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The shipping process is an intricate network of steps that link together to create a seamless transition between origin and destination.
It can be daunting for shippers with limited knowledge, so it’s important to understand each step in the process to make educated decisions that will affect your bottom line.
Doing so will help boost customer satisfaction, reduce storage costs, improve efficiency, identify problems quickly, and ultimately deliver a superior product or service.
In this blog post, we'll outline the various shipping process steps involved and provide helpful insights into how you can streamline operations while ensuring the efficient delivery of goods.
If you're just starting out or looking to refresh your understanding, we’ll cover everything you need to know about the shipping process.
Shipping Processes: The Backbone of Global Trade
The world of global trade has become an intricate web of shipping processes that enable countries to seamlessly transport goods from one corner of the world to another.
From container ships to airplanes, the transportation industry is continually evolving with newer technologies for efficient and fast deliveries. It's fascinating to think that a product may be made in one country, packaged in another, and sold in a third — and without the efficiency of shipping processes, none of it would be possible.
A well-managed shipping process influences how customers perceive a business and can have a major impact on customer satisfaction levels. On the other hand, poorly managed shipping processes can lead to delays, delivery errors, and damaged goods, which can negatively affect a business's reputation.
Let’s take a closer look at the different shipping process stages and methods available to ensure a streamlined shipping process.
Shipping Process Stages
Shipping processing is a crucial aspect of any business that deals with the movement of goods, whether domestically or internationally. It consists of three main stages, each of which plays a vital role in ensuring that orders are efficiently managed and delivered to customers on time.
Stage 1: Receiving Order
The first stage of the shipping process involves receiving an order from a customer. This stage typically includes the following steps:
- Order Placement: The customer selects the desired products and places an order through the company's website, sales representative, or other ordering channels.
- Order Confirmation: The company confirms receipt of the order and provides the customer with an order confirmation, usually via email or a notification on the ordering platform.
- Payment Processing: The company processes the payment for the order, whether through credit card transactions, bank transfers, or other payment methods.
During this stage, it is essential for businesses to have efficient systems in place to manage incoming orders, accurately capture customer information, and ensure seamless communication between all parties involved.
Stage 2: Order Processing
Once an order has been received and confirmed, the next stage is order processing, which entails preparing the goods for shipment. Key steps in this stage include:
- Inventory Management: The company checks its inventory to ensure that the ordered products are available and allocates them to the specific order.
- Picking and Packing: Warehouse staff pick the ordered items from the storage shelves and carefully pack them to prevent damage during transit.
- Labeling and Documentation: The company generates shipping labels and any necessary documentation, such as packing lists, commercial invoices, and customs forms for international shipments.
Efficient order processing requires streamlined workflows, effective inventory management, and proper staff training to minimize errors and delays in getting the goods ready for shipment.
Stage 3: Order Fulfillment
The final stage of the shipping process is order fulfillment, which involves delivering the goods to the customer. This stage encompasses the following steps:
- Carrier Selection: The company selects a suitable carrier or shipping service based on factors such as delivery speed, cost, and reliability.
- Shipment Collection: The carrier collects the shipment from the company's warehouse or designated pickup location.
- In-Transit Tracking: The company and customer can track the progress of the shipment using the provided tracking number or through the carrier's tracking system.
- Customs Clearance : For international shipments, the carrier or a customs broker will handle customs clearance procedures, ensuring that all required documentation is in place and any duties or taxes are paid.
- Delivery: The carrier delivers the shipment to the customer's specified address, completing the order fulfillment process.
Order fulfillment relies on effective collaboration between the company, carriers, and any third-party logistics providers involved in the shipping process. Businesses should continuously evaluate and optimize their fulfillment strategies to ensure timely and cost-effective deliveries.
By understanding and optimizing each stage, businesses can enhance their shipping efficiency, improve customer satisfaction, and ultimately drive growth and success in today's competitive marketplace.
As a crucial part of the global economy, the shipping process is vital for the transportation of goods across the globe. Organizing the most cost-effective international shipment requires careful consideration of multiple options for transportation, including:
From trucks to planes and ships, determining the best mode of transport can be a difficult decision to make. However, it's important to factor in key determinants like total cost, transportation time, and shipment security. For instance, shipping hazardous materials by plane may not be allowed, while some countries may not be accessible by road.
Ultimately, careful consideration is required when selecting the proper route and mode of transport to ensure that your shipping process runs smoothly and efficiently.
Shipping Process Steps
#1 Order Confirmation and Preparation
As buyers search for the best goods to import, they will ask suppliers for quotes. These quotes can come as a proforma invoice, which is an estimate subject to change. Once the quote is approved, the consignee creates a purchase order that outlines the order's details and cost of goods.
Then the seller needs to swing into action to ensure that the buyer receives their items on time and in good condition. When it comes to preparing products for shipment, meticulous attention to detail is an absolute must. That's why shipment packaging, parceling, and palletizing operations are carried out with the utmost care at the exporter's facilities.
