An Overview on Import Shipment for beginners

Shipping:
Definition:
It is defined as the physical transportation process of the cargoes and
containers from one place to another by means of any mode namely
road, sea or airways.
Shipping stakeholders
a) Exporter
➢ Exporter is the person who sends his cargoes to the purchaser
who is in another country.
➢ The exporter is also known as manufacturer, shipper, sender or
consigner.
➢ Shipper has to pay the export charges to the shipping line.
b) Importer
➢ Importer is the person who receives the cargoes from the
exporter who is in another country.
➢ The importer is also known as consumer, receiver, or consignee.
➢ Receiver has to pay the import charges to the shipping line.
c) Container manufacturer:
➢ First let us find out what is a container. So container is a rigid body
made of steel to store the cargoes. It is of many types namely dry
container, reefer container, open top container, flat rack
container and tank container.
➢ The container manufacturer is the one who manufactures the
containers for any customers but not limited to shipping lines and
the container leasers.
d) Container leaser:
➢ Container leaser is the one who leases the containers to any
customers but not limited to the shipping line alone.
e) Shipping line:
➢ Shipping line is the entity who owns the ships and containers. The
shipping line helps transporting the cargoes from one place to
another via sea lane.
➢ The shipping line owns the containers.
Note: Shipping line may lease some containers from the container
leaser.
➢ Usually the shipping line will have the container ratio in the
following structure;
Own_containers:Leased_containers::51:49
f) Customs/Central excise officials
➢ Customs are the government personnel whose sole job is to
collect the tariff for the international trade of goods and to
control the flow of the good from and to the countries including
verification of the documentations involved in the export and
import process, and also to inspect the cargoes whether they are
genuine or smuggled goods. With addition to this, the customs
also verify whether the cargoes exported and imported are
included in the government’s approved list which incorporates
the allowed and approved cargoes by the government for
exporting and importing the goods.
Example scenario 1: Indian government approves the export of
onions since India is producing surplus of onions.
Example scenario 2: Indian government prohibits to export onions
if in case there is deficit in the onion production and high demand
in onion.
Example scenario 3: Indian government also approves the export
and import of onions for only some certain friendly countries. Eg:
India prohibits the export and import process with the Pakistan.
➢ Central excise are the government personnel who controls the
movement of only the manufacture or production of the goods.
 The central excise officials will issue the “Sub Manifest
Transshipment Permit” with addition to the other documents
common to the customs which are all will be sent to the customs
by the Central excise personnel through a sealed cover which can
only be opened by the customs for verification.
➢ Customs officials will always present in the Container Freight
Station (CFS) and the Central excise official always present in the
ICD (Inland Container Depot) to perform their respective duties.
➢ Exception: There are some customers called Green channel
customers who does not need any customs clearance to proceed
with the export and import process.
g) Freight forwarders
➢ Freight forwarder is the agent/broker who assist the exporter and
importer in their exporting and importing process respectively.
➢ Since the exporters/importers will not have much time to look out
the exporting and importing activities respectively, they establish
a relationship with an agent/broker called Freight forwarder to
perform the export and import process of their goods.
Shipping facilities
The following are the shipping facilities involved to assist the shipping
process;
a) Depot
➢ It is the yard for storing the containers. The Depot stores the
containers from more than one shipping lines.
➢ Apart from storing the containers, repairing process shall also be
performed in the depot.
Note:
o Warehouse is the place to store the containers inside the
physical shelters.
 o Yard is the place to store the containers just in the open
ground.
b) Container freight station (CFS)
➢ The CFS is the warehouse facility where the cargoes shall be
stuffed/de-stuffed in the containers.
➢ It shall be usually located near the port.
➢ The customs personnel will present in the CFS and will perform
their inspection and verification process of the cargoes. In the
case of the export scenario, post the successful process, the
customs personnel will seal the container with their own specific
customs lock in the CFS. This lock will be unlocked when it is
imported in the destination country CFS.
c) Inland container depot
➢ The ICD is the warehouse facility which is meant only for the
hinterland exporters.
➢ The exporters will take the stuffed containers to the ICD for the
inspection and verification process.
➢ Here the containers stuffed with the cargoes are inspected and
verified by the central excise personnel and not by the customs
officials.
➢ Customs officials are present in the CFS and the Central excise
personnel are present in the ICD.
➢ Once everything is cleared, then the stuffed container can be
moved directly to the port terminal.
➢ In most of the scenarios, the containers form the ICD are taken to
the port though the railways. When the rail reaches the port, the
containers are unloaded in the place near the railways itself but
not in the container yard. When the vessel reaches the port
terminal, then only the port truck will come to the rail container
 storage place and pick-up the container and moves towards the
Quay to load it on the vessel.
d) Port
➢ The port is the international trade junction where the interchange
of the goods take place through the process of export and import.
The port consist of many port terminals where all the terminals
will have the common port gateway only through which the
transporters can enter to go to the respective port terminals.
➢ Port and terminals are different wherein the port can be called as
port terminal only if it has only one terminal which is a rare
scenario.
➢ The port terminals are owned by respective private owners
namely L&T, etc.
➢ The below diagram depicts the port and terminals;
 Berth 1

