RELO Roundtable…a gathering place

There are many people and companies involved in an international shipment.

It will help if you understand who they are, what they do, and how they work together.

You will likely have direct contact with one or two of the many companies involved, and little or no contact with the others.

This understanding will help you to make an informed choice.

 

The Shipper

This is you, the person doing the shipment.

You will also be the “Exporter” (the person exporting goods from the country of origin) and the “Importer” (the person importing goods into the destination country). 

It is very important that you understand this. As the “Shipper”, you are accepting responsibility for the legality of the goods that are being shipped, any import duties, supplying paperwork, and, most importantly, any charges that might arise in the event of some unusual occurrence (like a riot or strike, a natural disaster, a customs inspection, or an unusual, unexpected or impractical delivery situation).

In short, make sure that you know all of the rules for importing to the specific country to which you are shipping, and budget extra money in the event that it is needed.

The Origin Agent

This is the local representative that will visit your home to perform a visual survey.  This professional assessment allows the local moving company to determine the actual scope of services requested by the homeowner as part of their unique international relocation.  This is the best way to determine an accurate cost estimate.  They might also perform the packing and loading of the household goods if requested by the customer or national account. 

The origin agent might also be the Freight Forwarder, The Consolidating Warehouse, and/or the Move Manager. See below for details on these other functions.

 

The Freight Forwarder

This is the specialized transportation entity that arranges the ocean freight and does the export documentation (including a “House Bill of Lading”). This company will also move your cargo from the pick-up point to the seaport or aerial port of embarkation at origin. 

In many countries, a Freight Forwarder must be licensed. In the USA, the Federal Maritime Commission (FMC) makes a distinction between a Freight Forwarder (FF), and a Non-Vehicle Operating Common Carrier (NVOCC). For the typical customer doing international shipping, the difference doesn’t matter, so when I say Freight Forwarder, I mean either a Freight Forwarder or NVOCC.

Individual shippers, HR professionals, or company relocation coordinators can easily check to see a Freight Forwarder is licensed at the FMC's website at www.fmc.gov

For shipments originating or departing from the USA, it is best to use a Licensed Freight Forwarder, or one of their authorized agents.  If in doubt, check with the FMC.

You might also choose to work with a Freight Forwarder in the destination country. This is particularly useful if you are moving to a country with unusual rules for import, or if English is your second language and you are moving someplace which speaks your mother tongue.

The Freight Forwarder might also be the Origin Agent, the Consolidating Warehouse, and/or the Move Manager.

 

The Consolidating Warehouse

To move internationally, loose household goods and personal effects normally must be containerized into some type of larger shipping container.  If your things do not exclusively occupy an entire shipping container, your goods will need to be loaded or co-mingled into a container with other cargo. This decision will be made based on the volume of your shipment, and the location of the origin.

In this case, your goods will be detained in a warehouse to wait until there is enough cargo heading to the same destination to fill a container. This is called the Consolidating Warehouse. If you live near a port city, this will probably be the same warehouse as the Origin Agent (but not necessarily). If you live far away from the port, your goods will be sent by truck to the consolidating warehouse.

For the most part, this will be “invisible” to you, although it is quite possible that goods will seem to move in the “wrong direction” before being loaded onto a ship.

For example, cargo from Cleveland, Ohio to London, England might be moved to Chicago, Illinois to be loaded into the container there.

To expedite the transportation and delivery of your household goods, it is best to use a consolidation warehouse that handles a significant amount of cargo volume between the origin and destination points of your move. 

The Consolidating Warehouse can also be the Origin Agent, The Freight Forwarder, and/or the Move Manager.

 

The Export Port

This is the actual port where the container is brought (already loaded and sealed) to be loaded onto the ship. It is also known as the Port of Embarkation or POE. For all practical purposes, this means nothing to you, as you won’t be dealing with it in any way.