#2 Shipping Term and Method Selection
Selecting the proper shipping terms and transport mode is crucial to any successful shipping endeavor. It's the second stage of the shipping process and ultimately determines the risk and cost incurred during transportation.
Incoterms, or international commercial terms, specify the responsibilities for both the seller and buyer and determine when the ownership and risk of goods are transferred. Choosing the right Incoterm ensures smooth communication and efficient operations.
Additionally, as we’ve mentioned before, the type of transport mode, such as ocean, air, or land, affects the delivery time, transit costs, and security of your shipment.
#3 Freight Booking
Partnering with a freight forwarder can alleviate many logistical challenges of shipping goods. With their expertise in preparing essential documents required for shipping and customs clearance, you can focus on your core business while they handle the details.
Essential Shipping Documents
Before sending the goods, both parties must prepare several essential documents to ensure a smooth and hassle-free shipping process. These documents play a crucial role in providing necessary information to the parties involved. The key documents that need to be prepared include:
- Commercial invoice - provides information about the goods being shipped, including their type, quantity, and value. It is required in most cases to demonstrate compliance with regulations and to calculate duties and taxes.
- Packing list (Weight list) - it's required if the invoice doesn't contain information such as the weight and number of containers.
- Certificate of Origin - a document that indicates the origin of goods and is often used by customs authorities to determine whether or not certain duties or taxes should be applied
- Bill of Lading, Airwaybill, or CMR - documents issued by a shipping company that outlines the shipment details for goods being transported. This includes information about items, weight, volume, origin, destination, and other relevant details
- Insurance document - a document that provides evidence of insurance coverage for the goods being shipped
- Import License (if required) - a document that confirms the importer has permission to import certain types of goods into a specific country. In some cases, an import license may also be required to secure certain types of financing
- Movement Certificates (EUR.1, A.TR) (if needed) - documents that show the compliance for all EU member states. Any country outside of the EU must register in one of these documents to qualify as a non-EU country
- Quality, Test, or Inspection Certificates (if required) - certain products may require additional documentation to verify the compliance of their contents. This could include certificates for organic products, textiles, pharmaceuticals, food, beverages, or chemicals.
When it's time to export your shipment, the forwarder can be relied on to book the correct routes in advance and secure transport for the freight. By entrusting your logistics to a reputable partner, you can have peace of mind knowing that your goods are in good hands.
#4 Goods Transportation
Once the goods are expertly packed and ready to go, the next step is transportation.
Depending on the shipping Incoterms, the transport will either be arranged by the supplier or the consignee with the help of their freight forwarder.
From there, export clearance can begin, ushering the products towards their ultimate destination efficiently and easily.
#5 Export Customs Clearance Processing and Placed In-Transit
When preparing to leave your country of origin, it's important to keep in mind that your goods must be cleared through customs before departing. Double-check step three to ensure that all necessary documents are in place for approval and that your goods will be free to leave the country.
While the customs process can seem daunting, it doesn't have to be. By having all documentation sorted before arrival at the border, you can make your experience as seamless as possible.
Cargoflip’s export documentation software can help streamline your shipping process. From enerating accurate paperwork to ensuring compliance with international regulations, this powerful tool offers a range of features designed to simplify the complexities of exporting goods.
If you’re looking for a cost-effective way to save both time and resources, sign up for a free trial.
#6 Import Customs Clearance Processing
After a long journey, your goods have finally arrived at their destination. However, before they can be delivered to their intended recipient, they must undergo an import clearance.
This process ensures that all necessary taxes, tariffs, and charges are properly applied to your imported goods. Additionally, some commodities may need to undergo quarantine inspection upon arrival to ensure they meet safety standards in the country of destination.
#7 Delivery to the Final Destination
After all the hard work of arranging the shipment, the final step is getting the goods to the customer. Since 53% of all shipping costs are attributed to last-mile delivery, it should not be overlooked.
This is where the Incoterms come into play again, determining who is responsible for handling this stage of the process. From there, you can determine the best transport options based on the specific shipment type: air or sea freight, FCL or LCL.
Wrapping Up the Import-Export Journey
Navigating the complexities of the shipping process can be a daunting task for importers and exporters alike. However, businesses can successfully streamline the process and ensure their goods' timely and safe delivery by understanding the key steps involved, preparing the necessary documentation, and working closely with professional partners such as freight forwarders and customs brokers.
Moreover, leveraging technology, such as Cargoflip’s export documentation software, can further enhance efficiency, reduce the risk of errors, and improve overall shipping management. As international trade continues to evolve and grow, mastering the shipping process will remain critical to business success worldwide.
By implementing the insights and strategies outlined in this article, importers and exporters can confidently chart their course towards shipping mastery, effectively overcoming challenges and capitalizing on opportunities in the global marketplace.