1. Service Content
· Air Freight with Customs Clearance: The freight forwarder is responsible for booking space with the airline and providing international transportation services from airport to airport. Upon arrival, a designated agent handles customs clearance, tax payment, cargo pickup at the airport, warehousing, and distribution. Typically, this service includes "double clearance and tax payment".
· Air Freight: The freight forwarder books space with the airline and transports the goods to the destination airport. After arrival, customers can handle customs clearance and delivery on their own. Note that customs requirements and fees vary by country, so it's advisable to confirm details with the freight forwarder before shipping.
2. Transit Time
· Air Freight with Customs Clearance: Considering customs declaration at the departure airport and customs clearance at the destination airport, the average transit time is typically 5-7 days.
· Air Freight: Direct flights generally take less than 24 hours, while connecting flights vary depending on the distance to the destination. Shorter distances usually require 1-2 days, while longer distances may take 3-5 days.
3. Logistics Tracking
· Air Freight with Customs Clearance: During the air freight stage, you can track progress using the air waybill number on the airline's official website. For the final delivery stage, use the courier tracking number to check the delivery information in the destination country.
· Air Freight: For direct flights, you can track using the air waybill number on the airline's official website. For connecting flights, the first leg can be tracked on the airline's website. If there are second or third legs involving truck transfers, you need to check the flight information on the respective airline or local trucking company's website.
4. Applicable Clients
· Air Freight with Customs Clearance: Suitable for retailers or small-batch shipments, such as order fulfillment for cross-border e-commerce sellers or Amazon FBA inventory preparation.
· Air Freight: Generally suitable for large-scale B2B shipments, such as those required by traditional foreign trade businesses.
Loading Method: Cargo must be loaded onto pallets or containers and then loaded into the cargo hold as a whole to ensure space utilization and cargo stability.
· Freight Forwarder Allocation: Airlines primarily focus on passenger services. To reduce freight costs, they often outsource part of the cargo hold's container or pallet positions to specific freight forwarders, charging fixed fees monthly or per pallet position.
· Advantages of Pallet Booking Agents:
· Optimize loading strategies by loading according to the maximum weight and volume capacity of each pallet.
· Combine heavy goods with light bulky goods to maximize the transport value of each pallet.
· Differences Between Pallet Booking and Non-Pallet Booking:
· Pricing Authority: Non-pallet booking is priced by airlines; pallet booking agents can set prices based on market demand.
· Peak Season Market: During peak seasons, the demand for pallet positions increases, allowing agents to adjust prices.
· Pallet Position Application and Risks:
· Pallet booking agents can apply for more pallet positions based on market demand but must bear agency fees and market risks.
· Cargo Dumping Risk: Although agents have pallet positions, the final control over these positions remains with the airline. If priority is given to official cargo or if high temperatures limit capacity, the agent's pallet positions may be unloaded.
Airfreight Rate is the charge standard from the origin airport to the destination airport, typically expressed in the local currency of the origin country (often the local currency, while sea freight charges are mostly in US dollars USD). In the air waybill rate category column, common rate codes include "Q", "N", "M", etc., which are explained as follows:
· M: Minimum Charge — Minimum Freight
The minimum charge is the starting fee for a single shipment. If the calculated cost based on actual weight is lower than the minimum charge, the minimum charge will be applied. Minimum charges vary between regions; for example, the minimum charge from China to Europe is approximately RMB 320.
· N: Normal Rate — General Cargo Rate (under 45 kg)
This rate applies to cargo weighing less than 45 kg, excluding specially designated or classified rates.
· Q: Quantity Rate — Weight Break Rate (over 45 kg)
For general cargo, the higher the weight tier, the lower the relative freight cost. Common tiers include +45, +100, +300, +500, and +1000 kg.
· C: Specific Commodity Rate — Designated Commodity Rate
This rate applies to bulk goods with strong seasonality and low unit value, such as agricultural products, textiles, chemicals, paper, wood products, precision instruments, etc.
· S: Class Rate Surcharge — Classified Cargo Surcharge
This surcharge applies to special goods such as live animals, valuables, perishable goods, firearms, etc., and is 150% of the base rate.
· B: Basic Charge — Basic Freight
This applies only to shipments between EU countries.
· K: Rate per Kilogram — Per Kilogram Rate
This also applies only to shipments within the EU.
In air freight, the setting of weight tiers significantly impacts the calculation of freight charges. Below is a detailed explanation of "tier alignment":
1. Weight Tiers and Freight Charges
· Weight Tier and Unit Price: Generally, as the chargeable weight increases, the unit price decreases. Higher weight tiers mean lower per-kilogram freight rates, and vice versa.
2. Definition of Tier Alignment
· Concept of Tier Alignment: When allowed by the airline, if the actual weight of the cargo does not meet the requirement for a more favorable price tier, the shipper can choose to be charged at the minimum weight of that tier, thereby obtaining a lower freight rate.
3. Example Analysis
Using a shipment weighing 298 kg as an example:
· Pricing Details:
o Rate for Q100 kg tier: 16 CNY/kg
o Rate for Q300 kg tier: 15 CNY/kg
· Freight Calculation:
o Without Tier Alignment:
§ Freight = 298 kg × 16 CNY/kg = 4768 CNY
o With Tier Alignment:
§ Freight = 300 kg × 15 CNY/kg = 4500 CNY
4. Comparative Advantages
· Economic Benefits: By using tier alignment, shippers can significantly reduce freight costs. In the above example, choosing tier alignment saves 268 CNY, demonstrating the economic benefits of this strategy.
5. Precautions
· Airline Policies: Not all airlines or routes allow tier alignment pricing. Therefore, before shipping, it is advisable to confirm relevant policies with the freight forwarder or airline to ensure proper utilization of this mechanism.
In air freight, cargo density is typically classified into the following categories: less than 1:300, 1:300, 1:500, and 1:1000. For cargo classification, goods with a density greater than 1:300 are generally considered heavy cargo, while those below 1:167 (sometimes below 1:200) are considered light cargo. Goods that are neither particularly heavy nor light are referred to as standard cargo, such as those with a density of 1:250.
Different densities correspond to different rates. Generally, the higher the density, the more favorable the rate, because denser cargo occupies less space during transportation, allowing more cargo to be loaded within the limited cabin space, thus improving transport efficiency.
