Tips, Tricks for the everyday Forwarder
Posts tagged container
TEU. Sounds rude.
Jan 23rd
Frankly, what’s a TEU? Sounds strange..
A TEU actually stands for Twenty-foot Equivalent Unit. Which, actually stands for the regular 20′ containers you find in container ports all over the world.
More on TEU here.
Officially: it’s a 20-foot (6.1 m) long shipping container. What about those 40′ containers? They are referred regularly as 2 TEU instead.
The economy of a country is usually viewed from the container ports of the country, with respect to import/export business. Therefore, TEU is a way to judge the profitability of a container port, based on the quantity of containers every year.
Here’s a list of the world’s busiest ports.
Make sure you learn this, because this term is used fairly regularly in the shipping business! Don’t show your weakness by asking ‘what’s a TEU?’ 
You’ll thank me for saving your day 
Demurrage = Hell
Sep 8th
Have you ever did a shipment, and encountered demurrage fees? If you do, you sure as hell know that you should avoid it, evade it, run away from it, and just totally stay away from the D word as much as possible.
Why? Why the fear of this simple yet cool word?
Let’s just focus on the example of shipping a container. Sending a container and the container got ‘stuck’ at the port for some reason or another? Yeah that sure as hell suck. Why would a container get ‘stuck’? It really depends. On some occasions its because of Customs, some others might be due to some issues with the container or the goods themselves.
Whatever the case, demurrage fees are incurred when the container stays in the port for too long. The port will then charge a ‘fee’ for putting the container over the -free parking duration provided-, and they charge a fixed rate per day. If you think the fee is nothing, think again.
There are cases where they can’t settle the payment for the container, and therefore cannot obtain the Bill Of Lading document from their supplier. (Read more about Bill Of Lading here.) This is one of the worst cases that can happen to you.
Lets do a simple example: Buyer A requests for shipment from Supplier B, and Supplier B does a CIF shipment to Buyer A. Supplier B waits for Buyer A to complete full payment before the item is released to Buyer A. Buyer A then has some problems with their company, and thus can’t afford the payment. Assuming demurrage fees for Buyer A’s port is $100 per day, a month delay will therefore costs approximately $3000 extra for a shipment. Now think about it, a full container might costs about 2000-4000 for a delivery to anywhere in the world. Now add another extra $3000 and the fee just doubled. Throw in Sales Tax and Import Tax, and add the price of your goods themselves, thats a whole whopping figure.
If Buyer A delays for too long, the demurrage will keep going up. It will reach a point where the price becomes so expensive that the container just stays stuck in the port with the goods! Yes, that happens everywhere, everyday, all the time. It’s really common. Now looking at those ports with many containers, have a self doubt and think about how many containers are left-over containers instead.
Tip: Always make sure everything is planned well ahead for any shipment!
Bill of Lading
Sep 7th
One of the most feared and respected document in the history of sea freight, the Bill of Lading, or B/L or BoL or just BL.
What the heck is a “BILL OF LADING”?
You have no idea.
Today we are going to talk about the Original Bill Of Lading and the Surrender Bill of Lading (the 2 most common B/L documents)
Original Bill of Lading.
A normal standard B/L document is created by the agent on the supplier side which then passes it to the supplier. Let’s imagine a scenario. Some company in Singapore wants to buy handicraft goods from Indonesia. They contact the supplier on Indonesia side, and negotiate on the pricing and the delivery charges. The supplier and the buyer then engages a logistics company or a forwarding company to help them with the shipment. The supplier will receive a Bill of Lading from the forwarding company.
Now, pause for a while, and ponder. What’s a bill of lading and what’s it purpose anyway? Well, it’s a document, that’s for sure. What it really does is that it is a vital document to ensure that payment has been received by the supplier in order for the buyer to obtain their cargo. It’s much like a middle-man that ensures that no one will be able to cheat the other party. The supplier must send the Bill of Lading through post to the buyer in order for the buyer to obtain the cargo at the port. Else, the port will NOT release the items to the buyer. That way, both side ‘loses’ I guess. Buyer can’t receive their items, and the supplier already delivered the items without receiving payment… The best of course, is the buyer paying the supplier promptly. The supplier will then send the B/L document to the buyer, for cargo retrieval at the port.
Bill Of Lading–img–
So back to the scenario, assuming the buyer pays the supplier, and the item has already arrived at the seaport of Singapore. The buyer can then engage a haulage company to bring the container out of the port. The buyer must give the B/L document to the haulage company for retrieval. The port will not release the cargo otherwise. So it will be stuck at the port until you could finally pay the supplier, which you have to pay the port additional fees for holding your items! $$$$$
What about surrender B/L? This is an interesting one.
Some companies don’t wish to go through the trouble of sending and receiving a B/L. So, they can contact the port directly (in our case it’s the seaport of Singapore), and notify them that they wish to deal it with surrender B/L. For surrender B/L, the buyer is not obliged to pay first; they can take the items out of the port without paying the supplier first. This tends to be more dangerous for suppliers… But hey, I guess there are all kinds of people in the world aren’t there. Surrender B/L tend to incur charges from the port due to processing.
There you have it. Original B/L and Surrender B/L. Quite a mouthful!
Have a great evening guys.
Invoice and Packing List
Sep 7th
I had a client that caused major issues recently, due to some minor mistakes made by the client. The client was sent documents regarding the packing list and the invoice of the items being shipped for verification. She verified quickly and told me that everything is valid.
When the container arrived at the local port (this is an import shipment), customs officials are suspicious of the figures provided by the invoice; the amount is too low. After contacting the client about this, she re-checked the document and found out that the invoice is actually invalid; the amount stated is wrong and there are extra items being charged.
Who’s the party to blame? Supplier for writing the wrong information? Or is it the Consignee for not checking the documents properly? In my own opinion, it’s actually the client’s fault.
Simple example: When you buy something to eat and you pay, the change you got back – do you check the amount? If you don’t, you are actually similar to the client. One should always check the change being returned, the amount being paid, and the goods being received. You should check everything. You can’t really blame them for giving less when you actually did not check do you? Some stuff are common sense.
Money
In the client’s case, if the customs does not believe in the client’s plight, she will have to pay the full import duty instead of the waiver due to Form D (COO with import duty waiver ability). She might have to pay a fine too, for causing all the troubles. A very expensive lesson I believe.
RULE OF THUMB: ALWAYS CHECK EVERYTHING BEFORE YOU COMMIT.
