INTERNATIONAL
TRANSPORTATION
The DCI Way
Objectives
The objective of this presentation is to give
you an understanding of international
transportation terminology and procedures
so you are able to confidently sell the
product to your customers.
Topics
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Laws and Licenses
DCI and Dedicated Global
Incoterms
Harmonized Tariff Schedule
Information Required
Looking Forward
Laws and Licenses
• Air
There are no laws or licenses to broker air freight. The Transport Security
Administration (TSA) are very stringent in regulating the security procedures
of an In-direct Air Carrier (IAC). An IAC has gone through a thorough
security check and, because of this, is permitted to book freight directly
through an airline onto its aircraft. The IAC carries out security threat
assessments against any company or individual who comes into contact
with the freight or paperwork to ensure that it isn’t tampered with and that it
is safe to travel on passenger aircraft. Also, as of Aug 2010, all freight that
is going to travel on a passenger aircraft must be screened. The TSA are
establishing a system of security that is commensurate to that of
passengers baggage. This will require screening at piece level. This
means that pallets/skids will have to broken down in to individual items prior
to screening. The charges for the screening will be the consignor’s
responsibility.
Laws and Licenses
• Sea
The Federal Maritime Commission (FMC) have declared that no company or
individual may be involved in, or promote themselves as freight forwarders without an
Ocean Transportation Intermediaries (OTI) license. OTI services refer to the
following:
1. Dispatching of shipments on behalf of others to facilitate shipments by
common carrier, including ordering cargo to port
2. Preparing or processing export declarations, bills of lading and other
export documentation
3. Booking or confirming cargo space
4. Arranging for warehouse space
5. Arranging cargo insurance
6. Clearing shipment in accordance with US Government export regulations
7. Preparing and/or sending advance notice of shipments to banks, shippers
and consignees
8. Handling freight monies on behalf of shippers
9. Coordinating the movement of shipments from origin to the vessel
10. Giving export advice to exporters.
DCI and Dedicated Global
DCI is a certified IAC. To gain this accreditation, DCI had to go thru
multiple security and threat assessment checks. This certification
allows DCI to tender its customers cargo to on passenger aircraft..
To accomplish this, all persons involved in this process must be
security threat assessed and pass a simple knowledge test. The
customer must also become a known shipper to the IAC which
involves a security assessment. Dedicated Global Carriers is now a
fully licensed Ocean Freight Forwarder and Non-Vessel Operating
Common Carrier (NVOCC). This means that as Dedicated Global,
we are able to tender cargo loads for USA customers, whether
import or export, for shipment by sea. We are able to make
commissions for this service and charge the customer directly
without having to use a third party.
Incoterms
Incoterms or International Commercial Terms
are a series of international sales terms,
published by International Chamber of
Commerce (ICC) and widely used in
international commercial transactions. They are
used to divide transaction costs and
responsibilities between buyer and seller and
reflect state-of-the-art transportation practices.
They closely correspond to the U.N. Convention
on Contracts for the International Sale of Goods.
The first version was introduced in 1936 and the
present dates from 2000.
Incoterms
Group E – Departure
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EXW - Ex Works (Named Place) The seller makes the goods available at
his premises. The buyer is responsible for all charges
Group F – Main Carriage Unpaid
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FCA – Free Carrier (Named Place) The seller hands over the goods,
cleared for export, into the custody of the first carrier, named by the buyer,
at the named place.
FAS – Free Alongside (Named Loading Port) The seller must place the
goods alongside the ship at the named port. The goods must be cleared for
export. This is for maritime only.
FOB – Free On Board (Named Loading Port) The seller must place the
goods on the ship, named by the buyer; cost and risk being divided at the
ships rail. The goods must be cleared for export. This is for maritime only.
FOT – Free On Truck (Named Truck Loading Location)
FOR – Free On Rail (Named Loading Railhead)
Incoterms
Group C – Main Carriage Paid
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CFR – Cost and Freight (Named Destination Port) The seller must pay
the costs and freight to bring the goods to the port of destination. Risk is
transferred to the buyer once the goods have crossed the ships rail. This is
for maritime only.
