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Secrets of International Trading copyright

Freight Surcharges

"...depending on the circumstances, shipping companies may levy one or more charges..."

Levy of additional charges include:

1. Currency Exchange surcharge to allow for charges in
foreign exchange rates after publication of freight rates.

2. Bunkers Surcharge to allow for higher world oil prices,
as determined by OPEC.

3. Basic Rate Services Additional for Containers.
This is a "stuffing" charge for containers to cover stuffing and "un-stuffing" the container, even though you may have stuffed it yourself.

4. Equipment Handling Charge for Containers.
This is heavy lift charge for goods shipped in containers.

5. Port Surcharge this is an extra charge to cover extra port fees  e.g. for shallow draft vessels.

6. Congestion Surcharge this is to help offset the extra cost of shipping shipping delays caused by port congestion.


Shipping Stowage
"Which part of the ship"
the exporter's goods may be placed or "stowed" in different parts of the ship according to arrangements made.


Regular Stowage
If no special request is made, the exporter's goods are placed anywhere in the regular holds, below deck, with other goods probably stacked on top.
To avoid damage from crushing, etc., the exporter's goods need to be well packed in a strong box.

Special Stowage
The exporter may request, at extra cost, that his goods be placed in the freezer hold or for certain perishable goods, he may request that they be stowed away from the heat, but not refrigerated or refrigerated, but not frozen.

On Deck Stowage
The cheapest way of shipping goods by sea is to have them carried on deck. However, such goods are then exposed to the weather with no liability of the shipping company for such damage.

Also, of course, such goods would be the first to be thrown overboard or jettisoned should the ship run into trouble and need to be lightened. Because of the above factors, marine insurance rates for such goods are higher than for goods stowed below deck.

Liquid Cargo
Most ocean cargo vessels have liquid cargo tanks on board with capacities ranging from 20,000 to 40,000 gallons.

Many of these are located in the lowest part of the vessel and are often filled with seawater, if no liquid cargo is available. Other such tanks are between the decks. For very large liquid cargo, specialized tanker ships are used.

These are metal rectangular boxes of various sizes that can be leased for one voyage or on a round-trip basis. Goods shipped in containers are levied a special charge additional to the regular freight rate.


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Ocean Shipping Procedure

Bigger export firm have a traffic department will take care of overseas shipping. With smaller firm, this task is usually delegated on a fee basis, to freight forwarder. The following steps are involved in a typical overseas shipping procedure.

1. The Freight Forwarder is advised of the export order.

2. The terms of sale are examined to determine the exporter's shipping responsibility and ability to fill the order.

3. If letter of credit is involved, it must also be carefully examined to insure that any shipping conditions (such as shipping date, no partial shipments, discharge port, transshipment restrictions, etc.) are met or, if impossible to meet, arrangements be made for the letter of credit to be amended.

4. Quotations on freight rates sought from different shipping agents.

5. A shipping line and vessel are selected.

6. Space is booked as early as possible (as shipping space is not easily available to all destinations) through a shipping agent. The space should be on a ship with an acceptable loading port and acceptable estimated time of arrival (or ETA) at the required port of destination.

The choice of loading port must be balanced against the preferred date of sailing. Information about sailing schedules is available in specialized shipping publications and in the business sections of the major newspapers.

The agent that represents the shipping line will, in booking the space, requires full details of the shipment, including weight, size, contents value, ports of shipment and destination. This is recorded by the exporter onto a shipping note that is sent to the steamship office.

The shipping agent then sends the exporter a contract number and an engagement note showing the details of the shipment, including name of the ship, destination, loading port, loading date, arrival date, and the shipping rate.

The exporter may cancel the space that has been reserved if the export order falls through. However, it should let the shipping company know as soon as possible so that the space can be allocated to someone else. Otherwise the shipping company will invoice the exporter for the unused space.

7. Customs forms are filled out for the country of destination.

8. The shipment is appropriately packaged and marked.

9. Wait for the "calling forward" notice from the shipping company.

10. The shipment is dispatched to the port with a consignment note.

11. A bill of lading is obtained from the shipping company and freight charges are paid.

12. The bill of lading and other required documents are delivered to the bank for collection.

Next page 4/5   5/5  " can still obtain a 'clean bill of lading' by signing a letter of indemnity..."

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