Having an efficient logistics strategy is an important part of any business that deals in the import/export of goods across borders. Devaluing the importance of transportation can lead to unnecessary delays and financial encumbrances. Freight forwarders serve as the missing link in the logistics communication, ensuring a safe and timely delivery of the goods. They cater to all the basic and complex operations of the clients, from supply chain management to the final distribution of the goods to the destination.
Here are some of the ways a freight forwarder can improve your logistics operations:
- Thorough Knowledge: Freight forwarders have a complete understanding of Customs rules and regulations. They keep themselves updated with any important amendments therein. This can help you to avoid any costly penalties or confiscation of the consignment by Customs officials. They understand the speed, cost and reliability of the different shipping methods as well as guide you in selecting the most appropriate one.
- Access To State-Of-The-Art Technology: It is important to know the progress of your transported goods throughout transit. Freight forwarders have access to online tracking systems that allow them to receive real-time data about the location of your shipment and the estimated time to reach the destination.
- Cost And Time Efficiency: Saving time and money is the essence of a successful import/export business. When you work with a freight forwarder, you can rest assured of shipping your goods in the most cost effective manner in the shortest possible time. They will help you choose the most viable route for the transportation of your consignment, thus, minimizing downtime and obstacles. They have an extensive network of domestic and international carriers to safely get your goods to the destination.
- Insurance Coverage For Goods: While shipping goods, there may be a possibility of en-route damage or theft. Many freight forwarders offer cargo insurance to minimize the liabilities caused against damage occurred due to unforeseen incidents during the transit. This mitigates the financial risk associated with the transportation of goods.
Freight Bills versus Bills of Lading: There are a lot of different terms within the shipping and logistics industries, and it is important for customers to have a clear understanding about those terms – it is enough on its own to help you understand a lot of what is happening with your shipments. One of the single most important terms to understand is the difference between a bill of lading and a freight bill. They are very similar at first glance, but they have some differences worth paying attention to.
• Bills of Lading – A bill of lading is an official document that gives a precise name and number to each item being shipped. They are admissible in a court of law if needed, and include information like value, weight, and more. They essentially represent the agreement between the shipper and the carrier since they detail what is being shipped, where it’s going, and more. It is a kind of service level agreement, and as such it is vital to ensure that they are accurate.
• Freight Bill – A freight bill is not admissible as evidence in a dispute. They are essentially invoices that include the price of the shipment, additional charges, and other information. It’s important to maintain them for your records – not because of any legal situation, but for your own records and review. While knowing the difference between the two is the first step, taking a closer look at them is important.
As mentioned above, the bill of lading is a vital piece of documentation since it serves as a legally binding document between the shipper and the carrier. Some of the items you will find listed on the bill of lading include: shipper and receiver’s names, special instructions to the carrier, PO or account numbers used for order tracking, date of the shipment, number of units in the shipment, type of packaging, a note if any hazardous materials are included, a description of items, NMFC freight classification, exact weight of the shipment, and declared value of the goods within the shipment.
Essentially, the bill of lading serves three key purposes, each one of which deserves closer attention as well.
(1) Evidence of Contract of Carriage: It’s important to note that the contract between a buyer and seller exists as soon as the buyer places the order, and the contract between the shipper and the carrier exists once the booking for the shipment is made. While the bill of lading isn’t the actual contract, it serves instead as evidence of the contract between the shipper and the carrier. That’s why its accuracy is so vital.
(2) Receipt of Goods: The bill of lading is issued by the carrier or their logistics provider, and is issued in exchange for receipt of the freight. This means that it serves as proof that the carrier has received the goods in good condition.
(3) Document of Title: This means that whomever holds the bill of lading essentially has the legal right to claim the goods. However, different terminologies and different consignments within the lading will have an impact on the way this title claim works.
Types of Bills of Lading: There are two primary types of bills of lading, and each one will have a different impact on the document of title aspect of its existence. These two types of bills of lading are: (1) Straight Bill of Lading – This is a bill of lading that is simple and straightforward. The goods are consigned to a designated party. (2) Order Bill – This is a type of bill in which the goods are consigned over to the order of a named party. The biggest difference is that straight bills of lading are generally not negotiable, while an order bill is.
Inaccuracies In A Bill Of Lading: There are numerous potential problems that can arise when you fail to use an accurate bill of lading. These include: (1) Loss of the right to limit your liability; (2) The loss of P&I coverage; (3) Loss of the right of indemnity from the charter; (4) Potential criminal prosecution; and (5) Exposure to claim. For instance, if your bill of lading states that the goods are loaded in good condition but they arrive damaged, the receiving party will have the right to make a claim against the carrier. But if there is no information or it is inaccurate, the receiver won’t have that right and it will be difficult to get your claim made or paid.
Ensuring Accuracy in a Bill Of Lading: There are a few tips that you can keep in mind to help ensure your bill of lading is as accurate as possible. Triple check all informants on the bill of lading before you sign. Set up a consistent bill of lading template that you can use each time. Utilize the services of a third party logistics provider and a transportation management system.