Shipment Procedure

Export cargo can be exported to the overseas buyer by sea,

air or land. However, shipment by sea is the most popular
and generally resorted to, as it is comparatively cheaper.
Besides, the ship's capacity is far greater than other modes
of transportation. Nevertheless, transportation by air is
utilized for export of expensive items like, diamonds, gold,
etc. The shipment stage includes the following steps:
(a) Reservation of shipping Space: Once the export contract is finalised,
the exporter reserves the required space in the vessel for shipment. On
accepting the exporter's request, the shipping company issues a shipping
Order. The original copy of the shipping order is given to the exporter and the
duplicate is sent to the commanding officer of the ship. The shipping order is
an instruction by the shipping company to the commanding officer of the ship
that  the goods as per the details given should be received on board.
(b) Arrangement of Internal Transportation up to the Port of
Shipment: The exporter makes necessary arrangements for transportation of
goods to the port either by road or railways. On loading goods into the railway
wagon, the railway authorities issue a 'Railway Receipt', which may be either
'freight paid' or freight to pay'. It serves as a title to the goods. The exporter
endorses the railway receipt in favour of his agent to enable him to take
delivery of the goods at the port of shipment.
(c) Preparation and Processing of Shipping
Documents: As the goods reach the port of shipment,
the exporter should issue detailed instructions to the
C&F agent for the shipment of cargo along with a
complete set of the documents listed below:
Letter of Credit along with the export contract or
export order.
Commercial Invoice (2 copies)
Packing List or Packing Note.
Certificate of Origin.
(d) Customs Clearance: The cargo must be cleared from the Customs
before it is loaded on the ship. For this, the above mentioned documents,
along with five copies of shipping bill, are to be submitted to the Customs
Appraiser at the Customs House. The Customs Appraiser ensures that all
the formalities relating to exchange control, quality control, pre-
shipment inspection and licensing have been complied with by the
exporter. After verification, all documents, except the original GR,
original copy of Shipping Bill and one copy of Commercial Invoice, are
returned to the C&F agent.
(e) Obtaining 'Carting Order' from the Port Trust Authorities: The
C&F agent, then, approaches the Superintendent of the concerned Port
Trust for obtaining the 'Carting Order' for moving the cargo inside the
dock. After obtaining the Carting Order, the cargo is physically moved
into the port area and stored in the appropriate shed.
(f) Customs Examination and Issue of 'Let Export Order': The
Customs Examiner at the port of shipment physically examines the
goods and seals the packages in his presence. The same can be
arranged for at the factory or warehouse of the exporter by making
an application to the Assistant Collector of Customs. The Customs
Examiner, if satisfied, issues a formal permission for the loading of
cargo on the ship in the form of a Let. Export Order'.
(g) Obtaining 'Let Ship Order' from the Customs Preventive
Officer: 'Let Export Order' must be supplemented by a 'Let Ship
Order' issued by the Customs Preventive Officer. The C&F agent
submits the duplicate copy of Shipping Bill, duly endorsed by the
Customs Examiner, to the Customs Preventive Officer who endorses
it with the 'Let Ship Order'.
(h) Obtaining Mate's Receipt and Bill of
Lading: The goods are then loaded on board the ship
for which the Mate or the Captain of the ship issues
Mate's Receipt to the Port Superintendent. The Port
Superintendent, on receipt of port dues, hands over
the Mate's Receipt to the C&F Agent. The C&F Agent
surrenders the Mate's Receipt to the Shipping
Company for obtaining the Bill of Lading. The
Shipping Company issues two to three negotiable and
two to three non-negotiable copies of Bill of Lading.
Role of clearing & forwarding agents

