RAPID SHIPPING CHECKER

1. Request for quote from potential buyer

Check applicable Incoterm. → Determine point of transfer of risk

→ Determine transport to be arranged by you
→Air
Sea
Multimodal

→ Determine insurance necessary

→ certificate to be presented
own insurance
Explanation:
By checking the applicable INCOterm you know exactly what all your
rights and obligations are in respect of your contract with your buyer in
respect of where and how to deliver, time limits, insurance, licences,
transfer of risk ,notices, transport documents, packaging. A copy of
Incoterms 2000 should be in your office.
Note that the use of Incoterms 2000 is not compulsory. By mutual
agreement, buyers and sellers might agree to other terms.

Check FCL or LCL → Is adaptation to FCL possible?

Is palletizing required? Include dimensions in
volume of shipment.

Explanation:
As a rule, FCL shipments are cheaper in ocean freight than LCL. More-
over, FCL gives you the opportunity to have the empty container placed at
you factory and loading can be done with your own personnel It also will
save you in pre-carriage costs and is time-saving. Closing date for FCL-
loads might be a few days later than for LCL-loads
In case you will ship LCL, your buyer might want palletised shipments.
Even if that is not the case, handling in port of departure/arrival is time
(and thus cost) saving.

Check suitable departure/arrival

schedules for order planning → Is advance booking required due to congestion of
transport lines? Check with forwarder(s).

Explanation:
It might be useful (and cheaper) to avoid a seasonal peaks in freight offers
which might raise transport prices, or the inability to book freight space .If
you do not deliver in time, your buyer could put a fine on you.

Check total shipping & handling

operation with forwarder(s) → packing/palletising/inland transportation/main
carriage/ (intermediate) storage
Explanation
 Are all relevant items available and available in time, like packaging,
pallets, inland transportation? Make a time schedule and include extra
time for unforeseen delays.

Check documentation required → invoice

B/L-AWB
Insurance certificate
consular invoice
packing list
inspection certificate
customs documents
export/import licence
other documents viz:
Explanation:
Even if you deliver in time, your buyer might refuse to accept the goods
because of the existence of some documents. Agree on beforehand on the
number of documents to be produced by you, and make sure that you have
them in your possession at the time you need them.

Determine required advance- → including all documentation.

notice work back from point of delivery

Explanation:
You need to know the time between placing an order and actual delivery in
all respects, like manufacturing, packaging, shipping, transportation and
delivery, but also in obtaining the right documentation.

Check payment terms

Explanation:
Realise when and how your buyer will pay. In case he pays after delivery at
his plant there might be a considerable time between production/shipping
and payment.

Calculate financing costs

Explanation:
Financing costs can be a considerable part of you sales price, especially if
there is a long time between shipping and payment.

Make firm offer → sales price ex works plus financing costs,

packing& shipping, storage, forwarders fee,
documentation, insurance.

Explanation:
Take all previous items into account. Make sure you can perform
according your offer, so you are sure that:
– Pre-carriage is available
– containers are available
– freight can be booked
 – packaging is available
– manpower for packing and loading is available
– documents can be obtained in time
– your production is in time, or your stock is sufficient

1. On receipt of order

Check differences from request

for quote → evaluate and adapt

Explanation:
Your buyer might have changed some of the terms of the contract, so make
a precise comparison. In case there are changes, investigate whether these
changes are acceptable for you. You might want to recheck some items. If
that takes time, inform your buyer accordingly.

Check volume & packing → decide LCL or FCL

Explanation:
Of course, if you decide in this stage whether to ship FCL or LCL, you
have made 2 quotes, as there is a considerable difference in freight costs
between the two

Check time limitations → ex factory, warehouse, packer, groupageco,

shipping agent
→ documentation

Explanation
Now is the time to make an accurate schedule for ” things to do” with
their respective time limit. This includes both “in house” personnel as
third parties.

Book transportation → according to quotes from forwarder

Explanation:
Get all you book confirmed in writing to exclude later misunderstandings
When applicable, suggest changes
to buyer → improvement, or non-availability of shipping at
desired time of shipment

Explanation:
As a result of change in the original order confirmation. In this stage no
surprises should occur. If that happens, you did not do you previous home
work well enough!
 2. Order confirmation

Confirm order to buyer → volume, packing, Incoterm, period of

departure/arrival, payment, delivery terms

Explanation:
Check again that you can perform as promised. Do you have firm
bookings? Is packaging material available? Can you get all necessary
documents? In time? Is freight booked? Have you informed and instructed
all third parties? Do you have their confirmation in writing? Is your
production unit informed and ready?

Send notice of appropriation → including shipping details

Explanation:
Once you have delivered your goods to the carrier, in most cases you have
to inform your buyer in writing. Check chapter A7 of the relevant Incoterm

Present documents for payment → FOB/FCA/CFR/CIF/CIP to buyer or bank

Explanation:
Your buyer will pay only after presentation of the agreed documents in
case you sell FOB/FCA/CFR/CIF/CIP. These are departure contracts.
The sooner you present them, the sooner you get paid. In other cases
buyers pay after arrival of goods.

Inform buyer of changes → delays, other routings, other vessels

Are you still within agreed period? If not:

Explanation:
Buyers expect delivery according to your notice. If anything changes,
inform him. It will take away irritation. Special attention should be given
tot the question whether you still deliver within the agreed contractual
period.

Ask extension → If out of time, shipment might be refused.

Explanation:
Asking extension might mean that you are still in business, although it
means that you have to grant a rebate on your sales price. By not asking
extension you run the risk that your buyer will refuse to take reception of
the goods, being not shipped during the contractual period.