In practice, the ideal scenario is to achieve "optimal mix of light and heavy cargo," ensuring efficient use of cabin space and reaching the aircraft's maximum weight limit. If there is too much cargo, it may result in overweight but underutilized cabin space; conversely, if the cargo is too light, it may lead to underloading without reaching the maximum weight limit.
Although higher density usually results in more favorable rates, different airlines, routes, and freight forwarders may have varying definitions and preferences for classifying light and heavy cargo.
Light Cargo: Commonly referred to as light freight, it refers to cargo where the volumetric weight is greater than the actual weight.
Heavy Cargo: Refers to cargo where the actual weight is greater than the volumetric weight.
Calculation Method: Length(cm) × Width(cm) × Height(cm) ÷ 6000 = Weight(KG), or 1 cubic meter (CBM) is considered as 167 kg.
Examples:
1) Actual weight of the cargo is 3500 kg, volume is 5.5 CBM.
Converted Volumetric Weight: 5.5 × 167 = 918.5 kg < Actual Weight 3500 kg, therefore it is classified as Heavy Cargo.
2) Actual weight of the cargo is 500 kg, volume is 5.5 CBM.
Converted Volumetric Weight: 5.5 × 167 = 918.5 kg > Actual Weight 500 kg, therefore it is classified as Light Cargo.
Cargo Type
Whether the cargo is classified as sensitive directly impacts the freight cost. Sensitive cargo has fewer transportation options and higher safety requirements, making it more expensive to transport. Additionally, the volume and weight of the cargo affect the price because they determine the aircraft type and load capacity. Different aircraft models have different weight limits.
Packaging Method
Some goods require additional packaging, such as wooden crates or pallets, which increases transportation costs. Extra packaging not only adds material costs but can also influence the choice of transportation method.
Transportation Distance
The distance of transportation affects the freight cost. Generally, long-distance transportation is more expensive, and sometimes additional remote area fees are charged. Relatively speaking, shorter international air freight distances are cheaper.
Flight Selection
Different airlines have varying charging standards, and pricing differs for large and small shipments. Direct flights and connecting flights have different arrival times, and whether the shipment is direct or involves a transfer also affects international air freight charges.
Fuel Surcharge
Fluctuations in fuel surcharges directly impact international air freight prices. Monitoring changes in fuel surcharges can help assess variations in transportation costs.
Origin of Cargo
Holidays can affect international air freight prices. During holidays, cargo shipments tend to concentrate, increasing demand and straining capacity, leading to higher prices.
International Situation
Changes in the international situation can affect flight schedules, causing freight rates to rise or fall. For example, issues like pandemics or regional conflicts can lead to reduced or suspended flights, driving up international air freight prices; conversely, when conditions improve, rates may decrease.
Air Waybill
1. Master Air Waybill (MAWB): It is a transport document issued by the airline, but not a document for picking up goods.
2. House Air Waybill (HAWB): It is a transport document issued by the freight forwarding company and also not a document for picking up goods.
Random Documents
Documents transferred with the aircraft, usually including MAWB, HAWB (if any), manifest, packing list for customs clearance, Commercial Invoice, Certificate of Origin (CO, if any), etc., which are used to assist foreign customers with customs clearance.
For express delivery, there is no need to attach random documents, and only an invoice needs to be attached when shipping.
Airway Bill (AWB) plays a crucial role in cargo transportation. It differs significantly from a marine bill of lading but shares similarities with international rail waybills. Below is a detailed explanation of the airway bill:
1. Functions of an Airway Bill
1. Proof of Transport Contract
o The airway bill serves as a transport contract between the shipper and the air carrier. Unlike a marine bill of lading, the airway bill itself is the transport contract between both parties and has binding force. Once signed, it becomes effective until the goods are delivered to the designated consignee.
2. Proof of Goods Receipt
o The airway bill also acts as a receipt for the goods. After receiving the cargo, the carrier or its agent will provide one copy to the shipper as proof of receipt. This document confirms that the carrier has received the goods and loaded them under good conditions.
3. Freight Invoice
o The airway bill records various charges, including those payable by the consignee, and fees due to the carrier and agent. This makes it function as a freight invoice and billing document, which can also serve as an accounting voucher for the carrier.
4. Customs Document
o For export shipments, the airway bill is a required customs document. Upon arrival at the destination airport, it typically serves as a basic document for customs inspection and release.
5. Insurance Certificate
o If insurance is required by the carrier or shipper, the airway bill can also serve as an insurance certificate, proving the insurance status of the goods during transportation.
6. Internal Business Reference for Carrier
o The airway bill travels with the cargo, identifying the goods and recording information about their dispatch, transshipment, and delivery. Carriers use this document to arrange cargo transportation.
2. Structure of an Airway Bill
· Number of Original Copies: An airway bill typically has three original copies:
1. Shipper's Copy: Given to the shipper as proof of receipt by the carrier or agent.
2. Carrier's Retained Copy: Kept by the carrier for accounting purposes.
3. Copy Accompanying Cargo: Travels with the cargo and serves as proof of delivery to the consignee.
· Back Terms: The back of each bill usually contains terms covering transport liability, claims procedures, and other important information.
The airway bill not only serves as a transport contract, proof of goods receipt, freight invoice, and customs document but also acts as an essential reference for business transactions between the carrier and shipper. Understanding the multiple functions of the airway bill helps all parties better protect their rights in international cargo transportation.
1. Meaning of UN
o UN stands for "United Nations." In transportation, a UN box refers to packaging that meets the United Nations' standards for hazardous materials transport. These packages are internationally certified to ensure compliance and safety in transporting dangerous goods.
2. Necessity of UN Boxes in Hazardous Material Transport
o Hazardous materials have dangerous properties such as explosiveness, flammability, toxicity, corrosiveness, and radioactivity. Non-compliant packaging during transport, loading, or storage can pose serious safety hazards. UN boxes are certified to meet specific safety standards, ensuring the robustness and sealability of the packaging to prevent leaks or contamination during transport. Carriers and airports often inspect packaging compliance, and non-compliant goods may be rejected. Therefore, packaging that meets UN standards is essential for transporting hazardous materials.
