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Procedure for Air and Sea Shipment

Introduction

Air and sea shipments are two primary modes of transporting goods globally. Each has its unique procedures to ensure smooth logistics and compliance with international regulations.

Air Shipment Procedure

1. Pre-Shipment Preparation

  • Select Air Shipment: Ideal for time-sensitive or high-value goods.
  • Partner with a Freight Forwarder: Collaborate with a reliable air cargo service.
  • Secure Packaging: Ensure goods are packaged securely for air transport.
  • Labeling: Label packages with clear handling and destination information.

2. Booking and Documentation

  • Book Airline Space: Reserve space on a suitable airline for cargo transport.
  • Prepare Documents:
    • Commercial Invoice: Details goods, value, and terms.
    • Packing List: Contains detailed information about the cargo.
    • Airway Bill (AWB): Equivalent to a bill of lading for air freight.
    • Export Declaration Forms: Required for customs clearance.
  • Obtain Export Customs Clearance: Ensure compliance with export regulations.

3. Cargo Handover

  • Deliver to Air Cargo Terminal: Transport goods to the terminal.
  • Inspection and Verification: Ensure goods are inspected and verified for air transport.
  • Handover to Airline: Transfer goods to the airline or cargo handler for loading.

4. Transportation

  • Scheduled Flights: Transport goods via scheduled flights.
  • Tracking: Monitor shipment progress using real-time tracking systems.
  • Communication: Keep stakeholders updated on shipment status.

5. Post-Arrival at Destination Airport

  • Unload Goods: Unload cargo at the destination airport.
  • Submit Documents for Import Customs Clearance:
    • Airway Bill
    • Commercial Invoice
  • Pay Import Duties and Fees: Clear applicable duties and fees.

6. Final Delivery

  • Release Goods: Release goods to the importer or their representative.
  • Arrange Last-Mile Delivery: Coordinate delivery to the importer’s premises.
  • Inspect Goods: Confirm receipt and inspect goods for any damages.

Key Considerations

  • Insurance: Ensure coverage for air-specific risks.
  • Documentation: Verify the accuracy of all documents.
  • Packaging: Ensure compliance with airline regulations.
  • Tracking: Use real-time tracking systems for updates.

Sea Shipment Procedure

1. Pre-Shipment Preparation

  • Select Sea Shipment: Ideal for cost-effective, bulk, or heavy cargo.
  • Partner with a Freight Forwarder: Collaborate with an experienced sea freight service.
  • Secure Packaging: Ensure goods are packaged to prevent damage during transit.
  • Labeling: Label packages with destination, weight, and handling instructions.

2. Booking and Documentation

  • Book Vessel Space: Reserve space on a shipping vessel.
  • Prepare Documents:
    • Commercial Invoice: Details goods, value, and terms.
    • Packing List: Contains detailed information about the cargo.
    • Bill of Lading: Acts as a receipt, contract, and title document.
    • Certificate of Origin: Required for determining goods’ source.
  • Obtain Export Customs Clearance: Ensure compliance with export regulations.

3. Cargo Handover

  • Transport to Port: Move goods to the port of loading (POL).
  • Inspection and Verification: Ensure cargo is inspected and verified.
  • Load into Containers: Securely load goods into containers for transport.

4. Transportation

  • Ship from POL to POD: Transport goods from the port of loading to the port of destination.
  • Tracking: Monitor shipment progress using tracking systems.
  • Communication: Keep stakeholders updated on shipment status.

5. Post-Arrival at Destination Port

  • Unload Goods: Unload cargo at the port of destination.
  • Submit Documents for Import Customs Clearance:
    • Bill of Lading
    • Commercial Invoice
  • Pay Import Duties and Fees: Clear applicable duties and fees.

6. Final Delivery

  • Release Goods: Release goods to the importer or their representative.
  • Arrange Last-Mile Delivery: Coordinate delivery to the importer’s premises.
  • Inspect Goods: Confirm receipt and inspect goods upon arrival.

Key Considerations

  • Insurance: Ensure comprehensive coverage for transit risks.
  • Shipping Route: Opt for secure and efficient routes.
  • Communication: Maintain clear communication with all stakeholders.
  • Compliance: Adhere to international and local trade regulations.

Principal Export Documents

The following documents must be sent to the importer:

  • Commercial Invoice
  • Packing List
  • Bill of Lading (for sea) / Airway Bill (for air)
  • Combined Transport Document
  • Certificate of Inspection/Quality Control (if required)
  • Insurance Certificate/Policy (for CIF sales contracts)
  • Certificate of Origin
  • Bills of Exchange and Shipment Advice

Auxiliary Documents

These include:

  • Proforma Invoice
  • Intimation for Inspection
  • Shipping Instructions
  • Insurance Declaration
  • Shipping Order
  • Mate Receipt (MR) / Standard Shipping Note (SSN)
  • Application for Certificate of Origin
  • Letter to the Bank for Collection/Negotiation of Documents

Pre-Shipment Regulatory Documents

On average, there are 9 regulatory documents associated with the pre-shipment stage:

  • Gate Pass I / Gate Pass II (Central Excise Authorities)
  • AR4 Form (Central Excise Authorities)
  • Shipping Bill/Bill of Export (Central Excise Authorities)
  • Export Application/Dock Challan (Port Trust)
  • Port Trust copy of Shipping Bill
  • Receipt for Payment of Port Charges
  • Vehicle Ticket
  • Exchange Control Declaration (RBI)
  • Freight Payment Certificate
  • Insurance Premium Payment Certificate

Conclusion

Both air and sea shipments require meticulous planning and adherence to specific procedures to ensure successful delivery. Understanding these processes helps businesses navigate the complexities of global logistics efficiently.

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