International shipping is a long journey for the goods to travel from one end to another, and during the transit where the goods are moved from factory to warehouse, from warehouse to carrier then eventually reach the receiving end, there is a lack of visibility in how the goods are handled. Shipper occasionally suffers loss from incident without knowing how that actually happens, some might be caused by their owned negligence, inexperience or mistakes made by others.
Plan ahead is always important and here are a few tips from our experience that could help reduce the risk or loss during international transportation.
Know you product
In commonly traded merchandize, there are general goods that do not require additional attention in transportation i.e. toys, garment.
and commodities that constant care saves the day, for example, chemical goods.
No one knows a product better than who produces it
Unless it is a product developed by your owned R&D team where you get full understanding of the product nature, do consult the experts in the field regarding the safety requirement for shipping.
Does it fall into any IMO category, require any specific packaging or transportation method;
whether or not the finished products require moisture control
or grocery products that require temperature control process
Professionally pack and load your shipment
There are two types of products that required strict compliance on packing and loading;
Temperature controlled product
Exporters dealing with the likes of fruit, meat, fish and vegetables that require temperature control should be well aware of the usage of reefer container.
It worth taking note that reefer container is not designed to reduce the temperature of the cargo but rather maintain the pre-set cargo temperature. Therefore, the key in keeping the pre-set cargo temperature during international transportation is largely depending on how well the airflow circulates within the container.
Generally speaking, there are two scenarios;
In the case of chilled cargo, air has to flow through the cargo at all times so that heat and gases are removed, therefore the cartons used should have ventilation
In the case of frozen cargo, air has to flow around the cargo so there should be no gaps between the cargo and the walls and the cargo itself, so the cargo has to be block stowed
Hazarous goods - Lithium batteries
Lithium batteries is widely used following technology development in consumer electronic products. Due to its hazardous nature, packaging, labeling and loading are of crucial importance, it is also subject to full compliance from respective regulatory body.
Packing: For batteries NOT packed or installed in equipment, cells and batteries shall be packed in inner packagings that completely enclose the cell or battery, protection against short circuits, no conductive materials, strong outer packaging that is able to withstand a 1.2m drop test.
Labeling: Lithium handling label required
Always have your shipment insured
Always keep in mind that in most cases, carriers bear limited responsibility from an incident unless there is hard evidence to conclude carrier’s negligence to which shipper could file a claim for compensation.
Having your shipment insured doesn’t merely ensuring you the peace of mind from straight-forward cargo damage, but also providing financial support in ship collision or cargo explosion where common carriers are likely to call for general average, a legal way to share all the cost/loss with all cargo owner aboard. In the situation of General Average, all shippers are required to make a deposit to the carrier with only exemption to those covered by insurance policy.
To make the insurance policy work to your best interest, understanding the basics of cargo insurance are important and here are the key areas to pay attention to;
Incoterm: be shipper or consignee, deciding who is responsible for insurance policy filing shall be referring to incoterm in sales contract, where it is shipper to make the filing under CIF term and consignee to do the same under FOB and EXW.
Commodity: Different type of commodity is subject to different policy writing.
General Merchandize (toys, garments etc) are having lower transport risk compared to fruit, pharmaceutical products that require temperature control. Make sure to consult your insurance agent to learn about the policy against different products and select a suitable one for your shipment.
Coverage: port-to-port coverage is the most commonly used term, however, please keep in mind that under such coverage, the insurance policy will only cover the risk during the period when the goods are under the custody of ocean or air carrier. It is highly suggested to extend the coverage to door-to-door so as to provide a better risk management plan for end to end transportation.
Premium and deductible: Most of the time when people file an insurance policy, they tend to go for the one with competitive cost, fair enough as insurance is part of transportation cost.
What’s the catch?
“Competitive” insurance policy normally provide limited support, for instance there are three types of institute cargo clauses that attached to marine insurance such as ICCA, ICCB, ICCC
Institute Cargo Clause A is considered the widest insurance coverage and you should expect to pay the highest premium because you are asking for total coverage. (All-risk coverage)
Institute Cargo Clause B is considered a more restrictive coverage and you should expect to pay a moderate premium because perhaps you are only requesting the more valuable items in your cargo to be covered or only partial cargo coverage.
Institute Cargo Clause C is considered the most restrictive coverage and you will probably pay the lowest premium but your cargo coverage will be much less (Big case or no case)
Moreover, lower insurance premium paid would probably result in a big value deductible in claim, so make sure to choose the plan wisely.
Full information disclosure
When sending sensitive or hazardous cargo, full information disclosure is important and should be strictly complied. Especially for Lithium batteries where there is strict regulation from IATA to fly on cargo-only flight, in the occasion that the battery is not installed or packed in any equipment.
Fail to do so will result in heavy fine, black-listed by carrier and worst case scenario, jail term.
Work with reliable cargo agent
Cargo agent works with various cargo owners and have thorough understanding over the process in handling different type of commodity for import and export.
Working with a reliable cargo agent shall ensure a smooth operation and ease of doing international business.