This time, I would like to talk about the flow of marine transportation. Especially in this topic, I’ll focus on FCL cargo.
How is a cargo actually transported in marine transportation?
It’s important for beginners and apprentices of logistics to understand the flow of cargo and it’s paperwork.
First of all, let’s understand the overall logistics flow, then you will know what to do in each section in the flow.
First, let’s see the production work in a factory. It is quite rare for an individual person to use containers for transportation. But some factories produce goods every day, and ship them overseas every week.
Our customers also transport various cargoes by marine transportation,including automotive parts, frozen foods, paper, leather products, cosmetics, scraps, packaging materials, and so on.
Once the QC of a completed product is done, a factory’s shipping representative send a booking to a forwarder.
At this time, the followings are informed; type and number of containers, pick-up date, loading place, Cut Off、ETD、ETA、unloading place, Cut Off, ETD, ETA, free time.
Based on the information, the forwarder prepares vessels, trucks, custom clearance, and confirms necessary documents.
Basically, many customers request a one-stop logistics service which has advantages of having a single contact to complete logistics to a forwarder.
And this checking the necessary documents is especially important. If any of information is wrong, a cargo cannot pass through custom clearance properly nor board a vessel.
In addition, if a certificate of origin has a mistake, a cargo is not allowed for duty reduction.
We need special attention for paperwork mistakes.
To pick up a cargo, we visit a container depot to pick up an empty container in the morning of the cargo pickup or in the evening of the day before. Container depots are also referred to as container vanpools.
The depot is stacked with lots of used shipping company containers that have been cleaned and repaired. When picking up an empty container, we have to be careful of the quality of the container.
A poor quality container is sometimes assigned even though we have booked a container grade A.
Our service is to ensure that our truck drivers check the quality of the containers they pick up and deliver them to our customers.
Once the empty container is delivered to a customer’s factory, we load cargo into it. A large scale customer may use dozens of containers a day.
We calculate the time to load and also manages truck’s delivery schedule.
The container may shake greatly at sea, so it is important that cargo is not moved inside. It must also be lashed firmly.
The container arrives at a port, where it is loaded onto a vessel. The term “Cut Off” is used for dead line of container “gate in” at the port.
In addition, Container Return means that it has to go back to port to be loaded on a vessel.
Before the container is loaded on a vessel.
・AFR (to Japan: advance declaration of exports – 24 hours before ETD)
・VGM (mandatory declaration of the total weight of the container)
and export custom clearance have to be completed.
You have to apply a lot of applications before a cargo is loaded onto a vessel.
A really large number of containers are being collected in a terminal.Therefore, Cut Off must be kept because enough time for loading and unloading in a port is necessary.
When a container is loaded onto a vessel, it is lifted and loaded by a large crane called a gantry crane. The total weight of the container is a major issue since it is being lifted.
Some costumers inquire whether a 40 feet container can carry twice the weight of a 20 feet container, but it can’t. Keep in mind that cargo weigh is roughly limited to about 25 tons, whether 20 feet or 40 feet.
Like this, lots of containers are loaded onto a vessel. There is a limit of the space on a vessel as you see the picture. Depending on the season, it can be difficult to keep a space.
B/L is issued when a container is loaded onto a vessel. Let’s take a look at the flow.
B/L is issued by a forwarder, and it is sent to Shipper.
During the time, payment for goods is made between Shipper and Consignee.
For Original B/L, Shipper will send the original B/L to Consignee by a courier service such as DHL or Fedex.
Thus, Consignee must obtain B/L to pick up D/O.
A container is repeatedly loaded and unloaded at each port, while being rocked in a vessel on the sea. A vessel is sometimes delayed due to the weather, but this can’t be helped.
Marine transportation can take a few days to arrive if it’s the close ocean, but it may take up to two months if it’s a long route like Japan-Europe.
Before vessel arrive to the port, Arrival Notice is issued and sent by an importer’s forwarder to Consignee.
Arrival Notice has a number of costs, such as Terminal Handling charge and D/O fees, which an importer has to pay.
Let’s take a closer look at the import process.
An importer must obtain D/O, which is a delivery note. So, the amount of money that is written on Arrival Notice is payed to a forwarder.
At the same timing of the Arrival Notice payment, B/L is also submitted.
If it’s an original B/L, the original document is submitted, and if it’s Surrendered B/L, a copy is submitted to a forwarder.
In exchange for Arrival Notice payments and B/L submission, an importer’s forwarder releases D/O to Consignee.
In order for an importer to pick up a container, not only D/O but also import custom clearance must be completed.
Documents such as Invoice, Packing List, and Certificate of Origin are entered into the system, and a shipping person declares the import.
If there is no problem with the declaration, they issue an import permit, but if not, an inspection will be required.
Having obtained D/O and completed import clearance, Consignee can submit D/O to container yard and they pick up the container from the yard.
A trailer arrives at the destination, and a cargo is unloaded. This is the end of delivery.
Let’s look back at each process here.
A product is made in the factory.
There is a booking request from a customer.
A forwarder arranges all logistics.
All required documents are checked.
An empty container is picked up.
An empty container is delivered to a customer and a cargo is picked up.
The cargo arrives at a port. At this time, we have to go through VGM and export custom clearance.
The container is loaded onto a vessel.
B/L is issued when the vessel leaves the port.
Marine transportation is done.
This is where we move on to the import step.
Arrival Notice is issued 2 to 3 days before the vessel arrives at a port.
An importer pays Arrival Notice and also submits B/L.
D/O is released from forwarder to importer.
We must also clear import custom clearance.
D/O is submitted in a yard and the cargos is released.
The cargo is being delivered.
After all this process, the cargo is finally sent to the overseas destination.
How did you like it? It looks like we’re just transporting cargo in a container, but there are various documents required in the process.
If there is a mistake in the documents, a cargo will not be transported smoothly.
Please understand the whole cargo and documents process so that you can make smooth international logistics arrangements.
Contact to IINO san