Step by step logistics process
Delve into the comprehensive guide on the export logistics process, covering everything from initial planning and documentation to shipping and customs clearance. Learn how to streamline operations, ensure compliance, and optimize your supply chain for efficient international trade.
· Logistics is the process of planning and executing efficient transportation and storage from the point of origin to the consumption of goods. The objective is to provide timely delivery in a cost-effective manner.
· The process of exporting goods having many step & each step is closely related to each other.
· Import-export logistics involves managing the movement of goods and materials across international borders. It encompasses a range of activities from sourcing and procurement to transportation and distribution.
· Work in Export-Import industry is a necessary to know everything related to logistic process & important point.
How to do sea export
· In sea export, we are exporting goods of higher quality and lower cost compared to the other three methods.
· Businesses can also use shipping containers for land-based goods transportation. If a business needs to transport large quantities of products but there is no pressure for prompt delivery, shipping by sea may be suitable.
How to do by air export
· A cargo aircraft is a fixed wing aircraft that is designed or converted for the carriage of cargo rather than passenger.
· Such aircraft is making for a large container cargo & it not for incorporate passenger amenities.
· Air cargo have a large amount of air cargo freight is high as compare to sea & road mode but it is fastest wat for delivery of goods.
How do by road export
· Road transport is a most flexible option for export. It is usually quick & efficient.
· Road transportation is a low-cost schedule transportation tracking the location of goods, safe & private delivery.
· Road transport is possible, when two boundaries is connected with each other.
· But if anyone is in between possible, there will be using sea transportation.
What is logistics
· Logistic is generally the detail organization & implementation of complex operation. Logistic is the management of flow of thing between the point of origin to point of destination, reprocess or consumption of goods.
· In export logistics processes, tangible goods such as material equipment, supplies, food, and other items are managed through a series of critical steps. These steps include handling physical items such as packaging, inventory management, transportation, security, fuel, warehouse operations, and more.
· Logistics involves coordinating resources for efficient transportation, storage and distribution. Explore the intricacies of export import logistics for global trade success.
· In logistics, it can be included tangible goods such as material equipment & supplies as well as food & other items. During the logistic involve physical items, Packaging Inventory, Transportation, Security, Fuel, Warehouse etc.
What is Incoterm?
· Incoterm is an International Commercial Terms are a set of trade which is develop by international chamber of commerce & Incoterm included risk & responsibility between buyer & seller will be same all over the world.
Incoterm 2020 (International commercial terms 2020)
· International commercial terms are official terms published by the International Chamber of Commerce (ICC). Incoterms are voluntary authorities that are globally accepted and follow the rules and regulations for determining the responsibilities of buyers and sellers for the delivery of goods from one country to another under the contract for international trade.
· Incoterms is determine Roles & Responsibility between buyer & seller.
Type of Incoterm
There are 11 types of Incoterms
· EXW
· FCA
· FAS
· FOB
· CFR
· CIF
· CPT
· CIP
· DAP
· DDP
EXW: EX-Work
· EX-Work is a process where the buyer is doing every work, like first their container comes to our factory and our labour will load goods. Then every task will be done by the buyer, like customs clearance in India and customs clearance in his destination country, paying import duty, etc.
· In EX Work buyer is pay every charge from our factory to their warehouse.
· Ex-deed occurs when the seller delivers the items to the buyer at the seller’s location or another specified location.
· If the products need to clear customs clearance, they need not be loaded on any storage vehicle for sale.
FCA: Free Carrier
· The seller delivers the goods to the carrier or another personal nominated by the buyer at the seller’s name place.
· The seller will deliver the products to the buyer’s designated carrier or person at the seller’s location.
· The parties are well advised to transport the goods from this place exactly & Then risk is passes on buyer at that point.
FAS: Free Alongside Ship
· The seller delivers when the goods are place any alongside the vessel (quay/barged/ship) nominated by the buyer at named port of shipment.
FOB: Free on Board
· The seller has to deliver the goods on the vessel nominated by the buyer. After delivered on vessel, risk & damages of goods which is bear by buyer. Most of exporter is working only in FOB Incoterm.
· EX: – In FOB Incoterm Seller is load goods, Then transport to port & then container stuff on vessel. After stuffing the consignment on the vessel, buyer risk and responsibility start, and the buyer is free from his risk and responsibility.
