EXPLAINED OCEAN SHIPMENT FLOW.
HOW IS THE PROCESS OF THE CARGO AND DOCUMENTS FOR SEA SHIPMENT?
This time, I would like to talk about the flow of marine transportation. Especially in this topic, I’ll
focus on FCL cargo. How is a cargo actually transported in marine transportation? It’s important
for beginners and apprentices of logistics to understand the flow of cargo and it’s paperwork.
First of all, let’s understand the overall logistics flow, then you will know what to do in each
section in the flow.
LOGISTICS FLOW
1. A product is made in the factory 9. B/L is issued when the vessel leaves the port
2. There’s a booking request from a customer 10. Marine transportation is done
3. A forwarder arranges all logistics 11. Arrival Notice is issued
4. All required documents are checked 12. Payment for A/N & B/L is submitted
5. An empty container is picked up 13. D/O is released from forwarder to importer.
6. An empty container is delivered to a customer 14. Import custom clearance
and a cargo is picked up
15. The cargo is released
7. The cargo arrives at a port
16. The cargo is being delivered.
8. The container is loaded onto a vessel
Cargo is made at the factory
First, let’s see the production work in a factory. It is quite rare for an individual person to use
containers for transportation, but some factories produce goods every day, and ship them overseas
every week. Our customers also transport various cargoes by marine transportation, including
automotive parts, frozen foods, paper, leather products, cosmetics, scraps, packaging materials, and
so on.
Booking to the Forwarder
Once the QC of a completed product is done, a factory’s shipping representative send a booking to
a forwarder.
At this time, the followings are informed:
・Container Type
・Container Quantity
・Pick-up date
・Loading place
・Unloading place
・Cut Off Date
・ETD
・ETA
・Free Time
・Direct or Transship
Forwarder arrange logistics
Based on the information, the forwarder prepares vessels, trucks, custom clearance, and confirms
necessary documents.
Basically, many customers request a one-stop logistics service which has advantages of having a
single contact to complete logistics to a forwarder.
Check necessary documents and information
And this checking the necessary documents is especially important. If any of information is wrong,
a cargo cannot pass through custom clearance properly nor board a vessel.
In addition, if a certificate of origin has a mistake, a cargo is not allowed for duty reduction. We
need special attention for paperwork mistakes.
Pick up the empty container
To pick up a cargo, we visit a container depot to pick up an empty container in the morning of the
cargo pickup or in the evening of the day before. Container depots are also referred to as container
vanpools.
The depot is stacked with lots of used shipping company containers that have been cleaned and
repaired.
When picking up an empty container, we have to be careful of the quality of the container. A poor
quality container is sometimes assigned even though we have booked a container grade A.
Our service is to ensure that our truck drivers check the quality of the containers they pick up and
deliver them to our customers.
Cargo Pick up
Once the empty container is delivered to a customer’s factory, we load cargo into it. A large scale
customer may use dozens of containers a day.
We calculate the time to load and also manages truck’s delivery schedule. The container may shake
greatly at sea, so it is important that cargo is not moved inside. It must also be lashed firmly.
Container arrives at the port
The container arrives at a port, where it is loaded onto a vessel. The term “Cut Off” is used for dead
line of container “gate in” at the port.
In addition, Container Return means that it has to go back to port to be loaded on a vessel. Before
the container is loaded on a vessel.
・AFR (advance declaration of exports – 24 hours before ETD)
・VGM (mandatory declaration of the total weight of the container)
and export custom clearance have to be completed. You have to apply a lot of applications before a
cargo is loaded onto a vessel.
Terminal situation
A really large number of containers are being collected in a terminal. Therefore, Cut Off must be
kept because enough time for loading and unloading in a port is necessary.
Container Lift On
When a container is loaded onto a vessel, it is lifted and loaded by a large crane called a gantry
crane. The total weight of the container is a major issue since it is being lifted.
Container Weight
Some costumers inquire whether a 40 feet container can carry twice the weight of a 20 feet
container, but it can’t. Keep in mind that cargo weigh is roughly limited to about 25 tons, whether
20 feet or 40 feet.
The space on the vessel
Like this, lots of containers are loaded onto a vessel. There is a limit of the space on a vesel.
Depending on the season, it can be difficult to keep a space.
B/L is issued
B/L is issued when a container is loaded onto a vessel. Let’s take a look at the flow.
B/L is issued by a forwarder, and it is sent to Shipper. During the time, payment for goods is made
between Shipper and Consignee.
For Original B/L, Shipper will send the original B/L to Consignee by a courier service such as DHL
or Fedex.
Thus, Consignee must obtain B/L to pick up D/O.
Ocean Shipment
A container is repeatedly loaded and unloaded at each port, while being rocked in a vessel on the
sea. A vessel is sometimes delayed due to the weather, but this can’t be helped.
Marine transportation can take a few days to arrive if it’s the close ocean, but it may take up to two
months if it’s a long route like Japan-Europe.
Arrival Notice is issued
Before vessel arrive to the port, Arrival Notice is issued and sent by an importer’s forwarder to
Consignee.
Arrival Notice has a number of costs, such as Terminal Handling charge and D/O fees, which an
importer has to pay.
Import Process
Payment for Arrival Notice
An importer must obtain D/O, which is a delivery note. So, the amount of money that is written on
Arrival Notice is payed to a forwarder.
Submit B/L
At the same timing of the Arrival Notice payment, B/L is also submitted. If it’s an original B/L, the
original document is submitted, and if it’s Surrendered B/L, a copy is submitted to a forwarder.
D/O is released
In exchange for Arrival Notice payments and B/L submission, an importer’s forwarder releases
D/O to Consignee.
Import custom clearance
In order for an importer to pick up a container, not only D/O but also import custom clearance must
be completed.
Documents such as Invoice, Packing List, and Certificate of Origin are entered into the system, and
a shipping person declares the import.
If there is no problem with the declaration, they issue an import permit, but if not, an inspection
will be required.
Container is released
Having obtained D/O and completed import clearance, consignee can submit D/O to container yard
and they pick up the container from the yard.
Container is delivered
A trailer arrives at the destination, and a cargo is unloaded. This is the end of delivery.
After all this process, the cargo is finally sent to the overseas destination.
Summary
How did you like it? It looks like we’re just transporting cargo in a container, but there are various
documents required in the process.
If there is a mistake in the documents, a cargo will not be transported smoothly.
Please understand the whole cargo and documents process so that you can make smooth
international logistics arrangements.
apprentice
be issued
be released
import
export
custom clearance
