LOGO

Chapter 3

TRANSPORTATION IN FOREIGN
TRADE
 OBJECTIVES

1. Distinguish between types of transportation in foreign

trade
2. Understand the meaning, effects, advantages and
disadvantages of each type transportation in foreign trade
3. Understand how to send goods and deliver goods in
foreign trade, thereby apply them to perform freight
forwarding.
4. Select and negotiate transportation and delivery of goods
in each specific situation.
2
 Exercise

❖ Calculate the optimal number of shoes packed in a 20 ft

container (5.85m x 2.32m x 2.28m), knowing that each carton
(20cm x 30cm x 40cm) can hold 6 pairs of children's shoes.
❖ Please quote the shoe export price according to FOB Hai
Phong price (Incoterms 2020), knowing that the factory price
at the factory in Hanoi is $1.56/pair, the domestic shipping
cost of 20ft container from Hanoi to Hai Phong is 5 million
VND/cont. Bill of lading issuance fee is $30/set. Terminal
handling charge (THC) is 200$/cont. Exchange rate is 1 USD
= 25.000 VND.

3
 Definition and role of
transportation

• Definition: Transportation in foreign trade is an

operation of means of transport to bring goods or
people from one location to another on an
international scale.
• Objects of transportation: people and goods
• Requirements: means of transportation (cars, airplanes, trains,
ships, pipelines, etc.)
• Modes of transportation: one method or multimodal method
• Transportation costs: increase the value of goods

4
Roles of transportation in foreign trade

Roles of
transportation

Promote
international Increase
trade good’s value

Create
environment
and business
opportunities
5
Transportation modes in foreign trades

Sea transportation

Air transportation

Road transportation

Rail transportation

Pipeline transportation

6
Sea Transportation

Pros Cons

7
 Types of Sea Transportation

Shipping
Commodity
schedule

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voyage goods

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 Voyage Charter and Liner Charter

Content Liner Charter Voyage Charter

Schedule Ships run regularly according to Ships do not run regularly, do not
a predetermined schedule, follow a certain schedule, but
stopping at certain ports according to the charterer's request

Charges -Pre-determined, stable for a - Fluctuations according to supply and

period of time demand
-Based on rates or charges -Agreement by the ship owner and
controlled by the charterer → complicated and time
Transportation Association consuming
→ simple, takes little time - Loading and unloading fees are
agreed upon by both parties
-Freight includes loading and
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9
Documents in Sea Transportation

10
 Bill of Lading – B/L

▪ What is bill of lading?

▪ Roles of bill of lading?

▪ Types of bill of lading? Meaning of each type

of bill of lading?

11
 Bill of Lading – B/L

▪ A type of sea transportation document is issued

to shipper based on shipper’s requirements

▪ Carrier:
• Or the representative of carrier

▪ Issued when:
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• shipped on board Ӂ ұ
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• received for shipment

12
 Roles of bill of lading

▪ Proof of cargo by sea is signed

▪ Receipt of goods by the carrier issued to the shipper
▪ Documents certifying the ownership of the goods
written in the bill of lading là ch ứng từ ị ề
xác đ nh quy n s ở hữu của ộ
hàng hóa thu c v ề ng ười gh

ậ
v n đ n ơ

▪ International payment documents

▪ Customs clearance for imported goods
▪ As the basis to sign insurance contracts for import and
export goods
ậ ơ
v n đ n để tên người nhận: vận đơn đích danh
ậ ơ
v n đ n để trống mục consignee: ai cầm được vận đơn này có quyền sở hữu hàng hóa (Blank B/L)
Vận đơn theo lệnh : Có cụm "to order of..." theo lệnh của (người nhận - consignee) trao quyền cho ộ
m t bên khác (carrier/
forwarder) để nhận đơn và giao hàng đến cho consignee

13
 Types of bill of lading

Legal aspect
• Straight B/L vận đơn đích danh (vd ở slide tiếp theo)
• To order of B/L vận đơn theo lệnh:
• To bearer B/L
Note
• Clean B/L thường là FCL, sau khi carrier nhận hàng từ shipper, carrier kiểm tra thùng container (chỉ bên ngoài), nếu con
• Unclean B/L ko bị móp méo, chảy nước, vvv...==> carrier phát hành Clean B/L, ngược lại nếu có vấn đề ==> Unclean B/L

Time issued
• Shipped on board B/L
slide tr ước
• Received for shipment B/L

Shipment method
only 1 means of transport, tuy nhiên trong tr ường hợp ể ả ậ ơ ạ ể
chuy n t i. v n đ n này ko ghi l i các đi m d ừng==
• Through B/L
more risk
• Multimodal B/L several shipments (different means of transport
• Charter party B/L
Collection method
• Master B/L ậ ơ ủ
v n đ n ch : do chính ch ủ phát hành

