INTRODUCTION TO SHIPPING
Name
Course
Tutor
Date
Introduction to shipping
Introduction
Shipping gets defined as the process by which goods get transported by sea or by any other means of transportation from one region to another. The import process is where a consumer acquires products from another country to be shipped into their own while the export process is where the goods get transported from one’s country to the consumer in another country. The cycle for shipping is the process through which freight charges and companies for shipping respond to supply and demand. The stages for shipping get based ion the demand of the customer. The four stages involved in the cycle for shipping include trough, recovery, peak, and collapse. This paper seeks to provide a report on the process of export for a car from Japan, which will get used by a shipping agent in delivering the product to the final consumer.
Steps in an export process
Step 1: having an order for export
The agent must receive an order for export in which is an agreement in the document form that gets made between the importer and the exporter before the exporter starts procuring the goods for shipping. The order can also be in the form of a purchase order, invoice, or credit letter (Sinha, 2020).
Step 2: examining and confirming the order for export
This step entails the examination of the order for export by the exporter to determine whether it complies with the conditions and terms that got established in the agreement. This is a critical step, as all the other subsequent actions are dependent on it. The items for export that get examined at this particular stage include the description of the product, the shipment terms, payment terms, requirements for insurance and inspection, last negotiation date of documents with the bank, and the documents that realize the payment. After these aspects have been examined, then the exporter confirms the order.
Step 3: procurement of goods
The bank of Japan, under the scheme for export credit, extends credit for pre-shipment to the exporter for the purpose of financing the capital needs that are working for raw material purchase, process, and convert them into the products that are finished to export them. The exporter follows the procedures that get laid down in approaching the bank for the credit for pre-shipment. The exporter then starts procuring and packing the goods for shipment.
Step 4: Central Excise Duty Clearance
The process of acquiring clearance from Excise duty commences immediately after the goods have been procured. Once the shipment proof gets provided, the Central Excise and Sale Act of Japan offers a refund for Excise duty through the two alternative schemes that an exporter gets to choose from, providing a 100% rebate on tax on the exports. The fits scheme entails getting goods out of the warehouse of the factory without pay but under bond to the authorities for Excise, and the second, making payments of the duty at the time of removal of the product from the factory and filing a duty rebate claim after the goods have been exported.
Step 5: inspection before shipping
There are several goods that require certification of quality according to the certification of the government of Japan for them to get exported. As such, Japan’s custom authorities will need the exporter to submit a certificate for inspection to be issued by an authority that is competent before the shipment of the goods gets allowed. Inspection gets conducted under self-inspection, consignment-wise inspection, and In-process Quality Control. There copies of the certificate for inspection get produced with the original copy being for verification of custom, the second copy to the importer and the exporter remains with the third for reference.
Step 6: appointing forwarding and clearing agents
After the inspection certificate has been obtained from the agencies for customs, the exporter makes an appointment of agents for forwarding and clearing to do the labeling of the goods, arrange for transport to the port, and overseas shipment, the customs cargo clearance, procuring transport and other relevant documents. The agents perform their duties on the exporter’s behalf. The documents that get submitted to the agent include the customs triplicate declaration form, letter for credit, 8-10 commercial invoices, and the original and duplicate GR form, among other documents that are relevant to the particular shipment.
Step 7: goods to the shipment port
After the formalities for pre-shipment inspection and clearance of Excise get completed, and the goods are labeled, marked, and packed ready for export, the department for export reserves space on the ship for which the goods will get transported to the importer. As proof of reservation for space, the company for shipping presents the exporter with a document called a shipping order. A receipt for the wagon registration fee, the order for shipping, and a note for forwarding get submitted if the goods get transported via rail.
Step 8: customs clearance and port formalities.
After receiving the relevant documents from the department of exports, the forwarding and clearing agent takes the cargo delivery for storage in the warehouse. He then acquires permission and clearance from the authorities from the port to be able to take the goods to the shed for shipment. The department of customs grants export permission and physically verifies the goods in the yard for shipment. The export clearance gets granted on the shipping bill. The documents the forwarding and clearing agent has to submit to customs for permission to ship include the form for the contract, commercial invoice, Shipping Bill, credit letter, and GR form.
Step 9: documents dispatch by the exporters forwarding agent
The agent for forwarding and clearing dispatches all the documents to their exporter after the shipping company’s lading bill has been obtained. These documents include the credit letter, duplicate GR form, clean on board Bill of Lading, copy for export promotion, drawback copy, commercial invoice, Gate pass, and AR4/ AR4A.
Step 10: Origin certificate
After the exporter obtains the above documents, the exporter makes an application to the Commerce Chamber for the Origin Certificate and acquires it. The exporter will have to acquire a GSP Origin Certificate if the goods get exported to countries that offer GSP concessions. This certificate will get obtained from an authority like the Agency for Export Inspection.
Step 11: advice for dispatch of the shipment for the importer
The importer will send the advice for shipment to the importer with details of the vessel that will dispatch, the date, and expected arrival time of the shipment at the port. The documents sent to the importer include a packing list, bill of Lading, custom’s invoice, and commercial invoice.
Step 12: documents submitted to the bank
The exporter finally submits documents to the bank, including credit letter, GR form, marine insurance policy, commercial invoice, packing list, and origin certificate.
Step 13: claiming export incentives
After the export order has been processed at the three shipment levels, the pre-shipment, shipment, and post-shipment, the importer claims incentives for export that apply to him/her.
Reference list
Sinha, D.K. (2020). Steps Involved in the Processing of an Export Order. Viewed in June 2020.
Available from https://www.yourarticlelibrary.com/export-management/12-steps-involved-in-the-processing-of-an-export-order-explained/41222