How shipping companies operate?
A shipping line is a company or organisation that owns and operates vessels, responsible for the handling and transporting of cargo aboard their ships. They deal with the cargo from point of origin to destination (port to port), transiting regular routes on fixed schedules aboard their own vessels. From the point of ordering a product in one country to the point of receiving it in another country, there are many players involved. Each player has a significant role in making sure the goods depart from point of origin and arrive at destination point with minimum disruption.
How they operate:
- Importer: Importer is the buyer. It is an organisation or a person who brings in goods or services into a country from abroad for personal use or for sale. The importer identifies the need for a product (goods) at a specific location, searches for the best supplier – globally, and places an order for purchase.
- Exporter: Exporter is the seller. He manufactures or procures the products required by the buyer and sends it out of the country to another foreign country.
- Banks: Banks play multiple roles in international trade. They act as financiers, negotiators of the trade contract, and custodians of the goods/documents.
- Insurance Company: Insurance is a crucial part of the shipping process. Insurance companies help cover the risks involved in transportation.
- Freight Forwarders: Freight forwarders are agents who coordinate with the other participants in the shipping process on behalf of the importer/exporter. They sometimes organise the haulage from the shipper to the departure port and also from the receiving port to the consignee (owner of the goods)
- Customs House Agents (CHA): assist the exporters and importers in getting clearance from custom authorities.
- Shipping Company: The company that owns the carrier (ship) that carries the goods from port of loading to port of destination.
- 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. The appointment of who handles the clearance process will depend on the agreement between the exporter and importer.
- 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.
- 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.