Shipping is an integral and critical part of international trade. The success of an international trade transaction is more often than not dependent on how one manages the entire shipping process.
To understand how the international shipping process works, first, let’s take a look at the main participants in the procedure:
1. Importer: Importer is the buyer. He identifies the need for a product (goods) at a specific location, searches for the best supplier - globally, and places an order for purchase.
2. Exporter: Exporter is the seller. He manufactures or procures the products required by the buyer.
3. Banks: Banks play multiple roles in international trade. They act as financiers, negotiators of the trade contract, and custodians of the goods/documents.
4. Insurance Company: Insurance is a crucial part of the shipping process. Insurance companies help cover the risks involved in transportation.
5. Freight Forwarders: Freight forwarders are agents who coordinate with the other participants in the shipping process on behalf of the importer/exporter.
6. CHA: Customs House Agents assist the exporters and importers in getting clearance from custom authorities.
7. Shipping Company: The company that owns the carrier (ship) that carries the goods from port of loading to port of destination.
8. Customs: In any international trade, custom authorities of at least two countries - country of export and country of import - are involved. The customs authorities provide clearance for the goods to leave the country of export and enter the country of import.
9. Port Authorities: Like the customs, port authorities of at least two countries are involved in the shipping process. The port authorities in the exporting country provide clearance for the goods to be loaded on the ship. The port authorities in the importing country provide clearance for the goods to enter the country of import.
10. Intermodal Transport Providers: Rail/road transport providers are also an important part of the shipping process. They facilitate the movement of goods from factory/warehouse to port of loading and the movement of goods from port of destination to the final destination.
The International Shipping Process - Exports from India
Contrary to popular belief, the international shipping process does not start when the shipment is loaded on a ship, it starts when the importer identifies the need for a particular product and floats an enquiry - globally, to procure those products.
The shipping process involves the flow of goods and documents from the place of origin to the place of destination. For the process to be completed successfully, the transfer of goods and the documents from one party to another must take place in synchronization.
Here is an infographic that shows the steps involved in the international shipping process (for a shipment exported from India) from the time the need for a product is identified till it is fulfilled.
We understand both the importance of international trade and the challenges involved in it. To reduce the time involved and make the process more efficient, we created an integrated supply chain platform that brings together some of the main participants in the international trade ecosystem.
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