• House B/L ậ ơ
v n đ n th ứ cấp, ậ
dô công ty giao nh n phát hành

Characteristic
• Original B/L
• Copy B/L 14
 Types of bill of lading

❖ Straight B / L: A bill of lading issued to a named consignee. Only the

undersigned on the bill of lading can receive the goods, the carrier will only
deliver the goods at the named port of destination to the person named in the
bill of lading, which cannot be transferred to others by endorsement.
❖ To order B / L: The bill of lading does not specify the name of the consignee
but states clearly it receives the order from whom; can be to order of shipper or
to order of Bank. This type of bill of lading can be transferred many times by
endorsement. This is a bill of lading commonly used in international trade and
ạ ậ ơ
lo i v n đ n này có th ể ể
đc chuy n nh ượng ề ầ ằ
nhi u l n b ng hình th ức ậ
kí h u.==> minimize the risks, ==> ph ổ ế ấ
bi n nh t . However

B/L is lost, can nit receicve the goods to order of...

transport.
❖ To bearer B / L: A type on which the consignee's name is not specified, the
captain will deliver the goods to whom submit a B / L and therefore this type is
transferred by hand delivery. 15
 Straight Bill of Lading

consignee iss the owner of the goods, only the consignee written here is

allowed to received the goods (even if they don't show the orriginal B/L

11
To order of Bill of Lading

12
 Types of bill of lading

❖ Shipped or Laden on board B/L: is a B/L issued after loading into

the ship. On this B/L, the day, month, year of delivery is specified.
Buyer and issuing bank are required to present "Clean and Shipped
on board B/L"

❖ Received for shipment B/L: A type of transport document issued

before goods are loaded onto the ship (maybe goods are still in the
warehouse, port ...). On this B/L, it does not specify the date of
loading, but clearly stated that the goods were "received for
loading", it does not legally represent a proof of loading but acts as a
commitment by the carrier to transport those goods.

18
 Types of bill of lading

❖ Through B / L: A bill of lading used in the case of transporting goods

(transhipment) along the way, ie changing ships and carriers but the
same mode of transport.

❖ Combined Transport B / L or Multi modal Transport Documents: is a

document used in transport by two or more different means of
transport and commonly used in container transport, Pallets.

❖ Charter party B / L or Congen B / L: Used in charter ship method.

19
 Types of bill of lading

➢ Master B/L: is the bill of lading issued by the Effective Carrier to the
exporter or shipper providing freight forwarding services.
➢ House B / L: Issued by the forwarder, it is issued on the basis of the
Master B/L and is the legal basis to regulate the relationship between
the delivery service provider and the customer.
➢ Original B / L: The type used to receive goods, pay, transfer, claim,
sue ... issued by the carrier at the request of the shipper
➢ Copy B/L: the type of B/L is used to compare, check information.

20
 Process of getting B/L

Deliver Shipper
Shipper goods to prepares
prepares the carrier/ Shipper
goods forwarder Instruction - SI shipping

notes: ch ỉ
ị ế
th x p hàng

Send SI to
Receive and Make payment carrier/forwarder
check for B/L before ship’s
original B/L departure

Amend B/L (if

any)

21
 B/L in practice

❖ Original B/L:
▪ Full 3/3, airway in reality, consignee can have all 3 originals while bank and shipper keep the copies

▪ Telex release goes with surrender B/L,

❖ Master B/L
▪ As a master/ a carrier
▪ Safe when delivering goods
▪ Used when applied L/C payment
❖ House B/L
▪ Easy to amend B/L, low cost
▪ Riskier when having conflicts
▪ Handling fee will be applied
▪ LCL must use House B/L

22
 B/L in practice

❖ Surrendered B/L
▪ Shipper re-send full original B/L to the carrier/ forwarder
▪ Pay fee of surrendered bill
▪ Cancel the original B/L and issue surrendered B/L
▪ Carrier “call” the agent in the importing country to release the
goods.
▪ Shipper scan B/L and send it or send code telex release
to the consignee
▪ Release the goods with surrendered B/L is faster than that
with original B/L
▪ Pay more fee of telex release
▪ Note: The carrier could issue surrendered B/L immediately
when receiving goods from the shipper.
23
24
 Sea Transport documents

