization.

Containerization did away with the manual sorting of most shipments and the need for warehousing. It displaced many thousands of dock workers who formerly handled break bulk cargo. Containerization also reduced congestion in ports, significantly shortened shipping time and reduced losses from damage and theft.

An intermodal container (also container, freight

container, ISO container, shipping container, hi-cube container, box, conex box and sea can) is a standardized

reusable steel box used for the safe, efficient and secure storage and movement of materials and products within a global containerized intermodal freight transport system.

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In general, it is possible to stow 25-30 cubic m of cargo in a 20’ container

55-60 cubic m in a 40’ container

68-70m3 in a 40’ high-cube container

FCL is a door to door concept. Containers are sealed at origin and opened at the destination, offering high security and minimum handling the majority of containerized UN cargo is FCL

This is greatest interest in the case of shipments to land locked countries, as the use of containers practically eliminates the risks of loss, pilferage and delays in the port of unloading for transhipment over land. However, if reloading is required before the final destination, this method offers lower security, higher risk of theft or damage during loading/offloading and /or exposure to adverse weather conditions.

LCL is a terminal to terminal concept. When a shipper does not have enough Cargo to load a container to its full capacity, a forwarder running a consolidated container service may be contacted and allowed to add.

Functional classification of maritime cargo/terminal

GROUP WORK

Your are to select various transportation means for the following cargo:

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C E

Responsibilities

Organization structures

Objectives

Customs is an authority or agency in a country responsible for collecting customs duties and for controlling the flow of goods, including animals, transports, personal effects, and hazardous items, into and out of a country

Each country has its own laws and regulations for the import and export of goods into and out of a country, which its customs authority enforces. The import or export of some goods may be restricted or forbidden

In most countries, customs are attained through government agreements and international laws. A customs duty is a tariff or tax on the importation (usually) or exportation (unusually) of goods. Commercial goods not yet cleared through customs are held in a customs area, often called a bonded store, until processed. All authorised ports are recognised customs areas

In other words, KDRM administers seven main and thirty-nine

subsidiary laws. Apart from this, KDRM implements eighteen laws for

other government agencies. KDRM is now known as JKDM (Jabatan

Kastam Diraja Malaysia) when Dato' Sri Hj. Ibrahim bin Jaapar takes

over as Director General of Customs in 2009.

The Royal Malaysian

Customs (RMC) / (Malay: Kastam

Diraja Malaysia (KDRM)) is the

government agency responsible for administrating the nation’s indirect tax policy.

Assist the government to formulate policies relating to the indirect tax administration by identifying new tax resources so as to bring in more revenue.

Plan, create and implement techniques for the efficient collection of revenue through the introduction of new procedures and equipment.

Introduce more effective methods to combat smuggling which causes loss of revenue.

Help promote the rapid growth of local industries by means of administering tariff concessions, duty drawbacks, establishment of free industrial/commercial zones and licensed manufacturing warehouses.

Conduct research in the valuation of goods for purposes of collection of duty and maintain a check on the proper collection of duties.

Act on behalf of other departments/ministries such as ministry of trade, ministry of home affairs, department of agriculture, department of wildlife and department of health to control import and export of goods which are prejudicial to the interest of the country.

Participate actively in the activities of international bodies, such as the world custom organization and world trade organization.

Import duties

Export duties

Excise duties

Sales tax

Service tax/gst

Vehicle levies

The royal customs and excise department, Malaysia is principally a revenue collecting department, collecting various indirect taxes such as

IMPLEMENTATION STRATEGY

◦ Enforcement

◦ Prevention

◦ Management

◦ Corporate planning and development

To ensure the goals, objectives and responsibilities of the Customs Department are implemented, various strategies are formulated;

The Royal Customs and Excise Department cooperates with a number of other agencies, and a license and permit from responsible agency is necessary to import the following products: alcoholic beverages; animal and animal products; certain

health and medicinal food products;

meat and meat products; plant and plant products; poultry and poultry products.

Imported goods may enter into Malaysia legally when shipment has arrived within the legal landing place and at customs airport. All goods to be imported whether or not subject to import

To collect customs duties, excise duties, sales tax, service tax and vehicle levies

To prevent loss of revenue

To assist industries by providing facilities

The objectives set by Malaysian Customs Department are as follows:

Types of forms

Proper preparation of customs form

Essential endorsement

Supporting documents

Offences and penalties

Malaysian Customs Documentation - Custom documentation's would consist of prescribed forms which appear in the second schedule of the Customs Regulations 1977. All imported goods, both dutiable or not, must be declared in the prescribed forms and be submitted to the customs station at the place of import.

These prescribed forms which are applicable for the importation and exportation of goods are goods declaration forms. The type of customs declaration form that is required by the customs department depends on the type of customs procedure applicable to the goods.

Customs Form no. 1: Declaration of goods imported

Customs Form no. 2: Declaration of goods to be exported

Customs Form no. 3: Application/ Permit to transport goods within the Federation/Malaysia

Customs Form no. 8: Application/ Permit to tranship/remove goods

Customs Form no. 9: Requisition/ Permit to remove dutiable goods from customs

44

Custom Form 1

Relevant sections under the Custom ACT 1967 are as follows :-

Section

78 (1)

The importer or his agent is required to submit a declaration in the prescribed form to the proper officer of Customs for importation of dutiable goods which are warehouse on arrival. Such declaration must be presented within one month of landing or within 3 days of receiving a notice from the proper officer of Customs. In the case of goods imported by road, such declaration shall be made on arrival of the goods at the place of import

Section

78 (2)

Dutiable goods exempted from warehousing requirement must be declared at the time of arrival at the place of import

Section 78 (3)

Goods imported by post must be declared on demand made by the proper officer of Customs

Section 81 (1)

In the case of non-dutiable goods imported by sea or air, the importer or his agent is required to submit the declaration not later than 10 days after the arrival of the vessel or aircraft

Section 82

In the case of non-dutiable goods imported by rail, the importer or his agent is required to submit the declaration at the time of delivery of the goods.