3. Advantages and Features of UN Cartons
o Moisture Resistance: Suitable for humid environments, especially during rainy seasons in southern regions. For Class 4 flammable materials or those that ignite on contact with water, these cartons provide enhanced protection.
o Compression Resistance and Sealing: UN cartons are highly durable, effectively preventing damage and leakage during transport. They have excellent sealing properties, and standard UN cartons can even support an adult's weight.
o Lightweight and Multiple Sizes: Available in various sizes to ensure cargo safety without increasing transportation burden or costs.
4. Precautions
o UN boxes must be certified by compliant third-party certification bodies. Ordinary boxes with just the UN logo cannot replace legitimate UN boxes and cannot obtain relevant hazardous material packaging certificates. Therefore, UN boxes should be purchased from compliant suppliers to ensure their legality and transport safety.
References:
· IATA Dangerous Goods Regulations Manual
· National and Local Hazardous Materials Transport Standards
Air Freight Appraisal, officially known as the Identification and Classification Report for Air Transport of Goods, is used to evaluate whether goods meet the safety requirements for air transport. The following types of cargo typically require an air freight appraisal:
1. Magnetic Cargo: According to IATA Regulation 902, magnetic items must have a surface magnetic field strength of less than 0.159 A/m (200 nT) to be transported as general cargo. Common items that need testing include electronic devices, speakers, magnets, etc.
2. Powdered Cargo: All powdered items require an appraisal report, such as diamond powder, spirulina powder, plant extracts, etc., to ensure that the powder will not leak or pose safety hazards during transport.
3. Cargo Containing Liquids or Gases: Certain instruments (such as thermometers, barometers, etc.) contain liquid or gas components and must be confirmed not to pose risks to flight operations.
4. Chemical Cargo: Chemicals are divided into hazardous and non-hazardous categories. Non-hazardous chemicals require a non-hazardous material certificate, while hazardous materials must comply with specific packaging and labeling requirements.
5. Oily Items: Items containing fuel or flammable liquid residues, such as certain machinery, automotive parts, etc., require an air freight appraisal to ensure safe transport.
6. Battery-containing Cargo: Battery-containing goods are potentially dangerous and fall under Class 4.3, Class 8, or Class 9 hazardous materials. Common examples include electronic devices and power tools, which need to be appraised to confirm safe transport conditions.
Each Air Waybill (AWB) contains specific information about the cargo, as well as contact details for the consignee and shipper. If errors are found in the consignee information, payment method, destination port code, etc., after the cargo has departed from the origin airport, a CCA telegram must be used to make corrections. CCA (Cargo Charge Adjustment Notification) is a document used to notify changes in transportation fees, other charges, or payment methods.
1. Is CCA Free?
Airlines typically charge for sending a CCA telegram. The CCA fee varies significantly between different airlines, generally ranging from 200 to 800 yuan, and sometimes exceeding 1,000 yuan. Most forwarding agents will charge this fee based on actual circumstances.
2. Purpose of CCA
During transportation, if changes are required due to the shipper's reasons or mistakes by the carrier (or its agent), and the cargo has already left the departure station, a CCA telegram can be used to correct the specific amount of freight charges or payment methods. This telegram must be agreed upon and confirmed by the relevant carrier and destination authorities.
3. Reasons for Issuing CCA
The reasons for issuing a CCA telegram include:
1. Written Change Request: The shipper submits a written request to change the transport or payment method, which is retained by the carrier.
2. Involuntary Changes: Changes in fees and payment methods due to involuntary transport changes caused by weather, mechanical failure, embargo, or other carrier-related issues.
3. Fee Errors: The issuing carrier discovers an error in the fees listed on the air waybill and notifies other carriers.
4. Notification by Interline Carrier: An interline carrier discovers an error in the fees listed on the air waybill and notifies the issuing carrier and other relevant carriers.
5. Transit Station Fees: Fees incurred at a transit station that were not listed on the air waybill are notified to other relevant carriers.
Precautions
Not all cargo can be changed via a CCA telegram. Customs regulations in certain destination ports (such as IST [Istanbul], GRU [São Paulo]) do not allow CCA telegrams for changes. Therefore, shipments to these destinations require careful verification of the AWB content to avoid unnecessary losses.
I. What is a Pallet Pad?
In air freight, a pallet pad refers to a board used to support cargo to ensure that its weight is evenly distributed. It is typically placed between the cargo and the base of the container or the aircraft cargo hold floor. The material can be wooden boards or similar materials that meet specified dimensions. Types of pallet pads include wooden blocks, wooden boards, and foam boards. According to civil aviation regulations, the material should preferably be hard wood such as fir or pine. If other materials are used, their compressive strength must not be lower than that of wood. Generally, the weight of the pallet pad is calculated as 4% of the cargo weight.
Function: The main role of a pallet pad is to increase the load-bearing area of the cargo, distribute the weight evenly, reduce the pressure on the container base or aircraft cargo hold floor, thereby providing protection.
II. Why Add Pallet Pads?
During actual transportation, all cargo is usually placed on pallets or in containers and transported to the aircraft cargo hold. If heavy but small-volume cargo is loaded onto the aircraft, it may cause the pressure on the cargo hold floor to exceed its structural load limit, leading to several issues:
1. Structural Damage: Overloading can damage the structure of the cargo hold floor, potentially causing permanent deformation.
2. Container Deformation: The base of the container may deform, affecting its transmission system and ease of loading/unloading.
3. Flight Safety: Structural damage can endanger flight safety and increase subsequent maintenance costs.
To avoid these situations, airport ground operation agents will add pallet pads as required to increase the load-bearing area, reduce pressure, protect the aircraft cargo hold structure, and ensure flight safety.
III. Which Cargo Requires Pallet Pads?
Typically, air cargo weighing more than 300KG per piece generally requires a pallet pad. However, different aircraft models and cargo hold floors have varying load capacities, so ground operations will determine whether to add a pallet pad based on the actual situation (such as individual size, weight, aircraft model, cargo hold area, etc.).
Additionally, pallet pads are required in the following situations:
· Extra-long or Extra-wide Cargo: When oversized cargo obstructs the grooves around the pallet, making it impossible to secure the cargo with net ropes, pallet pads are used to elevate the cargo.
· Special Equipment: Such as aviation cases or wheeled machinery, which are difficult to secure and prone to slipping, also require pallet pads, sometimes referred to as base boards.
By adding pallet pads, the safety of air cargo and the smoothness of the transportation process can be effectively ensured.
