International Shipping

Introduction

Doing international shipping and international moving is exciting, but it can also be difficult. Chances are good that you will do this only once in your life, and most people will never do it. Therefore I have written this guide to outline how the process works and to help you make informed choices, especially about how to prepare and how to choose an International Shipping Company. This is written for people shipping household goods for personal use. May you have a successful move!

1. The Shipper

This is you, the person doing the shipment. You are also the “Exporter” (the person exporting goods from the country of origin) and the “Importer” (the person importing goods into the destination country). It is very important that you understand that as the “Shipper” you are accepting responsibility for the legality of the goods that are being shipped, any import duties, supplying paperwork, and, most importantly, any charges that might arise in the event of some unusual occurrence like a port strike, a customs inspection, or an unusual delivery situation. Therefore you need to make sure that you know all of the rules for importing to the specific country to which you are shipping. You should also budget extra money in the event that it is needed.

2. The International Shipping Company (the Move Manager)

I use the term “Move Manager” to represent a function that can be performed by any of several people or companies. The International Shipping Company you choose will be your Move Manager. It is the company that will oversee your shipment, it is the company you will sign the contract (or agreement, or estimate) with, and it is the company that will be sending you your bill. It is the company you will turn to in the event of any claims for damages, updates on your shipment, and general questions about the process.

All of the other entities involved with your shipment will be “employees” or “subcontractors” of the International Shipping Company/Move Manager. Since your agreement will be with the Move Manager, any problems or concerns will need to be addressed to the Move Manager, and any disputes will need to be settled with the Move Manager.It is a very good idea to use an International Shipping Company/Move Manager that will also be performing one of the other functions discussed below (such as the Origin Agent, Freight Forwarder, or Destination Agent), for the following reasons:

• For ease of communication between the Move Manager and the involved parties
• o that the Move Manager will have more direct responsibility for your shipment
• So there will be less overhead (since the Move Manager will be making money performing some other function such as being the Origin or Destination Agent, the Move Manager won’t need to add extra charges for handling the entire process)

3. The Origin Agent

This is the local company that will do the visual survey, i.e. it will send someone to your home to see what is being shipped before quoting for the move, in order to give an accurate quote. The Origin Agent will also pack and load the shipment. The Origin Agent might also be the Freight Forwarder, the Consolidating Warehouse, and/or the Move Manager. See below for details on these other functions.

4. The Freight Forwarder

This is the company that will arrange the ocean freight and do the export documentation (including a “House Bill of Lading”, i.e. a document showing information specific to your shipment such as your name). This is also the company that will move your cargo from the pickup point to the port.

In many countries, including the Kenya, a Freight Forwarder is supposed to be licensed. You can easily check to see whether the Freight Forwarder you want to use is licensed Note that the Federal Maritime Commission makes a distinction between a Freight Forwarder (FF) and a Non-Vehicle Operating Common Carrier (NVOCC). However, for the typical customer doing international shipping, the difference doesn’t matter, so when I say “Freight Forwarder”, I mean either a Freight Forwarder or an NVOCC.

For shipments originating from the United States, it is best to use either a licensed Freight Forwarder or what is known as an “authorized agent”.

You might also choose to work with a Freight Forwarder in the destination country. This can be particularly useful if you are moving to a country with unusual rules for import or if English is your second language and you are moving to a county where your native language is spoken. The Freight Forwarder may also function as the Origin Agent, the Consolidating Warehouse, and/or the Move Manager.

5. The Consolidating Warehouse

If you do not have an exclusive container (an ocean container holding only your shipment), your goods will need to be loaded into a container with other cargo. The decision about whether to use an exclusive container will be made based on the volume of your shipment and the distance between the origin city and the port of embarkation.

If your goods need to be consolidated, they will wait in a warehouse called a Consolidating Warehouse until there is enough cargo to fill a container. If you live near a port city, this will probably – but not necessarily – be the same warehouse as the warehouse of the Origin Agent. If you live far away from the port, your goods will be sent by truck to the Consolidating Warehouse.

For the most part, this process will be “invisible” to you, although it is quite possible that goods will seem to move in the wrong direction before being loaded onto a ship. For example, cargo going from Nairobi, kenya to London, England might be moved to mombasa, to be loaded into a container in Mombasa because it is less expensive to do it that way. The Consolidating Warehouse may also function as the Origin Agent, the Freight Forwarder, and/or the Move Manager.

6. The Export Port

This is the actual port where the container is brought (already loaded and sealed) to be loaded onto the ship. For practical purposes this means nothing to you, as you won’t be dealing with it in any way. The only important thing to know is whether the Origin Port Fees and Origin Terminal Handling Charges are included in your quote. They will usually be listed as “Origin Port Fees” or “OTHC” (Origin Terminal Handling Charges). For shipments going from the Kenya, these fees are regulated and relatively low and they are almost always included; however, it is worth checking to make sure.

Under NO circumstances should you ask for, or accept, a price “From Port”! If you want to save some money by bringing the goods somewhere, ask for the price “From Warehouse”. Nothing goes to the port that is not already loaded into a container, sealed, and cleared from Export Customs. (Clearance at origin is almost always done by computer.)