Section 83

In the case of non-dutiable goods imported by road, the declaration must be submitted at the time of arrival at the place import

Section 80

The exporter or his agent, in respect of dutiable exports, must complete the declaration in the prescribed form to the proper officer of Customs :-

At the Customs port of shipment if export by sea;

At a duly appointed inland Customs station where the goods are loaded or at the place of export if export is by rail ;

At the place of export if export is by road and

At the Customs airport if the export is by air

The goods must be produced to the proper officer of Customs at the place of export or any other place as the officer may direct. No dutiable goods shall be removed from the place at which such goods were produced to the proper officer of Customs unless export duty on them has been paid or permitted to be removed by a senior officer at Custom

Custom Form 2

Relevant sections under the Custom ACT 1967 are as follows :-

Used for transport goods from one territory to another in Malaysia by sea/air . Relevant regulation under Custom Regulation 1977 are as follows :-

Regulation 15 (1)

The owner of goods who desire to have goods transported is required to submit to the proper officer of customs an application in the form of customs 3 at the place of loading from which goods are intended to be transported

Regulation 15 (2)

The proper officer of custom shall issue the permit to transport goods if he satisfied that the goods are intended for transportation

Regulation 15 (3)

Goods shall not be loaded or water-borne to be shipped or loaded into an aircraft or air-borne for transportation except under the supervision and direction of the proper of customs.

Custom Form 3

Regulation 15 (4)

The Director General of customs may refuse to permit transportation of goods which are restricted by an order made by the Minister of Finance

Regulation 15 (5)

Under this regulation “good” is defined as goods on which Custom duty, excise duty, and sales tax shall have been paid. For goods which are liable to customs duty on export or prohibited on export, security has to be furnished

Regulation 16

The consignee or his agent must produce copies of the Custom 3 originally submitting and approved by the proper officer of customs at the place of loading of the goods. If the consignee’s copy and the customs copy are in order, the goods may be examined and released by the proper officer of customs.

Used for movement of dutiable goods under transshipment or custom transit procedures.

Section 23(2) of the Custom Act 1967 stipulates that except with the permission of the proper officer of Custom no such goods after having been landed or unshipped shall be transshipped: or after having been put into any boat or craft to be landed shall be removed into any boat or craft previously to their being landed.

Regulation 12 (1)

The transshipment of good by sea/air is only allowed under a permit given by the proper officer of Custom and in accordance to the conditions contained in the permit which in the Custom no.8

Regulation 12(2)

Application in custom no 8 required to be submitted to the proper officer of custom at the place of transshipment by the consignor or his agent or the agent of the vessel or aircraft transporting the goods in intended for transshipment.

Cn’tnue

Custom Form 8

Regulation 12(3)

The proper officer of custom shall approve transshipment if he is satisfied that the goods are intended for transshipment by approving the customs no.8

Regulation 12(4)

Transshipment of goods shall be in the presence and under the direction of the proper officer of customs.

Regulation 12(5)

The proper officer of custom acting on the directions of the Director General of Customs may refuse to permit transshipment of goods which are prohibited on import or export

Custom Form 9

This form is to be used for part removal of dutiable goods from custom warehouse or licensed warehouse on payment of Custom Duty or other charges

Regulation 29

The owner of dutiable goods has submit to a Custom form no.9 for the removal of part of the consignment of dutiable goods from custom control subject to the payment of the Customs duty and shall assessed on the goods to be removed

Other Related Section

Section 79 of the Custom Act 1967 requires the declarant of dutiable goods imported to give a full and true account of the number and description weight measure or quantity and value of all such dutiable goods and the country of origin of such goods

Section 80 of the Custom Act 1967 requires the exporter of dutiable goods to declare the full and true account of the number and description of packages and of the description, weight, measure and quantity and value of such dutiable goods and the country of destination of such goods

Section 87 of the Custom Act 1967 requires the declarant of non-dutiable goods imported or to be exported to give a full or true account of the particulars which are required in respective prescribed forms

Section 90 of the Custom Act 1967 allows Customs declaration forms to be made by a forwarding agent licensed by the Custom Department for the purpose and duly authorized by the owner of the goods

Supporting documents for the declaration forms are

as follows: 1. Bill of lading or consignment Note, where appropriate

2. Commercial invoice relating to the goods

3. Bank documents such as letter of credit etc

4. Certificate of origin of the goods

5. Packing list/weight list

6. Import license

Supporting documents for the declaration forms are as follows:

1. Commercial invoice relating to the goods

2. Consignment note

3. Foreign exchange documents

4. Export licence

A Certificate of Origin (often abbreviated to C/O or COO) is a document used in international trade. It is a printed form, completed by the exporter or its agent and certified by an issuing body, attesting that the goods in a particular export shipment have been wholly produced, manufactured or processed in a particular country.

Or in Short “A Certificate of Origin (CO) is a document which is used for certification that the products exported are wholly obtained, produced or manufactured in a particular Country. It is generally an integral part of export documents.

A packing list, is a shipping document that accompanies delivery packages, usually inside an attached shipping pouch or inside the package itself. It commonly includes an itemized detail of the package contents and does not include customer pricing. It serves to inform all parties, including transport agencies, government authorities, and customers, about the contents of the package. It helps them deal with the package accordingly.

Ocean bill of lading

A Bill of Lading is a standard-form document. It is transferable by endorsement (or by lawful transfer of possession) and is a receipt from shipping company regarding the number of packages with a particular weight and markings and a contract for the transportation of same to a port of destination mentioned therein.

A Bill of Lading is a document generated by a shipping line or its agent, giving details of a shipment of merchandise. Alongside this principal purpose, the bill of lading also certifies that the goods have been shipped aboard a vessel (and in some cases certifies the condition of the goods at the point of loading), assigns title to the goods, and requires the carrier to release the merchandise to the holder of the title or a named party at the destination port.

A Delivery Order (abbreviated D/O) is a document from a consignor, a shipper, or an owner of freight which orders the release of the transportation of cargo to another party. Usually the written order permits the direct delivery of goods to a warehouseman, carrier or other person who in the course of their ordinary business issues warehouse receipts or bills of lading.

Online DO

Container DO

The relevant sections of the Customs Act 1967 below:

O&P are for offences and penalties in making incorrect declaration and falsifying documents whereby whoever committing the offences stated below shall on conviction, be liable to imprisonment for a term not exceeding 12 months or to a fine not exceeding RM5,000 or both

Makes, orally or in writing, or signs any declaration, certificate or other document required by this act which is untrue or incorrect in any particular.

Makes, orally or in writing , or signs any declaration or document, made for consideration of any officer of customs on any application presented to him, which is untrue or incorrect in any particular.

Counterfeits of falsifies, or uses, when counterfeited or falsified, any document used in the transaction of any business or matter relating to customs.