When the goods arrive at the destination airport and are not picked up within the specified time, customs in different countries will take corresponding measures. The specific situations are as follows:
I. Customs Handling Measures
1. Destroy the Goods
o In some countries, if the goods are not picked up on time, the customs may directly destroy the goods. This usually occurs when the goods do not comply with local regulations or cannot be cleared through customs.
2. Return to the Original Place of Departure
o The customs of some countries will require the uncollected goods to be returned to the original place of departure. During the return process, the destination airport may incur storage fees and other related costs, which the consignee needs to bear.
II. Goods Abandonment Handling
If the consignee decides to abandon the goods, the following steps need to be followed:
1. Submit a Goods Abandonment Declaration
o The consignee must submit an official goods abandonment declaration to the airline, indicating the intention to abandon the goods.
2. Costs Assumption
o After abandoning the goods, the handling fees and storage fees incurred at the destination airport shall be borne by the consignee or the shipper. This means that even if the goods are abandoned, the relevant costs still need to be paid.
To avoid unnecessary losses and costs, it is recommended that the consignee pick up the goods in a timely manner after they arrive at the destination, understand the relevant regulations of the local customs, and ensure the smooth customs clearance and pickup of the goods. In case of special circumstances, communicate with the airline and the customs as soon as possible to seek a reasonable solution.
I. Confirming Cargo Status
1. Contact the Airline:
o First, the consignee should contact the airline at the destination airport to confirm whether all cargo has arrived.
o Provide relevant information such as the air waybill number and shipping details to help the airline locate the cargo quickly.
2. Check for Pickup Notifications:
o Sometimes, the airline may not notify the consignee of pickup in a timely manner. The consignee should proactively contact the airline to check on the cargo's arrival status.
o If the airline confirms that the cargo has arrived but did not notify the consignee for pickup, the consignee can request relevant proof from the airline.
II. Precautions
· Timely Communication: Maintain timely communication with the airline to ensure you receive the latest cargo status updates.
· Keep Records: Document the content and time of communications with the airline for future reference and handling.
· Monitor Timeliness: After confirming the cargo's arrival, arrange for pickup promptly to avoid additional fees due to delayed retrieval.
By following these steps, the consignee can effectively confirm the cargo status and avoid unnecessary delays and losses.
I. Differences Between Non-Vessel Operating Common Carriers (NVOCC) and Actual Carriers
1. Actual Carrier:
o Refers to the carrier that owns vessels and physically transports the cargo. Whether it is the initial leg or subsequent legs of the transport, the actual carrier is responsible for the physical movement of the cargo.
2. Non-Vessel Operating Common Carrier (NVOCC):
o Definition: An operator engaged in non-vessel operating common carrier business, who accepts transportation commissions from shippers, issues their own bills of lading or other transport documents, and charges fees from the shippers.
o Responsibilities: Completes international maritime transport through actual carriers and assumes carrier responsibilities. Some international freight forwarders also fall under the category of NVOCCs.
o Relationship with Freight Forwarders: Freight forwarders act as intermediaries between shippers and actual carriers, taking primary responsibility for the entire transportation process but not owning transport vehicles. NVOCCs sign contracts with shippers but do not perform the actual transport; actual carriers sign contracts with NVOCCs and are responsible for the physical transport.
II. Is a Freight Forwarder with NVOCC Qualification Better?
1. Credentials Are Not the Only Standard:
o A freight forwarder with NVOCC credentials is not necessarily better than one without such credentials.
2. Price and Service:
o The prices and space allocations obtained by NVOCCs are not always better than those of other freight forwarders, and service levels can vary significantly.
3. Basis for Selection:
o For shippers, choosing a freight forwarder or NVOCC should be based on the value-for-money and ability to meet specific needs, rather than relying solely on credentials.
A shipment of sea export cargo from a domestic departure point to an overseas destination typically incurs the following three categories of fees:
1. Port of Loading Local Fees (RMB Fees)
Port of loading local fees usually include customs declaration fees, pickup fees, stuffing fees, port miscellaneous fees, port security fees, bill of lading fees, manifest entry fees, Terminal Handling Charges (THC), Origin Receipt Charges (ORC), seal fees, etc. These fees are collectively referred to as Local Charges. According to FOB terms, these fees are borne by the seller (seller/shipper) because FOB is the Free On Board price, and all costs and risks incurred before the cargo leaves the port of loading are the responsibility of the seller.
It is particularly important to note that Advanced Manifest System (AMS) fees in the U.S. and Entry Summary Declaration (ENS) fees in the EU should also be borne by the seller, as these fees occur before the cargo is loaded at the port of loading and thus fall under "pre-FOB" expenses.
2. Freight and Related Surcharges (USD Fees)
Under FOB terms, ocean freight (Ocean Freight) and related surcharges (such as bunker adjustment factor (BAF), emergency bunker surcharge (EBS), Suez Canal Surcharge (SCS), Peak Season Surcharge (PSS), General Rate Increase (GRI), Direct Service Surcharge (D/A), etc.) are borne by the foreign buyer. FOB is the Free On Board price, which does not include ocean freight and insurance, so the buyer must arrange for a freight forwarder or carrier and bear the freight costs.
3. Destination Port Local Fees
Destination port local fees typically include customs clearance fees, port maintenance fees, handling fees, storage fees, operational fees, delivery fees, duties, etc. For less-than-container-load (LCL) shipments, additional fees such as de-stuffing fees, container cleaning fees, sorting fees, etc., may also apply. Since FOB terms are Free On Board, all destination port local fees are borne by the buyer (buyer/consignee).
Similarly, under Cost and Freight (C&F) and Cost, Insurance, and Freight (CIF) terms, destination port local fees are also borne by the buyer. C&F only adds freight costs, while CIF adds both freight and insurance costs. According to the Incoterms, C&F and CIF do not include destination port clearance-related fees and responsibilities. The risk transfer boundary for FOB, C&F, and CIF is the same: delivery is completed when the goods pass over the ship's rail at the port of loading, and the risk and responsibility for the goods then shift to the buyer.
1. Definition of Overbooking and Container Roll
"Container roll" is a common term in foreign trade, freight forwarding, and logistics industries, referring to situations where a shipping container (Container) fails to be loaded onto the vessel on time. This primarily includes Full Container Load (FCL) and Less than Container Load (LCL) scenarios. Relatively speaking, LCL containers are less likely to be rolled because consolidators generally have strong capabilities and close relationships with shipping companies, and LCL involves multiple clients, so they try to avoid rolling unless unavoidable due to customs inspections or other force majeure factors, which would delay loading until the next voyage.