CIF – Cost, Insurance and Freight (Named Place of Destination)
Exactly the same as CFR except the seller must in addition procure and pay
for insurance for the buyer. Maritime only.
CPT – Carriage Paid To (Named Place of Destination) The
general/containerized/multimodal equivalent of CFR. The seller pays for
carriage to the named point of destination, but risk passes when the goods
are handed to the first carrier.
CIP – Carriage and Insurance Paid (To) (Named Place of Destination)
The containerized transport/multimodal equivalent to CIF. Seller pays for
carriage and insurance to the named destination point, but risk passes
when the goods are handed over to the first carrier.
Incoterms
Group D – Arrival
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DAF – Delivered at Frontier (Named Place) The seller pays for
transportation to the named place of delivery at the frontier. The buyer
arranges customs clearance and pays for transportation from the frontier to
his factory. The passing of risk occurs at the frontier. This is for rail and
road.
DES – Delivered Ex Ship (Named Port) Where goods are delivered ex
ship, the passing of risk does not occur until the ship has arrived at the
named port of destination and the goods made available for unloading by
the buyer. This is common on bulk commodities such as coal, grain and dry
chemicals and where the seller owns or has chartered their own vessel.
DEQ – Delivered Ex Quay (Named Port) This is similar to DES, but the
passing of risk does not occur until the goods have been unloaded at the
port of destination.
Incoterms
Group D – Arrivals (continued)
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DDU – Delivered Duty Unpaid (Named Destination Place) The seller
delivers the goods to the buyer to the named place of destination. The
goods are not cleared or unloaded from any form of transport at the place of
destination. The buyer is responsible for the costs and risks for the
unloading, duty and any subsequent delivery beyond the place of
destination.
DDP – Delivery Duty Paid (Named Destination Place) This seller pays
for all transportation costs, duties and bears all risks until the goods have
been delivered.
Incoterms
Harmonized Tariff Schedule
The Harmonized Tariff Schedule (HTS) is the primary resource for
determining the tariff classifications or duty for goods imported into the USA.
The HTS is based on the international harmonized commodity coding and
classification system, which has been established by the World Customs
Organizations. All countries base their tariff schedules on the harmonized
system, making it easier to conduct international trade.
The HTS assigns a 10 digit classification number to a good, based on such
things as its name, use and/or the material used in its construction. There
are over 17,000 unique 10 digit HTS classification code numbers.
There are 99 chapters arranged in to 22 sections.
Harmonized Tariff Schedule
SECTION XII: FOOTWEAR, HEADGEAR, UMBRELLAS, SUN
UMBRELLAS, WALKING STICKS, SEASTICKS, WHIPS, RIDING-CROPS
AND PARTS THEREOF; PREPARED FEATHERS AND ARTICLES MADE
THEREWITH; ARTIFICIAL FLOWERS; ARTICLES OF HUMAN HAIR
Chapter 64
Footwear, gaiters and the like; parts of such articles
Chapter 65
Headgear and parts thereof
Chapter 66
Umbrellas, sun umbrellas, walking sticks, seasticks, whips, riding-crops and
parts thereof
Chapter 67
Prepared feathers and down and articles made of feathers or of down; artificial
flowers; articles of human hair
Information Required
To ensure that a suitable method of transportation is selected for the
customer, the following information is required:
1. Consignor
2. Consignee
3. Full description of freight
4. Sizes
5. Weights
6. Country of origin (goods could have been imported then assembled
in the USA for re-export)
7. Incoterm
8. Harmonized tariff code
9. Expected shipping date
10. Expected arrival date
Looking Forward
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IATA certified (Dangerous Goods by Air)
IMDG certified (Dangerous Goods by Sea)
C-TPAT (Customs-Trade Partnership Against Terrorism)
ISO 9001-2000 (International Supply Chain standards)