CFR: Cost & Freight
· The seller delivers the goods to the port of destination or port of buyer.
· We have a taking risk & responsibility at the buyer port. After buyer port every risk & responsibility is transfer to the buyer.
· Seller must contract on the cost & freight. All the cost is pay for sending cargo at the port of destination or Seller is pay cost & freight.
CIF: Cost Insurance Freight
· CIF is like CFR
· All the process in CIF, it is a same like CFR.
· But here, Is the seller purchase an insurance cover for protect the cargo any risk & damages.
CPT: Carriage Paid To
· The seller delivers the good to carrier or another person nominated by the seller at an agreed place.
· The seller must contract for pay the cost of carriage necessary to bring the goods to the name place of destination.
CIP: Carriage & Insurance Paid
· Seller has a same responsibility as CPT, but they also contract for insurance cover against the buyer risk of loss or damages to the goods during the carriage.
· Under CIP, Buyer has to obtain insurance or minimum cover.
DAP: Delivered Duty Paid
· The seller delivered, When the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination.
· The seller bears all risk involved in bargaining the goods to the named place.
DPU: Delivered Place Unloaded
· DPU replace the former Incoterm DAT (Delivered at Terminal).
· The seller delivers, When the goods once unloaded are placed at disposal of buyer at a named place of destination.
· The seller bears all risk involved in bringing the goods to unloading them at the named place of destination.
DDP: Delivered Duty Paid
· The seller delivers the goods are placed at disposal of the buyer, cleared for import on buyer port & transport ready for unloading at the named place of destination.
· The seller bears all the cost & risk involved in bringing the goods to the place of destination.
· Exporter have to clear custom in India & Also clear custom in buyer port & pay all cost, Insurance, freight, import duty.
· From the 11 Incoterm, Exporter is only using only these three incoterms mostly. FOB, CIF, EXW
Types of containers
There are a many different types of containers in circulation, each used for different purpose.
· Standard Container
· Open Top Container
· Flat Rack Container
· Refrigerated & Insulated Container
· Tank Container
Types of shipping line
Line Service
· Liner shipping is the service of transporting goods by means high-capacity ocean going ship that transit regular routes on fixed schedule.
· Today there are approximately 400 liner services in operation with most offering weekly departures from all ports at which each service calls.
Tramps Services
· Tramp services or tramp services are a vessel that has no fixed route or schedule and is available at short notice or not fixed schedule.
· It is loading any goods from any port to any other port.
What is Stuffing
· Stuffing means Loading a container on vessel or ship place.
How to do stiffing in Export
· Cold storage
· Factory Stuffing
· Packing House
· Local Transportation
· Inland Container Depots, Known as ICDs.
· Concur Train
· Container Freight Station
· Dock Stuffing (Port)
Different types of packaging
· Pallets
· Boxes & Crates
· Label of Number of pallets
· Label for hazardous material
· Fruits & Vegetable packing for export
What is CHA?
· CHA means Custom House Agent, who is providing the services of logistics or he is the person who books the container, customs clearance, packaging details, transportation to the port all the services are provided by CHA.
How to get Quotation from CHA
First of all we have to mail CHA for quotation. Then he is providing quotes like this,
· Product Name:-…………………………………………………………………………
· Product HS Code :-………………………………………………………………………..
· Port of Loading:-………………………………………………………………………………..
· Port of Destination :-……………………………………………………………………..
· Packing Weight :-……………………………………………………………………………..
· Product Packaging Size:-………………………………………………………………….
· Mode of transport by Air, Sea, Road:-……………………………………………………………
· FCL Full Container Load/ LCL Less than container load: -…………………
· Factory Address Pick up: -…………………………………………………………………..
· Local Transportation: -…………………………………………………………………………………….
· Other Certification: -………………………………………………………………………………
How to calculate price in Export
· Export pricing is the important factor for promoting export & facing international trade competition.
· It is important for exporter keep in mind down their price for taking export benefits & expenses
· Here, is not a fixed formula to find best prices. But price can be different in types of exporters like Manufacturer exporter or Trader Exporter.
