Tariffs and Duties

Customs clearance often entails the payment of taxes, duties, and tariffs, which can vary greatly depending on the country of origin, type, quality, and value of goods, trade agreements, and diplomatic relations. Dealing with tariffs and duties can be a daunting process, making it important to conduct extensive research. For example, you’ll need to find out how to classify goods correctly to ensure you are paying the correct amount. This involves identifying the specific tariff codes for the goods you are importing. Under the system maintained by WTO, the classification of goods depends on factors such as intended use, composition, and description. Once you have identified the correct code based on factors like the above, you can check the duty rate which corresponds to that code.

Compliance Requirements

Freight forwarders must comply with a range of standards and regulations to ensure a smooth clearance process and avoid the rejection or seizure of goods. Among the most important requirements are product safety, environmental protection, and sanitary and phytosanitary regulations. Additionally, European freight forwarders may encounter labor and human rights, export control, and intellectual property regulations intended to protect patents, copyrights, and trademarks.

Documentation

Customs clearance involves a lot of paperwork such as certificates of origin, packing lists, and commercial invoices. Other forms that may be needed include insurance certificates, permits and licenses, import/export declarations, and bills of lading.

Without the required forms, customs authorities can take various actions based on acting laws and regulations and the severity of non-compliance. They can request additional information, reject the shipment, seize the goods, or impose penalties and fines. As customs officials may need additional information, this can result in delays and extra costs such as demure charges and storage fees. If the customs authorities choose to reject the shipment, consequences can vary from increased costs for reshipping and financial loss to supply chain disruptions and damage to relationships with customers, supplies, and other parties.

Lastly, importers that fail to provide proper documentation can face legal liabilities such as revocation of export/import licenses, additional penalties, and even criminal charges.

Additional Considerations when Shipping to Customers in Developing Countries

In some countries, especially developing ones, customs clearance procedures may be slow and bureaucratic, with a lack of automation and modernization. This can lead to delays in the clearance process, resulting in increased costs and potential supply chain disruptions. Additionally, there may be a lack of clear and consistent regulations, making it more difficult for freight forwarders to navigate the customs clearance process. Other challenges that can make customs clearance time-consuming and challenging include language barriers, lack of infrastructure, shortage of skilled workforce, and limited availability of resources, including transportation and cargo handling equipment and warehousing.

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Air Cargo

Air cargo insurance offers coverage for damage and loss of goods due to improper loading and packaging and during unloading and loading. The policy typically covers cargo for perils such as burglary and theft, accidents, and natural disasters such as earthquakes, tornadoes, and hurricanes. At the same time, the coverage may have some exclusions and limitations, like the destination of the shipment, the types of goods transported, and preexisting damage such as weakness or inherent defects. Examples of exclusions are also missed deadlines and delays, inadequate protection of cargo, and unexplained shortages and losses.

Maritime Cargo

This type of coverage offers protection against damage or loss of goods while shipped by waterways or sea. The range of covered perils includes theft, accidents, and extreme weather conditions such as floods, hurricanes, and storms. Maritime insurance also offers coverage for collisions, fire, and loss and damage resulting from grounding. There are some exclusions and limitations as well, such as nuclear hazards, piracy, delays in transit, and unseaworthiness. The latter applies to vessels that fail to comply with safety regulations or are unfit for travel.

Road Cargo

Road cargo insurance offers protection for a wide range of goods shipped by road, including industrial equipment, high-value items, perishable and hazardous goods, and general merchandise. While the conditions can vary, covered perils typically include natural disasters, fire, theft, and accidents like overturns and collisions. Certain exclusions may also apply such as delay, intentional damage, civil unrest, wear and tear, and nuclear hazards.

Rail Cargo

European freight forwarders can also purchase rail cargo insurance to protect customers’ shipments against loss or damage during transit. This type of policy usually offers protection for perils such as fire, natural disasters, theft, and accidental damage due to derailment and collisions. Certain perils may not be covered, including political risks, loss of marketability or value, misconduct and deliberate damage, and improper packaging. Inherent vice is also a common exclusion when it comes to damage due to the nature of the items being shipped, including fragile and perishable goods.

Other Policies

There are other policies available to freight forwarders such as workers’ compensation, general liability, and errors and omissions insurance. The errors and omissions policy, for instance, offers protection against claims for negligence, oversight, and mistakes. It covers costs such as judgments, settlements, and legal fees. The general liability insurance covers property damage and injury resulting from freight forwarding operations while the workers’ compensation policy offers protection for illness and injury.

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What Steps the Shipping Process Includes?

