Logistics
What are logistics?
Logistics are the processes needed to get your goods or services from their origin to their destination. Logistics goes beyond the mode of transportation. It also includes the legal arrangements, insurance, border requirements, and delivery.
What are the main steps and considerations for goods logistics?
Arrange the sale: The first step for international trade is to agree the terms of the sale. Contracts need to be drawn up. Various trade documents will apply including commercial invoices, getting Incoterms agreed, trade finance may be needed, and the mode of transport or shipping needs to be decided on too.
Prepare for export: After the terms of the sale are agreed the shipment needs to be packed, labelled, and documented appropriately. There may be additional requirements to be considered. Other requirements need to also be considered, Bills of Lading, Rules of Origin, selecting the right HS (Harmonized System) Codes, Tariff & Non-Tariff measures, Sanitary & Phytosanitary Measures, Technical Barriers to Trade. Warehousing costs at the port before and after shipping, container types, and potential restrictions for the shipment should be considered.
Prepare for import: Once a shipment has reached its destination, it will need to clear customs before it can be released either to the recipient or for further transportation. Customs clearance can depend significantly on where the goods are being shipped and the type of transportation chosen.
Deliver to buyer: Finally, once the item has cleared customs and been released from storage, the last step requires delivery to the buyer.
What are freight forwarders and other intermediaries and how can they help my business?
Freight forwarders and other intermediaries can significantly reduce the required work for an international transaction. Types of intermediaries include:
- Customs brokers and clearing agents: These are specialists in customs rules and procedures. They can help ensure import documents are correct and may assist with forwarding arrangements. To find a licensed customs broker, the first step is to search the national customs agency where the import will take place, as they frequently list registered brokers that can be contacted.
- Freight brokers: They match shipments with land transportation, helping you find a way to get a delivery to its destination on schedule, usually by truck or rail.
- Ship brokers: They match ship owners with importers or exporters that want to charter a vessel to transport their product.
- Freight forwarders: They help with all the above, assuming the entire logistical, legal, and financial responsibility of a shipment. Freight forwarders generally arrange everything from transportation and shipment consolidation to tracking or monitoring and delivery to the final destination. Most countries will have a trade association for Freight Forwarders to help you select the right provider.
Links to Supporting Information
Trade4MSME Guide Shipping
Trade4MSME Guide Trade Finance Introduction
Trade4MSME Guide Incoterms
Trade4MSME Guide Bills of Lading
Trade4MSME Guide Rules of Origin
Trade4MSME Guide How Do I Determine My Product’s HS Code?
Trade4MSME Guide Sanitary and Phytosanitary Measures
Trade4MSME Guide Customs and Border Procedures
The International Trade Centre’s (ITC) SME Academy Introduction to International Transport and Logistics. An online training course.
