Freight forwarders ensure the safety, efficiency and effectiveness of cargo delivery and packing as well as handle the paperwork and customs clearance aspects on behalf of exporters, importers or other persons.
General aspects on freight forwarding
Freight forwarders manage the transportation of goods across the globe on behalf of exporters, importers or other persons. More specifically, they ensure that the goods to be moved meet the necessary conditions to pass through customs and that their accompanying paperwork is in order, as well as the packing. It should be noted that they may also supervise the transportation of dangerous goods.
This article serves as an introduction to the most important aspects related to the freight forwarding service industry.
Transported goods are only cleared into the UK upon the verification of their licences and additional paperwork. Some of the organisations involved in this verification process include the Department for Environment, the Department for Food and Rural Affairs, HM Revenue & Customs or the Rural Payments Agency.
Verifying whether the transported goods meet all the necessary conditions for customs clearance is one of the main responsibilities of freight forwarders. This task can be handled either by the freight forwarders themselves or it can be assigned to a customs brokerage company.
These customs services also involve the payment of duty and taxes, so freight forwarders must have the financial resources to cover the costs of the guarantees and bonds associated with these payments. Also, they need specific software in order to access the HMRC system and report or make such payments for most HMRC functions are electronic.
The integrated Tariff of the UK
Based on the integrated Tariff of the European Union but adapted to the UK terms of trade, this set of regulations, also referred to as the UK Trade Tariff, comprises all the customs measures and duties importers and exporters must comply with upon shipping goods into and outside the UK.
General aspects on trade documentation
The role of documentation in international trade and the transportation of goods is an essential one. Therefore, freight forwarders must be able to provide proper paperwork in order for an export or import to be carried out successfully and for them to receive their payment.
Importers and exporters must provide the freight forwarders with clear written instructions prior to the initiation of the delivery. Usually, these instructions are sent via email or fax. However, often times they are handed over to the driver who collects the cargo, particularly in air freight situations. They may also be provided via phone, in which case they should be confirmed in writing for safety reasons.
The freight forwarders must also be provided with invoices and packing lists, as well as licences for the goods to be moved and dangerous goods declarations if required.
Each type of freight is associated with a specific carriage document as follows:
• Air freight: the air consignment note;
• Sea freight: the bill of lading;
• Road freight: the CMR consignment note.
These documents may not be issued by the same party, in which cases the freight forwarders must familiarize themselves with the mode of operation of each issuer. It is also recommended that they familiarize themselves with the import and export customs clearance procedures and the associated documentation.