Essentials of Freight Forwarding 5.1.pptx

Essentials of Freight Forwarding 5.1.pptx

1. Essentials of Freight Forwarding

2. REFERENCE

3. IMPORTANT DATES ASSSIGNMENT S – May 3 (Fri) MIDTERM – May 10 (Fri) FINAL EXAM: May 17 (Fri)

4. Essentials of Freight Forwarding P2 Commercial Documentation

5. Enabling Learning Objectives (ELO’s) Documentation Requirements: ▶ Identify Regulatory Requirements: Understand and identify the legal and regulatory documentation requirements for international trade in a given country or region. ▶ Explain Documentation Timelines: Explain the importance of adhering to specific documentation timelines and deadlines in international trade transactions. ▶ List Key Information: Compile a comprehensive list of essential information and data needed for international trade documentation. ▶ Distinguish Between Types: Differentiate between various types of documents required for international trade, including commercial invoices, certificates of origin, and bills of lading. Invoices: ▶ Create Accurate Invoices: Learn how to create accurate and compliant commercial invoices for international transactions, including details such as pricing, currency, and Incoterms. ▶ Calculate Duties and Taxes: Understand how to calculate and include relevant duties, taxes, and fees in international invoices. ▶ Invoice Language and Formatting: Learn the importance of presenting invoices in the appropriate language and format for the destination country. Export Documents: ▶ Prepare Export Declarations: Understand how to prepare and submit export declarations to customs authorities, as required by the exporting country. ▶ Master Bill of Lading: Learn how to complete a master bill of lading and understand its role in international shipping. ▶ Certificate of Origin: Describe the purpose of a certificate of origin and how to obtain one for export documentation.

6. Enabling Learning Objectives (ELO’s) Import Documents: ▶ Understanding Import Regulations: Gain knowledge of import regulations and documentation requirements of the destination country. ▶ Import Licensing: Explain the concept of import licenses and how to obtain them when required. ▶ Customs Documentation: Learn about customs clearance documents, such as import declarations and customs bonds. Transportation Documents: ▶ Bill of Lading Types: Understand the different types of bills of lading, including negotiable and non- negotiable, and when to use each. ▶ Air Waybills: Explain the role and importance of air waybills in air freight shipments. ▶ Packing List: Describe the purpose of a packing list and how to create an accurate and complete packing list for different modes of transportation. Electronic Data Interchange (EDI): ▶ EDI Implementation: Learn the basics of implementing Electronic Data Interchange for efficient and paperless international document exchange. ▶ Data Security in EDI: Understand the importance of data security and confidentiality when using EDI for international trade documents. ▶ EDI Standards: Familiarize with common EDI standards and protocols used in international trade, such as UN/EDIFACT and ANSI X12. Document Preparation as a Marketing Tool: ▶ Branding in Documentation: Explore how the preparation and presentation of international trade documents can be used as a marketing tool to enhance the company's brand image. ▶ Document Accuracy and Reputation: Understand how accurate and well- prepared documents can contribute to a positive business reputation in international markets. ▶ Document Automation: Learn about the benefits of document automation and the use of technology in improving document accuracy and efficiency.

7. The Complex Web of International Trade Documentation ▶ International trade involves numerous documents that must adhere to specific requirements based on goods, destination, transportation, and payment methods. ▶ Accurate documentation is crucial for smooth cross-border trade, compliance with regulations, and proof of transaction details. ▶ Filling out these documents correctly is complex, with varying requirements between countries and industries. ▶ Errors or missing documents can lead to delays, extra costs, and legal complications. ▶ Specialized software solutions have emerged to simplify the document generation process, reducing the risk of mistakes and streamlining the workflow. ▶ Extensive documentation requirements often involve multiple originals and copies, posing logistical challenges for exporters when dealing with various intermediaries and organizations. ▶ Despite digital advancements, many countries still favor paper-based documents, presenting logistical, financial, and environmental challenges. ▶ The role of software in simplifying documentation is crucial, offering efficiency, accuracy, and convenience. Future trends may include increased electronic submissions and international standardization of trade documentation processes.

8. The Significance of the International Invoice in Trade Transactions ▶ Currency and Exchange Rates: International transactions often involve multiple currencies. Exporters must specify not only the price of goods in the currency of their own country but also the equivalent value in the currency of the importing country. This necessitates an awareness of current exchange rates and a clear display of the chosen currency. ▶ Incoterms: The International Commercial Terms, or Incoterms, dictate the responsibilities and risks associated with the delivery of goods. Exporters must specify the chosen Incoterm on the international invoice, as it determines the point at which ownership and risk are transferred from the seller to the buyer. ▶ Customs and Regulatory Compliance: International invoices must adhere to the customs and regulatory requirements of the importing country. This includes accurately identifying the products, specifying their HS (Harmonized System) codes, and providing any necessary certifications or documentation for compliance with trade regulations and tariffs. ▶ Shipping and Transportation Details : In international transactions, the invoice should include comprehensive shipping and transportation details. This encompasses the mode of transportation, the port of departure, and the destination port, among other specifics. Accurate shipping information is crucial to prevent delays, clear customs, and facilitate the smooth movement of goods. ▶ Language and Cultural Considerations: An international invoice should be presented in a language that the importer understands. This could necessitate translations or the use of standardized, universally recognized terminology. Additionally, an understanding of cultural nuances is important to ensure respectful and effective communication in an international business context. ▶ Taxation and Duties: Taxation and duty- related information, such as VAT (Value Added Tax) or GST (Goods and Services Tax), must be included in an international invoice. Accurate taxation information is essential for compliance with the tax laws of the importing country and for the importer's claims for input tax credits.

9. Commercial Invoice ▶ An international shipment invoice is known as a commercial invoice and can be sent directly to the importer or indirectly through banking channels depending on the payment terms. ▶ The commercial invoice must provide a precise description of the products being billed, including the Harmonized System Number, due to customs clearance requirements. ▶ The terms of trade or Incoterms® rule used should be explicitly stated, following the International Chamber of Commerce guidelines to clarify responsibilities for various ancillary services and fees. ▶ Detailed notes of prepaid items should be included, such as international insurance payments for CIF or CIP shipments, to ensure accurate duty calculations. ▶ The terms of payment, whether it's a letter of credit, bank draft, cash-in- advance, purchasing card, or an open-account sale, should be clearly indicated. ▶ The currency for payment should be specified, with strategies for handling currency fluctuations discussed in our previous lectures. ▶ Essential shipping information, including departure and destination ports, shipping company details, shipment dates, box or container quantities, weights, and sizes, must be provided. ▶ Identifying information for involved parties, including seller- exporter and buyer- importer names, contact persons, addresses, and relevant details, should be included without local telephone access codes.