Clearing and forwarding agents are well-versed with customs and

shipment procedures. They support exporters with facilities like 1:
• Warehousing facilities before goods are transported to docks
• Booking of shipping space or freight
• Advice on cost of shipping via sea or air
• Arrangement of loading goods onboard
• Information on shipping lines and freight to different
destinations
• Obtaining marine insurance policies
• Preparation and processing of shipping bills like Bill of Lading,
Dock receipt, Export declarations, Consult invoice, 
Certificate of Origin, Commercial invoice, etc
• Forwarding of bank collection papers
Clearing and forwarding agents play an important role in
ensuring smooth shipment and clearance of cargo. Their
responsibilities include timely documentation, submission of
appropriate paperwork to authorities and related subsidiary
activities such as arranging specialized labour and transport to
help clear goods quickly. Some of their key roles are2:
• Determining harmonised tariff of goods for customs duties
• Calculating import duties and taxes or VAT as applicable
• Assisting with clearing instructions to confirm that all
information received from shipper and consignee is accurate
before submitting for customs clearance
• Framing Bill of Entry (BOE) to be submitted
• Arranging customs clearance or release with relevant
requirements as per the cargo to avoid penalties and
delays
• Facilitates shipments for exporters while acting as a
guarantor to ensure that commercial operations take
place under agreed conditions
Cargo Management

Cargo Management refers to the handling of activities

in the logistic centres and warehouse which includes
transporting cargo, unloading cargo, picking, sorting
and warehousing.  is the process of overseeing and
managing the delivery of goods. Any company, large or
small, that deals with cargo movement has to decide
how they’re going to deliver freight on time to the right
destination, and at the lowest cost possible. In the
transportation process, such companies are called
shippers, even if they employ third parties to ship their
goods.
Freight management is a part of the logistics process,
which covers the whole supply chain operation from
warehousing to supplier relationships and inventory
control. As a shipper, you can handle all of these
processes or outsource some of them, for example,
freight management. On the image above you can see
the whole list of tasks in logistics, but what operations
make up freight management?
Steps in cargo management

Carrier selection. If you’re using a third-party carrier, you need to pick the
right one, establishing rates, terms, and expectations.
Route optimization. Find the most efficient route and choose the
transport mode(s), assigning vehicles, drivers, and balancing the load. This
is important for the owned fleet as your carrier will choose the best routes
for you.
Documentation and regulations management. This includes preparing
the appropriate paperwork, insurance management, and ensuring the
government compliance of goods and transportation.
Tracking and tracing shipments. This involves ensuring freight visibility
and transparency. A carrier usually provides vehicle tracking but you can
also track each package and container individually.
Data collection and analytics. Gain insights from collected data and
optimize the shipping process.
Containerization

Containerization is the packaging together of software code

with all it’s necessary components like libraries, frameworks,
and other dependencies so that they are isolated in their own
"container."
This is so that the software or application within the
container can be moved and run consistently in any
environment and on any infrastructure, independent of that
environment or infrastructure’s operating system. The
container acts as a kind of bubble or a computing
environment surrounding the application and keeping it
independent of its surroundings. It’s basically a fully
functional and portable computing environment.
Containers are an alternative to coding on one
platform or operating system, which made moving
their application difficult since the code might not
then be compatible with the new environment. This
could result in bugs, errors, and glitches that needed
fixing (meaning more time, less productivity, and a lot
of frustration).
 Benefits

The "lightweight" or portability characteristic of containers

comes from their ability to share the host machine’s 
operating system kernel, negating the need for a separate
operating system for each container and allowing the
application to run the same on any infrastructure—bare
metal, cloud—even within virtual machines (VMs), as we’ll
see in the next section. 
Similarly, developers can use the same tools when working
with containers in one host environment as they’d use in
another, which makes the development and deployment of
containerized apps across operating systems much simpler.
 Shipping Documents