Three main steps are order receiving, processing, and fulfillment. When an order is received, it can be fulfilled provided that items are in stock. Order processing involves verifying the customer’s name and address to ensure that all data is accurate. A picking list is created as a next step so that goods are prepared, packed, and transported.

Shipping Strategies and Methods

There are a number of shipping methods that international freight forwarders can use, including overnight and 2-day shipping, same-day delivery, and expedited, international, freight, and hybrid services. With freight shipping, for example, cargo is transported by sea, land, and air and via intermodal transport in Europe and globally. Retailers typically use this mode of transportation to ship products to distributors and fulfillment centers and to get inventory from manufacturers.

International shipping involves moving products from a country of origin to a country of destination located overseas or globally. This method is considered expensive and challenging for any e-commerce retailer. This is because the different countries have their own requirements, taxes, tariffs, and regulations to meet. Most e-commerce businesses choose to work with a fulfillment partner when shipping goods internationally.

Expedited shipping is basically any method that is faster than standard delivery. The turnaround depends on factors such as destination, carrier, and quantity. E-commerce retailers that use expedited shipping enjoy benefits such as improved customer satisfaction and loyalty and lower shopping cart abandonment rates. E-commerce retailers also use overnight shipping to ensure that packages and envelopes are delivered on the next business day.  Same-day delivery is another expedited shipping method whereby customers are guaranteed to receive orders on the same they goods have been purchased. Surveys show that over 60 percent of customers are willing to pay extra for expedited delivery while 56 percent of buyers aged 18 – 34 actually expect same-day delivery.

Costs

Costs vary substantially based on factors such as value of contents, carrier, shipping method used, destination, and package weight and dimensions. Dimensional weight is one factor that forwarders take into account. Shipping costs are typically calculated based on whichever is greater, dimensional weight or the weight of the package itself. Additionally, carriers typically charge handling fees which include costs involved in generating a shipping label, packing, moving inventory, loading products on a truck, etc.

In most basic terms, when retailers calculate the price point to sell, they account for credit card processing, packaging costs, the cost of goods, and shipping fees. The four categories above make for the total cost before profit margin. Some retailers offer free shipping to build customer loyalty and reduce cart abandonment. They are still able to stay profitable by offering loyalty programs, setting a spend threshold, or including shipping fees in the price of products.

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3D Printing

Experts predict that 3D printing will contribute to decentralized production, with print centres opening in markets worldwide. This means that commodities can be printed at the customer request instead of being moved over long distances. Replacement parts will no longer need to be shipped and kept in warehouses. Instead virtual warehouses will print parts based on data models.

Artificial Intelligence

AI is expected to transform the shipping sector and to boost productivity by 20 percent. New technologies are constantly developed and implemented, including human-machine interface, truck platooning, and predictive maintenance. Human-machine interface solutions include software and hardware that enable communication between the driver and the vehicle and improve safety and situation awareness. Truck platooning is used for convoys and involves automated support systems and connectivity technologies. The main benefits are improved efficiency and safety and reduced carbon dioxide emissions. New regulations are already being implemented at the EU level. The goal is to offer incentives to freight forwarders that adopt platooning technologies. These include flexible driving times, carbon dioxide bonuses, and tax and toll incentives. Regulatory changes are already under discussion with regard to multi-brand data standardization and light, steering, and brake signal transmission.

Artificial intelligence can help with route optimization and improve efficiency by accounting for staff, vehicle, and traffic data and environmental factors. This will result in reduced CO2 emissions, improved fuel efficiency, and lower last mile costs.

Internet of Things

IoT helps managers to monitor the flow of raw materials, inventory, energy consumption and efficiency, conditions, and performance of machinery. IoT technologies help improve operational safety, monitoring, supply chain planning, and theft detection. Among the many benefits are employee safety monitoring, lower shipping costs, and reliable and efficient truck tracking. New tools help managers to monitor conditions during deliveries, indoor temperature in warehouses, and the number of items at any given time.

Drones

The use of drones for last mile, urban, and rural delivery can help reduce traffic jams in cities and improve connectivity for regions with limited access and poor infrastructure. In the near future, unmanned aerial vehicles or drones are expected to account for about 80 percent of deliveries, thus reducing shipping costs by half for last mile deliveries. Unmanned aircraft offers a number of benefits such as efficient commercial services, security, and environmental protection. The 2015 EU Aviation Strategy has been developed to account for issues such as insurance and liability, safety, and data protection and privacy.

Experts also expect that in the future, drones will be used to search for missing employees, identify high-risk locations, and track assets.