10. Pro forma Invoice ▶ A pro forma invoice is a commonly used international document, serving as a quote rather than an actual invoice. ▶ Due to the complexity of international transactions and the various cost factors involved, importers may request a pro forma invoice to estimate their final expenses. When an exporter requests payment through a letter of credit, the information from the pro forma invoice is used by the issuing bank to open the letter of credit, and it must match the final transaction documents. ▶ ▶ Careful attention is essential when creating a pro forma invoice, as any variance between the pro forma invoice and the final commercial invoice may lead to discrepancies, requiring costly amendments. The pro forma invoice should mirror the final commercial invoice in terms of information, amount, and quotes from other suppliers involved, such as shipping and insurance. ▶ ▶ Including an expiration date in the pro forma invoice is crucial, as international transactions treat offer expiration differently from domestic ones, particularly under the United Nations Convention on the International Sale of Goods (CISG). ▶ In international transactions under the CISG, the offer in a pro forma invoice cannot be revoked by the seller (or buyer) before the expiration date, making it an irrevocable offer, with different rules than in many domestic transactions.

11. Consular Invoice ▶ A consular invoice is needed for exports to specific Latin American countries. ▶ It is a regular commercial invoice printed on consulate- provided stationery and made official by the consulate through stamping, embossing, or other procedures. ▶ Obtaining a consular invoice can be time- consuming, involving exchanges with the consulate. ▶ Countries that require consular invoices use them to forecast foreign currency needs and generate revenue through stationery and officialization fees. ▶ The requirement for consular invoices is diminishing and is often seen as a non- tariff trade barrier by exporters. ▶ As of June 2017, consular invoices were still required in about six countries, primarily in Latin America.

12. Specialized Commercial Invoices ▶ Commercial invoices are vital in international trade, recording transaction details for goods or services. ▶ Some countries, such as Canada, Mexico, New Zealand, Brazil, and Israel, mandate specialized commercial invoices printed on standardized forms. ▶ These forms meet specific criteria and are compliant with the country's customs regulations and legal requirements. ▶ The requirement is intended to facilitate customs procedures and expedite clearance, not seen as a trade barrier. ▶ Specialized international stationery printers provide these standardized forms. ▶ The use of such invoices simplifies the work of customs employees and enhances trade efficiency.

13. Specialized Commercial Invoices The utilization of specialized commercial invoices offers several notable advantages: ▶ Simplification of Customs Procedures: Standardized commercial invoices streamline the customs clearance process by presenting information in a structured and consistent format. This simplifies the work of customs officials, who can quickly locate and verify essential data, such as the product description, value, and origin. As a result, goods can move through the customs process more efficiently, reducing delays and enhancing trade facilitation. ▶ Enhanced Accuracy and Compliance: The use of specialized invoices helps ensure that exporters provide accurate and complete information. These forms often include fields for specific details required by customs, such as the HS (Harmonized System) codes for products. This not only aids in maintaining legal compliance but also reduces the potential for errors or discrepancies. Greater Transparency and Accountability: Standardized forms foster transparency and accountability throughout the supply chain. The structured layout of these invoices makes it easier for customs officials, as well as other parties involved, to understand the transaction and confirm that it aligns with international trade regulations. This transparency builds trust and promotes efficient trade relations. Consistency and Predictability: Specialized invoices provide a consistent and predictable framework for conducting international trade. Exporters can readily access and complete these forms, knowing that they meet the legal requirements of the importing country. This consistency aids both small and large businesses, as they do not need to tailor their invoices for different markets. ▶ ▶ ▶ Compliance with Legal Regulations: Using standardized commercial invoices helps exporters meet the specific legal requirements of the destination country. Some countries have unique regulations regarding invoices, and specialized forms ensure that exporters adhere to these rules. Compliance is essential for avoiding legal disputes and potential penalties.

14. Export Documents ▶ Governments may impose document requirements for exports to gather accurate data on outgoing products. ▶ Specific documents like Electronic Export Information (EEI) in the United States and the Single Administrative Document in the European Union serve this purpose. ▶ Export licenses may also be necessary when governments seek to control the export of certain goods or limit trade with specific countries for political reasons. ▶ These licenses are required in cases of controlled merchandise or embargoes.

15. Electronic Export Information ▶ The Electronic Export Information (EEI) is required by the U.S. government for exports over $2,500 per item category, except for exports to Canada. ▶ EEI is collected electronically by U.S. Customs and Border Protection or the Census Bureau. ▶ EEI replaced the paper Shipper's Export Declaration (SED) and helps tabulate exported products and their destinations. ▶ The EEI's definition of "exporter" designates the U.S. principal party in interest (USPPI) as the manufacturer, improving the accuracy of export statistics. ▶ The data collected is available through the National Trade Data Bank on the International Trade Commission's website with a subscription.

16. Single Administrative Document ▶ The Single Administrative Document (SAD) is required by the European Union for all exports. ▶ It can be submitted in paper or electronic form and must be filed where the goods are packed and shipped. ▶ The "owner of the goods" or their representative is responsible for filing the SAD.

17. Export Licenses ▶ Export licenses are government authorizations for specific product exports. ▶ Export licenses are usually required for national treasures, antiques, raw materials, or for political and military control. ▶ Several countries like India, Britain, France, Russia, and Turkey use export licenses to control the export of antiques and cultural artifacts. ▶ Some governments, like China, use export licenses to manage the export of raw materials like rare earths and phosphates. ▶ Export controls can be implemented for political reasons, such as the Ivory Coast banning cocoa exports in 2011. ▶ Export licenses are also employed for political or military objectives, notably by the United States. ▶ Various countries have export restrictions or controls, with over 50 countries identified by the OECD. ▶ The European Union, for instance, prohibits the export of personal data gathered on customers or consumers.

18. Fair trade in cocoa from the Ivory Coast

19. U.S. Export Controls ▶ U.S. export control policy has been shaped by historical milestones such as the CoCom agreement, the Export Administration Act, and the Comprehensive Anti-Apartheid Act. ▶ These milestones led to the creation of the Commerce Control List, which specifies which commodities and products can be shipped to certain countries. ▶ The list is published in the U.S. Export Administration Regulations (EAR) and was revised in 1996 to shift from a policy of "everything not explicitly authorized needs an export license" to "everything is authorized unless specifically prohibited." ▶ In 2002, the Bureau of Export Administration was renamed the Bureau of Industry and Security. ▶ U.S. export control policies focus on three elements: the product being exported, the entity purchasing it, and the ultimate destination of the product. ▶ Dual- use products, which can have both commercial and military applications, are subject to close scrutiny to ensure they are not diverted for military use.

20. Internet Encryption ▶ Businesses are increasingly interested in conducting international transactions over the internet, requiring data security for confidential information like credit card details. ▶ Encryption software is a means to secure data by scrambling it, making it readable only to those with the corresponding software. ▶ The United States government has historically classified encryption technology as sensitive due to potential military applications, placing it on the Commerce Control List. Initially, the U.S. government restricted the use of encryption software on the internet as it was considered an export, but certain entities like banks, health facilities, and online merchants were granted access. ▶ ▶ The Bureau of Industry and Security (BIS) now permits low- level "mass-market encryption" for export, but software with such encryption is still subject to BIS review. Software products containing low- level encryption remain listed in the Commerce Control List. ▶

21. The Product Exported The Bureau of Industry and Security (BIS) publishes the Commerce Control List (CCL), which lists products that concern the United States and may require export licenses. Each product on the CCL is assigned an Export Control Classification Number (ECCN), different from the Harmonized System Number, to determine the need for an export license. Products not on the CCL are classified as "EAR99" by the BIS, although some may still require licenses if under the jurisdiction of another government entity. The BIS provides the reason for each product's inclusion on the CCL, such as national security, anti- terrorism, or encryption. ECCN commodities may or may not require licenses based on the reason for listing and the destination country, with the BIS offering a Product/Country License Determination Matrix to assist exporters.

