Frequently Asked Questions
1. When would I need a freight forwarder and what does he do?
A freight forwarder is a person or company that organizes shipments for individuals or companies. Most freight forwarders work with various carriers types to facilitate the movement of goods. Freight forwarders are experts in supply chain management. A forwarder will work with ocean carriers to move cargo ranging from raw agricultural products to manufactured goods. There are many different ways to transport your cargo, including ships, airplanes, trucks, and railroads.
2. We have decided that we need to ship a large amount of cargo. What should I do next?
You will need to contact the freight forwarder to discuss with him/her, to discuss what you need ship and when. At that time you will need to provide the information on your shipment. For example you need to define the place of departure final destination. The freight forwarder will then inform you of what is required for your shipment to reach its final destination as per your instructions.
3. When it comes to packaging what is required?
First the forwarder would need to know what is to be shipped and by what mode of transportation will be used for the transport of the cargo.
Packaging for freight shipments is very important due the loading and unloading must be considered at various locations through the shipment chain. Crating is the safest way to protect your shipment. Depending on how the cargo will be transported for some cargo that is transported on board Ro/Ro vessel in some cases no packaging is required and the cargo will be secured by the vessel’s crew.
4. What is AES and when is it required?
AES stands for Automated Export System and is the system that is used to transmit your Electronic Export Information on your shipment. The Electronic Export Information (EEI and formerly known as Shipper’s Export Declaration (SED)), is required by law to enable U.S. Government agencies to enforce laws related to the export of goods. This information is submitted to U.S. customs for cargo that is to be exported from the U. S.
5. I have a cargo shipment that will arrive at its destination what do I need to do to receive my cargo?
It would depend on what type of transport arrangements were made for shipping your cargo.
For example say your shipment is booked on a door to port basis. When the cargo arrives at the destination port the consignee listed on the bill of lading will be notified of the arrival. The consignee will then have to arrange customs clearance with the local customs office, pay any applicable duties and taxes and arrange the pick up from the port. In most cases there will also be destination port charges. The charges range in price depending on destination country, size of shipment, and type of transport. Ocean freight always has a higher destination port fees.
6. What is break bulk cargoes and what type of cargoes are typically break bulk?
In shipping, break bulk cargo or general cargo is a term that covers a large variety neither of goods that must be loaded individually, and not in intermodal containers nor in bulk as with oil or grain. Vessels that carry this kind of cargo are often called general cargo ships. The term break bulk derives from the phrase breaking bulk. These goods may be in shipping containers (bags, boxes, crates, drums, barrels). Unit loads of items secured to a pallet or skid are also used.
Loading and discharging by break bulk is labor intensive. The cargo is brought to the dock next to the ship and then each individual item is lifted on board separately. Once on board each item must be stowed separately. A typical break bulk or bulk cargo would, all types of grain, logs, wood chips, packaged goods, steel slabs, wind mills and may others.
7. What are bills of ladings?
The Bill of Lading is an instrument issued by an ocean carrier to a shipper that has three functions, namely it is a receipt for goods shipped (not negotiable), as evidence of the contract of carriage (not the contract), and as a document of title for the goods (i.e. if you have the Bill of Lading, you own the concerning goods). A bill of lading which is clean, indicates that the goods have been properly loaded on board the of the carrier's ship. A bill of lading which is claused, indicates that something is wrong between the goods loaded and the goods listed on the bill. This must be done at the time of loading.
8. I am interested in moving a large amount of cargo via ocean transport how does vessel chartering work? Please see below some examples of different types of charters.
Chartering is an activity within the shipping industry (which means renting of a vessel or space). In some cases a charterer may own cargo and employ a shipbroker or a chartering agent to find a vessel to deliver the cargo for a certain price, called a freight rate. Freight rates may be on a per-ton basis over a certain route (e.g. for iron ore between U.S. and China) or alternatively may be expressed in terms of a total sum - normally in U.S. dollars - per day for the agreed duration of the charter.
• A voyage charter is the hiring of a vessel and crew for a voyage between a load port and a discharge port. The charterer pays the vessel owner on a per-ton or lump-sum basis. The owner pays the port costs (excluding stevedoring), fuel costs and crew costs. The payment for the use of the vessel is known as freight. A voyage charter specifies a period, known as laytime, for unloading the cargo. If laytime is exceeded, the charterer must pay demurrage. If laytime is saved, the charter party may require the ship-owner to pay despatch to the charterer.
• A time charter is the hiring of a vessel for a specific period of time; the owner still manages the vessel but the charterer selects the ports and directs the vessel where to go. The charterer pays for all fuel the vessel consumes, port charges, and a daily hire to the owner of the vessel.
9. Please explain the meaning of the consignee and the shipper?
If Sender sends a widget to Receiver via a delivery service, Sender is the consignor and Receiver is the consignee. A shipper can be: Someone who sends goods for shipment, by packaging, labeling, and arranging for transit, or who coordinates the transport of goods.
10. What is demurrage and dispatch mean in shipping terms?
The term demurrage originated in vessel chartering (notably voyage chartering) and refers to the period when the charterer remains in possession of the vessel after the period normally allowed to load and unload cargo (laytime). By extension, demurrage refers to the charges that the charterer pays to the ship owner for its extra use of the vessel. Officially, demurrage is a form of liquidated damages for breaching the laytime set out in the governing contract (the charter party).
The reverse of demurrage is dispatch. If the charterer requires the use of the vessel for less time than the laytime allowed, the charter party may require the ship owner to pay dispatch for the time saved.