This site explains in simple language some of the often confusing aspects of shipping such as:
If you are an inexperienced shipper, you will no doubt find some of the terminology confusing!
Here are some common words and phrases with a simple explanation
A Bill of Lading (BL or B/L) is a document that transfers ownership of the cargo. Your supplier may insist on payment before releasing the Bill of Lading. You will need the BL to get your cargo from the quay. They can be issued as original bills, which mean that you need to have physical copies and submit them to whoever is responsible for your shipping. They can also be issued as an express bill or sea way bill which means you don't need physical copies.
If you are working with Original Bills, make sure that you get hold of them and send them to your shipping agent whilst the cargo is in transit
This is the invoice that you will get from your supplier and must be used for customs clearance. The packing list will be similar to the invoice but with measurements / weights rather than costs. You may get other invoices such as freight invoices and VAT / Duty invoices which are different.
Incoterms are the way responsiblity for cargo is organised. The most common terms you will encounter is ex-works, which means you are responsible for collecting the cargo from the supplier and everything else through to delivery. FOB (Free On Board) means that the supplier will deliver to somewhere local to them, usually a shipping agent. Then you would be responsible for the cargo for the rest of the journey. FOB is very common when shipping from China.
There are many other incoterms, if your supplier mentions other terms please seek further advice.
This simply refers to Less than Container Load or Full Container Load. If you don't have enough cargo to fill a full container, it can often be more cost effective to send the cargo as LCL. The main difference here is that the cargo needs to be loaded into a container with other people's cargo, then unpacked in the UK. This can add some extra time but this will be worth it, if you are not shipping a lot of cargo at once.
This can cause some confusion! On a Bill of Lading, the Shipper is the supplier. If you're arranging the shipping that doesn't always make you a Shipper!
This is the opposite of the Shipper on a Bill of Lading. In most cases, you will be the Consignee as this refers to the company or person who is buying the cargo
On a Bill of Lading, the Notify Party is the nominated agent who is looking after the cargo. For an inexperienced shipper, it's wise to have your shipping agent down as Notify Party so they have better control when the cargo arrives in the UK and this can prevent extra costs.
Quay rent is an extra cost, which can be incurred if your container is sat on the quay longer than the free time you are given. This is seperate to container demurrage which can refer to both the container taking longer than the alloted free time to get to quay, be delivered and then brought back to quay, and also if it takes longer to be offloaded at the delivery point than the free time allowed. Quay rent is usually down to the Port of arrival. Container Demurrage is down to the shipping line.
If you don't have an EORI number, you will need to get one preferably before you even think about shipping! If this seems a little intimidating, please take a look in the contact section!
Please see section on customs clearance to find out more.
At the point of delivery, it is often assumed that you have facilities to offload. For some LCL shipments, you may request Tail Lift Delivery, where the back of the truck drops down and a small pallet truck can help offload your pallet.
If you have contacted a freight forwarder, they would normally speak to their agent in the country of origin to help make arrangements. This can relieve a lot of pressure so once you have found a supplier and made arrangements to buy some products to sell back in the UK, you can keep better control by using someone in the UK who is experienced and can sort out the collection and shipping.
The cargo will then be loaded into a container either at the suppliers, or at an agents warehouse. The container will be sealed and the Bill of Lading will be issued based on these details.
Depending on when the cargo was shipped on board (Date it left), and where it came from, you should be able to get an ETA (Estimated Time of Arrival) which will help you plan in advance so you are prepared for the cargo arriving into the UK. During this time, you should make sure you get original bills from your supplier or at least ensure the cargo is 'released' to you. You also need to have copies of the Commercial invoice.
If you do not know what the tariff code / commodity code is (sometimes it is on the commercial invoice) then you should find out what it is. HMRC can help you with this. Also, make sure you have enough funds to pay for the VAT and Duty when it arrives.
In order to make sure your cargo can clear customs when it arrives into the UK, you must ensure you have an EORI number (see above), an invoice and the tariff code / commodity code. It's wise to have a freight forwarder organise this for you so you may want to consider getting a freight forwarder to handle this for you even if you have paid your supplier for the shipping up until it arrives in the UK.
The Customs Clearance involves payment of VAT and Duty. The Duty rate is a calculation based on the tariff code. Whilst in the UK, VAT is currently 20%, this figure is based on a combination of the value of the cargo, freight, duty and some other costs.
You must pay this before the goods will clear!
If you follow the above tips, you should avoid most problems but in shipping there are numerous problems that can occur. Our suggestion would be to get in touch with a small independent freight forwarder that can look after your cargo as if it was their own!