22. The Purchaser of the Product ▶ The Entity List. This list identifies people, companies, and organizations engaged in weapon proliferation, drug smuggling, or terrorism, and to which the U.S. government wants to control exports. Sales to persons or organizations on the Entity List require an export license. The Entity List is maintained by the BIS. ▶ The Unverified List. This list identifies individuals, companies, and organizations that are suspected of engaging in activities that. the BIS considers illegal. Before making a sale to a person on the Unverified List, the exporter must check with the BIS about possible issues. The Unverified List is also maintained by the BIS. In addition, the exporter must report a suspect transaction when. the transaction has elements that the BIS considers “red flags,”such as when a cash sale is made for a product that is generally. Purchased on credit, or when a product is sold to a company that. does not appear to be in the exporter’s main line of business. ▶ The Specially Designated Nationals List. The Specially Designated Nationals List contains the names of persons located. abroad with whom exporters are expressly warned not to do. business. These persons have been deemed to represent countries. to which the United States does not want to export, or they? represent companies or organizations engaged in terrorism or trafficking. Some of these companies are located in the United. States. The Specially Designated Nationals List also identifies. U.S. persons, companies, or organizations “whose export privileges have been revoked.” The list is maintained by the Department of the Treasury. ▶ The Debarred List . An exporter is expressly prohibited to sell to a person on the Debarred List, and a company that is contacted. (even for a domestic sale) by one of these companies must notify. the BIS. The Debarred List is maintained by the United States Department of State.

23. The Country of Import ▶ The Commerce Control List (CCL) determines whether a product with an Export Control Classification Number (ECCN) can be exported to a specific country. ▶ The U.S. has different export regulations for friendly and unfriendly countries, with embargoes imposed on certain products for select countries. ▶ Total embargoes prohibit any product exports to Cuba, Iran, North Korea, and Syria. ▶ Limited embargoes apply to other countries, including Belarus, Iraq, Libya, and Venezuela. ▶ When an export license is required, exporters need an Individual Validated Export License with specific terms and conditions, including a Destination Control Statement on related documents.

24. Deemed Export ▶ The U.S. Bureau of Industry and Security (BIS) regulates exports of products with potential risks to national security. ▶ BIS also includes "deemed exports," covering products sold to foreign nationals within the United States. ▶ Companies should monitor and control access to sensitive technology by foreign employees. ▶ Export licenses may be required to grant foreign employees access to controlled technology. ▶ Permanent U.S. residents are exempt from these regulations.

25. Fines ▶ Schlumberger Oilfield Holdings, a wholly-owned subsidiary of Schlumberger, a Curaçao-based company with headquarters in Sugarland, Texas, agreed to pay over $232 million for trading with Iran and Sudan. ▶ Hetran, located in Pennsylvania, manufactured a large horizontal lathe, which it sold for $800,000 to a company in the United Arab Emirates. Since Hetran’s president knew that the shipment was ultimately being sent to an Iranian company named Falcon Instrumentation and Machinery, he pleaded guilty and was sentenced to a fine of $837,500. ▶ Gary Tsai pleaded guilty to illegally export high- precision milling machines to his father, Alex Tsai, in Taiwan. These milling machines needed a Validated Export License that was not obtained. Alex Tsai was sentenced to two years in prison. ▶ Weatherford International conducted business in Cuba, Iran, Sudan and Syria through Weatherford’s subsidiary in the United Kingdom. Combined, Weatherford generated approximately $110 million in revenue from sales to these countries. The company was fined $100 million. ▶ EgyptAir Airlines Company, the flag carrier airline of Egypt, leased two Boeing 737 aircraft to Sudan. EgyptAir agreed to pay a fine of $140,000 for having re- exported the aircraft without a Validated Export License.

26. The Significance of End- Use Certificates in International Trade ▶ Legitimacy and Accountability: EUCs serve as a legal commitment by the importing entity, typically a government or authorized agency, to use the goods for the intended, legitimate purpose. This commitment holds the importer accountable and legally responsible for any deviations from the stated purpose. ▶ Preventing Diversion: The primary purpose of End- Use Certificates is to prevent the diversion of controlled goods for unauthorized or unacceptable uses. These certificates act as a safeguard, providing a formal mechanism for exporters to confirm the intended end use of their products. ▶ Government Oversight: In most cases, End-Use Certificates are issued by the importing country's government or relevant authorities. This adds an additional layer of oversight, as government officials evaluate and approve the intended use of sensitive items, thereby reducing the risk of misuse. ▶ International Agreements and Treaties: End-Use Certificates often align with international agreements and treaties that regulate the export and use of certain goods. Compliance with these agreements is vital for maintaining diplomatic relations and international trust. ▶ Security and Transparency: EUCs contribute to security and transparency in international trade. By ensuring the intended use of controlled items, they bolster the integrity of export controls and promote international peace and security. ▶ Preventing Human Rights Abuses: In the case of military equipment, End-Use Certificates are instrumental in preventing potential human rights abuses or misuse of such equipment, such as the use of weapons against civilian populations.

27. Enabling Learning Objectives (ELO’s) The Impact of a Significant Disruption in International Logistics: ▶ Assess the consequences of a major disruption in international logistics on global trade and supply chains. ▶ Analyze the vulnerabilities and risks associated with disruptions in international logistics. International Organizations: ▶ Identify the key international organizations that play a role in regulating and facilitating international logistics and trade. Understand the functions and objectives of these international organizations in the context of logistics. The United States’ Approach: ▶ Examine the strategies and policies employed by the United States in managing and responding to disruptions in international logistics. ▶ Evaluate the effectiveness of the U.S. approach in mitigating logistical disruptions. The European Union’s Programs: ▶ Explore the programs and initiatives implemented by the European Union to address disruptions in international logistics. ▶ Compare and contrast the European Union’s approach with that of the United States. Other Countries’ Approach: ▶ Investigate how various countries around the world approach the management of significant disruptions in international logistics. ▶ Analyze the similarities and differences in the approaches of different countries. Corporate Efforts: ▶ Examine the role of private corporations and businesses in managing and adapting to disruptions in international logistics. ▶ Evaluate the best practices and strategies that corporations employ to safeguard their supply chains during disruptions.

28. Introduction ▶ The 9/11 attacks highlighted the vulnerability of open economies to terrorism and marked a turning point in addressing terrorist threats ▶ The response shifted from reactive to preventive and systematic approaches, leading to unprecedented security measures. ▶ In the years following the attacks, the U.S., its trading partners, and international organizations introduced measures to prevent international terrorism. ▶ These measures have significantly affected the way international business operates. ▶ The need for enhanced security has given rise to corporate security management functions to protect international supply chains from criminal activities. ▶ Security measures imposed by governments and international organizations can be integrated with a firm's security activities in international trade. ▶ Although individual security measures may not be highly effective, their collective implementation has improved security in international logistics and increased focus on these efforts.