❖ Shipping note: This is the instruction of the shipper for the shipping
company and port authority, the loading and unloading company,
providing all the details about the goods sent to the port for loading
and instructions necessary.
❖ Mate’s receipt: A document issued by the ship mate to the shipper
and the owner confirms that the ship has finished delivery.
❖ Cargo manifest: This is a summary of the types of cargo loaded on
board to transport to different ports, established by agents at the port
of loading based on the waybill.
❖ Dock sheet & Tally sheet: A Dock sheet is a type of tally sheet that
records the number of goods delivered at the wharf. A tally sheet is a
type of tally sheet that the goods loaded onto the ship are recorded by
the tallying officer. ấ ờ ể
gi y t

ả
ế ờ ả ố ượ ỡ
ki m đ m hàng hóa: khi HH r i c ng s

ớ
sheet ph i trùng v i dock sheets
lố ng là bao nhiêu, khi d hàng xu ng, tally

❖ Ship’s storage plan: This is a ship placement chart. 25

 Why uses Mate’s receipt?

• The mate's receipt records the results of the cargo

inspection that the ship's cargo inspectors conducted while
the cargo was loaded onto the ship.
• In fact, the vice captain is the person authorized by the
shipper having the right to dispose of and escort goods on
board.
• The vice captain, on behalf of the shipper, is responsible
for rescuing the goods and is responsible for the shipping
contract for the goods when the ship is in distress.
26
 INCOTERMS

❖ Incoterms stands for International Commercial Terms.

❖ Issued by the International Chamber of Commerce in
Paris
❖ Latest version 2020, effective from 01/01/2020
❖ Clarifying the division of responsibility, cost and risk in
the process of transferring goods from seller to buyer
Responsibility: custom charance, domestic transportation, ocean transortation (booking), Insrurance, Unloading, Loading,...

27
 INCOTERMS

➢ Scope
Only limited to issues related to the division of obligations, costs and
risks of the parties in contracts for the sale of tangible goods

➢ Legal value of Incoterms

✓Not mandatory international trade law ệ ệ
Vd: Doanh Nghi p Anh ko làm vi c theo Incoterms

✓It must be shown in the purchase and sale contract to be legally

valid
✓Not the only commercial practice document in international trade

28
 INCOTERMS

Incoterms 2000 Incoterms 2010

• E: EXW • All transport methods:

• F: FAS, FCA, FOB EXW, FCA, CPT, CIP,
• C: CFR, CIF, CPT, CIP DAP, DAT, DDP
• D: DAF, DES, DEQ, • Sea transport: FAS,
DDU, DDP FOB, CFR, CIF

29
INCOTERMS 2010

28
 Air Transportation

❖ Characteristics of air transportation

❖ Air transport often has a high and fast shipping speed. Air transport

requires a comprehensive technical equipment and transportation

facilities such as airports, meteorology and information.

❖ Air transport respond promptly in emergencies and in cases where

other vehicles cannot be used such as rescue, storm, earthquake.

31
 AIR TRANSPORTATION

- Straight route
- High speed, less time to deliver goods.
- Safe
- Offer standardized service
- Simplify process and documents
- Respond promptly in emergencies

- Higher fees/charges.
- Require advanced techniques and safe
conditions.
- Unsuitable with big volume, low value
goods.
- Invest much money on infrastructure and
human resources. 32
 Infrastructure of air transportation

• Place for airplane to arrive and depart

• Include areas for importing, exporting and transshipment
Port goods.

• Mode of transport
• Combined airplanes for customers and goods
Airplane • Airplane for goods only.

• Xe vận chuyển container/pallet (Container/pallet transporter)

• Xe nâng (Forklift truck)
Other • Thiết bị nâng container/pallet (high loader)
equipmen • Băng chuyền hàng rời (self propelled conveyor)
• Pallet/Container
t

33
 Goods in air transportation

• Small volume

• Immediate delivery

• High-valued goods

• Long distance

34
 Regulations and organizations of
international air transport

❖ Invented in the early 20th century but until the 30s of this century this mode was

truly developed.
❖ In 1944, the international civil aviation organization of the United Nations
members: countries

abbreviated as ICAO was established. The second war broke out, causing the
operation of this organization to be delayed. In 1947, this organization actually
came into operation with 4 fundamental purposes including:
❖ Ensure civil aviation growth safely and orderly. Air transportation without flight
corridors is very dangerous and does not guarantee security for countries.
❖ Encouraging the development of flight systems, airports and air modes. Air transport is
required to have other means of service such as airport systems, beacons, air traffic,
transport vehicles, etc.
❖ Encourage the design and control of air transport for peaceful purposes. This
organization mainly operates for the purpose of developing civil aviation.
❖ Ensure civil aviation must meet regularly, effectively and economically 35
 Regulations and organizations of
international air transport