Barriers to the Adoption of New Technologies

The Digital Supply Chain Information Survey reveals that the main barriers to the adoption of new technologies are lack of tech skills, company culture, budget limitations, and legacy infrastructure. Over 60 percent of logistics operators are expected to work together with technology and other external providers when offering services.

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When to Use

For European logistics operators that are moving cargo inland from port facilities, rail freight is a good alternative. This is especially true for countries with busy inland routes that cause delays. It is also best to use when large volumes are shipped in bulk, especially when time is a factor. While air transport is faster and used over long distances, it is not suitable for large volumes. Because of weight and size limitations, air freight cannot be used for oversized cargo.

Rail transport is also a good choice when shipping raw materials such as metal ore and coal and farm and grain products such as barley, rye, rice, wheat, soybeans, and corn. Other types of cargo that are often moved by rail include construction materials, chemicals, automotive parts, and fertilizers.

This mode is also suitable for shipping essential items such as lumber, cement, steel, plastic resins, and energy commodities. In addition, road transport uses three times more fuel, making rail freight both a cost-effective and environmentally friendly alternative.

Finally, it is a preferred option when customers require exact delivery time. Air transport, for example, is weather dependent, and airports often cancel flights in inclement weather such as storms, heavy snowfall, and hurricanes.

Factors That Determine Rates

A combination of factors determines rates, including distance, type of goods, dimensions, size, and volume, customs clearance, and insurance coverage. Obviously, distance is a key factor, making rail transport the cheapest when goods are moved over long distances. Dimensions of cargo include the weight and size of the commodities transported.  Nature of the goods is another factor, i.e. whether shipping fragile, flammable, toxic, or hazardous goods.

While rail is a cost-effective option to ship vehicles and automobile parts, it is clearly not the best for low-volume, high-value commodities, diamonds being one example. Rates also depend on proximity to delivery and pickup locations or where the nearest railway station is found. When cargo crosses borders, customs clearance is another consideration as import and customs clearance fees may be due.

The railway line or shipping company completes a railway bill, including details such as quantity and packaging, terms of loading and payment, and consignee and shipper contact information. An insurance coverage may also be required, which depends on the type of cargo transported.

Other factors that influence rates include market and intermodal competition and public policy. Demand is also crucial. Large population centres have vast markets where demand for commodities is higher, driving per-mile costs down.

Like other modes of transportation, the choice of rail freight is a trade-off between quality, safety, price, and speed. If time is not a factor and price is the most important consideration, then sea freight would be the best choice.

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Shipping Hazards

The choice of loading and shipping equipment depends on whether different hazards are present, including altitude, extreme weather conditions, compression, vibration, and shock. Shock, for instance, occurs when items fall down or shift or are struck by other items during transit. When cargo is under load, compression may occur in the aircraft, ocean containers, railcars, and trailers.

Weather may also cause damage to cargo because of humidity levels and extreme temperatures. IFA members assess shipping hazards in order to choose the most appropriate loading and packing equipment and mode of transportation. Special equipment may be used for irregular items, especially cargo that can be a health hazard. The same goes for configurations and labelling that prevent stacking and for cargo with odd dimensions that is at risk of damage during handling. Different handling methods can be used to handle cargo while in transit, including automatic, mechanical, and manual handling.

Types of Loading Equipment

Loading equipment comes in different types and varies in dimensions or size. Examples of loading equipment include large and small wood stacking frames, large and small covers, expendable pallets, Euro pallet cages, and Euro pallets. Euro pallet cages, for instance, make maneuvering easier and safer for staff and absorb bumps and knocks in logistics and retail locations. Euro pallets are also used for loading and weigh between 20 and 25 kg. Pallets help ensure worker safety, stable and secure storage of cargo, and smooth transit.

Types of Packing Equipment

Carriers use different types of materials for corrosion protection, including VCI film and bags. Corrugated paper is usually used as a separation material and paper padding. Cushion packaging is also suitable for cargo protection. Boxes on expendable pallets and non-palletized boxes are used as well, along with expendable pallets that are fitted with wooden stacking frames. Other types of packing equipment are wooden planks and crates that are made to measure and safe to transport abroad. Carriers also use timber saddles to move large items and oversized cargo.

Packing

Different packing methods and processes are used depending on the mode of transportation. For overland transport, carriers choose fitting cardboard box sizes and interior trays, based on the weight and quantity of cargo. Plastic film can be used to line up items and prevent boxes from soaking through in case that any oil remnants are left.