29. The Fallacy of One- Hundred- Percent Inspections ▶ Advocates of one-hundred-percent inspection propose inspecting all imported cargo to ensure safety and deter criminals. ▶ They argue that it is the safest method as nothing dangerous can enter the country. ▶ While it may act as a deterrent, this approach is largely ineffective for enhancing border security due to several reasons. ▶ One reason is that it is impractical and logistically challenging to inspect all incoming cargo. ▶ Additionally, it can create bottlenecks and disrupt trade flows, affecting the efficiency of the supply chain.

30. The Fallacy of One- Hundred- Percent Inspections ▶ Physical inspection of each container is time- consuming, taking about three hours per container. ▶ Assuming inspectors work efficiently and can handle three containers per day, one inspector can manage 750 containers annually. ▶ For the vast number of containers crossing borders in regions like the United States and the European Union (over 25 million ocean containers), employing enough inspectors to cover all cargo would be a monumental and costly task. ▶ The cost of hiring and maintaining an adequate number of inspectors for global cargo inspection would amount to many billions of dollars.

31. The Fallacy of One- Hundred- Percent Inspections ▶ Inspecting all cargo would lead to significant delays in ports. ▶ Ports need substantial storage space to accommodate and inspect newly unloaded containers, approximately 120 per hour. ▶ The need for storage affects the movement of containers within the port, leading to bottlenecks and delays. ▶ Shifting the inspection process to the port of departure would not eliminate the problem but only relocate it.

32. The Fallacy of One- Hundred- Percent Inspections ▶ Inadequate resources: The large number of containers and high inspection time per container would require a vast number of inspectors, far beyond practicality. ▶ Inefficiency: Rushed inspections would be superficial and fail to uncover well- hidden dangerous goods, leading to a false sense of security. ▶ High costs: Even with a cursory inspection approach, the program would necessitate a substantial number of inspectors and result in significant expenses, offering only a minor reduction in risk.

33. The Fallacy of One- Hundred- Percent Inspections One-hundred- percent inspection, as demonstrated by the TSA in the United States: ▶ Shows empirical evidence of inefficiency: The TSA, operating on a one-hundred- percent inspection system, has failed to detect 95% of mock explosives and banned weapons during testing. ▶ Reflects inadequacy in performing its mission: The TSA lacks the ability to perform its mission effectively. ▶ Demonstrates the ability of testers to bring unauthorized items onto aircraft undetected, highlighting significant security shortcomings.

34. The Impact of a Significant Disruption in International Logistics ▶ Natural disasters and catastrophes can disrupt international trade. For instance, Hurricane Katrina closed U.S. Gulf ports, leading to months of delays in grain and commodity shipments. ▶ Terrorist acts pose a grave threat to international trade. After the 9/11 attacks, all North American airline traffic was halted for three days, causing delays in air cargo and operations that took weeks to resolve. ▶ The potential consequences of a terrorist act are significant. A simulation involving a dirty bomb scare in U.S. ports indicated that shutting down ports for 12 days would create a backlog of containers lasting three months, with an estimated cost of $58 billion in 2002. ▶ Costs have likely increased over time, making the potential economic impact of similar events in 2017 much higher, possibly around $75- 80 billion. ▶ Such disruptions are not limited to the United States and can occur worldwide due to various events, whether natural or man- made. ▶ To mitigate these risks, governments and international agencies have collaborated to establish security measures addressing vulnerabilities in the global supply chain.

35. International Maritime Organization ▶ International organizations like the International Maritime Organization (IMO) and the Customs Cooperation Council monitor international agreements and treaties. The IMO was among the first to implement enhanced security measures, introducing the International Ship and Port Facility Security (ISPS) Code in December 2002. The ISPS Code was incorporated into the International Convention for the Safety of Life at Sea (SOLAS), which had already been signed by 148 countries, ensuring rapid implementation. The ISPS Code enhances port security with Part A specifying required measures for ports, and Part B offering recommendations for their implementation. Due to varying port characteristics, locations, and cargo types, ISPS Code implementation and costs differ widely. Implementation of the ISPS Code has generally improved security and led to benefits like reduced theft, fewer stowaways, and smoother port operations at a relatively low cost per container handled. Port security is achieved through tight access control, video recording, and secure communication systems. Port security officers oversee these activities. The United States Coast Guard collaborates with 47 other countries through International Port Security Liaison Officers, sharing best practices to enhance port security globally. The ISPS Code for ships involves the appointment of company security officers and ship security officers who develop security assessments and plans based on ship and cargo type. Additional ship security measures include background checks for crew members, document security, employee training, and adherence to specific standards, with many ships having obtained International Ship Security Certificates to indicate compliance. ▶ ▶ ▶ ▶ ▶ ▶ ▶ ▶ ▶

36. World Customs Organization ▶ WCO's traditional role: The WCO traditionally focused on simplifying and harmonizing customs procedures. ▶ Security enhancement initiatives: The WCO has undertaken initiatives to enhance security, complementing efforts by organizations like the IMO. ▶ Pre- screening high- risk shipments: The WCO encourages standardization of documents, identifies high- risk shipment data characteristics, and establishes guidelines for customs authorities to access shipment documents before loading. ▶ Advanced Cargo Information: This focus on advanced cargo information is akin to initiatives by the U.S. Customs and Border Protection agency. ▶ Collaborative approach: The WCO aims to facilitate the identification of high- risk shipments and improve security measures in international trade.

37. The World Customs Organization (WCO) plays a significant role in enhancing international shipping security ▶ All customs authorities must adhere to a set of advance electronic information standards for all international shipments. What is required of shippers should be identical, regardless of country of export and country of import. Each country must have consistent risk management approaches to address security threats. ▶ ▶ Exporting countries’ customs authorities must comply with a reasonable request from the importing country’s customs authorities to inspect outgoing cargo, preferably using nonintrusive technology (x- rays) if possible (see Figure 16.3). All customs authorities must provide benefits to companies that demonstrate that they meet minimum standards of security. Such companies are called Authorized Economic Operators, and benefit from faster processing of customs clearance and lower inspection rates.16 ▶

38. The Role of the International Chamber of Commerce in International Logistics Security The International Chamber of Commerce (ICC) is a prominent global organization that plays a vital role in shaping international trade practices and policies. In the context of international logistics security, the ICC has been a strong advocate for collaboration and the development of international agreements to ensure the safe and efficient movement of goods across borders. This essay discusses the ICC's stance on security initiatives, emphasizing the importance of international cooperation and the protection of sensitive business information.