**Vessel Delay (Missed Sailing)** differs from container roll. Container roll is caused by unilateral reasons from the shipping company (such as over-allocating slots beyond actual capacity), while vessel delay usually occurs when the freight forwarder or shipper fails to complete relevant procedures on time.
2. Causes of Overbooking and Container Roll
During peak shipping seasons, demand for ship space increases, and shipping companies have limited slots, making it easy for overbooking to occur, especially on popular routes. Container roll typically happens when shipping companies overbook slots to ensure full loads. For example, if a port originally allocates 100 slots but the shipping company releases 110 slots, the extra 10 containers cannot be loaded and must be postponed to the next voyage. The final number of rolled containers may be fewer than 10 due to cancellations, missed deadlines, or customs issues.
3. Who Gets Rolled?
When shipping companies roll containers, they do so selectively, usually prioritizing containers from customers with lower freight rates, average relationships with the shipping company, or those deemed less important, rather than on a first-come, first-served basis.
4. Why Can Shippers Be Rolled Even Without Fault?
Although container roll is often caused by shipping companies, they do not bear responsibility for it. The main victims of container roll are shippers, consignors, and freight forwarders, who may face issues such as re-clearing customs, delayed deliveries, and even customer claims or loss of business. The root cause of container roll lies in shipping companies maximizing profits by overbooking slots at the expense of service quality.
I. There are two situations for full container and consolidation.
1. Full Container Load (FCL) Goods: All the goods in the container belong to the consignor. It can be declared in two or more bills of lading, and usually corresponds to multiple bill of lading numbers.
2. Consolidated Goods: The container contains goods from multiple consignors. Booking and operations are done as a full container, and declared in multiple bills of lading. Sometimes it is called "consolidation".
II. Less than Container Load (LCL) in Maritime Transport
LCL (LCL, CFS-CFS) refers to booking and operations carried out in the way of LCL cargo.
III. Differences between FCL Operations and LCL Operations
1. Full Container Load (FCL) Operations:
o Delivery Terms: CY-CY (Container Yard to Container Yard).
o The consignor will receive a container booking note (called shipping order, S/O in South China) provided by the freight forwarder after booking.
o The consignor or the agent will pick up the empty container at the designated location by presenting the container booking note, load the goods into the container, and then transport it to the designated container yard for entry into the port and loading onto the ship.
2. Less than Container Load (LCL) Operations:
o Delivery Terms: CFS-CFS (Container Freight Station to Container Freight Station).
o The consignor will receive a delivery notice (or warehousing notice) from the freight forwarder after booking.
o The consignor or the agent will deliver the goods to the designated location on time according to the delivery notice. The LCL company or warehouse is responsible for picking up the container, documentation, and packing, and the consignor is only responsible for delivering the goods.
I. Cut-off and Departure
"Cut-off" refers to the customs clearance deadline, while "departure" refers to the vessel departure time. "X cut-off X departure" is a common term involving container cut-off and departure times, which are crucial for ensuring smooth transportation processes. For example, "1 cut-off 3 departure" means that goods must be cleared by customs on Monday, and the release order must be delivered to the terminal, with the vessel departing on Wednesday.
It is important to note that the schedule of "X cut-off X departure" varies depending on specific ports and transport requirements. Different ports and modes of transport may have different regulations. Therefore, when conducting maritime business, it is essential to understand these regulations to ensure smooth transportation. To catch the vessel, customs clearance must be obtained before the "cut-off" time, and the release order must be delivered to the terminal (sometimes electronic release information can replace the paper release order).
II. Other Meanings of "Cut-off"
· Bill of Lading Cut-off (截单): Refers to the deadline for submitting or modifying bill of lading samples, including Verified Gross Mass (VGM). Missing this deadline may result in late submission fees or amendment fees, and each shipping company and route may have different regulations.
· Port Cut-off (截港): Refers to the deadline for receiving loaded containers at the terminal. Loaded containers must enter the terminal or warehouse by this time; otherwise, they will not be allowed entry. This is sometimes referred to as the cut-off for laden containers and is typically denoted as CY cutoff or CY closing.
· Customs Clearance Cut-off (截关): Refers to the deadline for completing customs clearance. Goods must be cleared by customs and the release order must be submitted to the shipping company by this time. Late submissions will be considered as uncleared, and the cargo will not be allowed to board the vessel.
1. Pre-pickup
Pre-pickup refers to the early extraction of containers, which is usually used when the terminal has not yet scheduled to open. For example, when a ship is expected to depart on the weekend, but the shipping company requires cut-off on Friday, the consignor can handle pre-pickup. Through pre-pickup, the consignor can cut off in advance after obtaining the container seal number and then arrange for container stuffing after the opening plan of the port is confirmed. This is more economical than incurring drop-off fees after direct container stuffing.
2. Drop-off
Drop-off refers to the process of placing the container in the corresponding container yard. When the goods have been stuffed into the container but the port has not yet opened, the container is not allowed to enter the port. If the container stays on the truck waiting for the port to open, demurrage charges, detention charges, etc. will be incurred. Therefore, the consignor usually finds a container yard near the terminal for drop-off and then picks up the container and enters the port after the port area opens.
3. Pre-entry
Pre-entry refers to the early entry of containers into the port. Some ports (such as Shanghai Port) require that containers can only enter the port after it opens. If the terminal has not yet issued the opening plan, when returning the container, drop-off needs to be handled, and the container will be placed in the container yard near the terminal. If there is an opening plan but it is not yet time for the port to open, the container pre-entry can be directly handled to avoid drop-off fees.
Choices in Actual Operations
In actual operations, both pre-pickup and drop-off are important links to ensure that goods enter the port on time. Pre-pickup allows the consignor to cut off in advance without the port opening plan, avoiding additional costs due to waiting for the port to open. Drop-off is to temporarily place the container in the container yard and then pick it up and transport it after the port opens.
The choice between pre-pickup and drop-off should be based on the actual situation. If the expected port opening time is long or cannot be accurately determined, pre-pickup can be chosen to avoid unnecessary waiting time and costs. If the port opening time is relatively certain and there is enough time to arrange container stuffing and entry procedures, drop-off is also a reliable option.
