1. Packing & Shippability
Rules far stricter for international freight than for domestic. Air freight and ocean freight function under different parameters, so it’s important to know what applies to which when it comes to packaging materials.
There are two things to keep in mind when packing for air freight: size and weight. Due to limited space, air freight is more expensive, and packaging materials add extra weight. If you’re looking for quicker shipping times, air freight will be your better option.
Rules for ocean freight are a little more lenient. It’s much cheaper than air freight, but it’s much slower as well. If your schedule permits, sending your cargo via ocean freight is the way to go. Extra packaging won’t cost extra either.
Crates or Pallets
Many countries have these same regulations to prevent the spread of pests and diseases. Goods will be taken or destroyed, and penalties will be enforced if you do not follow guidelines. So before you start packing, make sure you understand the requirements for shipping to your destination country. Wood that is not heat treated, fumigated or ISPM compliant, could be subject to penalties. This wood is susceptible to carrying pests like insects or fungus (that can potentially spread disease), and will not be ISPM 15 compliant.
What is ISPM 15, you ask? This stands for International Standards For Phytosanitary Measures No. 15. ISPM 15 was created by the International Plant Protection Organization (IPPC). The IPPC is a part of the United Nations Food and Agriculture Organization. Follow this standard to ensure wood being used for shipping is treated and safe for travel.
Dangers of International Shipping
Untreated lumber risks the transference of invasive species (plant, insect, or otherwise) across international lines. While we have species that are native to the U.S.—like the pinewood nematode—such a pest could pose a huge threat to the ecology of the country of destination. These critters, no matter how microscopic, can decimate a country’s native flora and fauna. The Eastern European Gypsy Moth alone can defoliate 700,000 acres of the Northeastern United States a year, causing millions of dollars in damage.
3. Duties, Customs & Incoterms
There are four documents you should look out for. The commercial invoice, the certificate of origin, the NAFTA certificate of origin, and the electronic export information. What are those, you ask?
- Commercial Invoice is one of 2 documents that lists the country of origin. You must list the country of origin on every commercial invoice, for every shipment and each product enclosed.
The commercial invoice establishes the products you’re shipping. This is the main document for valuation, importation control, and duty resolve. The information on it will help determine your export tariff rates.
- The exporter (you!) must sign the (CO) Certificate of Origin. To certify the country of origin for each product in your shipment. This certificate is required by some countries for all or specific products you’re importing. There are some cases when you must notarize this document.
- The NAFTA Certificate of Origin is another version of a certificate of origin. However, it is specific to transits between Canada, Mexico, and the U.S.
- The Electronic Export Information (formerly Shipper’s Export Declaration), or EEI, is the most common of all export documentation. Due to being used to document export statistics. You or your freight forwarder is in charge of filing it. It’s required for shipments over $2,500 and for any shipments requiring an export license.
This document is necessary for all current and former U.S. territories, though they are not technically exports. It isn’t necessary for Canada, unless the item being shipped requires an export license.
Global parcel shipping has its own set of customs documents and clearances. It’s much cheaper to ship parcel globally than it is to ship freight. As the customer will only be responsible for duties and taxes.
To facilitate commerce around the world, the International Chamber of Commerce (ICC) publishes a set of Incoterms, officially known as international commercial terms. Globally recognized, Incoterms prevent confusion in foreign trade contracts by clarifying the obligations of buyers and sellers.
The most common incoterms are:
- EXW (Ex Works)-The seller packages the goods and prepares them for pick-up, while the buyer is responsible for transport costs and risks. This favors the seller.
- FOB (Free On Board)- Location usually follows the designation of FOB, and it’s pertinent to how you use the term. Its shipping point, or sometimes origin, means that the buyer is responsible for multiple things. For the transport costs (as well as risks) while the freight is in transit. FOB destination means the seller is responsible for transport costs (as well as risks) while the freight is in transit.
- CIF (Cost, Insurance, and Freight)-This means that the seller is responsible for costs, freight, and insurance (it’s in the name!). Against the buyer’s risk of loss, or damage to the goods, while in transit.
- CPT (Carriage Paid To)-The seller is only responsible for making sure the freight arrives to the carrier’s safely. After the seller drops the freight off at a carrier’s, or a place agreed upon, the seller pays the cost. The cost to transport the goods to the landing place. As soon as the freight is at the carrier’s, liability shifts from seller to buyer.
- DDU (Delivered Duty Unpaid)-Here the seller is in charge of the safe delivery of the freight to its landing place. They are responsible for paying transit costs, and liability for damage. Once the freight arrives safely, liability transfers to the buyer. This includes any subsequent transport costs.
- DDP (Delivered Duty Paid)-The seller takes on all responsibility: costs, risks, export/import customs, etc. Until the freight has arrived at its landing place.