Fraudulently alters any document, or counterfeits the seal, signature, initials or other marks of, or used by, any officer of customs for the verification of any such document of for the security of any goods or any other purpose in the conduct of business relating to customs.

Being required by this act to make a declaration of dutiable goods imported or exported, fails to make such declaration as required or

Fails or refuses to produce to a proper officer of customs any document required to be produced under Section 100 of the Customs Act 1967

End of section

Custom act 1967

Sales tax act 1972

Free Zone Act 1990

Tariff classification and valuation

Goods vehicle levy act 1983

Service tax Act 1975

Excise Act

Customs Act 1967 encompasses the various aspects of responsibilities and departments functions. General aspect of the act can be focussed as follows:

Administration, appointment and authority

Formulating procedures

Control and implementation of importation and exportation of goods.

Determining the various facilities extended to importers and exporters

Offences and penalties.

Appointment and powers of officers

Levying of custom duties

Importation and exportation

port clearance

General provision affecting vessels in territorial waters

Manifest

Warehousing

Declaration of goods Drawback Miscellaneous Provisions Inspection, investigation, search, seizure, and

arrest Provisions as to trials and proceedings Offences and penalties Regulations General Special provisions

Harmonized Commodity Description & Coding System, commonly known as HS Codes and ASEAN Harmonized Tariff Nomenclature (AHTN) were created for international use by the Custom Department to classify commodities when they are being declared at the custom frontiers by exporters and importers.

AHTN is used for trade transaction between Malaysia and the other ASEAN countries, while the HS Code applies for trade with non-ASEAN countries. For reference of HS and AHTN Codes, you may search from Search Tariff function at JKDM HS - Explorer Website i.e. http://tariff.customs.gov.my

For exporters or importers who are not sure of the HS/AHTN codes for their products, they can refer to the officers at the Malaysia Royal Customs Department Head Office or any of its branch offices for assistance. This service is provided free of charge.

TARIFF CODE CLASSIFICATION

HEAD

ER SUB ITEM UNIT DESCRIPTION OLD HS

IMPOR

T RATE TRQ

EXPORT

RATE SALE TAX

3405 20 0 KGM

-Polishes, creams and similar preparations

for the maintenance of wooden furniture,

floors or other woodwork 340520000 10% 0 Nil 10%

3926 30 0 KGM

-Fittings for furniture, coachwork or the

like 392630000 Nil 0 Nil 10%

4420 90 200 KGM

--Wooden articles of furniture, not falling in

Chapter 94 442090200 Nil 0 Nil 10%

8301 30 0 KGM -Locks of a kind used for furniture 830130000 Nil 0 Nil 10%

8418 50 0 UNT

-Other furniture (chests, cabinets, display

counter, show-cases and the like) for

storage and display, incorporating

refrigerating or freezing equipment 841850000 30% 0 Nil 10%

Animals Antiques Animals / Plant products Customs Jewellery Narcotics Endangered animals Fire crackers Firearms / Ammunition Fur - e.g. animal skin, ashes Precious metals, stones Pornography

Principle customs legislations provide the authority to the department and their staff to execute their roles and responsibilities legally.

Based on the provision, the act and the regulations, the department thereafter generates the relevant instruction (PTK) and circulars with detailed guidelines to facilitate the officers to execute their works smoothly.

The sales tax act 1972, sales tax administered in our country is a single-stage tax charged and levied on locally manufactured taxable goods at the manufacturers level and as such is often referred to as manufacturers tax.

The tax is also imposed on taxable goods imported into the federation sales tax is imposed on imported goods at the point of entry.

In the case of locally manufactured goods, sales tax is charged and levied when such goods are sold or disposed of by the manufacturers, taxable goods are goods of a class or kind not for the time being exempted from sales tax. Exempt goods are listed in the schedule a of the sales tax order 1980

An act to provide for the establishment of free zones in Malaysia for promoting the economic life of the country and for related purposes. The activities include commercial and manufacturing operation. A free trade zone (FTZ) is a specific class of special economic zone. They are a geographic area where goods may be landed, handled, manufactured or reconfigured, and re exported without the intervention of the customs authorities. Only when the goods are moved to consumers within the country in which the zone is located do they become subject to the prevailing customs duties.

“Free zone” means any part of Malaysia declared under the provisions of subsection 3(1) to be a free commercial zone or a free industrial zone;

The Minister may, by notification in the Gazette, declare any area in Malaysia to be a free commercial zone or a free industrial zone and every such notification shall define the limits of such zone. subsection 3(1)

Free zones range from specific-purpose manufacturing facilities to areas where legal systems and economic regulation vary from the normal provisions of the country concerned. Free zones may reduce taxes, Customs duties, and regulatory requirements for registration of business. Zones around the world often provide special exemptions from normal immigration procedures and foreign investment restrictions as well as other features. Free zones are intended to foster economic activity and employment that could occur elsewhere. Farole, Akinci, ed., "Special Economic Zones: Progress, Challenges and Future Directions, World Bank, 2011.

Subject to this Act goods and services of any description, except those specifically and absolutely prohibited by law, may be brought into, produced, manufactured or provided in a free zone without payment of any customs duty, excise duty, sales tax or service tax.

The Minister may, at his absolute discretion, authorize any retail trade to be conducted in a free zone and the Minister may in relation to such authorization impose such conditions as he may

deem fit.

Adoption of export-led and import substitution policies The establishment of FIZs which are deemed to be outside Malaysia, enables the country to pursue a two-pronged strategy i.e. an export-led one focusing on the FIZs and the import substitution strategy to grow local industries and reduce the dependence on imports as the implementation of import substitution industry could at times be in conflict with the promotion of export-led policies for example, to grow the local industries, the government had in the early years of industrialisation, imposed high duties to protect certain local infant industries.

A high duty regime would then run contradictory to this policy.

Conducive environment for export

The development of FIZs has made available a conducive environment for export-oriented companies. The ease of importing raw materials and machinery and equipment as well as the export of goods with minimal customs control have been well-received by the MNCs. Located in an FIZ facilitates the companies’ operations as they essentially need to deal with the State Customs at the entry/exit points for all their imports and exports and the disposal of waste.

The companies in the FIZs have the dual benefits of enjoying the developed infrastructure at the site such as proper roads and drainage, telecommunication links and other utilities as well as third-party warehousing facilities, and yet be considered to be outside the country, thus be exempted from duties for all direct raw materials and machinery and equipment. An FIZ like Bayan Lepas also has the added benefit of a training centre- Penang Skills Development Centre (PSDC).