When products are shipped in layers, corrugated paper and honeycomb boards are used to protect cargo.In addition, strapping film may be used to ensure that the items are firmly affixed to the tray and placed into boxes. Plastic bands are widely used to seal boxes before shipping. When multiple products are transported in a single crate, padding is placed between them to prevent damage from occurring.

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What exactly is lean logistics

Lean logistics is a supply chain process which can help the members of the freight forwarding association reduce the costs for their services, improve their overall performance, speed up their services and create a more positive customer experience.

The term “Lean logistics” first originated in Japan, and can be defined as a process which allows for the efficient identification of time, effort and material wasting processes included in the supply chain. By identifying and eliminating these problems, the members of the international freight forwarders network can start offering much faster and cheaper services. In other words, lean logistics is the removal of any wasteful touchpoints, processes or packaging from the supply chain.

With the latest boom of online commerce, when more people are choosing to buy products online and expect the fastest and cheapest possible delivery by the list of logistics companies, implementing lean logistics allows for a vast improvement in the storage and distribution and the national and international freight forwarding services provided, so that the expectations of the customers are met.

By removing any unnecessary processes and materials involved in the process, the companies from the freight forwarders association can help minimize the delays and the wait time, as well as the shipping and delivery costs.

What are some of the advantages of Lean logistics

One of the main advantages of implementing lean logistics by the companies from IFA is the improved inventory management.  This system helps to minimize the waste caused by excess inventory as well as the risk of upsetting the customers due to stocking insufficient inventory.

With lean logistics being applied by many companies from the European network of transportation, the data collected allows for the removal of any redundancies, keeping tighter stocks and ensuring the customers’ production lines can work seamlessly without too much waste from holding inventory for too long. In other words, lean logistics can help reduce inventory risk significantly.

With lean logistics, the list of logistics companies can remove any unnecessary and wasteful steps and processes which can cause a shorter lifecycle of the goods. This no doubt affects the profitability and efficiency of the customers and of the international freight forwarders.

Another benefit is the reduction of the space needed for storage and distribution. By reducing the size of the warehouse space, the members of the freight forwarders directory can reduce the costs and investments for storage space and maintenance needs too.

In conclusion

If the European logistics companies manage to apply lean logistics properly and efficiently, and remove any redundant and wasteful processes from their supply chain management, the benefits for them and for the customers and end clients are plenty – including lower operation costs, higher profits, better efficiency and time management as well as faster shipments and deliveries and happier end clients.

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Such a system will help the forwarders throughout Europe to monitor not only the location of each smart container but also monitor other factors which can affect the condition of the cargo including the temperature, humidity levels, vibrations, shocks, as well as the opening and closing of the doors.This smart tracking system will ensure that the members of the International Forwarders Association know when the container is expected to arrive and will make the customs services faster and easier as well.

It is the lack of complete control over each shipment which has been causing delays and other problems for the members of the international freight forwarders network and for the entire distribution and supply chain.

It is a fact that on a global level, about one-third of the foodstuff gets spoiled before it reaches its end destination and the consumers. This amounts to about 1.3 billion metric tons of food, according to the Food and Agriculture Organization of the UN. A large percent of this food perishes while it is being forwarded to and in developing countries. In many cases, the deviations in the temperature of the refrigeration transport containers and vehicles is the cause for this huge loss.

This is why more international freight forwarding companies are starting to use smart containers for proper monitoring of the conditions of the foods during transportation.

The German Federal Ministry of Education and Research has created a consortium including 22 partners who are working on the research and change of the logistical processes of making shipping containers smart.

The system being used by the list of logistics companies uses 3G connectivity which is faster than the previous two generations of wireless mobile communication technologies.

Before the technological limits such as the lack of cloud connection and bandwidth limitations made such real-time tracking impossible for the containers when they were not on a truck.

Today, Freight supervision Units (FSU) are being placed on the containers themselves. These devices allow for external communication via an internal sensor network. Depending on the types of cargo being forwarded by the European logistics companies, different software bundles can be used to help with decision support or provide a customized food shelf-life model for the specific goods.

With such specialized software, the forwarders throughout Europe and the freight forwarders around the world will be able to receive alerts in real time in case a temperature change occurs in the container so that the customer can be informed directly about its status.

The main advantage is that the customer can react to such a potential problem quickly, and order new goods on time. Before this technology was implemented, the customer would find out that the goods are unusable only after they were delivered.

With this new smart technology, the quality of the goods can be monitored at all times, and the overall losses could be reduced from 30% to 20%.

This is excellent news for the members of the freight forwarders network, as well as for the customers throughout Europe and the world.

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This is why the international freight forwarders always strive to do the best to optimize it for your best interest.

