Freight Forwarder Insights
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What exactly is cargo?
In the context of international trade, "designated cargo" refers to the arrangement wherein a foreign buyer appoints a freight forwarder to handle the transportation of goods. These goods are typically classified as FOB (Free On Board), EXW (Ex Works), or other freight-to-pay options, indicating that the foreign buyer assumes responsibility for the freight costs.
Operation Procedure of Designated CargoThe freight forwarder appointed by the buyer (hereinafter referred to as the foreign agent) will send an email or contact its domestic company or partner by other means to inform the consignor's contact information.After receiving the consignor's contact information, the domestic forwarder will contact the consignor to inquire about the status of the goods and send an email or inform the foreign agent by other means. If the goods are ready, the forwarder will inform the other party of the expected shipment and inquire about its availability.If the booking number of the foreign agent is used, the booking number should also be requested so that it can be submitted to the shipping company.It is important to note that the designated cargo is subject to the instructions of the consignee, not the consignor. In the event that the consignor has a request that deviates from the standard procedure, they must inform the foreign agent and obtain their authorization before proceeding. Otherwise, the consignor's request cannot be accepted.Particularly in the initial operation of the consignor's goods, it is essential to exercise caution to avoid any potential issues.Once the foreign agent has granted permission to proceed, the consignor can proceed with arranging booking, trailer, customs clearance, and other related matters.
For stable goods of regular cargo, voyage information can be provided during the booking process, and the other party's preferred HBL format can be inquired about. Typically, the HBL format provided will be the one provided by the foreign agent.
During the cargo shipment arrangement process, it is essential to maintain communication with the foreign agent in a timely manner to address any updates or issues that may arise.
Following the loading and shipping of goods, and the issuance of the bill of lading, the handling charge should be requested from the foreign agent. This amount should then be submitted to the agent, along with the MBL, HBL, PSS (profit share sheet), and any additional customs clearance documents the agent may request.
It is also important to note that there may be more than one cooperative agent in the same country. To avoid any potential inconvenience, please ensure that goods are not mixed between different agents.If your company has a branch in the country, please refrain from disclosing this information to the foreign agent, as it may create the impression of competition and potentially impact future collaborations.
What are the risks involved in referring to the order?
The bill of lading issued by the forwarder to the consignor is HBL (forwarder's bill of lading) instead of MBL (shipping company's bill of lading), and HBL cannot really achieve the purpose of controlling the right of goods. This could result in a scenario where a foreign agent may release the goods without a bill of lading.
In the absence of HBL, a foreign agent may use its own MBL from the shipping company to retrieve the goods and release them to the consignee, potentially resulting in the consignor loaning two empty containers.
While the scenario of lending without a bill of lading is now uncommon, it is a possibility. Nevertheless, when exporters and importers are working together for the first time, it is crucial for them to be mindful of this issue and encourage the consignee to settle the payment for the goods promptly.