Find Export Pricing
Ø EXW Price
20 tons Rice
Rice Price Rs.25 kg
Price x weight
25 x 20000 (20 Tons) =5,00,000
5,00,000 + 50000 (Profit)=5,50,000 Exw Price
Calculation in Pieces (Nos)
One Pieces price = 500
Total Pieces 1000
1000 x 500 = 5,00,000
5,00,000 + 10% profit (Rs.50,000) = 5,00,000
Ø FoB Price
20 Tons Rice
Rice Price Rs.25 kg
Price x Weight
20000(20 Tons) x 25 = 5,00,000
5,00,000 + 50,000 (profit) = 5,50,000 Cost of Product
Cost of Operation (Export Cost)
Loding 5000
Transportation 2000
Insurance 2000
Unloading 5000
Stuffing 5000
THC 15000
Bill of Lading 3500
CHA 3500
Seal 1000
TPI Third Party Inspection 10000
Fumigation Certificate 3000
Phyto Certificate 2000
Chai Pani 2000
Total 80,000
5,50,000 + 80,000 = RS.6,30,000 FoB Price
CIF Price
Cost of Operation Rs.80,000
Insurance Rs.20000
Freight Rs. 78,000
Total Rs. 1,60,000
FOB Price + Insurance + Freight
5,80,000 + 2000 + 78,000 = 6,60,000
· We are providing rates in dollars. So, now we calculate the price in dollars.
· The current rate is $83.53 but when we calculate the price in dollars we can subtract 1 rupee. Example: – Current rate is 83.53 but we want to take 82.53. Because the bank charges some fee for exchanging currency.
CIF Price = 6,60,000 / 82.53 = 7997.09 $
FoB Price = 5,80,000 / 82.53 = 7027.75$
EXW Price = 5,00,000 / 82.53 = 6058.40$
· Calculation of price is very easy. Because we are using only these four terms Addition, Subtraction, Multiplication, Division (+, -, x, /).
· If you calculate price 5 to 10 time, you can understand automatically. How to calculate price.
What is FCL & LCL ?
FCL Full Container Load
·
FCL means container is loading full by buyer. Whole container is use for fill up with product. Exporter is not sharing the container with anyone.
LCL Less Than Container Load
· LCLmeans container is fill less / fill half / Third half fill or another exporter
goods are also involved in LCL or it is a mix container.
Freight rate calculation FCL/LCL
· Freight rate is simply calculating price at which a certain cargo is delivered from oneplace to another.
· Prices can depend on mode of transportation like sea freight, road freight, airfreight etc. Nature & form of cargo (loose cargo / containerised cargo
etc). Weight & Volume of the cargo & distance to the dealing
destination.
· Shipping line charge as per container size. These include 20 feet’s, 40 feet’s & 40 high cube containers. The amount of charge depends on where it coming going container, in which country is going. Where is going volume time of years & many other factor is of affecting.
· When exporter have does not enough item to fill container. So, there are companies allow another exporter use that space & we give a cost reduction. This is all handling by our CHA. So, don’t worry about this all headache.
What is Bill of Lading?
· A bill of lading recorded in the shipping of traded goods that has been received on board the ship. It is a document that establishes an agreement between a shipper and a transportation company for the transportation of goods. The transportation company shipping line releases these records to the shipper.
· The bill of exchange indicates the shipment destination address & contact
information of consignee & consignor (sender).
What is the air ways bills
· A non -negotiable document issued by an air carrier to acknowledge possession of a shipment & which serves as a receipt for the consignee (shipper).
· The airway bill indicates the shipment destination address & contact
information of consignee & consignor (sender).
What is Lorry Receipt (LR)
· LR means Lorry Receipt (Bilti) this receipt transporter once the material is
located on vehicle for delivery.
· This receipt contains the vehicle name, pickup address, delivery address, number of packages, material description vehicle type & date.
How to give quotation to the buyer
A checklist for preparing quote
· Quality & Grade
· Our local product name & buyer country product name (Both write).
· Harmonized System Code (HSC)
· Currency
· Price Per Unit of the product
· Number of Quality
· Number of Quantity
· Symbol, Number & Marks
Quotation Example
Dear Joel ,
Greeting of the day
Please find the price as below
Ceramic Tiles
HS Code 69079010
USD 5000/28 Tons FoB Mundra Port
USD 8500/28 Tons CIF Jabil Ali Port
Terms & Condition as below
Payment terms 30% Advance & 70% Against Bill of Lading
Price valid 2 days from this email
No refund, If advance once
After 25 days cargo will dispatch at the time of conformation of order
Waiting for your order conformation
Thank You & Have a great day
REGARDS,
MUKESH AMBANI
(EXPORT MANAGER)
RELIEANCE GROUP LTD
EMAIL:-mukesh.relieance.com
Whatsapp:-+91 9876543210
Website:www.relieance.com
Procedure of Export Clearance?
