What is Export Logistics?
Logistics for export, represents the entire supply chain channel which includes streamlining of order handling, transportation, inventory management and handling, storage, packaging, and clearing of the export goods. Efficient management of logistics by any export firm can give them a competitive advantage through better order handling and improved cash flows.
On the other hand, sub-par logistics management often leads to increased logistics cost and poor service.
Export Logistics Process
Once the product has been cleared for dispatch from the factory or the warehouse facility, the logistics process formally starts. One of the first things exporters need to do is to decide the mode of shipping and zero-in on an ocean freight forwarder , who is responsible for arranging and managing the transport of goods from point A to point B.
A freight forwarder maintains working relationships with several vessel operators and even non-vessel operating carriers to secure great deals for the shipper.
The next step is to arrange for a customs clearance agent for shipping, who is responsible for ensuring all laws and compliances with respect to export processes and the custom clearance requirements are adhered to till the goods reach the final point of destination. In some transactions, there may be 2 customer clearance agents to handle local laws more effectively.
Another aspect to consider is the container shipping method. For example, if one is shipping by sea/ocean freight export, and the quantum of goods being shipped is not enough to fill a full container load (also called FCL), then the shipper or exporter may have to arrange for less than container load shipments.
The goods to be shipped must be packed in an ‘export-ready’ manner, which includes the necessary marking and labeling of the cases, packages, or cartons. An export packing list document is required if more than one package is to be dispatched in the lot. The goods are then cleared from the exporter’s premises, after completing excise formalities (if any).
Export Logistics Documentation
The activities involved in the logistics process naturally have a flow of documentation:
Free trade document
Destination Control statement
where the export logistics coordinator take’s care of all these documents and also provides green light export trade & logistic services.
Responsibility for this ownership of documentations, payments and transfer of ownership of the goods are dictated by the latest incoterms 2020 series (incoterms article link)
For instance, under DAP incoterms (article link, the obligations and responsibilities are finite and a major chunk of the work will be handled by the buyer.
Conversely, under CFR incoterms (article link, a major chunk of the responsibilities and obligations of the export process is with the seller.
Export Logistics – Transportation Process
When it comes to sending the export products to the destination, various parties are involved in the process. Apart from the exporter, there is the buyer, the banks on either side of the transaction, the insurance company, export freight forwarding, customs house agents, C&F agents, the customs department, port authorities, transit transport providers, and the shipping company.
Let’s take a closer look at the entire export logistics tracking process:
• Once the goods are manufactured and the pre-shipment inspection and quality checks are done, the exporter or the customs house agent packages, labels, and marks the goods to adhere to the standard shipping practices.
• Thereafter, the exporter or the freight forwarder obtains a delivery order that needs to be collected for the containers and makes arrangements for the pick-up, stuffing, and sealing of the containers.
• They then arrange for intermodal transportation, which will carry the goods from the exporter’s premises to the point of loading.
• Once the goods arrive at the port, the exporter or their agent arranges for the customs clearance, documentation, and physical verification; and also pays any port dues.
• The documents and mate’s receipts are handed to the shipping line, which then provides a bill of lading to the exporter. The exporter has to send the original bill of lading and other documents to the buyer or their consignee/agent. These documents are later required by the buyer or their agent to take custody of the goods and for getting import clearance at the port of destination.
• Meanwhile, the goods are loaded to the carrier and depart from the port of origin.
Optimizing the Export Logistics Process
As with almost every endeavor, one best practice that is applicable everywhere is proper planning. It is no different with export logistics. Proper planning is required to ensure that the product is made available on time, there are no internal issues that may lead to stoppage of production, the preferred transportation option is available, and the correct shipping option has been selected after careful consideration.
The export logistics process is labor-intensive, with multiple people involved in the production, packaging, loading, and intermodal transportation - both at the docks and the carrier. So, efficient people management can make a significant difference here. Good interpersonal skills on your part can boost the efficiency of the people involved in the logistics process, thereby enhancing the product cycle.
Along with movement, proper storage of the export goods is of paramount importance. Perishability and fragility of the goods must be considered while warehousing the export product. Maximizing the storage capacity of warehouses through efficient storage practices should also be implemented.
As for the actual transportation process, the mode of transportation is key to the profitability and efficiency of the exporter. Speed and cost of delivery are directly proportional, so the choice of transportation must be made after keeping the cost-benefit factor in mind.
In today’s business world, implementing automation is crucial to business process optimization. These days, the movement of goods can be tracked and updated automatically through the use of the software. This practice can improve efficiency significantly by reducing manual intervention and enabling more accurate tracking of the movement of the goods.
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