Development of Electronics & Electrical Industry The most notable benefits arising from the development of FIZs in Malaysia is the emergence of the E&E industry, where companies such as Intel, Hewlett Packard, Motorola, Siemens Hitachi, Sony which set foot in Malaysia in the 70s have continued to grow their presence here. The inflow of the FDIs in E&E industry has created the multiplier effects that have a huge positive impact on the national economy, as indicated earlier. Critics may counter to say that the E&E perhaps would have developed even without the FIZs, however it cannot be denied that the availability of the FTZs then, was a definite attraction to the MNCs in the E&E, as these zones provided a conducive environment that met the needs of these export- oriented companies.

Transfer of technology The influx of these MNCs in the E&E industry has also encouraged the transfer of technologies to their Malaysian employees, who over the years have assumed leading positions in the managerial as well as technical fields, undertaking important tasks such as production planning and coordination with other companies within the MNCs global supply chain Malaysia as source of technology for other offshore plants Through the R&D activities, the MNCs’ subsidiaries in Malaysia have been able to reverse the trend of being fully dependent on their HQs for the know-how to being able to export certain technologies to other offshore plants worldwide. Investment in skills training The MNCs, besides on the job training, have invested substantially in beefing up the skills and technical expertise of their staff. Development of local supporting industries The growing presence of these MNCs in Bayan Lepas has also encouraged the development of local supporting industries to supply parts and specific services to these MNCs.

Shift from labour-intensive to capital and technology intensive

industries

The emergence of a group of MNCs which not only invest in the physical facilities but more importantly on the technical capabilities of Malaysians, both employees and local vendors, albeit with the aim of supporting their ventures in Malaysia, has benefited the country in terms of technological investments.

The development of FIZs has also successfully generated thousands of jobs which help to alleviate the otherwise critical unemployment situation in the early 70s.

To qualify for location in a FIZ, a company has to export at least 80% of its output and its raw materials or components are mainly imported, even though the government does encourage the use of local raw materials. If a FIZ company has obtained an approval from MITI to reduce its export condition to 60%, it can also apply to the customs to be allowed to export 60% instead of 80% Companies operating in a FIZ can enjoy duty free imports of raw materials, including packaging materials and machinery and equipment used directly in the production of approved products as in their manufacturing licence. The FIZ manufacturers are also exempted from the payment of sales tax, excise duty and service tax.

Goods which are taken out from any part of the principal customs area and brought into a free zone shall be deemed to be exported from Malaysia

Goods which are brought out of a free zone and taken into any part of the principal customs area shall be deemed to be imported into Malaysia

An act to provide for the imposition of a levy on all goods vehicle leaving or entering Malaysia. In his context goods vehicle leaving Malaysia whether laden or empty must pay RM200 and RM100 is leviable on goods vehicle entering Malaysia.

However in view of some development in the port activities in the south, the government has exempted goods vehicle entering Malaysia to deposit their load at PTP in certain areas exemption has been granted to goods vehicle of specific purposes.

Subject to this Act, there shall be charged and levied on every goods vehicle leaving or entering Malaysia a levy known as a goods vehicle levy. (2) The Minister may by order published in the Gazette, prescribe, from time to time, the amount of the goods vehicle levy to be levied under subsection (1). (3) Any order made under subsection (2) shall, at the next meeting of the Dewan Rakyat be laid on the table of the Dewan Rakyat and shall, at the expiration of one hundred and twenty days from being so laid or of such extended period as the Dewan Rakyat may, by resolution, direct, cease to have effect if and in so far as it is not confirmed by a resolution passed by the Dewan Rakyat within the said one hundred and twenty days or, if such period has been extended, within such extended period. (4) The goods vehicle levy shall be paid by the person for the time being driving the goods vehicle.

An act to make provision for the charging, levying and collecting of service tax in respect of:

Any prescribed taxable services provided by any prescribed professional establishment or

Any prescribed establishment

Any prescribed professional establishment or prescribed establishment

Excise duty is a form of taxation or duty imposed on certain goods:

Imported into Malaysia

Manufactured in Malaysia

As stipulated in the Excise Duties Order 2004. Description of goods under excise are as follows:

Beverages, spirit and vinegar

Petroleum products and gases

Vehicles other than railway or tramway inclusive of motorcars, and motorcycles

Toys, guns and sports requisites, parts and accessories such as playing cards, mah-jong tiles.

Excise duties are levied on selected products manufactured in Malaysia namely cigarettes, alcoholic beverages, playing cards, mahjong tiles and motor vehicles.

While excise duties are charged at ad valorem rates (according to value) for playing cards, mahjong tiles and motor vehicles, for cigarettes tobacco products and alcoholic beverages they are imposed at a combination for specific and ad valorem rates.

www.mida.gov.my

Goods and Services Tax (GST) is a multi-stage tax on domestic consumption. GST is charged on all taxable supplies of goods and services in Malaysia except those specifically exempted. GST is also charged on importation of goods and services into Malaysia.

Payment of tax is made in stages by the intermediaries in the production and distribution process. Although the tax would be paid throughout the production and distribution chain, only the value added at each stage is taxed thus avoiding double taxation.

Goods and Services Tax Act 2014

In Malaysia, a person who is registered under the Goods and Services Tax Act 2014 is known as a “registered person”.

A registered person is required to charge GST (output tax) on his taxable supply of goods and services made to his customers. He is allowed to claim back any GST incurred on his purchases (input tax) which are inputs to his business. Therefore, the tax itself is not a cost to the intermediaries and does not appear as an expense item in their financial statements.

End of section

Custom restriction of movement order

Customs duties exemption order

Customs duties ASEAN (exemption)order

Sales tax regulations

Goods exempted from payment of sales tax

Goods subject to sales tax – 15% to 5%

Sales tax regulation

Goods vehicles levy (exemption)order and regulations

Customs prohibitions of imports order 1988

Customs prohibition of export s order 1988

Amendement to the Basel Convention

The amendment to the Basel Convention (Decision III/1) has been implemented in Malaysia.

Malaysia restricts the export of hazardous wastes and other wastes for final disposal.

The Environmental Quality Act 1974, (Amendment 1996) Section 34B; and the Customs (Prohibition of Export) Order 1998 Amendment 2006.

The restriction covers all countries.

Export of hazardous wastes for final disposal is not allowed.