· Custom Clearance work involve preparation & submission of document required to facilitate export-import into the country. Representing clients during customs examination assessment payment of duty & Taking delivery of cargo from custom after clearance along with document.
CHA-Custom House Agent
· A Custom House Agent (CHA) is licensed to act as an agent for transaction of any business from to outside of India or to inside in India at a custom station or import-export goods at a custom station.
· CHA maintains detailed, Itemized & up to date account.
· CHA license may be temporary or permanent
What is Shipping Bill of Exchange?
· When sending good from one country to another country, Export has to follow many formalities, including submitting various applications acquiring licenses paying duties & so on.
· Clearance from the custom for export, an exporter has to submit application it is called shipping bill.
· Until exporter files the shipping bill, one cannot load the goods, The export may be through air, Vessel or Vehicle.
Transhipment/Partial Shipment
· According to the letter of credit, transhipment refers to the process of unloading from one mode of transportation & reloading onto another during a journey.
· It can be said that a beneficiary under letter of credit send the credit amount in single lot the corresponds to the entire credit amount & is loaded with a
single mode of conveyance.
Registration/AD code Registration
· AD Authorised Dealer code (AD Code) is 14-digit numerical code provided by bank with which your business has a current exporter have to register the port, where he is clearance the custom or export from any port he must register this code.
What is Shipping Bill?
· A form that custom & Excise uses before allowing product to be taken out of a bounded warehouse or exported from the nation.
Shipping Bill Filing
· There are different forms that have been prescribed by Central Board of Indirect Taxes & Custom (CBIC).
· Your choice would be depended on whether you intend to export duty free goods,dutiable goods under drawback or duty-free goods ex-bond.
· Shipping bill have filed in traditional prescribed format in shipping bill & bill of export (form) regulation (1991).
· A shipping bill can be filed after the particular vessel ship etc. It can be
granted to access good move to out of country.
· Once the bill is submitted, it is physically verified & the value of goods
intended for access export by custom authorities.
· Custom official verifies the bill and sign the copy with ‘LET EXPORT ORDER’ and ‘LET SHIP ORDER’.
Role of CHA
· Custom House Agent is like a legal advisor or lawyer they will provide right guidance.
· He has a mastery in clearance of custom.
· Custom officer may arise a query on bill of entry.
· CHA is better understanding language of CHA
· Whole custom procedure is done by CHA
Custom Examination
· At the ICD/CFS/Gateways port of export relaxed regime of examination.
· Before the Central Excise/Customs officer, Factory warehouse filled items are not examined unless seals are found to be tampered with.
· Before the Central Excise/Customs officer, factory warehouse-filled items are not examined unless seals are found to be tampered with.
· No investigation, when there is not export incentive, I.E when there is free
shipping bill.
Indian Export Promotion Bodies
· DGFT-Directorate General of Foreign
· ICD– Central Borad of Indirect Taxes & Customs
· RBI– Reserve Bank of India
· MOC-Ministry of Commerce
· FIEO– Federation of Indian Export Organization
· APEDA, EEPC, AEPC, Spices Board.
Export Inspection Council of India
· Export Inspection Council (EIC) is India’s of official export certification authority
formed to certify safety & quality of product exported from India.
· The exporter exports the product, when they meet the safety and quality standards
of the importing nation, Then, we can sell abroad.
International Bodies who are supporting to exporter & importer
World Trade Organization
· World Trade Organization is the only international organization dealing with global
rule & trade.
· WTO have main function is ensure that trade flows as smoothly predictably & freely possible.
International Chamber of Commerce ICC
· The International Chamber of Commerce is the largest, most diverse business
organization in the world.
· ICC perform three primary activities. The establishment of rules, dispute
resolution & policy advocacy.
ITC International Trade Council
· The International Trade Council/ Response 76 government export agencies 418 national & industry vertical chamber of commerce & approximately 29,000 corporation spanning 179 countries.