The only important thing to consider in your price quote comparisons is if the port fees and Terminal Handling Charges are included in each estimate. These will usually be listed as OTHC (Origin Terminal Handling Charges) or Origin Port Fees. From the USA, these fees are regulated and are usually relatively low.  They are almost always included in the estimated price, however it is worth checking to see to be sure.

Under NO circumstances should you ask for, or accept, a price “from port”! If you want to save some money by bringing the goods somewhere, ask for the price “from warehouse”. Nothing goes to the port that is not already loaded into a container, sealed, and cleared from Export Customs.

 

The Ship Line

This is the company that owns the ship. They will issue the “Master Bill of Lading” or “Seaway Bill of Lading”. For the most part, this will be invisible to you however it makes good sense to ask which ship line your goods will sail on, for two reasons:

• To make sure the quote is based on actual rates, and not a “guess”
• To allow online tracking direct with the ship line

It is also a good idea to understand a little about international shipping, and the “rules of the seas”.

International shipping and Ship Lines, are crucial to the world economy. Ship Lines move commercial cargo, military equipment, and anything else that needs to be moved from one country to another.

Since countries (and economies!) need Ship Lines, their ocean going vessels are given special allowances and privileges:

• Ship Lines have the right to overbook, and “roll” cargo to the next available ship. Any associated costs get passed on to the shipper (that’s you!)
• Ship Lines have the right to declare “End Of Voyage” in the event that the destination port is not available due to war, strike, or other unseen event. Any extra charges get passed on to the shipper (that’s you!)
• Ship Lines have the right to jettison cargo (throw it overboard) in the event that the ship gets damaged or might sink otherwise. If this happens, everyone whose container does not get jettisoned must pay for the containers that do get jettisoned. (This is pretty rare, by the way).
• Ship Lines can change schedules, routes, or almost anything else in the event that they need to (even if the need is strictly financial). You know who pays for this by now, right?
• Ship Lines are not responsible for any damages to cargo, or any related damages caused because of a late arrival, or no arrival of the cargo.
• Ship Lines must get paid before they will release the cargo.

This is slightly simplified, but you get the idea.

Ship Lines do have some rules and standards, as well as some obligations, but by and large, particularly for the one-time shipper, they are mostly untouchable. So make sure you have some extra money on hand in case of tidal wave or port strike. Usually another 10-20% is enough to cover it, and these instances are rare and easily verifiable (by asking the Ship Lines directly, or getting the Ship Line Bill).

The most important thing to remember is that Ship Lines work on a “highest priority” basis, and Household Goods (what you are shipping) is the lowest priority.

The Ship Line might also be the container line (see below).

 

The Container Line

The Container Line is the company that rents the ocean container. This may or may not be the same as the ship line, but for all practical purposes it won’t make a difference to you.

 

The Destination Port

This is where the goods are finally unloaded, in the country of destination. It is also known as the port of debarkation or POD. You will usually have no dealings with the port however you will owe them money!

It is very important that you check your quote to see that it includes destination port fees and Terminal Handling Charges, or at least shows what they will be.

Note – It is standard in international shipping to exclude destination port fees.

These fees are usually due in the currency of the destination country, and will often times be listed as not included. The quote you accept should include them, or show what they will be. Even if they are not listed, you must pay them, regardless of the amount.

In some very rare instances (usually third world countries) it is impossible to know in advance. You can always check with a shipping company in the destination country to see if they can tell you what those fees will be, and arrange your shipment through them.

If you can’t find out the amount of the destination port fees in advance, expect them to be $1000-$2000 or more, no matter the size of your shipment.

 

Customs Bonded Warehouses

This is the warehouse where your goods will be held until they clear through customs. Customs is a government entity entrusted with enforcement of a nation's security, laws and internal regulations to collect and protect import-revenues, and to regulate and document the flow of international commerce into and out of a country.

How customs clearance is handled will vary from country to country. For example, in Canada, the shipper must be present when the goods arrive. In the USA, an entire container is cleared through customs at once, even if there are multiple shipments in the same container. In some countries, containers with more than one shipment must be unloaded, and each shipment cleared through customs individually.