There is no information concerning restrictions on the import of hazardous wastes and other wastes for final disposal provided for Malaysia.

The Environmental Quality Act 1974, (Amendment

1996) Section 34B; and the Customs (Prohibition of Export) Order 1998 Amendment 2006.

The restriction covers all countries.

Hazardous wastes to be exported and destined for recovery are subject to the export guidelines on minimum percentage for recoverables.

Malaysia restricts the import of hazardous wastes and other wastes for final disposal. The Environmental Quality Act 1974, (Amendment 1996) Section 34B; and the Customs (Prohibition of Import) Order1998 Amendment 2006.

The restriction covers all countries.

Import of hazardous wastes for final disposal from non OECD countries requires a special permission and total prohibition for hazardous wastes from OECD.

Malaysia restricts the import of hazardous wastes and other wastes for recovery.

The Environmental Quality Act 1974, (Amendment 1996) Section 34B; and the Customs (Prohibition of Export) Order 1993 Amendment 1998.

The restriction covers all countries.

Import of hazardous wastes for recovery

requires written approval.

Excise duties are levied on selected products manufactured in Malaysia namely cigarettes, alcoholic beverages, playing cards, mahjong tiles and motor vehicles.

While excise duties are charged at ad valorem rates (according to value) for playing cards, mahjong tiles and motor vehicles, for cigarettes tobacco products and alcoholic beverages they are imposed at a combination for specific and ad valorem rates.

www.mida.gov.my

Alcoholic beverages

Animal/Plants product

Customs jewelry

Pharmaceutical products

Industrial Diamonds

Medical sample

Non fragile Antiques

Perishable Items

Watches

CD / DVD

Magazines / Brochures / Pamphlet

Import of all kinds of foods will undergo 100 % checking and will require sample.

Health Department Code 135.

Medicines, perfumes, fragrances and flavors - Pharmacy Dept Code 128.

Pharmaceutical products.

Industrial Diamonds.

Medical sample:

◦ items below 5 kg will require M.S.D.S

◦ items above 5 kg requires Import License and Manufacturing License.

Import of CD (software / program / manual (no movie/music) ), documents, brochures, books - KDN Dept Code 141.

Import of all medicine/medical/ pharmaceutical /cosmetics products will requires Food and Drug Authority License.

All audio items - video tapes, VCD, DVD, Laser Discs, records, cassettes will have to undergo checking and approval by Board of Films and Censorship.

End of section

Import and export documents Import and export duty Import and export exemption Duty drawback Payment under protest

The goods prohibited from exporting in Malaysia, unless accompanied by relevant export license include sugar, rice and paddy, eggs, meat, live animals, cockles, skin and parts of birds, minerals and ores, plants, coral, live fish, oil palms, milk and related products, rubber seeds and palm seeds.

Subject to ...., the persons specified in......are exempted from the payment of customs duty on the goods specified subject to the conditions stated.... A person designated in....... is subject to a condition to produce a certificate signed by such designated person as described in.......of the schedule to the proper officer of customs

Why do governments collect taxes and duties?

1. Government doest not have sufficient income to pay for all its expenses.

2. It is the responsibilities of the government to develop and maintain the countries. Taxes and duties are used to finance development, maintenance and administration of the governments employees and for the use of public goods.

3. All citizens unless exempted, will have to pay their taxes in various forms.

Duty is a type of tax that is levied upon goods imported from another country. It is also levied upon goods manufactured within the country such as excise duty. The word duty is mostly used in respect of goods such as custom duty, import duty, excise duty and so forth. Duty is levied only on goods and not on individuals. The most common example of duty is custom duty which is an indirect tax levied upon goods that are purchased from foreign countries and the buyer has to pay tax on them when they enter the country. Similarly, duty that is imposed upon goods going out of the country is called export duty.

Read more: http://www.differencebetween.com/difference-between-duty-and-tax/#ixzz33aGhBXUL

Import duty and taxes are due when importing goods into Malaysia whether by a private individual or a commercial entity. The valuation method is CIF (Cost, Insurance and Freight), which means that the import duty and taxes payable are calculated on the complete shipping value, which includes the cost of the imported goods, the cost of freight, and the cost of insurance.

Some duties are also based on quantity measurements, like weight or volume. In addition to duty, imports are subject to sales tax (VAT), and in some cases to excise.

CD means any import duty, export duty, surtax, surcharge or cess imposed by or under this act, any countervailing duty or anti-dumping duty imposed by or under the countervailing and anti-dumping duties act 1993 and includes any royalty payable in lieu of an export duty under any written law, or a contract, lease or agreement to which the federal government has consented.

Custom Act 1967

Export duty is leviable on the goods to be exported. Column (5) of the first schedule to the Customs Duties Order 1996 indicates the rate of export duty applicable on a particular type of goods.

Payment of customs duties or taxes can be made by cash, cheque or bank draft. Payment by cheque requires prior lodgement of security, normally in the form of a banker's guarantee to ensure the securing of the amount to be drawn.

Payment of customs duties or taxes shall be made at customs office at the place of import or export before the goods are released from customs control.

Manufacturers who do not enjoy duty exemption but have imported raw materials/ components/ packing materials/ accessories for use in the manufacture of finished products, which are subsequently exported, may alternatively apply for a drawback of the import duty with Customs.

Drawback, in law in commerce, paying back a duty previously paid on exporting excisable articles or on re-exporting foreign goods. The object of a drawback is to let commodities which are subject to taxation be exported and sold in a foreign country on the same terms as goods from countries where they are untaxed.

Duty Drawback is the rebate of duty chargeable on imported material or excisable material used in the manufacturing of goods in and is exported. The exporter may claim drawback or refund of excise and customs duties being paid by his suppliers. The final exporter can claim the drawback on material used for the manufacture of export products. In case of re-import of goods the drawback can be claimed.

The following are Drawbacks:

Customs paid on imported inputs plus excise duty paid on indigenous imports.

Duty paid on packing material.

Drawback is not allowed on inputs obtained without payment of customs or excise duty. In part payment of customs and excise duty, rebate or refund can be claimed only on the paid part.

In case of re-export of goods, it should be done within 2 years from the date of payment of duty when they were imported. 98% of the duty is allowable as drawback, only after inspection. If the goods imported are used before its re-export, the drawback will be allowed as at reduced percent.