Regardless of whether pre-pickup or drop-off is chosen, relevant regulations and procedures must be followed, and attention should be paid to the influence of factors such as weather and traffic on the entry of goods into the port, and plans should be adjusted in a timely manner to ensure that the goods arrive at the destination on time.
1. Shipping Space Release (放舱)
Shipping Space Release is the allocation of space (Space) by the shipping company based on the booking note (托运单 Booking Note) provided by the freight forwarder, after confirming details such as price. It is also referred to as allocating or confirming a space.
2. Container Release (放箱)
Container Release is the issuance of a loading order/pick-up order (known as S/O or Shipping Order in South China) after the shipowner confirms the price and space. The freight forwarder receives the pick-up order and forwards it to the container trucking company or the shipper, who then use this document for printing, picking up the container, and loading operations.
3. Differences and Connections Between Shipping Space Release and Container Release (放舱与放箱的区别与联系)
Shipping Space Release involves the freight forwarder applying for and receiving confirmation of space from the shipping company, usually in the form of a booking confirmation receipt indicating that the space has been allocated. Container Release, on the other hand, is the issuance of a pick-up order (S/O) by the shipowner after confirming the space, which the freight forwarder uses to pick up the container. In short, Shipping Space Release is the process of confirming the space, while Container Release is the process of obtaining the pick-up order to retrieve the container.
4. Operations After Shipping Space Release and Container Release (放舱和放箱后的操作)
After the driver picks up the container, they deliver it to the logistics warehouse or production site for loading. Once the container is picked up, the driver must promptly send the container number to the freight forwarder so that the forwarder can provide the necessary "supplementary information" for the bill of lading to the shipowner or agent before the deadline. Before customs clearance, the container number must also be entered into the manifest information.
1.Direct Route:
o Definition: The container is always transported by the same ship throughout the transportation process and is not unloaded midway.
o Example:
§ Departing from Tianjin Port, it calls at Dalian Port, Qingdao Port, Shanghai Yangshan Port, Ningbo Port, and Xiamen Port in sequence, and finally arrives at Los Angeles Port (Los Angeles).
§ The entire voyage takes 22 days. Although it calls at multiple ports, the goods are not unloaded, and the entire transportation is completed by the same ship.
2.Transshipment:
o Definition: The container is unloaded midway and loaded onto another ship to continue transportation to the destination.
o Example:
§ Departing from Tianjin Port, it first arrives at Hong Kong Port (Hong Kong), unloads at this port and reloads onto another ship, and then goes to Los Angeles Port (Los Angeles).
§ The entire voyage takes 18 days. Although the route involves a transshipment process, the transportation time is shorter.
Understanding the Impact of Direct Route and Transshipment
· Misunderstanding: Many customers believe that direct routes are always faster than transshipments. In fact, direct routes are not always faster, and transshipments may be more efficient.
· Potential Problems of Transshipment:
o In busy transshipment ports, transshipment may lead to the phenomenon of "port congestion", that is, the goods wait too long at the transshipment port. For example, after the container arrives at Hong Kong Port, due to the port being busy, it may need to wait for a week before being loaded onto the next ship, resulting in an extension of the overall transportation time of transshipment.
· Reasons for Customers to Choose Direct Routes:
o To avoid possible port congestion during transshipment, especially during peak seasons, choosing a direct route becomes a rational choice, although the overall voyage of the direct route may be longer.
When quoting to customers, it is very important to understand the definitions of direct routes and transshipments and their impact on transportation time. According to specific circumstances, customers can make more reasonable choices to ensure that the goods arrive on time and avoid unnecessary delays and additional costs.
An electronic release bill of lading (电放提单) is issued when the shipper applies to the carrier (shipping company). The shipping company at the port of loading then notifies the agent at the destination port via email or other means, allowing the cargo to be released without the need for a physical bill of lading. The consignee can collect the goods using a scanned or faxed copy of the electronic release bill of lading (with the company seal) or with identification.
Advantages：
· Solving the "Goods Waiting for Documents" Issue: It eliminates the need for the original bill of lading to be transferred through banks or couriers, especially suitable for short-sea shipping. In short-sea shipping, the cargo may arrive at the destination port before the original bill of lading, preventing the consignee from collecting the goods. This not only delays the process but can also result in additional fees such as demurrage and storage charges.
Legal Status：
· Title Document Function: An original bill of lading can be circulated and transferred under certain conditions, whereas an electronic release bill of lading cannot. This means that once an electronic release is made, the title document function, negotiability, and transferability of the original bill of lading are lost. The nature of an electronic release bill of lading is very similar to that of a sea waybill.
Newspaper Loss Report: First, the bill of lading needs to be reported lost in the newspaper, usually lasting for three days.
Bank Deposit
: According to the regulations of different shipping companies, usually 2-3 times the value of the goods needs to be deposited in the bank as a deposit, with a term of 2-3 years.
Issuance of Letter of Guarantee: After the loss report and the deposit are in place, the bank will issue a letter of guarantee to the shipowner.
(1) Free Demurrage
· Definition: It refers to the period during which a container can be stored for free at a terminal or container yard in a shipment of imported or exported containerized goods.
· Explanation of Container Yard: The "yard" in free demurrage refers to the storage location of containers, including inland container yards, terminal container yards, customs-supervised container yards, and ordinary non-supervised container yards, etc.
(2) Free Detention
· Definition: It refers to the period during which a container can be used for free in a shipment of imported or exported containerized goods.
· Explanation of Container: The "container" in free detention refers to the container, which is usually owned by the shipping company. If the free detention period is exceeded, the shipping company will charge detention fees. There is no problem of overdue for containers owned by the consignor, but if a third-party container is rented, there will also be a usage period.
(3) Free Demurrage and Free Detention in Import
· Situation: Usually, the sum of free demurrage and free detention is 14 days.
· Example: Suppose a container is unloaded at Tianjin Xingang on January 10th, and it is generally parked in the terminal container yard before customs clearance. After customs release, the consignor needs to pick up and return the empty container within 14 days. That is, from January 10th, the container should be returned by January 23rd at the latest, and demurrage fees will be charged for overdue.
(4) Free Demurrage and Free Detention in Export
· Situation: Usually, the free demurrage and free detention are 7 days.
· Example: Suppose an empty container is picked up on January 10th, and the container needs to be loaded onto the ship within 7 days (that is, by January 16th) after loading. If it is loaded on the 17th, an overdue fee will be charged for exceeding one day.
