Indian Maritime University

Freight Forwarding
SEMESTER - 3 : PAPER - 7

Chapter 1

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 Course Objectives
Indian Maritime University

• To provide basic Knowledge on Freight Forwarding operations and its

functioning.

• To develop knowledge in good management practices in Freight

Forwarding Operations.

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 Learning Outcomes
Indian Maritime University

• Students will develop understanding of Functionalities of Freight

Forwarding facilities and functioning

• Student will be able to understand basics of effective functioning of

Freight forwarding Operations

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 Freight Forwarding
Indian Maritime University

• Freight forwarding is the planning and coordinating of the movement

of commodities across international borders, on behalf of shippers

• Other tasks involved include, but are not limited to:

• Warehouse planning
• Supplying cargo insurance
• Customs brokerage.

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 Freight Forwarding
Indian Maritime University

• It consists of strategic logistics planning and execution for the

international movement of goods, on behalf of shippers

• A freight forwarder will carry out freight rate negotiations, container

tracking, customs documentation and freight consolidation, among
other tasks.

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 Freight Forwarder – Role
Indian Maritime University

Shipment
tracking –
Insurance Transportation
Management
systems (TMS)

Customs Brokerage
Negotiating
– License

Warehousing –
Consolidation
Storage

Cargo space
scheduling

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 Indian Maritime University
FF - Process

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 FF- Process
Indian Maritime University

• Establishing a contract between the freight forwarder and the

customer.
• Document preparation.
• Picking up the goods.
• Transporting the goods.
• Clearance and delivery.

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 Indian Maritime University
FF - Stages

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 Export Haulage
Indian Maritime University

• As per freight forwarders, export haulage is the very first stage in

logistics, where the transportation company picks up the cargo from a
company to the freight forwarder’s warehouse, which is either a self-
owned or a locally owned warehouse.
• The cargo is usually transferred in trucks. However, it may depend on
the distance to the warehouse and the type of cargo. Based on these
factors, the time of arrival is also determined.

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 Export customs clearance
Indian Maritime University

• International transportation of goods requires clearing through

customs before entering another country.
• Custom agents of the country of origin check the cargo and associated
paperwork, legal documents as well as permission of transit before
allowing it to leave the country.
• Freight forwarders usually have custom brokers to tackle this stage.

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 Items Checkpoint
Indian Maritime University

• Item checkpoint is also known as origin handling, which occurs when

the cargo is unloaded at the freight forwarder’s warehouse.
• The products are then inspected for damage, and the documents are
verified.
• The freight is also checked to ensure that it will be accepted at the
destination.
• Some of the restricted items include drugs, counterfeit, alcohol,
flammable liquids, etc.

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 Import Custom Clearance
Indian Maritime University

• After the shipment arrives at the destination country, it is then re-

checked to see if the products match, if there is any damage, as well as
the legality of the transit.
• There is a impose fees charged by the customs agent, which are
initially covered by the freight forwarder and later billed to the
customer.

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 Destination arrival and handling
Indian Maritime University

• After clearing import customs, the transportation company arranged

by the freight forwarder checks the paperwork of the shipment and
prepares the cargo for its delivery at the import warehouse.

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 Export Haulage
Indian Maritime University

• As per freight forwarders, export haulage is the very first stage in

logistics, where the transportation company picks up the cargo from a
company to the freight forwarder’s warehouse, which is either a self-
owned or a locally owned warehouse.
• The cargo is usually transferred in trucks. However, it may depend on
the distance to the warehouse and the type of cargo. Based on these
factors, the time of arrival is also determined.

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 Custom Clearance
Indian Maritime University

• Every exporter is required to obtain custom clearance in respect of

export goods before they are sent to buyers, irrespective of the mode
of shipment

• Mode could be Rail, Sea, Air or Road

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 Custom clearance
Indian Maritime University

• According to customs Act, Section 40

A person in-charge of the conveyance vessel , aircraft or vehicle

cannot permit loading of cargo without any customs permissions.

The exporter through the clearing and forwarding agent, also

known as customs house agent normally, obtains the customs
clearance.

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 Types of Customs Clearance – Int. Clearance
services
Indian Maritime University

• Exporting/ Importing good to foreign countries will have to pass

customs procedures apart from the location.

• First goods will drops at customs warehouse – inspections –

examining documents – duties and taxes during departures

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 Types of Customs Clearance – Import
clearance services
Indian Maritime University

• Import goods – company will have updated knowledge on latest

information - clearance office – multiple documents from
stakeholders. Customs officer – verification with support – payment of
duties and taxes – delivery/departure
Assessment Physical Payment Of
Preparing Submitting Obtaining Post-
Drawback Of Customs Examination Customs
Import Documents Customs Clearance
schemes Duties And And Duties And
Documents To Customs Release Procedures
Taxes Sampling Taxes

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 Types of Customs Clearance – Export
clearance services
Indian Maritime University

• Export goods – clearance office (mostly people use services here) –

multiple documents from stakeholders.
• Customs officer – verification with support – payment of duties and
taxes – delivery/departure

Examination Obtaining Post-

Preparing export Filing The Payment Of
And The Let Clearance
docs Shipping Bill Export Duties
Assessment Export Order Procedures

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 Certificate of origin
Indian Maritime University

• A certificate of origin (CO) is a document declaring in which country a

commodity or good was manufactured. The certificate of origin
contains information regarding the product, its destination, and the
country of export. For example, a good may be marked "Made in the
USA" or "Made in China".