It is important to find out how this process works, and what time limits you have before demurrage, storage, and/or other charges begin to accrue.

 

The Destination Agent

This is the local moving company in the destination country that will handle the customs clearing procedures, dealings with the port, and delivery to your residence.

You can use this company to arrange for the entire shipment, although it is standard to use a company in the country of origin. If you are moving to a country with unusual laws regarding personal import, or that speaks your language, it might make sense to choose the destination company to arrange your move.

It makes sense to find out who the destination agent will be when getting your quote, for the following reasons:

• To make sure the quote is based on a real figure, and not a just a guesstimate
• To check the reputation and references of the company that will be handling your goods at destination
• To ask any questions regarding import duties, restrictions, exemptions
• To find out about location specific concerns about access/egress limitations (Is “such and such” a city that is accessible to a 40 foot container? Do most places have elevators big enough to fit my super-sized sofa or California king sized bed?)

 

The Move Manager

This is a term I use to represent a function which can be done by any of several people or companies.

In simple terms, this is your salesman. This is the company with whom you sign the contract (or agreement, or estimate), and who will be sending your bill. This is the company you will turn to in the event of any claims for damages, updates on your shipment, or questions in general.

All of the other entities involved will be “employees” or “subcontractors” of the Move Manager. Since your agreement is with the Move Manager, any problems or concerns will need to be addressed to them, and any disputes will need to be settled with them.

It is a very good idea to use a Move Manager that will also be performing one of the other functions, for the following reasons:

• Ease of communications (between the move manager and the involved parties)
• More direct responsibility
• Less overhead (since the Move Manager is making money doing what they do, they won’t need to add extra for handling the entire thing.)

The International Shipping Company you chose will be the Move Manager, however I want to show this as a separate function, because to the consumer, it appears to be a separate function (from the other jobs defined above).

 

A Broker

A broker is a Move Manager that does not do any of the other work. This is not to be confused with a Freight Forwarder who might subcontract the origin agent and the destination agent, because the Freight Forwarder is doing something vital to the International Shipping process (even if you don’t see it being done).

Generally speaking, an international broker is an unlicensed entity. In most countries, this is illegal, but since International Shipping is such done by such a (relatively) small amount of the general population, there is usually no enforcement, until many, many complaints have been filed.

Since a broker is not doing any of the actual required work, his price will be higher than that quoted by any of the other companies he uses, assuming that company uses the same set of services as the broker.

However, often brokers will give seemingly lower prices because:

• They may not use the same quality set of services that another might choose.
• They may not check actual costs until after you have chosen to use their services, and then raise the prices through some loophole in their agreement.
• They do not pay any of the needed fees to be properly licensed.

Because of this, a broker might give what appears to be the lowest price, but what ends up to be either more expensive, or just a lower quality of service (more damages, more delays, more problems, more $$$)

More importantly, a Broker has no one checking his financial stability. If you pay the broker, and he doesn’t pay the ship line, you don’t get your goods! The Federal Maritime Commission requires a bond, and other industry trade groups check the financial stability of member companies (FIDI/FAIM, for example).

 

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Ed Singer is an Import/Export expert at Sonigo International Shipping, where he assists customers worldwide to arrange problem-free international moves. 

Based in Israel, Sonigo is part of UTS Unigroup and is a FIDI/Faim registered company.  FIDI is the largest global alliance of independent quality international removal companies; FAIM is the only quality standard for the international moving industry.

 

Ed Singer
Sonigo Intl Shipping
Ashdod, Israel
Tel: 972 8 6111-222
Fax: 972 8 6111-223
Cell: 972 52-611-9674
Skype:Ed.Singer.Israel
Email: Ed Singer
US Toll Free: 1 (866) 978-5224 or (201) 535-4703
UK Free Phone: 0 800 097 5563