I. Stuffing
· Definition: After delivering the goods to the designated warehouse, the goods are packed into containers in the warehouse and then enter the port.
· Process:
1. The factory delivers the goods to the warehouse designated by the freight forwarder.
2. The freight forwarder sends the warehouse entry sheet in advance, which contains information such as the warehouse entry code, warehouse location, contact person, and phone number.
3. Pack the goods according to the customer's requirements, including palletizing, attaching micro labels, attaching shipping marks, wrapping with film, reinforcing, etc.
4. If there are special packing requirements, it is necessary to communicate with the freight forwarder in advance to avoid devanning fees due to temporary requirements.
II. Trucking
· Definition: Pull an empty container to the factory for loading, and then directly enter the port.
· Process:
1. After the factory's production is completed, the freight forwarder confirms the container pulling time according to the shipping schedule.
2. The day before the trucking, the freight forwarder sends the driver's information (name, license plate number, phone number, etc.) to the factory.
3. Dangerous goods need to use vehicles with dangerous goods qualifications, and pay attention to the load capacity.
4. After pulling back the container, it is necessary to confirm whether the port accepts it. If it is not accepted, the container needs to be dropped off and then sent to the port after acceptance.
Precautions
1. Scope of Application of Stuffing: Stuffing is not limited to sea freight, but also applicable to air freight. Air cargo transportation is usually the responsibility of the consignor or shipper to deliver the goods to the airport export supervision warehouse.
2. Primary and Secondary Relationship of Business: In the full container load business of sea freight, trucking is usually the main method, and stuffing is supplementary. Trucking can directly pull the container to the factory, saving time and cost. Stuffing involves multiple handlings, which may lead to cargo damage and increased costs.
3. New Policies: According to the new policy of Shanghai Maritime Bureau, dangerous goods need to be stuffed in qualified dangerous goods warehouses. Factories without qualifications need to transfer the containers to compliant warehouses, take photos for records, and send warehouse information.
China's current freight rates use a segmented pricing system. Full truckload (FTL) goods are divided into 12 rate numbers, less-than-truckload (LTL) goods into 5 rate numbers; containerized cargo rates vary based on container type, tonnage, and cargo type.
The freight rate for each rate number is determined by the following mileage segments:
1. Full Truckload (FTL) Goods: Freight charges are generally calculated based on the marked tonnage of the truck. Railway locomotives and track machinery are charged per axle for both towing and self-propelled operations.
2. Less-than-Truckload (LTL) Goods: Charges are typically based on the weight of the cargo. Specific chargeable weights are billed according to the specified weight, while light and bulky LTL goods incur an additional surcharge.
3. Containerized Cargo: Rates are calculated based on the type and number of containers used. For express shipments, an additional 30% of the freight cost is charged as expedited fees, and special vehicle usage incurs extra fees.
Transportation Miscellaneous Fees
Transportation miscellaneous fees refer to all other charges outside the basic freight rate, including various handling fees, inquiry fees, storage fees, and loading/unloading fees. Specific items and standards are set by the Railway Corporation.
Special Freight Rates
Special freight rates apply to specific operating lines, specific types of cargo, and temporary operating lines. These rates are established by the State Council's railway authority and price control department.
International railway transportation is divided into three categories according to transportation speed: slow freight, express freight, and the transportation of full wagon loads attached to passenger trains. According to the quantity, nature, volume, and state of the consigned goods, international railway combined transport is divided into full wagon loads, less than wagon loads, and large-tonnage container goods, and the International Railway Freight Agreement clearly stipulates this.
1. Full Wagon Load Transportation
Full wagon load transportation refers to a batch of goods consigned under one consignment note, and its weight, volume, or shape requires one or more vehicles to load alone. Such transportation has lower costs, is fast, and has a large carrying capacity, and is one of the main forms of railway freight transportation.
2. Less than Wagon Load Transportation
Less than wagon load transportation refers to a batch of consigned goods whose weight or volume does not require a single freight vehicle to load. According to the International Railway Freight Agreement, goods with a weight of less than 5,000 kilograms and not requiring single vehicle transportation are considered less than wagon load goods. Heavy and bulky goods refer to goods with a weight of more than 1 ton or a volume of more than 2 cubic meters (or a length of more than 5 meters), and they are usually transported by full wagon load; sporadic goods (including 1-ton containers) are transported by means of vehicle sharing, container sharing, parcel transportation, or direct through less than wagon load transportation from one station.
3. Large-Tonnage Containers
Large-tonnage containers refer to goods or empty large-tonnage containers that are transported using large-tonnage containers and handled under one waybill.
I. Scope of International Railway Transport Business
The international railway transport business covers transportation from inland China to neighboring countries, including Mongolia, Russia, Vietnam, North Korea, and the five Central Asian countries (Kazakhstan, Uzbekistan, Turkmenistan, Tajikistan, Kyrgyzstan), as well as reverse transportation from the above countries to inland China.
II. Operation Process of International Railway Transport Business
1. Entrustment The consignor needs to inform the agent to arrange full wagon load or container transportation, including the sending station, destination country and arrival station, name and quantity of goods, estimated transportation time, name of customer unit, phone number and contact information.
2. Transport Documents After the consignor confirms the quotation and agency relationship with the agent, the consignor needs to entrust the agent in writing and provide the following documents:
o Transportation Power of Attorney
o Customs Declaration Power of Attorney
o Inspection Declaration Power of Attorney
o Customs Declaration Form, Inspection Declaration Form (with special seal)
o Contract
o Packing List
o Invoice
o Commodity Inspection Release Note
o Verification Form, etc.
3. Customs Declaration After the consignor prepares all the above documents, they are sent to the company designated by the agent, and the agent will arrange customs declaration at the port (such as Manzhouli, Erenhot, Alashankou, Pingxiang, etc.).
4. Departure According to the transportation plan notice, when the consignor delivers the goods at the place of shipment, they need to bring documents such as the customs declaration form, contract, packing list, invoice, customs seal, etc. For customs declaration at the port, documents such as the contract, packing list, invoice, customs declaration form, and commodity inspection certificate should be sent by express to the port agency of the agency company. After the goods are shipped, the third copy of the waybill is given to the consignor.