1. Commercial invoice

A commercial invoice is an essential shipping document that is issued to a buyer
before their items are shipped. This document assists local Malaysian and foriegn
customs authorities with all the information required for them to determine if your
shipment can be exported or imported. It provides a comprehensive summary of a
shipment, including the buyer’s and seller’s information, a description of their
contents, cost breakdown, harmonised system (HS) codes and terms of sale. Also
ensure to state the insurance costs and country of origin.
2. Bill of lading
The bill of lading (BL or BoL) is a legal export trade document between the person
shipping and the shipping company. It contains everything the shipping company
needs to know to be able to get the goods to the right destination in optimal
conditions. Information includes the shipping destination, the shipment’s contents
and handling instructions. The BL is attached to the product and should contain the
signatures of the seller, shipper, and buyer. It helps to prevent asset theft and to
ensure that all parties that acknowledge the shipment contents verify that what is on
3. Air waybill
An air waybill is a type of bill of lading and therefore, also contains key information of a
shipment, like its destination and contents. It works similar to an ocean bill of lading. For
such a document, the third-party carrier assumes responsibility from the time it receives the
parcel to when it delivers it. What’s special about an air waybill is that it is non-negotiable,
meaning only the specified receiver can accept the delivery and sign the document. Unlike
other bills of lading, it also does not specify flight details or when it will reach its destination.
4. Certificate of origin
A certificate of origin (COO) is an important shipping document that helps in verifying a
product’s country of origin. Through this, a custom’s authority would know where a certain
product was produced, manufactured and processed. You can apply for a COO from your
local chamber of commerce, submit and have it approved by the local authorities. If you’re
exporting to a country where free trade agreements are established between your country
and theirs, a COO would be a way to let customs know that goods are eligible for reduced
taxes and duties – termed preferential COO. Otherwise, it’s called a non-preferential COO.
Some countries don’t require such a document, so check to see what the port authorities of
your import destination have in their list of requirements.
5. Export and import licence
Different countries have different goods that they restrict shipping
out of the country. These could include certain liquids, chemicals or
medicines, or particular films and photographs. To export these
goods, businesses would need to apply for a special export licence to
obtain the permissions to bring such goods. To import or export
goods which require a license, traders first must register with the
Companies Commission of Malaysia. Once registered, a company
must then apply for an import license from the Ministry of
International Trade and Industry (MITI). Malaysia uses a privatized
single digital window for all import and export regulations called
Dagang Net.
6. Export packing list
An export packing list contains the following
information: 
Exporter’s details 
Consignee and buyer’s details 
Shipping details (method of dispatch, shipment type,
country of origin, country of final destination, voyage
number, date of departure) 
Product and packaging details 
Authorised signature
7. Insurance certificate
An insurance certificate is proof of insurance coverage if a
shipment is lost or damaged. It provides the buyer or
consignee with the assurance that they will be compensated
for any goods that fail to reach their destination. It also
ensures the shipper is covered if something happens. 
8. Inspection certificate
An inspection certificate is a document that professionally
verifies that the contents of your shipment are of the
quantity and quality specified, and that they are also what
the buyer ordered
Terms used in shipping industry

1. Incoterms – International Commercial Terms

When purchasing or selling goods, the goods need to
be moved from their origin to their destination. The
best way to do this is to negotiate at the point of
purchase how it is going to be accomplished. But in
order for both parties to understand and agree on the
particulars, they have to speak the same language and
agree on what the terms actually mean.
Incoterms is short for International Commercial
Terms. They are a series of pre-defined
2. COD – Change Of Destination
Imagine that your goods have been loaded onto a
container ship and are now on their way to their
destination. And for some reason, you realize you have
to change the destination!
No need to panic. This is when it is time to request a
COD – a Change Of Destination. This is a request
asking the container ship to discharge your container
and transport your goods to another destination than
what was originally booked.
3. CYCY – Container Yard to Container Yard
CYCY is short for Container Yard To Container Yard. A
container yard is a port facility where containers are
stored before they are loaded onto a ship or after they
have been discharged from a ship. The shipping term
CYCY explains that the responsibility of the carrier
begins (port of loading) and ends (port of discharge)
at the container yard.
4. DM – Demurrage
Demurrage is a fee that container lines charge when
you haven’t picked up your imported containers in
time. When your containers have been discharged,
there is a free period for storing them in the port
(provided by the container line). You have to pick up
your containers before the free period expires. If not,
you are charged for the number of days your
containers were left in the port.
5. Rollover – The container was never loaded onto the
ship
It sometimes happens that containers get rolled. This
means your container didn’t make the vessel. Not
having your container loaded onto the ship may
happen because of customs problems, overbooking, or
vessel omissions.
6. DT – Detention
Detention is a fee that you have to pay if you have
picked up your imported containers but didn’t return
them to the shipping line in time. You will then have to
pay for the extra number of days it took for you to
return the containers. You can also be charged for
demurrage fees if you have containers that cannot be
shipped out by the container line because you didn’t
return them in time. You will then have to pay for the
extra number of days the containers have been in your
possession
7. Port Storage
When your containers have been discharged from a
ship, they are moved to a container yard. The port
provides a free period of storage (not to be confused
with the free period demurrage provided by container
lines). During this period, you have time to take care
of customs clearance procedures and transport your
goods to a warehouse or the final destination
8. FCL (Full Container Load) & LCL (Less than
Container Load)
FCL is short for Full Container Load. This means you
have enough goods to stuff an entire container. LCL is
basically the opposite. It is short for Less than Container
Load and means you do not have enough goods to stuff
an entire container. Instead, your individual
consignment is combined and shipped together with
other consignments in the same container. At the port of
destination, the consignments are separated back into
their original individual consignments.
9. Bill of Lading
The Bill of Lading is a legal document issued by a
carrier to a shipper including shipment details such as
the type of goods, quantity, freight rate, and
destination. It represents the agreement between the
parties involved and helps guarantee that exporters
receive their payment and importers receive their
goods. The bill of lading also serves as a shipment
receipt.
10. Stuffing & Stripping
The last shipping term I’m going to share with you is
the most straightforward: Stuffing is the process of
loading a container with loose goods prior to
shipment. Stripping is the process of unloading a
container when it arrives at the port
Export Procedure Excise clearance for exports