39. ICC's Policy Statement on International Logistics Security ▶ International Agreements Over Unilateral Actions: The ICC stressed the importance of security initiatives being rooted in international agreements between countries. Rather than unilateral actions taken by individual governments, the ICC advocated for collaborative efforts that involve multiple nations. This approach promotes consistency and harmonization in security measures, reducing potential trade barriers. ▶ Leveraging Business Investments: The ICC acknowledged that businesses involved in international trade had already invested substantial resources in security initiatives. Therefore, the organization advocated for international rules and regulations that build upon and capitalize on these existing investments. This not only minimizes duplication of efforts but also ensures that security standards are cost- effective and practical for the private sector. ▶ Preventing Undue Burdens: The ICC expressed concerns that country- specific security requirements could place undue burdens on businesses engaged in international trade. Such requirements could lead to administrative complexities, compliance challenges, and increased costs. The ICC emphasized the need for harmonized, globally accepted security standards to prevent hindrances to trade. ▶ Protection of Business Information: A critical aspect of the ICC's policy statement was the protection of sensitive and confidential company information. The organization cautioned that as security initiatives collect and share data with various law enforcement authorities, great care should be exercised to ensure that no sensitive business information is inadvertently disclosed.

40. Importance of International Cooperation Consistency and Harmonization: By advocating for international agreements, the ICC promotes consistency and harmonization in security measures. This ensures that businesses do not face a patchwork of different requirements in each country, making it easier to conduct cross-border trade. Economic Efficiency: Collaborative security initiatives are more economically efficient. They reduce duplication of efforts, administrative burdens, and compliance costs, which ultimately benefits businesses and consumers. Protection of Business Interests: Protecting sensitive and confidential business information is paramount. International cooperation and agreement on data handling and sharing protocols help safeguard business interests while meeting security objectives. Facilitation of Global Trade: The ICC's approach aligns with its core mission of facilitating international trade. International agreements on security initiatives support the free flow of goods across borders, contributing to economic growth and prosperity.

41. National Governments’ Involvement ▶ Unilateral security measures: Many governments independently enforced various security measures in response to terrorist attacks over the past two decades. ▶ Diverse range of attacks: Terrorism has affected numerous countries with a growing frequency and an increasing diversity of groups targeting democratic societies, leading to the implementation of these measures. ▶ Wide- ranging impact on international trade: The security measures imposed by governments have had a significant impact on international trade operations and logistics. ▶ Indiscriminate terrorism: Terrorist activities are indiscriminate, targeting multiple countries and various types of targets, often involving both foreign and domestic terrorists. ▶ A global concern: Terrorism has become a worldwide issue, with few countries remaining untouched by its impacts.

42. National Governments’ Involvement

43. The United States’ Approach The United States government implemented several security measures to limit the country’s vulnerability to terrorist attacks, focusing initially on interdiction, a strategy that the country had already been pursuing in its war against contraband street drugs and illegal immigration, and eventually moving to a system of partnership with importers.

44. Interdiction ▶ Interdiction rationale: The interdiction approach seeks to prevent the entry of specific individuals and goods into a country, making it impossible for terrorists to operate. ▶ Immediate post- 9/11 measures: After the 9/11 attacks, the United States implemented strict monitoring of air travelers and their luggage, followed by extending these efforts to certain groups of foreigners denied visas. ▶ Creation of the TSA: The Transportation Security Administration (TSA) was established in 2001 by consolidating private security firms, with a focus on systematically inspecting passengers and checked luggage. However, this approach has faced criticism for its shortcomings. ▶ Interdiction as "theater": The TSA's policies have been criticized for their limited effectiveness, often viewed as security theater, offering reassurance but not necessarily achieving their stated goals. ▶ Formation of the Department of Homeland Security (DHS): The U.S. formalized its interdiction strategy in 2002 by establishing the Department of Homeland Security, which consolidated various agencies to enhance cooperation in counterterrorism efforts. DHS plays a substantial role in maintaining security within the United States.

45. Understanding Type I and Type II Errors ▶ Bomb detection machine operation: Bomb detection machines at airports aim to identify explosives by analyzing the air around luggage. They must operate quickly and less invasively due to the high volume of luggage. Type I error: The machine may incorrectly detect a bomb when there is none. This sensitivity is necessary, but it can lead to false alarms. This error is referred to as a Type I error or a "false positive." ▶ ▶ Type II error: Conversely, the machine may fail to detect a bomb when one is present, due to factors like good bomb packaging or insufficient trace chemicals in the sample. This error is known as a Type II error or a "false negative." ▶ Calibrating the machine: The machine is designed with an error rate of 5% for both Type I and Type II errors. Most worrisome error rate: In this context, both error rates are of concern, but the consequences of a Type II error (false negative) can be more severe as it means potentially failing to detect a dangerous item, like a bomb, which poses a greater risk to security. ▶

46. Understanding Type I and Type II Errors ▶ The paradox of Type I and Type II errors: People often mistakenly believe that the Type II error rate is more concerning than the Type I error rate, but this is incorrect. ▶ Incidence of one bomb per one million pieces of luggage: In this example, there is one bomb for every one million pieces of luggage, making the "bomb rate" 0.0001 percent. ▶ Analysis of one million pieces of luggage: Assuming one million pieces of luggage are inspected annually at a rate of about 2,750 pieces per day. ▶ Type II error rate (5%): With a Type II error rate of 5%, there is a 95% chance the machine will correctly detect a bomb when present. ▶ Type I error implications: The paradox arises from Type I errors, where the machine erroneously alarms on luggage without bombs. Over the year, this results in around 50,000 false alarms. ▶ Operator's challenge: The operator must manually inspect the 50,000 falsely alarmed pieces of luggage within a short time frame, but none contain a bomb. ▶ Handling of dangerous luggage: When the machine correctly identifies a piece with a concealed bomb, human nature makes operators assume it's another false alarm, potentially leading to the dangerous luggage being cleared. ▶ Extremely low probability of bomb: Only 0.002 percent of inspected luggage (1 out of 50,000) actually contains a bomb, making it challenging for operators to identify the rare occurrence among many false alarms.

47. Customs-Trade Partnership Against Terrorism ▶ Creation of C- TPAT: The Customs- Trade Partnership Against Terrorism (C- TPAT) was established by the United States in 2001 as part of its security measures. ▶ Program growth: The program initially had few participants, but by 2003, it had 137 companies involved. In 2016, over 11,500 importers and logistics service providers were enrolled in C- TPAT. ▶ High compliance: C- TPAT participants accounted for about 55% of the total value of shipments entering the United States, and all their shipments met U.S. Customs and Border Protection security guidelines. ▶ Focus on security: C- TPAT shifted away from interdiction and 100% inspection approaches, acknowledging that most international shipments are not threats. Instead, the program focuses on preventing tampering with shipments in the supply chain. ▶ Corporate responsibility: Corporations involved in international trade are encouraged to assess their supply chain security, identify vulnerabilities, and take measures to prevent tampering or substitution of goods. ▶ Supply chain security: C-TPAT's goal is to enhance supply chain security and minimize the risk of tampering or criminal interception of shipments.