Product certification assures buyers that a product meets certain set specifications, a minimum level of performance, or set safety requirements. Products manufactured in Malaysia, either to a Malaysian

Standard or a foreign standard issued by the respective national standards institutes are accepted by SIRIM for its Product Certification Marking Scheme. Thus, products certified by SIRIM will bear the Malaysian quality mark (ʺMSʺ mark) or the safety mark (ʺSʺ mark) to denote compliance with Malaysian standards specifications. The certified mark is used on products certified to a foreign national standard or international standard.

In the case of products requiring mandatory certification, control labels are issued. The labels are security printed and serially numbered, and specific procedures and conditions for their use have been established to ensure all items can be traced to the respective manufacturers.

Import Duties on Motor Vehicles in Malaysia various duties are levied on all vehicles imported in Completely Built-Up (CBU) form for sale in Malaysia, after which Sales Tax is added on. Basically, there are three categories defined by the Royal Malaysian Customs & Excise Dept and following a rationalisation exercise early in 2000, these are: A. Passenger cars (including station wagons) B. 4x4 vehicles (excluding models like the Subaru Impreza which are

considered passenger cars) C. Others (vans, MPVs, etc) PASSENGER CARS (PETROL ENGINES) Import Duty:-

Up to 1799 cc140% of CIF (Cost, Insurance & Freight) 1800 cc - 1999 cc170% of CIF 2000 cc - 2499 cc200% of CIF 2500 cc - 2999 cc250% of CIF 3000 cc and above300% of CIF

End of section

“Transhipment. The unloading of cargo from one flight and loading to another for onward carriage. [CSC]”

Transhipment defines the act of unloading of goods from one means of transport and re-loading them to another, at the same place. The act of unloading and reloading can be immediate or after short-term storage. The short-term storage should not exceed a certain period of time (e.g.14 days in EU) from the date when the goods are placed under temporary storage. The mode of transportation or conveyance could be changed.

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1. Cargo discharged at terminal.

2. Cargo stored at warehouse.

3. On arrival of the subsequent feeder vessel, cargo is loaded for on bound shipment.

End of section

Objective Criteria Type of premise Exemption of customs duties and taxes Goods not eligible for duty/tax

exemption Application of licence Temporary

In Malaysia, Manufacturing Bonded Warehouse is known as Licensed Manufacturing Warehouse (LMW) established under the provision of section 65/65A of the Customs Act 1967.

LMW is a type of bonded warehouse where the manufacturing process is allowed to be carried out to produce finished goods for export. Manufacturing operation therein is subject to minimal customs procedures. It is primarily intended to cater for export oriented industries.

The purpose of having LMW is to enable manufacturer to set up its factory within the warehouse. It is primarily intended for export oriented market whose entire production or not less than 80% are meant for export. With the licences, raw materials and components used directly in the manufacturing process are exempted from customs duties.

LMW factories can be established anywhere in the principal customs area. This makes it different from FREE INDUSTRIAL AREAS which have to be gazette & near the port .LMW gets the same tax benefits as FIZ such as total tax exemption for its raw materials/components/machinery/equipment which is used directly in the production.

PURPOSE OF HAVING LMW

Customs duty exemption is given to all raw materials and components used directly in the manufacturing process of approved produce from the initial stage of manufacturing until the finished product is finally packed ready for export. This includes packing materials and casings.

An LMW Company needs to renew this license every two years. During renewal, an LMW Company needs to submit a list of raw material and specify the projected quantity to be used for the year. These materials are grouped (categorized) using Tariff Codes provided by the Malaysian Customs department.

In order to enjoy this tax-exemption benefit, the year-to-date purchases for the approved items must not exceed the approved limit quantity. However, an LMW company can apply to increase the limit during the underlying period. Hence an LMW company needs to keep track of the year-to-date purchases so that it does not exceed the approved limit.

Location of Licensed Manufacturing Warehouse

The Government is more inclined to approve the set up of licensed manufacturing warehouses at rural areas to be in line with the Government’s policy to spread the export-oriented and labour intensive industries to less developed areas.

Although the location of the licensed

manufacturing warehouses at rural area is preferred, a certain degree of flexibility is exercised on the account of the special nature of the manufacturing operation.

Types of Premises

Premises considered suitable as Licensed Manufacturing Warehouse must be of permanent construction and secured to the satisfaction of the Director General of Customs.

The building must contain separate storage space for raw materials and finished products. It must also provide separate space to be used solely for the manufacturing of duitable goods.

Custom EDI Introduction to forwarding Segmentation of customer in the

logistics industry Freight forwarders relationship with

various parties. Services of freight forwarders Role of freight forwarders

http://cerasis.com/2013/08/08/3pl-vs-4pl/

A firm or an individual that needs to havecargo, freight,goods, produce or merchandise transported from a point A to a point B. The term first-partylogistics provider stands both for the cargo sender and for the cargo receiver.A 1PL can be amanufacturer, trader,importer/exporter,wholesaler,retailerordistributorin theinternationalcommercefield. It can also beinstitutionssuch agovernment departmentor anindividual or family removing from one place to another.Anyone having goods moved from their place of origin to their new place is considered to be first-party logistics provider

A second-party logistics provider (2PL)

is an asset-basedcarrier,which actually owns themeans of transportation. Typical 2PLs would beshipping lines which own, lease or charter theirships; airlines which own, lease or charter theirplanesand truckcompanies which own orlease their trucks

A third-party logistics provider (abbreviated 3PL, or sometimes TPL) is a firm that provides service to its customers of outsourced (or "third party") logistics services for part, or all of their supply chain management functions

For logistics providers the value proposition rests on 3 key pillars:

1. Optimizing logistics costs for customers,

2. Shortening the length of the order completion cycle

3. Reducing the number of fixed assts.

A third-party logistics provider (3PL)

provides outsourced or 'third party' logistics services tocompanies for part or sometimes all of their supply chain management function.Well known 3PLs include DHL, Wincanton, Norbert-Dentressangle, CEVA & NYK Logistics

Arrangement in which a firm contracts out (outsources) its logistical operations to two or more specialist firms (the third party logistics) and hires another specialist firm (the fourth party) to coordinate the activities of the third parties.

Read more: http://www.businessdictionary.com/definition/fourth-party-logistics-4PL.html#ixzz3Pd6NkUP8

A 4 PL is an integrator that assembles the resources, capabilities and technology of its own organization and other organization to design, build and run comprehensive supply chain solution.

www.logisticslist.com

An independent, singularly accountable, non-asset based integrator who will assemble the resources, capabilities and technology of its own organisation and other organisations, including 3PLs, to design, build and run comprehensive supply chain solutions for clients. KAP Freight Solutions is a typical example of a 4PL consultancy service, with access to national carriers at reduced rates so that maximum cost reductions are achieved through both re-organisation of logistics and effective procurement.