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 Certificate of origin
Indian Maritime University

• A certificate of origin (CO) records the country of origin that an

imported good has come from.
• The CO is often mandated by importing countries and included in
trade agreements, as it is used to levy the appropriate import tax, if
any apply.
• A CO can exist either in paper or digital format, and must be
approved by the requisite chamber of commerce or customs
authority.
• Preferred COs are abbreviated versions that are only used in the
presence of a free trade agreement or treaty.

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 Certificate of origin - info
Indian Maritime University

• The name and contact information of the producer of the product, including the
country of origin
• The name and contact information of the exporting agent
• The name and contact information of the receiver/importing agent
• A description of the good(s), including the appropriate product codes (known as
HS codes)
• The item's quantity, size, and weight
• A waybill or bill of lading number
• The item's means of transportation and route information
• A dated commercial invoice of payment
• Any additional notes or remarks

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 Indian Maritime University
ICEGATE

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 ICEGATE
Indian Maritime University

• ICEGATE is termed as Indian Custom and Central Excise Electronic Data Interchange or Electronic
Commerce Gateway. It is an online portal that works as an infrastructure for supporting the
management of the database of several bills regarding imports, exports, and several other services.
• ICEGATE is basically used by traders, import service providers, cargo transporters, etc. They have
the unique ICEGATE ID that helps in maintaining all the records and prevents the entry of any non-
registered user.
• ICEGATE also plays a great role in helping the citizens to clear out their taxes online without
spending much time in offline payment methods.
• ICEGATE registration is done for import, Import general manifest, export, Console manifest and
Export General Manifest.

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 ICEGATE –Services and advantages
Indian Maritime University

• ICEGATE is essential for filing import and export documents online.

• It provides tracking for the status of various online filings.
• Users receive timely updates on import and export status via
registered email.
• The 24/7 help desk supports queries and concerns.
• Only individuals with valid ICEGATE IDs can access and file documents
on the portal, ensuring privacy and security.

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 Insurance
Indian Maritime University

• Public liability insurance

• Employer’s liability insurance
• Freight liability insurance
• Cargo insurance
• Errors and omissions insurance
• Vehicle insurance
• Equipment insurance
• Specialized insurance
• Marine cargo insurance
• Commercial general liability insurance
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 Customs Act and regulations
Indian Maritime University

• It is a law that was first enacted in 1786.

• It has three main purposes are to ensure the collection of duties,
control the movement of people and goods into and out of a country.
• Two main laws standardised after independence
1. Customs Act 1962
2. Customs Tariff Act 1975

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 Customs – types of duties
Indian Maritime University

• Basic Customs
• Additional Duties
• Safeguard duty - needed to protect local industries from an increased
volume of imported goods
• Anti dumping duty - This would severely damage local industry, and is
therefore counteracted
• Countervailing duty - products which received benefits like tax breaks
or or subsidies
• Customs handling fee

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 Regulations - customs
Indian Maritime University

• The Directorate General of Foreign Trade (DGFT), which has the responsibility for implementing the
government’s foreign trade policy.
• The Bureau of Indian Standards (BIS), which has the responsibility as National Standards Body to
develop standardization, marking and quality certification of certain goods.
• The Wireless Planning Commission (WPC), which is a wing of the Ministry of Communications and
has the responsibility as regulatory authority for frequency spectrum management. All wireless
equipment needs approval from the WPC.
• The Food Safety and Standards Authority of India (FSSAI) is a regulatory authority for Food related
products.
• Plant Quarantine (PQ) is regulatory authority for imports of Plant and Agriculture related products.
• The Central Drugs Standard Control Organization (CDSCO) is the Central Drug Authority for
discharging functions assigned to the Central Government under the Drugs and Cosmetics Act.
Approval is required for all Pharmaceuticals and Bulk Drug.
• Animal Quarantine (AQ) is the regulatory authority for imports of animals and animal-related products.

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 Regulations - customs
Indian Maritime University

• Import Export Code (IEC)

• Goods and Services Tax Identification Number (GSITN)
• Customs Tariff Heading (CTH) / Harmonized System
Nomenclature (HSN)
• Customs Valuation Regulations (CVR)
• Free Trade Warehousing Zones (FTWZ)

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 Freight Forwarding – Modes
Indian Maritime University

• Ocean Freight
• Air Freight
• Truck Freight
• Rail

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 Indian Maritime University
Ocean FF

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 Indian Maritime University
Air FF

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 Indian Maritime University
Truck/Road FF

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 Indian Maritime University
Rail FF

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 Domestic and International FF networks
Indian Maritime University

• Freight forwarding networks can help you with better

coordination to streamline your workflow.
• Freight forwarding networks are reputable groups of freight
forwarders who work with each other to improve the excellence
of freight, logistics, and customs brokerage services.
• Freight forwarding networks serve as a worldwide umbrella
network of vetted members who work with each other under
established standards.
• They actively promote and support each other in logistics, and
related services by pooling sales, operational and financial
resources

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 FF Networks - 2023
Indian Maritime University

• Container Xchange
• MarcoPoloLine AG
• Security Cargo Network
• Globalink Network
• Conqueror Freight network

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 Indian Maritime University

Questions?

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