❖ In 1973 there were 125 member countries

❖ In 1988, 34 more countries joined, bringing the total number of members to 159.
❖ The International Civil Aviation Organization has drafted numerous international
conventions on aviation, such as the Geneva Convention in 1948 on the recognition of the
legality of international aircraft, the 1952 Roman Convention on damages in countries
where aircrafts fly through. member: airlines

❖ Airlines have voluntarily established the International Air Transport Association (IATA).
The Association has more than 160 firms in member countries to cooperate and coordinate
on the regulations of air transport standards, types of fees and documents of aviation
procedures, etc. ==>set international air transportation regulations => have more power than the ICAO

❖ Accordingly, the air freight forwarders also meet together to form Freight International air
transport Association abbreviated FIATA. This organization aims to protect the rights and
promote the interests and responsibilities of the parties that deliver and receive
international air freight.
❖ Freight International air transport and the International Air Transport Association works
together to organize seminars on aviation training, transportation, automation development.

36
 Regulations and organizations of
international air transport

❖ About geography:
• Aviation Area 1 is called the Regional Transport Association 1 including the
Americas, Greenland and Bermuda Region, Hawaiian Islands.
• Aviation Area 2, called the Region 2 Transport Union, includes Europe
(taking into account the Ural Mountains of Russia), Iceland, the Azores
Islands, Africa and adjacent islands, the Middle East and Iran.
• Aviation Area 3 called the Regional Transport Association 3 covers Asia
(from Pakistan), Australia and the Pacific Islands (except for Hawaiian
islands).

37
 Regulations and organizations of
international air transport

❖ About geography:
❖ Aviation Area 1 is called the Regional Transport Association 1 including the
Americas, Greenland and Bermuda Region, Hawaiian Islands.
❖ Aviation Area 2, called the Region 2 Transport Union, includes Europe (taking into
account the Ural Mountains of Russia), Iceland, the Azores Islands, Africa and
adjacent islands, the Middle East and Iran.
❖ Aviation Area 3 called the Regional Transport Association 3 covers Asia (from
Pakistan), Australia and the Pacific Islands (except for Hawaiian islands).
❖ Airline pricing and procedures will be issued every two years, including an orange
book of general rules and procedures, and a blue and red book of pricing. The red
color shows the rates for North America and Canada, while the green color covers the
rest. Those regulations make it possible for aviation to be considered a high-tech
transportation industry.

38
 Regulations and organizations of
international air transport

❖ About flight time: IATA divide the world into 24 time zones

Flight time will be divided by 24 time zones, each time will be added or
subtracted compared to the standard time zone is GMT (Greenwich mean
time). Therefore, for one day, there will be an international boundary line that
is symmetrical with the GMT time line. The plane flying from west to east
will be one day and vice versa.

39
 Regulations and organizations of international
air transport

❖ About airline price and IATA Airline Country

code
procedures:
FX FedEx Express USA
✓ Airline prices and procedures
BL Jestar Pacific Vietnam
will be issued every two years,
QF Quantas Australia
including an orange book of
FD Thai AirAsia Thailand
general rules and procedures,
TR Tiger Airway Singapore
and a green and red book of
VN Vietnam Airlines Vietnam
pricing. The red color shows
the rates for North America and IATA Airport Country
cod
Canada, while the green color e
covers the rest. Those PEK Beijing China
regulations make it possible for NRT Narita Japan (Tokyo)
aviation to be considered a ICN Incheon Korea (Seoul)
high-tech transportation BKK Bangkok Thailand
industry. 36
HAN Hanoi Vietnam
 Regulations and organizations of
international air transport

❖ General Cargo Rate- GCR: Applied to general cargo when it is necessary to travel
between two designated points without special value. This kind of charge will usually be
reduced gradually with a certain weight, which is usually 45 kg.
❖ Minimum –M: If this charge is lower, it won’t be profitable in transportation (including
handling charges) The minimum charge level of freight is decided by the IATA.
❖ Special Cargo Rate - SCR: This rate is lower than normal goods and depends on the
minimum weight, which is published according to the rates or depending on specific
conditions related to weight. Actually this is a competitive fee. ex: diamonds

❖ Class Rate / Commodity Classification Rate - CR / CCR: This is the discount or increase
rate based on regular freight. This charge applies to certain items, in designated areas or
when there is no separate regulated charge for specific items such as live animals, goods
valued over USD 1,000 / piece, luggage like cargoes, corpses, remains ...