Andrew Kunman of KAP places much emphasis on product configuration, assembly and packaging process re-engineering, plus distribution reorganisation and can often achieve large scale change without the complexity and extended timescales of technology implementation.

However, where technology is an essential component for other reasons, e.g. Automated warehousing, then Andrew can work closely with technology partners. Combining his ‘commonsense’ and down to earth approach with appropriate technology has produced results for some customers that significantly exceeded their expectations.

A Malaysia Customs Clearance or Forwarding Agent the appointed by Malaysia Royal Customs to organizes import and/or export shipments and works within the shipping and logistics sector. These shipments may be for individuals or for other companies such as manufacturers or retailers. A Freight Forwarder will usually act as an agent rather than an active carrier. In this way, a Forwarding Agent is a third party (non-asset-based) logistics provider who works to dispatch shipments via asset-based carriers. Freight Forwarding positions involve booking and arranging space for shipments on carriers such as vessels, aeroplanes, trucks and trains. FIATA (the trade association for freight forwarding and logistics firms) defines a Freight Forwarder as an ‘Architect Of Shipping’ – and this shows the commercial position of a Forwarder in relation to their clients

Contract logistics

Air and sea freight forwarding

Road transportation

Outsourced logistics activities commonly fall into three types of services:

Along with warehousing services (picking up packing and labelling), contract logistics suppliers have extended their traditional core into extra value added services, such as postponed manufacturing (light assembly, kitting, manufacturing and quality control), and even payment and customer management.

Air and sea freight forwarders are commissioned by companies top manage their freight overseas and overland. Their services includes transportation, customs brokerage, insurance and tracking. Most freight forwarders don’t own ships, airplanes or other transportation assets. Instead, they act as intermediaries in between customers an cargo carrier companies.

Road transportation typically is structured around three main segments, based on load type and weight.

1.Full truckload

2.Part load (less than truckload)

3.Groupage and express.

Rail services

Barges

What does a Freight Forwarder or Forwarding Agent Job description include?

The main purpose of a Freight Forwarder or Forwarding Agent is to arrange cargo movements to destinations overseas. In this role you could be involved in all modes of transport including air, sea, road and rail freight.

An International Freight Forwarder will have specialist expertise relating to preparing and processing documentation for international shipping.

A Forwarding Agent will typically review documentation such as commercial invoices and shipper’s export declaration Bills of Lading.

A Freight Forwarder or Forwarding Agent will also look at any other documents required by the carrier or the country of import or trans-shipment, including HM Customs documents – which are produced digitally, creating paperless working methods.

The role of Freight Forwarder or Forwarding Agent involves working with others’ and so being able to communicate clearly and being very organised is essential.

Application Import and Export Permit (AP)

Transhipment Transhipment is an essential feature of modern container operations. Due to high operation costs, large container ships usually serve only a few so called ‘hub ports’. The carriage from such ports to regional ports is for most of the time sub-contracted by shipping lines to local operators of feeder vessels. At the hub ports the containers are transhipped from the mother vessel to feeder vessels or vice versa. Furthermore, as a result of modern technological developments, such as post Panamax containerships, improved cargo handling facilities at port terminals, roll-on/roll-off ships, and the invention of standardized containers, which permit their integrated use on various modes of transportation, are frequently transferred to other means of transportation (truck, train, airplane) for inland carriage.

Where cargo passes in transit through a country, the freight forwarder co- ordinates the transfer of the cargo from one transport vehicle to another. This involves booking space on a transhipment vessel, discharging, sorting, loading and distribution of the cargo to various consignees. Transhipment agents generally act as agent for the shipper/consignee or another freight forwarder. Within the context of multimodal transport the forwarder might also act as contracting carrier

Packing, warehousing and distribution

The freight forwarder may arrange for packing, warehousing and distribution of cargo. He keeps the goods in storage before export and subsequent to import whilst awaiting transportation or distribution. The freight forwarder can either operate his own ware-house and offer those ancillary services as principal to the shipper and other freight forwarders or function as an agent in procuring the service from independent contractors for his customers.

The fact that the freight forwarder does not own the ware-house,

does not automatically lead to the conclusion that he offers the service as agent. In providing multimodal services the freight forwarder might act as principal and then sub-contract the physical performance. A contract of carriage can extend to storage services before and after discharge of the cargo awaiting custom clearance if so contemplated by the parties.

Arranging cargo insurance

Freight forwarders are not cargo underwriters, but merely arrange cargo insurance, for a service fee, as agents for their customers. In fact, it is good practice for a freight forwarder to suggest to his customer to procure insurance cover for his cargo on a gratis basis. The selling of ancillary services, such as insurance, for a commission is a traditional source of income for freight forwarders.

Documentation and customs clearance

The freight forwarder provides all necessary documentation for the import and export of goods having regard to legal- and customs requirements and the terms of the sales con-tract. He performs this function as an agent of the customer.

Payment of freight and local taxes

Also as agent of the shipper/consignee, the freight forwarder co-ordinates and effects payment of freight to the performing carrier and any local taxes, eg VAT or government service tax on behalf of his customers to avoid delays.

Transportation distribution analysis

The freight forwarder is considered the architect of transport in international trade. He advises his customer - as principal - on the available transportation options and plans the most efficient route according to the customer’s needs.

Transport arrangements

After the customer has decided on the route and mode of transportation, the freight for-warder makes the necessary bookings and dispatches the goods as an agent. In his classic role he arranges contracts of carriage and establishes direct contractual relationships between his customer - the shipper - and the carrier. He furthermore pays freight charges, insurance, packing, customs duties and then charges his customer a fee, usually a percentage of the total expenses.

Research rates, routings, or modes of transport for shipment of products. Maintain awareness of regulations affecting the international movement of cargo. Make arrangements for additional services, such as storage or inland transportation.

http://job-descriptions.careerplanner.com/Freight-Forwarder.cfm

1. Review the environmental records of freight carriers to inform shipping decisions.

2. Calculate weight, volume, or cost of goods to be moved.

3. Recommend shipping solutions to minimize cost or environmental impacts.

4. Select shipment routes, based on nature of goods shipped, transit times, or security needs.

5. Determine efficient and cost-effective methods of moving goods from one location to another.

6. Reserve necessary space on ships, aircraft, trains, or trucks.

7. Arrange delivery or storage of goods at destinations.

8. Arrange for special transport of sensitive cargoes, such as livestock, food, or medical supplies.

9. Assist clients in obtaining insurance reimbursements.

10. Complete shipping documentation, such as including bills of lading, packing lists, dock receipts, and certificates of origin.