Receipt of enquiry and sending quotations: The prospective

buyer of a product sends an enquiry to different exporters
requesting them to send information regarding price,
quality and terms and conditions for export of goods.
 2. Receipt of order or indent: In case the prospective buyer
finds the export price and other terms and conditions
acceptable, it places an order for the goods to be dispatched.
This order, also known as indent, contains a description of
the goods ordered, prices to the paid, delivery terms,
packing and marking details and delivery instructions.
 3. Assessing importer’s credit’worthiness and securing
a guarantee for payments: After receipt of the indent,
the exporter makes necessary enquiry about the
creditworthiness of the importer. The purpose
underlying the enquiry is to assess the risks of non-
payment by the importer once the goods reach the
import destination. To minimise such risks, most
exporters demand a letter of credit from the importer
 4. Obtaining export licence: Having become assured about
payments, the exporting firm initiates the steps relating to
compliance of export regulations. Export of goods in India is
subject to custom laws which demand that the export firm
must have an export licence before it proceeds with exports.
 5. Obtaining pre-shipment finance: Once a confirmed order
and also a letter of credit have been received, the exporter
approaches his banker for obtaining pre-shipment finance to
undertake export production. Pre-shipment finance is the
finance that the exporter needs for procuring raw materials
and other components. processing and packing of goods and
transportation of goods to the port of shipment.
 6. Production or procurement of goods: Having
obtained the preshipment finance from the bank, the
exporter proceeds to get the goods ready as per the
specifications of the importer
7. Pre-shipment inspection: he Government of India has
initiated many steps to ensure that only good quality
products are exported from the country. One such step is
compulsory inspection of certain products by a
competent agency as designated by the government. The
government has passed Export Quality Control and
Inspection Act, 1963 for this purpose.
 8. Excise clearance: As per central excise tariff act.
excise duty is required to he paid on the materials used
in the production of goods meant for export. So if the
exporter desires to produce the goods meant for export
by himself, he has to pay the excise duty on the
material materials used in production of goods for
export and obtain export clearance from the concerned
excise commissioner
Marine insurance of export cargo Shipment goods

Marine cargo insurance is a class of

property insurance that insures property while in
transit against loss or damage arising from perils
associated with the navigation of the sea or air and
subsequent land and inland waterways.
Marine Cargo Business is not constrained by borders,
and goods are shipped around the world. The transit
from its “Origin” to “Destination”, is exposed to various
risks.
What it covers?

Clause A – Cover against unnamed perils

Clause B
Washing overboard (accidently losing the cargo over the side as contrasted with
doing it deliberately)
Entry of sea, lake or river water to the vessel or place of storage, however, note that
this peril does not cover rainwater, sprinkler water or condensation type damage
Total loss of a package by falling overboard
Clause C
Fire and explosion
Grounding or stranding of the vessel
Jettison of the cargo (disposing of the cargo over the side of the ship deliberately)
Sinking
Collision
Damage to the cargo if it must be discharged after damage to the ship
What it doesn’t cover?