48. Customs- Trade Partnership Against Terrorism ▶ A lower inspection probability. At the port of entry, U.S. Customs and Border Protection assigns a security score to a shipment. If a shipment’s score falls below a specified threshold, an inspection is deemed necessary. For C- TPAT participating companies, the threshold is lowered. Tier I companies have an inspection rate that is 15 to 20 percent of the inspection rate of non-C- TPAT companies. The threshold is lowered further for Tier II companies, and Tier III companies’ shipments are not subjected to security inspections, only random compliance inspections.29 ▶ Priority inspections. For Tier II companies, if an inspection is deemed necessary, the shipment receives priority, and is moved to the front of the line. ▶ Priority processing. Both Tier I and Tier II companies have access to the FAST lane at the land borders of the United States, allowing them to process shipments faster. Tier III companies have access to a true “green lane,” which speeds up the processing on an import considerably.30 That “green lane” was what had been promised in the beginning of the implementation of the C- TPAT program, and what Tier II companies had hoped to obtain. As of 2013, it is not anticipated that this benefit will be extended to companies that have not achieved Tier III. ▶ Customs assistance. All C- TPAT participating companies can obtain assistance from Customs’ supply-chain security specialists to resolve security challenges.

49. Customs-Trade Partnership Against Terrorism ▶ C- TPAT evolution: C- TPAT has shifted from a voluntary to a mandatory program, involving importers, carriers, and third- party logistics providers. ▶ Compliance with international guidelines: C- TPAT operates within the framework established by the WCO's SAFE initiative. It focuses on shipments with presumed risk characteristics to minimize disruptions to international commerce, in line with ICC requirements. ▶ Mutual recognition agreements: The U.S. has signed agreements with various countries, including the European Union, for mutual recognition of security compliance programs, benefiting companies with U.S.- validated C- TPAT status. ▶ Importer Self- Assessment (ISA): Companies with C- TPAT Tier II certification for over two years can apply for the ISA program, involving self- assessment of supply- chain security and compliance monitoring. ▶ Trusted Trader Program (TTP): Under development by U.S. Customs and Border Protection, TTP will be for companies with regulatory requirements beyond CBP, simplifying the compliance process. Transition from ISA to TTP: TTP is expected to replace the ISA program, and it will involve self- assessment of trade compliance. ▶

50. Break Time!

51. Navigating the New CTPAT Trade Compliance Program Requirements

52. Maritime Transportation Security Act ▶ Maritime Transportation Security Act (MTSA): Enacted in 2002 as part of the Code of Federal Regulations (33-CFR- 101 through 107), implementing the IMO's International Ship and Port Facility Security Code (ISPS) with minor differences. Broad coverage: The MTSA applies to cargo vessels over 100 dwt and any structures related to U.S. waters, while the ISPS only covers vessels over 500 dwt and port facilities. It also covers passenger vessels with over 150 passengers compared to ISPS, which applies to all passenger ships. ▶ ▶ Port security requirements: Ports must have approved security plans monitored by a Port Security Officer, ensuring compliance with the U.S. Coast Guard Captain of the Port. ▶ Vessel security plans: All vessels calling on U.S. ports, regardless of flag, must have approved security plans overseen by a Vessel Security Officer, with approval from the U.S. Coast Guard Marine Safety Center. Security plan components: Both port and vessel security plans encompass aspects like port access, training programs, drills, record keeping, and the maintenance of emergency communication equipment. Emphasis on security: These initiatives aim to enhance security and compliance within U.S. maritime operations, aligning with international guidelines. ▶ ▶

53. Security and Accountability for Every Port ▶ Enacted in 2006: The U.S. Congress passed the Security and Accountability For Every Port (SAFE Port) Act, which made modifications to the Container Security Initiative (CSI), Customs- Trade Partnership Against Terrorism (C- TPAT), and introduced the Transportation Workers’ Identification Credential (TWIC) program. ▶ U.S. Coast Guard empowerment: The primary effect of the SAFE Port Act was to grant the U.S. Coast Guard authority to enforce the implementation of the Maritime Transportation Security Act (MTSA). Response to Dubai Ports World: The Act's creation was triggered by the controversy surrounding the Dubai Ports World's acquisition of the P&O company, which managed terminals in U.S. ports. Political objections led to the passing of the SAFE Port Act, ultimately causing Dubai Ports World to relinquish management of U.S. terminals. Unrelated to WCO's initiative: Despite sharing the same acronym, the SAFE Port Act is unrelated to the World Customs Organization's (WCO) initiative. Scanning mandate: The Act mandated that, by 2012, all cargo entering the U.S., not just containers, had to be checked for weapons of mass destruction using non- invasive methods like x- rays. The mandate saw extensions to 2014, 2016, and eventually May 2018. ▶ ▶ ▶ ▶ Compliance challenges: The U.S. Department of Homeland Security (DHS) expressed doubts about the feasibility and cost- effectiveness of achieving 100 percent cargo scanning compliance.

54. The Transportation Workers’ Identification Credential ▶ Identification Requirement: The Transportation Workers' Identification Credential (TWIC) program mandates that all individuals with access to U.S. ports must possess a biometric- based identification card, obtained after a background check. Approximately 3 million transportation workers hold TWIC credentials. ▶ Criticisms and Effectiveness: The TWIC program has faced criticism regarding card reliability, counterfeiting risks, and its ability to prevent terrorist acts. It has been labeled as essentially ineffective, with a critical Government Accountability Office report supporting this view. No significant changes or analyses have occurred as of March 2017. ▶ Expansion Plans on Hold: Initially, the TWIC program was intended for broader transportation modes, including airports and public transportation. However, as of July 2013, these expansion plans were on hold, and no progress had been made by March 2017.

55. Container Security Initiative ▶ Counterterrorism Measure: CSI addresses the threat of terrorists using containers to deliver weapons. It focuses on identifying containers before they are loaded onto vessels bound for the United States. ▶ International Cooperation: CSI involves U.S. Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE) officers stationed in foreign ports to target, screen, and inspect containers. It relies on cooperation from foreign officials, as U.S. authorities cannot conduct searches in non- U.S. territories. ▶ SAFE Initiative and Global Coverage: CSI aligns with the World Customs Organization's SAFE initiative and screens containers using non- invasive methods like x- rays. It operates in 58 ports worldwide and screens over 80% of maritime containerized cargo imported into the United States as of 2014.

56. Free and Secure Trade ▶ Joint Initiative: FAST is a collaborative program between the Canada Border Services Agency (CBSA), U.S. Customs and Border Protection (CBP), and Mexican Customs to expedite the movement of cargo and carriers across borders. ▶ Three Clearance Entities: FAST clearance involves the exporter/importer, carrier, and driver. Each entity undergoes background checks, and security measures at importer's facilities and by the carrier are reviewed. ▶ Dedicated Lanes: When all three entities are FAST members, they gain access to dedicated lanes at border crossings for quicker and more efficient border clearance. ▶ Bar- Coded Documents: Drivers present three bar- coded documents to border officers, one for each participating party. Bar codes are scanned at the crossing, while data declarations and verifications occur later. ▶ Voluntary Program: FAST is a voluntary program promoted by customs officials in all three countries, with approximately 78,000 drivers enrolled in the program as of 2016.

57. Importer Security Filing ▶ Supersession: The program supersedes a previous initiative and aligns with the World Customs Organization's SAFE guidelines for uniform information from shippers. ▶ 10 + 2 Rule: Commonly known as the "10 + 2 rule," it expands data requirements for importers and carriers. ▶ Importer Data (10 Items): Importers must provide ten pieces of data, including identification numbers, manufacturer and seller information, buyer details, shipping destination, stuffer's information, container stuffing location, country of origin, and Harmonized System number for the goods. ▶ Carrier Data (2 Items): Carriers are required to submit the vessel stow plan and container status message, including container number, location, condition, and event details. ▶ Timely Submission: Importers must provide this data to U.S. Customs and Border Protection at least 24 hours before the goods arrive in a U.S. port.