Why is the packaging so important for the freight forwarders network and for our customers?

Proper packaging of small shipments, complete loads and oversized cargo is essential not only to protect the goods and cargo from damage and contamination but is also crucial for the goal of achieving green logistics by the member companies of the European network for transportation.

Here are the factors which the European logistics network take into consideration when packing your shipments

The packaging materials used

The international freight forwarders network uses a wide range of packaging options suitable for all kinds of cargo and goods, including those which require specialized transportation, shipments of hazardous goods and for their distribution.

The experts from the international freight forwarders association carefully study each step of the process in order to identify the potential risks for the shipments of all international freight services they provide. Such risks can include environmental, mechanical and other factors during the loading, shipment, storage, and distribution of the goods or cargo.

Of course, the cost of the packaging materials used by the freight forwarders association is also a vital factor which is why the risks of damage are assessed in order to find the best-priced option for the customers of the European logistics services.

Optimizing the space by the freight transport association

The forwarders throughout Europe are well aware that the better the optimization of the space during the transport and storage of the goods – the lower the price for the services, such as contract logistics, integrated transport, and the European groupage services will be.

By ensuring that the packaging is compact enough and that the warehouses and transport vehicles are properly loaded, the freight forwarders Europe guarantees that the international freight forwarding services provided are at the best possible prices for the customers. By providing pallet shipping and combining intermodal transportation services, the freight forwarders also help reduce the resources needed and the shipment time for the forwarding storage and distribution of the goods.

The dimensions of the packaging

The list of logistics companies will make sure that the packaging used for your goods or cargo is as compact as possible, in order to reduce the price of the services provided. Plus, the lesser space there is during the transport, the lower the chance of the goods or cargo being damaged.

For larger loads, we offer palletization, to protect the goods, and to make the loading and unloading processes faster and more efficient.

The companies from the freight forwarders directory will help choose the most suitable dimensions of the packaging in order to ensure that they take up minimal space and that the price for the services provided is as low as possible.

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This allows them to pack them properly and to organize the care for those products which require special conditions for storage or transport, such as temperature levels, humidity and so on.

The proper preparation is vital for the freight forwarding services.

Here we will discuss all the basic details which the companies from the European network for transportation need to know in order to properly organizing the freight forwarding.

1. The type of cargo or goods – whether they are fast-moving, or other. This is essential because fast-moving goods require special vehicles which comply with certain requirements such as temperature and humidity levels as well as others.

2. The weight of the cargo needs to be estimated prior to or during their receipt. This includes the net weight of the cargo as well as the gross weight along with the packaging and other accessories used for their transport.

3. The dimensions of the cargo need to be known so that they can be properly fitted in the containers and vehicles for the groupage services and for the distribution logistics.

4. The next detail is the number of units. This is also important for the proper storing, packing, loading and unloading of the cargo.

When the volume of the cargo is small, the employees of the European logistics association can offer the customers a groupage transport service. In case the volumes are large and are sufficient to fill an entire container or vehicle, a service such as complete loads is offered.

5. The international codes for the products are another essential detail when preparing goods for shipping. They allow for easy identification of each type of goods during customs and other checks. The classification of the goods via numbers and codes makes it easier to identify the type of goods being transported, not only by type but with more specifics.

6. The employees of the freight forwarders directoryneed to get information about the preferences which the customers have regarding the type of transport to be used for the forwarding. This will allow them to choose the most suitable vehicle and make the best offer for forwarding. The type of transport also depends on the price which the customer is ready to pay for the services. Water transport is the cheapest type of transport. The European network for logisticsoffers express road and other transport at competitive prices.

7. The type of delivery preferred by the customer at the final destination of the freight forwarding. This is the question which all employees of the European logistics companies ask in order to properly plan and prepare the freight forwarding service. Apart from the delivery to a specific port, warehouse, office, or another place in any city or European country, the customers can also specify whether they need a door-to-door delivery service which will save them a lot of time too. The loads can be loaded from the premises of the customer (factory, office, warehouse or other) and delivered to the warehouse or office of the recipient.

8. Whenever it is necessary to prepare the documents for export or import in the cases when the freight forwarding services include crossing the EU border into third countries, the international freight forwarders can provide this services for the customers as well.This can save them a lot of time and effort. This detail needs to be clarified prior to the forwarding in order for all the necessary documents to be prepared in a timely manner for the shipment.

Based on all these details, the employers of the freight forwarding companies prepare their best offers for the services provided. The offers are calculated based on all requirements regarding the terms of delivery, any special conditions required for the forwarding, the need for special packaging and other specific details.

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