4. Payment

Check L/C and Incoterm on delivery (arrival) period and conditions

Explanation:
 Know what you have to do to get paid. In case after presentation of
documents, make sure that the documents are presented as quickly as
possible. In case after arrival, have the goods monitored on their way to
you buyer. If delays occur you possibly can take measures to speed things
up.

Inform forwarder about critical time limits

Explanation:
A forwarder should know what you promised your buyer, so he can inform
you when something is getting out of hand Inform him in writing – no
misunderstandings!.

Are documents presented as per L/C and Incoterm?

Explanation:
If not, documents will be refused and thus payment withheld until the
correct documents have been presented. Especially L/C’s are checked
letter by letter by bank employees.

5. Forwarder

General conditions in your possession?

Explanation:
By checking his general conditions you will find out how far his liability
will go. Evaluate your risk for his exclusions. Is he a member of an
association where you can go for arbitration in case of a dispute?

Is your buyer insisting on one particular?

forwarder → is he entitled to do so? Are you willing to accept?

Explanation:
Some big buyers use one forwarder worldwide for all their logistics.
Understandable for various reasons, but than you have to protect your
own interests. Buyers’ forwarders tend to look after buyers interest,
although they claim to be independent.

Compare prices from several forwarders

Explanation:
Some forwarders are better in your trade than others. Some forwarders
have more volume to offer and can negotiate better prices with transport
companies. Some forwarders grant a part of the rebates they get to their
principals

What services are in and excluded → transport, documents, communication, fees, services
packing
Palletising
Groupage
Packing list
Inspection
 Presentation of documents
Preparation of documents
Customs formalities
Sending tenders
Special services????

Explanation:
You should be able to get a precise breakdown of their services with the
costs involved. Remember that, as in your branch, prices are negotiable.
Make clear that you will not accept costs afterwards which have not been
negotiated on beforehand. “Costs for opening files” “postage costs”,
“messenger costs”, “special delivery costs” should be regarded as highly
suspicious.

Is forwarder informed of deadlines?

Explanation
That has two reasons
– By doing so you make him in a way responsible for adhering to
deadlines
– By giving him detailed deadlines he is able to think with you.

Is forwarder given detailed

instructions? → time schedules, documents, shipping, information
to give, tenders to send
Explanation:
A forwarder can only do his work properly if he knows his principal’s
obligations. That gives him the possibility to think with you, in stead of
simply following orders. He might see sudden opportunities for you which
he cannot if he is not fully informed. By informing him you will let him
know that he will be appreciated for his skills.
Are there differences between
calculated and actual invoice? → evaluate, discuss
Explanation:
Were some items not discussed on beforehand? Why not? Did some events
force the forwarder to make more/other costs? Whose fault was that?

6. Feedback from buyer

Goods have arrived according to → evaluate

Order confirmation/pack list/tender?

Explanation:
Especially when supplying to a new customer it is of vital importance to
learn buyers’ experience, in order to find out if you can optimise your
service. Your product might not be unique, but make sure your service and
reliability is. Good logistics can make or break you...

Has damage been ascertained upon → evaluate

arrival?

Explanation:
Is damage the result of insufficient packing, a not reliable carrier, careless
transport personnel, or the result of a one time event?
In the first case you can do something about it. However you can be sure
of 2 things:
– Your buyer is not happy. He has no (or less) good than he expected.
Instead, he might even be occupied in actions to recover his damage
from an insurance company...
– the insurance company, in subsequent cases of damage, will raise the
premium or even exclude your shipments

Have goods arrived in time? → also important in departure contracts

evaluate with forwarder
Explanation:
A buyer has his production schedule fixed on the arrival of your goods,
even in case he bought on a departure contract. To keep the customer
satisfied means that your shipment arrives within the expected period. JIT
deliveries become more and more important.

7. General questions

Can you combine your shipments with other shippers to the same buyer or same place of
destination? (FCL-LCL)

Explanation:
By booking FCL shipments with co-shippers will save you in ocean freight

Can you combine heavy and voluminous parcels into one shipment and thus reduce payload?

Explanation:
In ocean freight the rule is: 1 tm equals 1cbm. Freight is calculated over
the highest parameter.
In airfreight the rule is 1 kilo equals 6 cbcm.
A combination of heavy and voluminous packages in one parcel pays off.

Can you adapt the size of your packages to fit pallets/FCL?

Explanation:
Pallets: The size of the pallet is fixes the length and breadth of your
shipment, irrespective of how you use the surface of it.
Containers: If you ship FCL, you pay for the container as a unit. For
empty space you pay the same as for used space.

Can you avoid shipping during peak periods? If not, can you make advance preliminary
booking of freight space?

Explanation:
Peak periods offer less room for price negotiating. That might even be the
case if you are a regular shipper. You might want to consider shipping
 outside peak periods and take a temporary storage for your account at
destination.

Is setting up a centralized distribution channel in Europe an option to guarantee quicker

delivery times to your customers?

Explanation:
It gives you advantages such as
– shipping outside peak periods
– more reliable deliveries towards your buyer
– very short delivery times to your buyer
– Ship FCL.
– Calculate advantages against disadvantages
– storage costs at destination
– Is your production capacity capable to ship bigger quantities in one
time?
– You need an agent in Europe

8. In short

Ask yourself the following questions:

– Who arranges transport?
– Who pays for transport?
– Who arranges insurance during transport
– Who deals with damage claims?
– Who takes care of export/import clearance?

Risk management: Determine possible risks:

– production deadlines, delivery deadlines
– Inspection, packaging, storage.
– customs
– loading and discharging
– inland transportation