58. Importer Security Filing 1. The identification number of the importer of record (Employer 2. Identification Number [EIN] or Social Security Number [SSN]) The identification number of the consignee (EIN or SSN) The manufacturer (name and address) The seller of the goods (name and address) The buyer of the goods (name and address) The name and address of the business to which the shipment is going The stuffer’s name and address (the party that filled the container) The location where the container was stuffed The country of origin of the goods The six- digit Harmonized System number for the goods

59. Importer Security Filing ▶ 1. The vessel stow plan (the way the containers are organized onboard the vessel) ▶ 2. The container status message (container number, location, condition— full or empty— , events— loading or unloading— , and event times)

60. The European Union’s Programs ▶ Prevention Focus: The European Union's primary security focus is on prevention, addressing issues related to terrorism and weapons of mass destruction through proactive measures. ▶ Strategies Emphasized: The EU aims to reduce poverty, enforce international agreements against arms proliferation, restore democratic governments in conflict areas, and enhance international cooperation in criminal investigations to address security threats effectively. ▶ Compliance with International Guidelines: The EU has implemented security programs in line with international organization guidelines, including the International Ship and Port Facilities Security Code (IMO) and the SAFE framework (WCO). ▶ Uniform Response: The EU has largely adopted a uniform approach to security threats, aligning with international guidelines while addressing regional security concerns. ▶ Multifaceted Approach: The EU combines preventive measures, international cooperation, and adherence to security guidelines to enhance overall security.

61. Authorized Economic Operator ▶ WCO Mandate: The AEO program responds to the World Customs Organization's (WCO) mandate for customs organizations to provide benefits to businesses that meet minimum supply chain security standards and best practices. Eligible Entities: Companies involved in international trade, including importers, exporters, carriers, ports, airports, and other trade intermediaries, can become AEOs by demonstrating security measures approved by a national customs administration. ▶ ▶ Similar to C- TPAT: AEO is akin to Tier II of the United States' C- TPAT program but includes financial viability requirements not found in C- TPAT. ▶ Country- Specific Benefits: The benefits of AEO status, such as simplified customs procedures and reduced controls, are specific to individual European countries rather than applying uniformly across the EU. EU Authority and Mutual Recognition: AEO status is granted by one EU customs authority, and other customs authorities in the EU are expected to provide similar streamlined processes to their own AEOs. Additionally, AEO status can be granted to companies validated under the Customs- Trade Partnership Against Terrorism (C-TPAT). ▶

62. Customs Security Programme The European Union’s Customs Security Programme (CSP) was designed to develop and implement measures that enhance border security. CSP achieves this through improved customs controls. Importers are required to provide customs authorities with information on goods prior to their arrival in the European Union (pre- arrival declaration), and customs use this advance electronic information to perform a risk analysis of every shipment, which enables customs to identify high risk cargo bound for Europe. In a way that is encouraged by the WCO, European customs cooperate with other customs authorities worldwide to identify cargo that may present a threat and inspect cargo prior to shipment when requested.

63. Other Countries’ Approach ▶ European Union Model: Countries outside Europe and North America have implemented security policies resembling the EU's ISPS Code and SAFE framework, focusing on international cooperation rather than responding to a terrorism threat. Perceived U.S. Focus: Many believed that terrorists primarily targeted the United States and, to some extent, the European Union. Consequently, some considered terrorism primarily a U.S. issue from which other nations could distance themselves. U.S. Influence: The United States imposed additional security measures on trade partners, requiring them to implement these measures under the oversight of U.S. enforcement agencies, such as Customs and Border Protection, Immigration and Customs Enforcement, or the Coast Guard. Reluctant Adoption: Some countries initially embraced these changes reluctantly, as they had more pressing domestic issues and were hesitant to allocate resources to a "foreign" problem. Changing Perspective: Events such as bombings in Bali, Istanbul, Moscow, and Mumbai rapidly shifted the perspective, making many countries acknowledge terrorism as a global issue. However, they often perceived it as a lower risk compared to widespread poverty, substantial criminal activity, and potential social unrest. ▶ ▶ ▶ ▶

64. Corporate Efforts Supply Chain Security Perspective: ▶ Companies primarily view security in terms of theft, criminal activities (e.g., tampering, vandalism, counterfeit products), and cargo losses. ▶ They participate in security-related programs to prevent customs clearance delays. Total Security Management (TSM): ▶ 3Government programs focused on eliminating terrorism spurred the adoption of Total Security Management (TSM). ▶ TSM is inspired by Total Quality Management concepts and encourages employees at all levels to recognize the importance of security and suggest process improvements. ▶ TSM aims to integrate security into the corporate culture, with the belief that security costs are offset by reductions in theft, damaged goods, and productivity losses. Four Key Supply Chain Security Areas: ▶ 6.Companies must secure four key areas in their supply chains: fixed assets, inbound and outbound shipments, information, and workforce. To protect fixed assets, they install physical barriers, lock doors, increase outdoor lighting, and employ security guards and cameras. Emergency security procedures are established, and employees receive training on security breach response. To protect shipments, companies seal cargo containers, restrict the release of cargo information, instruct drivers to monitor their surroundings, and employ geo-fencing systems. Corporate information security is crucial, with procedures ensuring information reaches only authorized personnel. ▶ ▶ ▶ ▶ Human Resources Practices: ▶ 11. Good security practices rely on effective human resources practices, including background checks, activity monitoring, employee training to recognize security violations, and anonymous reporting systems.

65. What Will Happen in International Trade in 2023

66. PURPOSE OF CONTAINERS General- purpose containers General- purpose containers are THAT we can take anything we want, which is in the dimension limits of the containers.

67. Open top containers Open top containers are those whose cargo is out of the garage, with the height of the cargo. Example : Animals, Machinery.

68. VESSEL A craft for traveling on water, now usually one larger than an ordinary rowboat, a ship or boat.

69. Every Stop a Shipping Container Makes from China to Chicago

70. Difference between RO- RO and Breakbulk Cargo RO- RO : Roll- on roll- off vessel is designed to carry wheeled cargo such as cars, trucks, semi- trucks off the ship with their heels such as self-propelled modular transporter.

71. BREAKBULK Breakbulk : Break bulk cargo are goods that must be loaded individually are not in an intermodal container this sort of cargo is called general cargo ships.

72. Difference between Bulk and Containerized Vessel B ulk : A bulk carrier, bulk freighter specially designed transport raw material shipped in cargo unpacked cargo. Containerized Vessel: Containerized is a system of intermodal freight transport containers where the cargo is shipped in a container.

73. Difference between Feeder Vessel & Mother Vessel Feeder Vessel: Feeder vessel normally small in size. Feeder vessel used to take goods from small ports to major parts. It has a capacity to carry small container.