5. Port Handover After the goods arrive at the port, transfer and reloading procedures need to be handled. After the goods are reloaded, the freight company will notify the consignor of the reloading time, the number of the foreign reloading vehicle, etc.
6. Returning Customer Documents After the goods are reloaded and handed over, the customs will return the verification form and the customs declaration verification copy to our company, and the freight company will return them to the customer based on the freight payment situation.
III. Precautions for International Railway Transport Business
1. Container Condition Inspection Before loading, please carefully check whether the container is suitable and confirm that there is no pollution, damage or water leakage. If any problem is found, you can refuse to load and promptly notify the agent to replace or repair the container.
2. Overloading Prohibition The weight limit for goods stipulated by international railway combined transport is: 21.5 tons/20' container, 26.5 tons/40' container.
3. Offset Loading Prohibition Offset loading will affect railway loading operations and driving safety. The center of gravity of the goods needs to be centered, and the deviation from the center of the cross line at the bottom of the container should not exceed 10 centimeters to ensure balanced loading.
4. Goods Reinforcement Poor reinforcement of goods in the container may cause the goods to move or the vehicle to overturn during transportation, seriously affecting the safety of the goods.
5. Goods Numbering and Shipping Marks It is recommended to number the loaded goods by container and ensure that the shipping marks are clear and accurately reflected on the packing list to facilitate tallying and customs inspection.
6. Sealing and Handover After loading, please supervise the driver to seal and both parties sign to confirm the seal number and container number.
7. Consistency of Power of Attorney Information The goods information filled in the freight power of attorney must be consistent with the actual shipping information and waybill information, especially the product name, weight and volume; otherwise, it may lead to inconsistent freight charges or even fines.
Choices can be made based on the characteristics of the cargo and the urgency of delivery: For bulky goods, it is recommended to use air freight services to reduce the chargeable weight; if the delivery time is not urgent, choosing sea freight is more economical.
I. Booking Cargo Space and Trucking Services
To ensure a smooth customs clearance process for FBA ocean freight, it is necessary to book cargo space and trucking services in advance. Small logistics companies may not offer this service, which can lead to difficulties in customs clearance.
II. Customs Declaration and Submission of Required Documents
The complexity of FBA ocean freight requires the submission of various receipts and lists during customs declaration. If you choose to clear customs personally, it may result in longer waiting times.
III. Actions After Successful Review
Once the submitted documents are successfully reviewed, it indicates that the customs clearance process has been completed smoothly. At this point, according to the agreed time, you need to go to the customs office to collect the goods. If you choose an FBA ocean freight service provided by a logistics company, you do not need to appear in person or send someone; the company's staff will directly courier the goods to the designated overseas warehouse.
I. Reducing Transportation Costs
Overseas warehouse transshipment can significantly reduce transportation costs. The international logistics process of directly shipping goods from the producing country to the consuming country is usually more expensive. By concentrating cross-border goods in overseas warehouses and realizing consolidated transportation and unloading, it avoids one-time transportation to the target country. At the same time, by taking advantage of the transshipment preferential policies of third countries, overseas warehouse transshipment can enjoy more favorable tariffs and tax rates, thereby further reducing the costs of traditional import trade. This not only facilitates centralized customs clearance and inspection but also reduces the risk of goods being detained or lost due to various reasons during transit. Therefore, the overseas warehouse transshipment method effectively reduces transportation costs.
II. Improving Logistics and Transportation Efficiency
Compared with direct maritime transportation, although transshipment transportation increases some transshipment time, the transshipment overseas warehouses usually provide more comprehensive logistics sorting, distribution, and customs clearance services. At the same time, overseas warehouses are generally equipped with efficient management systems, making the logistics process more transparent and reducing freight interruptions and disruptions, thereby improving logistics and transportation efficiency.
III. Abundant Overseas Warehouse Services
Overseas warehouses not only deal with problems such as detention, overweight, and damage but also provide services such as sorting, distribution, and returns according to customer needs. These abundant services provide convenience for consignors and establish a good communication platform between consignors and logistics enterprises.
IV. Ensuring International Trade Security
The overseas warehouse transshipment business can effectively strengthen the security management of international goods by spot-checking goods to avoid security issues such as dangerous goods, counterfeit and shoddy products, and infringing products. At the same time, overseas warehouses will provide relevant insurance plans for goods to ensure safety during transportation.
1. EXW (Ex Works)
The seller delivers the goods to the buyer at the factory delivery location. The seller is not responsible for loading and export customs clearance. The buyer bears all costs and risks from the delivery location.
2. FCA (Free Carrier)
The seller delivers the goods that have completed export customs clearance to the carrier designated by the buyer at the specified location. The seller is responsible for export formalities, and the buyer bears the risks and costs after transportation.
3. CPT (Carriage Paid To)
The seller delivers the goods to the carrier and pays the freight to the destination. The risk is transferred to the buyer after delivery, and the buyer is responsible for import formalities and related costs.
4. CIP (Carriage and Insurance Paid To)
The seller is responsible for transporting the goods to the destination and insuring the transportation. The risk is transferred to the buyer after delivery, and the buyer needs to handle import formalities.
5. DPU (Delivered at Place Unloaded)
The seller delivers the goods after unloading at the destination. The seller bears all costs and risks before transportation and unloading, and the buyer is responsible for the costs after customs clearance and unloading.
6. DAP (Delivered at Place)
The seller transports the goods to the designated destination and bears the risks during transportation. The buyer is responsible for all costs and risks after unloading.
7. DDP (Delivered Duty Paid)
The seller is responsible for all costs, including transportation, insurance, and customs clearance, until the goods are delivered to the buyer. The buyer only bears the risk after delivery.
8. FAS (Free Alongside Ship)
The seller delivers the goods to the ship designated by the buyer at the port of shipment. The risk and cost are transferred to the buyer at this time, and the seller is not responsible for export customs clearance.
9. FOB (Free On Board)
The seller loads the goods onto the ship at the port of shipment, bears all costs and risks, and the buyer takes over the responsibility at this time.
10. CFR (Cost and Freight)
The seller bears the transportation cost to the port of destination, but the risk is transferred to the buyer after loading onto the ship. The buyer is responsible for insurance and import costs.
11. CIF (Cost, Insurance and Freight)
The seller is responsible for transportation and insurance costs to the port of destination. The risk is transferred to the buyer after loading onto the ship, and the buyer needs to handle import formalities.