Wilful misconduct of the insured – deliberately causing damage to the cargo

Wear and tear or inherent vice – the natural behaviour of cargo without any external
influence (such as cargo ripening or ferrous metals rusting)
Insufficiency of packing – this is a relative concept as the measure is the appropriate
packing for that cargo, not a standard across all cargos
Insolvency of the carrier – this is to try and focus cargo interests minds on the quality of
those with whom they do business
Delay – even if the delay is caused by a peril insured against. This is because insurers are
not interested in covering loss of market
Unseaworthiness – particularly if the insured was aware or should have been aware at the
time of loading. The concept of unseaworthiness is not just a ship with holes in her hull
but also incompetent crew, or missing radios.
Unfitness of a container or other conveyance (truck etc) to carry the cargo
Malicious damage – this is only in the ICC B and C Clauses
War – piracy is not included in this exclusion
Nuclear Strikes
Quality & pre shipment Inspection

Goods are not to be shipped unless they are of quality.

If quality standards are not maintained, exporter's
image gets ruined and further chances of export orders
come to a virtual close. Normally, quality brings repeat
orders to the exporters and so exporters should not
take the slightest chance in respect of goods exported
outside the country. Even the image of the country
would be at stake and so the Government has taken
several measures to maintain high standard of quality
in respect of exports
Inspection of goods may be conducted under
(j) Consignment-wise inspection
(ii) In-process Quality Control and
(iii) Self-Certification
EGS SERVICES

What are environmental goods and services? A clear definition of EG is

important because it will set clear parameter on the types of goods that
are actually iberalizat. There are different approaches to identifying
goods that have been proposed by WTO over the past few years for
multilateral iberalization of trade in EG. The first suggestion is a list of
environment-friendly products as proposed by the Friend of
Environmental Goods group including Canada, EU, Japan, Republic of
Korea, New Zealand, Norway, Switzerland, Taiwan and the US. The list
has a wide coverage containing 153 goods with the aim of securing a zero
tariff for these products by 2013. In addition, India has advocated the
‘environmental project approach’, where each WTO member designates
a national authority to select environmental projects based on criteria
developed by the Special Session of the Committee on Trade and
Environment.
Following the framework of the WTO, EG can be classified
by 12 groups namely, air pollution control, management of
solid and hazardous waste and recycling systems, clean up or
remediation of soil and water, renewable energy plant, heat
and energy management, waste water management and
potable water treatment, environmentally preferable
products based on end use or disposal characteristics,
cleaner or more resource efficient technologies and products,
natural risk management, natural resources protection, noise
and vibration abatement, and environmental monitoring,
analysis and assessment equipment
GSP Rules of origin

Certificate of Origin is the certificate that declares that

goods in the export shipment are manufactured or
produced in a particular country, basically, it tells about
the nationality of the export goods. There are two types
of Certificate of Origin - Preferential Certificate of
Origin & Non-Preferential Certificate of Origin (NP
CoO) issued in India.
Certificate of origin issued under GSP system comes
under preferential type certificate of origin and known
as GSP Certificate of Origin or Form a certificate of
origin.
Exporters having a Certificate of origin under GSP can
get the tariff concession on their export goods
exported in developed countries.
The Government of India has nominated various
agencies to issue the certificate of origin through a
Common Digital platform CoO Portal launched by
DGFT.
The Government of India has launched various agencies to issue
Certificate of Origin. To issue CoO under GSP following agencies
have been nominated and available to accept the application
online on the common portal to issue the Certificate.
Export inspection council
Textiles Committee
Marine Products Export Development Authority
Directorate General of Foreign Trade
Tobacco Board
Noida Special Economic Zone
Kandla Special Economic Zone etc.
Certificate of origin obtained under GSP (Preferential
type of CoO) can be shown at the customs to get tariff
concession in developed countries. The online system
has been launched to obtain a COO in India.