7. The Ship Line

This is the company that owns the ship. It will issue the “Master Bill of Lading” or “Seaway Bill of Lading”. For the most part, this will be invisible to you; however, it makes good sense to ask which ship line your goods will sail on, for two reasons:

• To make sure the quote is based on actual rates, and is not just a “guess”
• To allow online tracking directly with the ship line

It is also a good idea to understand a little about international shipping and the “rules of the seas”. International Shipping and Ship Lines are crucial to the world economy. Ship Lines move commercial cargo, military equipment, and anything else that needs to be moved from one country to another. Because countries need Ship Lines, Ship Lines are given special allowances and privileges, including:

• Ship Lines have the right to overbook, and “roll” cargo to the next available ship. Any associated costs get passed on to the shipper (that’s you!).
• Ship Lines have the right to declare “End of Voyage” in the event that the destination port is not available due to war, port strike, or other unforeseen event. Any extra charges get passed on to the shipper (that’s you!).
• Ship Lines have the right to jettison cargo (throw it overboard) in the event that the ship gets damaged or might sink otherwise. If this happens, the Ship Line is not liable for the loss of cargo.
• Ship Lines can change schedules, routes, or almost anything else in the event that they need to (even if the need is strictly financial). You know who pays for this by now, right?
• Ship Lines are not responsible for any damages to cargo, or any related damages caused because of a late arrival or no arrival of the cargo.
• Ship Lines must get paid before they will release the cargo.

This is slightly simplified, but you get the idea. Ship Lines do have some rules and standards, as well as some obligations, but by and large, particularly for the one-time shipper, they are untouchable. So make sure you have some extra money on hand in case of a tidal wave or port strike. Usually 10%-20% of the total price quote will be enough to cover it, and these instances of extraordinary circumstances are rare and easily verifiable by asking the Ship Lines directly or by looking on the Ship Line bill.

The most important thing to remember is that Ship Lines work on a “highest priority” basis, and household goods (what you are shipping) is the lowest priority. The Ship Line might also be the Container Line (see below).

8. The Container Line

The Container Line is the company that owns and rents out the ocean container. This may or may not be the same as the Ship Line, but for all practical purposes it won’t make a difference to you.

9. The Destination Port

This is where the goods are finally unloaded in the country of destination. You will usually have no dealings with the port. However, you will owe them money! It is very important that you check your price quote to make sure that it includes Destination Port Fees and DTHC (Destination Terminal Handling Charges), or at least shows what they will be.

Note – In giving quotes for international shipping, it is routine but almost always unacceptable to exclude Destination Port Fees.

These fees are usually due in the currency of the destination country, and they will often be listed as “not included”. The quote you accept should include them or at least show what they will be. Even if they are not listed, you must pay them, regardless of the amount.

In some very rare instances (usually in third-world countries) it is impossible to know these fees in advance. However, you can always check with an International Shipping Company located in the destination country to see whether that company can tell you what those fees will be, and you can also arrange your shipment through that company. If you can’t find out the amount of the Destination Port Fees in advance, expect them to be $1,000-$2,000 or more, no matter the size of your shipment.

10. The Customs Bonded Warehouse

This is the destination warehouse where your goods will be held until they clear customs. How this is handled will vary from country to country. For example, in Canada the shipper must be present when the goods arrive. In the United States, an entire incoming container is cleared through customs at once, even if there are multiple shipments in the same container. In some other countries, however, containers with more than one shipment must be unloaded and each shipment cleared through customs individually this also applies to Kenya. It is important to find out how this process works and how much time you have before storage and other charges start.

11. The Destination Agent

This is the company in the destination country that will handle the customs clearing procedures, dealings with the port, and delivery to your residence. You can use the Destination Agent as your International Shipping Company/Move Manager to arrange for the entire shipment. Although it is standard to use a company in the country of origin, if you are moving to a country with unusual laws regarding personal imports, or to a country where your native language is spoken, it might make sense to do this.

It also makes sense to find out who the Destination Agent will be when getting your quote, for the following reasons:

• To make sure the quote is based on a real figure, and is not just a “guess”
• To check the reputation and references of the company that will be handling your goods at destination
• To ask the Destination Agent questions regarding import duties, restrictions, and exemptions
• To answer any location-specific concerns about access (Is there access for a 40-foot container in such and such a city? Do most residential buildings in that city have elevators big enough to fit my super-sized sofa?)

12. The Broker

A Broker is a Move Manager that does not do any of the other work. A Broker is not to be confused with a Freight Forwarder that might subcontract the Origin Agent and the Destination Agent, because the Freight Forwarder is doing something vital to the international shipping process even if you don’t see it being done.

Generally speaking, Brokers are unlicensed. In most countries, this is illegal, but since international shipping is done by such a (relatively) small segment of the general population, there is usually no enforcement until many, many complaints have been filed.

Since a Broker is not doing any of the actual required work, his price to manage the move will be higher than that quoted by any other company he uses, assuming that company would use the same set of services as the Broker. However, often Brokers will give seemingly lower prices than other companies because:

• They may not use the same set or quality of services that another company might choose.
• They may not check actual costs until after you have chosen to use their services, and then they may raise the prices through some loophole in their agreement.
• They do not pay any fees to be properly licensed.

Because of this, a Broker might give you what appears to be the lowest price, but either it ends up being more expensive than the original quote or you get a lower quality of service (more damages, more delays, more problems, more of your $$$ to fix).