Export cargo can be exported to the overseas buyer by sea, air or land. However, shipment by sea is the most popular and generally resorted to, as it is comparatively cheaper. Besides, the ship's capacity is far greater than other modes of transportation. Nevertheless, transportation by air is utilized for export of expensive items like, diamonds, gold, etc. The shipment stage includes the following steps:
(a) Reservation of shipping Space: Once the export contract is finalised, the exporter reserves the required space in the vessel for shipment. On accepting the exporter's request, the shipping company issues a shipping Order. The original copy of the shipping order is given to the exporter and the duplicate is sent to the commanding officer of the ship. The shipping order is an instruction by the shipping company to the commanding officer of the ship that the goods as per the details given should be received on board.
(b) Arrangement of Internal Transportation up to the Port of Shipment: The exporter makes necessary arrangements for transportation of goods to the port either by road or railways. On loading goods into the railway wagon, the railway authorities issue a 'Railway Receipt', which may be either 'freight paid' or freight to pay'. It serves as a title to the goods. The exporter endorses the railway receipt in favour of his agent to enable him to take delivery of the goods at the port of shipment.
(c) Preparation and Processing of Shipping Documents: As the goods reach the port of shipment, the exporter should issue detailed instructions to the C&F agent for the shipment of cargo along with a complete set of the documents listed below:
(d) Customs Clearance: The cargo must be cleared from the Customs before it is loaded on the ship. For this, the above mentioned documents, along with five copies of shipping bill, are to be submitted to the Customs Appraiser at the Customs House. The Customs Appraiser ensures that all the formalities relating to exchange control, quality control, pre-shipment inspection and licensing have been complied with by the exporter. After verification, all documents, except the original GR, original copy of Shipping Bill and one copy of Commercial Invoice, are returned to the C&F agent.
(e) Obtaining 'Carting Order' from the Port Trust Authorities: The C&F agent, then, approaches the Superintendent of the concerned Port Trust for obtaining the 'Carting Order' for moving the cargo inside the dock. After obtaining the Carting Order, the cargo is physically moved into the port area and stored in the appropriate shed.
(f) Customs Examination and Issue of 'Let Export Order': The Customs Examiner at the port of shipment physically examines the goods and seals the packages in his presence. The same can be arranged for at the factory or warehouse of the exporter by making an application to the Assistant Collector of Customs. The Customs Examiner, if satisfied, issues a formal permission for the loading of cargo on the ship in the form of a Let. Export Order✝.
(g) Obtaining 'Let Ship Order' from the Customs Preventive Officer: 'Let Export Order' must be supplemented by a 'Let Ship Order' issued by the Customs Preventive Officer. The C&F agent submits the duplicate copy of Shipping Bill, duly endorsed by the Customs Examiner, to the Customs Preventive Officer who endorses it with the 'Let Ship Order'.
(h) Obtaining Mate's Receipt and Bill of Lading: The goods are then loaded on board the ship for which the Mate or the Captain of the ship issues Mate's Receipt to the Port Superintendent. The Port Superintendent, on receipt of port dues, hands over the Mate's Receipt to the C&F Agent. The C&F Agent surrenders the Mate's Receipt to the Shipping Company for obtaining the Bill of Lading. The Shipping Company issues two to three negotiable and two to three non-negotiable copies of Bill of Lading.
Shipping bill filing is mandatory for any exporter when moving goods out of country. Shipping bill is a legal document to be filed with customs to complete necessary export customs formalities of country to move goods out of a country. Shipping bill along with other required export documents is filed by exporter or his agent. After completion of necessary customs formalities, a ‘let export order’ is obtained in shipping bill. Shipping carrier can move goods only after obtaining such let export order as a proof of completion of customs procedures under the said shipment.Difference between EGM and Shipping Bill What is EGM? How does an Export General Manifest work?
Once after moving goods out of country, filing of EGM by shipping carrier is a legal requirement. After sailing vessel or aircraft crossed respective country’s territorial border, the shipping carrier files with customs, the details of shipment moved out of country based on the details of shipping bill. This EGM is one of the proofs adopted by customs department for exports. The customs department releases export promotion copy of shipping bill (EP copy of shipping bill) to the exporters, on the basis of such EGM filed by shipping carrier of goods. Export promotion copy of shipping bill is one of the documents accepted as proof of ‘Export’ by various government agencies to extend various export benefits to exporters.
What is IHC? How does THC work? What is the difference between THC and IHC in export and import? Is IHC applicable for port to port shipment?Difference between IHC and THC in export and import.
IHC means Inland Haulage charges and THC Terminal Handling Charges. The transportation cost to move goods from inland container freight stations to sea port of loading or vice versa is called Inland Haulage Charges IHC. Terminal handling charges is the charges payable to port terminals against handling equipments.
The term IHC - Inland Haulage Charges means the transportation charges from inland container freight station to sea port of loading or vice versa. If Cargo freight station is away from sea port of loading, the shipper completes customs formalities at such container freight station and arranges to move cargo to port of loading either by rail or road. Normally, most of cargo in such locations is moved by rail. If moved by rail, the charges of moving goods from such location to port of loading or movement charges from port to inland freight station is known as Inland Haulage Charges. Inland haulage charges vary CFS to CFS, as the distance from CFS to port of loading varies one to another. Inland Haulage Charges – IHC – is collected by shipping line when releasing Bill of lading for export shipments, and when issuing Delivery Order in case of import.
Terminal Handling Charges (THC) is the charges collected by terminal authorities at each port against handling equipments and maintenance. THC varies port to port of each country, as the cost of handling at each port differs one to another port, depends up on the total cost of port terminal handling at each location. Normally, Terminal handling charges (THC) for exports is collected from shipper by shipping lines while releasing Bill of Lading after completion of export customs clearance procedures. In the case of shipments moved from inland destinations other than sea port, the said THC is collected at same location while releasing bill of lading by carrier. The import terminal handling charges is collected by shipping carriers at the time of issuing delivery order to consignee to take delivery of goods.
We wish to bring to your kind attention to our earlier circular dated Aug.17, 2015 informing about new GSP system of European Union which will come into effect from Jan.1, 2017. The following are the highlights of the system.