11. Consolidate loads with a common destination to reduce costs to individual shippers.

12. Inform clients of factors such as shipping options, timelines, transfers, or regulations affecting shipments.

13. Keep records of goods dispatched or received.

14. Maintain current knowledge of relevant legislation, political situations, or other factors that could affect freight shipping.

15. Monitor or record locations of goods in transit.

16. Negotiate shipping rates with freight carriers.

17. Obtain or arrange cargo insurance.

18. Pay or arrange for payment of freight or insurance fees or other charges.

19. Prepare invoices or cost quotations for freight transportation.

20. Recommend or arrange appropriate merchandise packing methods, according to climate, terrain, weight, nature of goods, or costs.

21. Verify proper packaging and labelling of exported goods.

22. Verify adherence of documentation to customs, insurance, or regulatory requirements.

23. Clear goods through customs, arranging for applicable duties and taxes.

24. Complete customs paperwork.

25. Make arrangements with customs brokers to facilitate the passage of goods through customs.

26. Provide detailed port information to importers or exporters.

27. Provide shipment status notification to exporters, consignees, or insurers.

28. Refer exporters to experts in areas such as trade financing, international marketing, government export requirements, international banking, or marine insurance.

29. Analyze shipping routes to determine how to minimize environmental impact.

30. Consider environmental sustainability factors when determining merchandise packing methods.

31. Arrange for transport, using a variety of modes, such as rail, short sea shipping, air, or roadways, to minimize carbon emissions or other environmental impacts.

EDI (Electronic Data Interchange) is the transfer of data from one computer system to another by standardized message formatting, without the need for human intervention. EDI permits multiple companies, possibly in different countries to exchange documents electronically. Data can be exchanged through serial links and peer-to-peer networks, though most exchanges currently rely on the Internet for connectivity.

http://searchdatacenter.techtarget.com/definition/EDI

http://ecommerce.hostip.info/pages/384/Electronic-Data-Interchange-EDI.html

An EDI message contains a string of data elements, each of which represents a singular fact, such as a price, product model number, and so forth, separated by delimiter. The entire string is called a data segment. One or more data segments framed by a header and trailer form a transaction set, which is the EDI unit of transmission (equivalent to a message). A transaction set often consists of what would usually be contained in a typical business document or form.

EDI applies to documents such as purchase orders, invoices, shipping notices and commission sales reports, as well as other important or classified information. For example, an insurance company can verify that an applicant has a driver's license through an EDI exchange.

EDI is primarily used by large companies to have a uniform processing system, enabling efficiency. Cost, speed, accuracy and efficiency are the major benefits of EDI. The system is expensive to implement and usually requires help from a consultant that specializes in the field.

Using EDI systems eliminates the need -- and therefore cost -- to print, file, store, post and retrieve paper documents. The goal is to get rid of paper and have everyone working with the same invoice so that information is processed and read easily.

EDI via Action Script version 2 (AS2): This communications protocol securely exchanges data over the Internet. Two computers (a client and a server) connect in a point-to-point mode through the Internet. AS2 is sent securely in an envelope that uses digital certificates and encryption.

Web EDI: EDI is directed via Internet browser, duplicating paper-based documents into Web forms that contain fields where users enter information. It is then automatically converted into an EDI message and sent via secure Internet protocols.

Mobile EDI: This method enables the transmission of documents through mobile devices.

Managed Services: Managed services systems outsource the EDI document control to a third-party provider.

The potential of sustainable procurement as a policy instrument has been increasingly recognized, and over recent years there has been a growing commitment at different levels to integrate sustainable aspects in procurement decisions and to use the procurement process, to raise awareness and to create incentives for suppliers to improve their sustainability performance. Sustainable procurement of freight forwarding services means making sure that the freight transport services are, or will become as sustainable as possible

Sustainable procurement guidelines; freight forwarding. United Nations Environment Programme, 2011

Life cycle management Sustainable energy source Regulations and legal requirement Lowering CO2 Recycle

Logistics counts – it is not a commodity. Logistics is not only a chief catalyst of global trade and a defining component behind value creation – it is also a business of strategic importance in the move towards a low-carbon economy.

Technological change will be achieved through a concerted drive from companies, governments and financial institutions. Given the higher price tag attached to new technologies, mutual support and long-term planning by all key players is essential.

Collaboration will increasingly be seen as an enabler to attain sustainability; even erstwhile competitors will cooperate more closely. As carbon emissions reduction becomes a priority for suppliers, business customers and logistics companies, cooperative business models will expand both vertically and horizontally along the supply chain.

Business models of logistics companies will change as sustainable innovations open up new opportunities.

CO2 labelling will become standardized. CO2 labels allow customers to compare green products. Transparency will raise confidence among logistics customers and end consumers when making climate-friendly choices.

Carbon emissions will have a price tag. As reducing carbon emissions becomes more important for companies, governments and customers, it will become part of a business’ accounting and decision-making process. This will increase the demand for a price to be attached to CO2 emissions.

Carbon pricing will lead to more stringent regulatory measures. Companies will only accept a price tag on carbon emissions if governments ensure a level playing field.

In general, products that are harmful to the environment shall not be used in the provision of services or supply of goods.

Energy sources that have minimal impact on global warming / greenhouse gases must be used.

Materials should be easily recyclable using locally available facilities and have minimum impact on the release of greenhouse gases, ozone-depleting gases and on ecological balance, during production, use and disposal.

Equipment that contains ozone-depleting substances (ODSs) that are controlled by the Montreal Protocol (e.g. Methyl Bromide, Chlorofluorocarbon (CFC) gases and Persistent Organic Pollutants (POPs)) will not be considered at all.

In the scope of this background report on office IT equipment the following environmental performance criteria on equipment is of special interest:

Durable equipment that has minimal impact on the environment (i.e. green batteries, energy efficient printers with double-sided printing facilities) and equipment that can be refilled, recharged or reused will be given priority. Equipment that has too long of a lifecycle (plastic bags, or those containing PVC, chlorine, heavy metal and ODSs) will not be purchased.