41
 Regulations and organizations of
international air transport

❖ Freight All Kinds Rate - FKR: The general freight rate for all types of containers.
❖ Container Freight Rate - CFR: is a freight rate calculated based on a container
designed to be technically and certified.
❖ Other Freight Rate: This type of freight rate is applicable to special goods or to
transport in special circumstances without other freight rate regulations. This rate
includes the following types:
❖ Unit Load Device Rate - ULD: This is actually the cost of moving the Pallet, Igloo.
❖ Deferred payment Rate - DPR: is the freight rate for the goods that the time of
loading has not been determined. This type is cheaper than normal goods because
they often have to go behind due to the placement.
❖ Package Rate - PAR: applies to air transport. Airlines do so to avoid losing their
customers in case the sender wants to hire another airline to forward.
❖ Groupage Rate –GR: This rate is applied by aviation agents or professional
forwarding organizations when sending goods by container.

42
 Note for the fee

❖ Measurement of goods according to international practice: yards,

pounds, inches, barrels, metric tons
❖ Specifically in the aviation industry, if the weight of the goods is
large, it is calculated by weight (tons, kg), if the size is large, it is
calculated by cubic volume (m3).

43
 Air transport documents

1. Airway bill – AWB

2. Shipper's Letter of Instruction
3. Commercial invoice
4. Other documents if required
1) Shipper’s declaration about living animals
2) Shipper’s declaration about dangerous items
3) Shipper’s declaration about weapons and explosives

44
 Airway bill

Airway bill is a document issued

by the air transport agency to the
shipper to confirm receipt of the
cargo for transport.
there iss mo cladd

45
Types of airway bill

46
 Types of airway bill

❖ Master Airway Bill (M.AWB): An airway bill that the airline issues directly
to the shipper through the airline agent.
❖ House Airway Bill (H.AWB): An airway bill issued by air agents to
shippers when they perform consolidation services.
❖ AWB: An airway bill issued by an airline on which the carrier's
identification is displayed. This airway bill is used when the airline acts as
the carrier.
❖ Neutral AWB: A standard airway bill issued by IATA in 1986, with the
carrier's name on it, without the carrier's symbol, but with the words As
Carrier. FIATA recommends that forwarders use airway bill when they are
consolidating (acting as a transport contractor) or acting as an agent for an
actual carrier. This airway bill is intended to replace the consolidation bill
(H.AWB) because the consolidation bill does not meet the requirements of
UCP when paying by L / C.
47
 How to fill an airway bill

1st original – 2nd original – 3rd original –

original 1 for issuing original 2 for issuing original 3 for issuing
carrier consignee shipper

48
 How to fill an airway bill

Copy: 6-11 copies basing on what’s required

Copy 4 – Delivery receipt for airport of destination

Copy 5 - for Customs Declaration

Copy 6 - for receiving agent

Copy 7 - for Sales office

Copy 8,9,10,11 - extra copies

49
 Roles of airway bill

Proof of contract of carriage

Proof of receipt for delivery
Billing receipt
Insurance certificate
Customs clearance documents
Documents instructing the airline staff to receive the goods,
check the payment of freight
Unlike seaway bill, airway bill does not have validity, which
means that cannot be bought and sold transfer and when
receiving the goods without presentation of the original (only
required to show the receipt and identification ID to receive
goods).

50
 Other air transport documents

❖ Shipper’s Letter of Instruction for issued AWB)

❖ A type of document issued by the seller to the buyer or to the airline
in which it states full declaration of instructions related to the
shipment; Based on this document, the agent signs AWB to confirm
the content with the airline. In fact this acts as a guarantee,
commitment on goods.
❖ Commercial Invoice
❖ As the basis for customs in tax calculation, also the basis for all
consular documents.
❖ Other declarations
❖ Shipper’s Declaration for live Animals
❖ Shipper’s Declaration for Dangerous goods
❖ Shipper’s Certificate for Weapon and Demolition Explosive

51
 Types of bill of lading

❖ Clean B / L: A type of B / L on which the carrier does not make any

bad notes about the goods or goods packaging; is the B / L type
issued to the shipper by the carrier after the goods have been loaded
"In apparent good order and condition"; is the evidence that the
seller has fulfilled his delivery obligation and may be one of the
evidences on the quality and packaging of the goods; is the B / L
type accepted by bank for goods payment.
❖ Unclean B / L: A type of B / L on which the carrier has any bad
notes about the external condition of the goods or the packaging
such as "Broken case" "Leaking case" "Wet case" "Empty case" ...;
this type of B / L is not accepted by the bank

52