Berth
2
Terminal 1

Berth 3

Gateway

G
Berth
1 a
t Port
Terminal 4 e gate
w
a way
Berth y
2

Gateway Gateway

Berth 4

Terminal 3 Terminal 2
Berth
2

Berth 1 Berth 1 Berth 2

➢ Difference between the Port and Harbor:

o Both are same in meaning with only one main difference where
the Port is made artificially/man made and harbor is made
naturally.
o The port terminal comprises of the following;

e) Port terminal
➢ Port terminal is the place where all the containers are mover
from/to the CFS to load and unload them on the vessels.
➢ The below diagram depicts the Port terminal structure;
 Gateway Port terminal

Container yard

Container yard

Quay

Berth 1 Berth 2

Berth 1

Sea shore

Container yard
It is the port facility where the containers are stored post the
acceptance for the export and import.
Quay/Wharf
Quay: It is the structure built at an angle to the navigable waterway
with sufficient depth of water by its side in such a way that the
container ships shall be docked or stationed for loading and unloading
the containers/goods.
 Quay can accommodate the big ships.
Wharf: It is similar to the Quay but it can accommodate only the small
ships and streamers.
Berth
Berth is the place where the ships can be safely docked alongside the
Quay for loading/unloading the containers from the port terminal.
Shipping process – High level
It comprises of the following processes namely;
a) Import
It is the process of receiving the cargoes from another country by
means of roadways, railways, seaways or airways.
The below step by step descriptions shall provide the outline of the
import process;
1) Carrier reaches the destination port. Before reaching the destination
port.
2) On arrival, the Shipping line shall intimate the FF (in place of
importer) with the document called Cargo Arrival Notice (CAN) with
which the FF will approach the customs with the help of the Customs
House Agent (CHA) to finish the customs documentation to clear the
import of the cargoes.
3) The shipping line shall issue the containers list to the CFS.
4) CFS will send the transporters to the port terminal to pick up all the
containers as per the list issued by the shipping line which are
unloaded from the carrier to the Port’s Quay.
Note:
 ➢ Importers have to pay the duty charges to the Government since
the Government shall not encourage the imports since it affects
the country’s home made goods.
5) The Demurrage charge is not billed on the shipping line by the Port
terminal since it is not applicable for the import process.
6) The moment the container is landed in the CFS from the port, the
detention charge is billed on the importer by the Shipping line until it
reaches the depot recommended by the shipping line.
7) In the CFS, the customs officials will perform the inspection and
verification process of the cargoes in the container. The customs
officials will store the customs cleared cargoes and not cleared
cargoes in separate sections respectively.
Note:
The customs shall allow all the following cargoes for the bidding
process with the approval from the exporter;
i. Cargoes which are not cleared by the customs
ii. Cargoes which are cleared by the customs, but not yet
accepted by the importers up to some time period.
8) The Shipping line will issue the Delivery Order (DO) to the FF for the
customs officials in the CFS to allow the cargoes to be handed over
to the importer
9) Along with the delivery order, the shipping line will issue the gate
pass to the importer/FF only when the importer/FF pays the full
detention cost amount to the former. The shipping line will bill the
importer/FF the detention cost considering some time period and
will capture the same time period in the gate pass. It is also known
as detention charge.
10) Once the container reaches the depot gate by the transporter
nominated by the FF on behalf of importer, the transporter will show
the gate pass to the depot gate-in personnel.
11) The gate-in personnel will check the time period in the gate pass
which was actually captured by the shipping line.
Scenario 1: The transporter surrendering the container to the depot
at the timeline fixed by the shipping line
Incase the transporter has surrendered the container before the
gate pass timeline fixed by the shipping line, then the depot gate-in
personnel will allow the transporter to bring in the empty container
and store the same inside the depot container storage yard.
Scenario 2: The transporter surrendering the container to the depot
beyond the timeline fixed by the shipping line
The depot gate-in personnel will not allow the transporter to bring in
the empty container and will inform the shipping line for the late
arrival of the empty container in the depot. The shipping line will
again charge the importer/FF for the surrendering the empty
container beyond the defined time line.
12) Once the container enters inside the depot, there is a person
named Surveyor who surveys the containers if there is any damage
or not.
13) Post the successful survey process, the container will be stored in
the depot.
14) Finally the FF will charge the importer for his job done on behalf
of the importer.
15) Again the supply chain will follow with the exporting process.