Freight Forwarder

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A freight forwarder, or forwarding agent known as a Non-Vessel Operating Common Carrier (NVOCC), is a person or company that organized shipment for individuals or corporations to get goods from the manufacturer or producer to a market, customer or final point of distribution.

A forwarder does not move the goods but acts as an expert in the logistics network. They can use a variety of shipping modes, including:
– Ships
– Airplanes
– Trucks
– Railroads

MIDDLE MAN
MULTI MODA

INTERNATIONAL TRADE

International freight forwarders typically handle international shipments. They have additional expertise in preparing and processing customs and other documentation and performing activities pertaining to international shipments.

Information typically reviewed by a freight forwarder includes:
– Commercial Invoice
– Packing List
– Shipper’s Export Declaration (PEB : Pemberitahuan Ekspor Barang)
– Bill of Lading, or Airway bill.
and other documents required by the carrier or country of export, import, and transshipment. (e.g. Certificate Of Origin, IMO Class, Quarantine Certificate)

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Other required documents for arranging international trade:
1. P.O or contract.
2. Methods of payment: Receipt of payment (T/T), L/C, etc.

Forwarder responsibilities included advice on documentation and customs requirements in the country of destination. His correspondent agent overseas looked after his customers’ goods and kept him informed about matters that could affect movement of goods.

BILL OF LADING

What document does freight Forwarder issue?
Freight Forwarder would issue a BILL OF LADING or AIR WAYBILL for the shipments he handles. B/L is NEGOTIABLE in international Trade. While AIR WAYBILL is NOT NEGOTIABLE.

B/L is a document issued by a carrier (or his agent) to acknowledge receipt of cargo for shipment.

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AIR WAYBILL

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An air waybill is a receipt issued by an international airline for goods and an evidence of the contract of carriage, but is not a document of title to the goods. Hence, the air waybill is non-negotiable. This is stated in the air waybill.

By accepting a shipment an IATA cargo agent is acting on behalf of the carrier whose air waybill is issued.

AWB is 11 digit numbers, the first 3 numbers is the airline code.

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IATA

International Air Transport Association is a trade association of the world’s airlines. It consists of 265 airlines, primarily major carriers, representing 117 countries or 83% of total air traffic.

The IATA supports aviation with global standards for airline safety, security, efficiency. It helps formulate airline industry policy and standards.

IMPORTANT POINTS

Important information we need to pay attention when arranging a shipment. These information we need to put into the documents.
1. Shipper (Seller)
2. Consignee (Buyer), Notify Party
3. POL = Port of Loading. Airfreight: Airport of Departure.
4. POD = Port of Discharge. Airfreight: Airport of Destination.
5. Term of shipment
6. Carrier & moda of transportation. Airfreight: FLIGHT/DATE.
7. Latest shipment date.
8. Presentation of documents within….. days after B/L date.
9. Number and kind of packages.
10. Description of goods.

L/C

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L/C: Letter of Credit (also known as Documentary Credits), is a letter from a bank guaranteeing the a buyer’s payment to a seller will be received our time and for correct amount. In the event that buyer is unable to make payment on the purchase, the bank will be required to cover the full/remaining amount of the purchase.

L/C is governed by rules promulgated by International Chamber of Commerce known as UCP 600 (Uniform Customs and Practice for Documentary Credits).

Because a L/C is typically a negotiable instrument, the issuing bank pays the beneficiary or any bank nominated by the beneficiary.

Issuing bank – – Buyer
Beneficiary bank – – Seller

Rules:
– INCOTERM – – term of shipment.
– UCP 600 – – L/C.

INCOTERM

INCOTERM: International Commercial Term, a.k.a Term of shipment:
EXW = Exworks
FOB = Free On Board
CFR (also known as CNF) = Cost and freight
CIF = Cost, Insurance and Freight
DDU = Delivery Duty Unpaid
DDP = Delivery Duty Paid

RESOURCES: Wikipedia, Investopedia, IATA, letterofcredit.biz

EXAMPLE

Mr. Adi Satria, Sales Manager of PT. Karya Jaya Utama, at Rungkut Industri XXX/309 Surabaya, got an order from:

1. Great Arrows Trading Ltd., 31st Suriya Sekera Street, Colombo, Srilanka. The company’s product is kerosene stove. 1,512 unit kerosene stove into 12 pallets. Gross weight 9,080 kgs. Price per unit (FOB Surabaya) USD 25.00. Using L/C, term of shipment is FOB Surabaya. Surabaya/Colombo. The order would fit into 1 x 40’HQ. Latest shipment date is 5 January 2017.

2. Super Kitchen Ltd., 15th Capt. G. Raiya Rd., Dhaka, Bangladesh. 2,268 unit kerosene stove into 18 pallets. The order would fit into 1×20′ (6 pallets gross weight 4,540kgs) & 1×40’HQ (12 pallets gross weight 9,080 kgs). Using L/C, term of shipment is FOB Surabaya. Latest shipment Date 7 January 2017. Price per unit USD 25.00.

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