74. Difference between Feeder Vessel & Mother Vessel Mother Vessel : Mother vessel normally big in size. Mother vessel only severe major parts. It has a capacity to carry thousand containers.

75. Life Inside Gigantic Tanker Ships Transporting $150 Million Worth of Oil

76. REVIEW: Definition and Purpose of key documents in International T r a d e

77. QUOTATION An offer to sell goods or services in international trad e. A request for quote (RFQ) is a process in which a company solicits select contractors to submit bids for the chance to fulfill certain projects. Also called an invitation for bid (IFB), it's especially important to companies that need a consistent supply of standard products.

78. Purchase Order A purchase order is a commercial document and the first official offer issued by a buyer to the seller indicating types and providing, agreed price detail to be purchased include quantity price and other detail.

79. Commercial Invoice The commercial invoice is a legal document between the supplier and the customer that clearly describes the amount due to the customer seller and buyer record the details which are sold out unit price quantity the total sum of goods.

80. Packing List Itemize a list of articles each shipping package given quantity description weight of the contents. Prepared by the shipper item number and dimension.

81. Certificate of Origin Certificate of origin is an important International trade the document confirms that the goods particular shipment the cargo and cargo details which be reassured of destination.

82. Shipping Instruction A shipping instruction is a document advising detail of cargo and exporter’s requirements and physical movement freight forwarder to issue the bill of lading.

83. Shipping Bill and Bill of Lading It is a document filed by the exporter and value of goods qualified customs it is examined on customs authorities Tariff and regulations.

84. Pre- Alert documents When your cargo is ready for shipping before the departure of cargo. Free alert aloes final checking for all shipping documents for the filling with the custom at the destination.

85. Cargo Arrival Notice CAN be given by a carrier or agent the conscience (and to the notify party) e- income about the arrival of shipment number package goods and weight and collection charges on the bill.

86. SALES INVOICE Sales Invoice is a written document used by a seller to inform the detail of the transaction to their customers. It includes all factors about the due date, number of products, seller, buyer and also total price. A receipt will be sent after the seller received payment from their customer. It is prepared by the shipper and provided to the consignee. It contains product name cargo details total number of units.

87. CIFFA offers three courses comprising the following topics:

88. ESSENTIALS OF FREIGHT FORWARDING PART 1: COMMERCIAL DOCUMENTATION AND REGULATORY COMPLIANCE

89. There are three types of documents in international transportation:

90. 3 TYPES OF DOCUMENTATION IN INTERNATIONAL TRANSPORTATION TRANSPORTATION COMMERCIAL FINANCIAL

91. Transportation documents Transportation documents , such as the bill of lading or air waybill are issued by carriers. Financial documents will be outlined in the sections on international payments in this textbook.

92. Commercal documents Commercial documents are issued by exporters. They are, for example, the commercial invoice and the packing list. Regulatory documents are required when shipping goods into and out of Canada to/from a foreign country (issued for Customs’ or other organizations’ purposes, e.g., the import permit, certificate of origin, etc.).

93. EXPORT DOCUMENTATION Most commercial documents are prepared in the country of export. Preparing the documentation for an export shipment is more demanding than the mere processing of import documents. The exporter always issues a commercial invoice; determining who is responsible for the rest of the documentation depends on the Incoterm® governing the transaction.

94. IMPORT DOCUMENTATION The challenges of import documentation are different from those of export documentation, as we find ourselves at the receiving end of what was created at origin. We often have little control or input, plus we sometimes receive the documentation late. This Photo by Unknown author is licensed under CC BY- SA .

95. IMPORT DOCUMENTATION The number of types of documents we have to handle is limited, but they come from all over the world and can be subject to misunderstandings due to differences in culture, language, political systems, business climate, etc. Our challenge, as import forwarders, is to advise the customer (importer) of the import documentation requirements and to guide the overseas shipper (usually through our overseas office or agent) on the required documents so that they are complete and correct in order to meet all of the Canadian entry requirements of Canada Customs (CBSA) and the other government departments involved (OGDs).

96. One of the importer’s challenges is to have all required documentation available on time, and our role as a freight forwarder is to proactively facilitate that, thereby avoiding delays, penalties, demurrage, storage charges and other problems.

97. COMMERCIAL INVOICE The commercial invoice is one of the most important documents in a trade transaction and serves the following purposes: This Photo by Unknown author is licensed under CC BY- SA .

98. In Canada, the commercial invoice should be in English or in French.

99. No matter what the language or languages of the document are, complete accuracy of the information on the Commercial Invoice is essential to avoid excessive duties and/or penalties.

100. We prepare the Canadian export declaration on behalf of a cu s t ome r , it must mirror the information contained in the commercial invoice.

101. This document is generally prepared by the seller/exporter and, as freight forwarders, we can play an essential role in guiding customers so that the commercial invoice is complete and accurate and meets requirements.

102. This is an example of the minimum requirements for a commercial invoice

103. certificate of origin (C.O.O.) The certificate of origin (C.O.O.) is an important trade document attesting that goods in a specific export shipment are wholly obtained, produced, manufactured or processed in a particular country or meet the rules of origin of a preferential treatment or a Free Trade Agreement. The C.O.O. constitutes a declaration by the exporter and is a legally binding document.

104. There are two main types of certificates of origin:

105. There are two main types of certificates of origin:

106. Consular invoices and Consular visas are two different things. Some countries used to require Consular invoices to be purchased from their Consulates or Embassies in the country of dispatch, filled out by the exporter, stamped or consularized at origin, then dispatched to the importer, who then needed to present it to local Customs

107. While the economic benefits of free- flowing trade are one of Canada’s greatest assets, controls have been judged essential for a variety of reasons:

108. What Makes U.S. Shipping So Difficult

109. There are two types of permits: a general export permit and an individual Export Permit.

110. GENERAL EXPORT PERMITS General export permits (GEP) were introduced to minimize the administrative burden of export controls on exporters and to streamline export licensing procedures. GEPs enable an exporter to export certain specified goods that are subject to control to eligible destinations without the necessity of submitting an export permit application. These are generally applicable for less- sensitive goods, removing the need to apply for an individual export permit.

111. Any Canadian resident can use GEPs.

112. A GEP is a valid export permit that is used to minimize the administrative burden for exporters and to streamline licensing procedures.

113. INDIVIDUAL EXPORT PERMITS When an export permit is required and a GEP cannot be used, an individual export permit (IEP) must be obtained; this is done on- line via the Export Controls On- Line (EXCOL) process. EXCOL is an internet-based system that allows applicants to apply for export control documents electronically.

114. An export declaration is not required for goods with a final destination in the U.S. for U.S consumption.

115. There are three methods of filing an export declaration: Canadian Export Reporting System (CERS): G7 EDI Export Reporting: Export Summary Reporting (filed through the CERS):

116. 1. Canadian Export Reporting System (CERS):

117. 2. G7 EDI Export Reporting:

118. 3. Export Summary Reporting (filed through the CERS):

119. 2. Communications Regarding the Customer and the Freight

120. Managing the costs of doing international trade in 2023

121. Reference Essentials of Freight Forwarding (8th Edition) [Texidium version]. (2019). Retrieved from http://texidium.com