A Littoral State
September 19, 2016
Factors influencing trade fluctuations
September 19, 2016
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In moving cargo, many international procedures and rules about documentation have to be followed carefully. Among important aspects relating to cargo imports and exports are the following:

  • Customs – Every country has regulations relating to what may be brought into the country and whether a “duty” (a state-imposed fee) will be placed on a particular item if it is brought into the country. Sometimes these customs “duties” are in place to protect local industry from cheaper foreign products. For example, an item might cost $20 to make in the country but the landed cost of that item – imported from another country – is $16. To protect the local industry making that item, the country may impose a customs duty of $5 on the imported item. This means that the cost of buying the imported item will be $21, making the local item ($20) cheaper to consumers. Customs (a government authority that in South Africa is known as the South African Revenue Service or SARS) control the movement of cargo into the country, checking that import duties are paid, and also checking that no prohibited items (e.g. drugs or illegal weapons) are brought into the country. Customs therefore have to ”clear” cargo into the country and have the power to search containers or other items of cargo.Export cargoes are also subject to customs regulations, although fewer duties are payable on exports than on imports. The customs department also keeps records of imports and exports.
  •  Documentation – For imports and exports, a large number of documents need to be completed. This is necessary for the customs department, for the port authority and to ensure that payment has been made to the supplier.
  •  Bill of Lading – One of the important documents used in shipping is the Bill of Lading, which is the contract under which containers are carried. It is the contract between the carrier (the shipping company in whose ship the cargo is to be carried) and the shipper (the person or company who is sending the cargo). A Bill of Lading acts as a receipt and a contract. A completed Bill of Lading legally shows that the carrier has received the cargo as described and is obliged to deliver that cargo in good condition to the consignee (the person or company to whom the cargo is going). Some other important aspects about the Bill of Lading are the following :
    • On the front of the Bill of Lading are details of the cargo, the port and date of loading, the port and date of discharge, the name of the carrier and the ship in which the cargo will be shipped, and other information that is important to the shipping process.
    • On the back of the Bill of Lading are many clauses in very small print that govern the conditions under which the cargo is shipped. The carrier and the shipper agree to these terms and conditions. In theory, for example, they could tell the owners of a container that was going to be discharged in Cape Town to go and fetch it from Durban where they had found it convenient to unload it. In practice, any shipping line that exercised its full contractual rights like that would soon have no customers. If the wind is too high to permit discharge in Cape Town or if there is a strike or heavy congestion that makes it uneconomic for the ship to wait outside Cape Town, the shipping line may well discharge the container in Durban but will then either tranship it back to Cape Town or truck it down to Cape Town in order to keep the customer happy and obtain future business.
    • Title of Ownership – A Bill of Lading gives the right to possession of the cargo at the discharge port.
    • A more detailed discussion of Bills of Lading will be found in the Grade 12 section.
  • Forwarding and Clearing Agents – As you can see, importing or exporting goods can be quite complicated. Delays or not having the right documentation can cost a lot of money in penalties. It is important to have experts helping an importer or exporter to ensure that the cargo is moved quickly and smoothly. Therefore, to help with the documentation and transporting the cargo to or from the port, an exporter will appoint a forwarding agent while an importer will appoint a clearing agent. These agents are experts in moving the cargo through the port.
  • Logistics Warehousing – Logistics is the moving of cargo and equipment. Logistics Warehouses are operated by specialist companies who import a particular type of goods (e.g. electronic goods) and distribute them on behalf of the manufacturer. For example, ABC Logistics in Durban acts for XYZ Electronics in Korea. ABC imports electronic goods from XYZ, they arrange all the documentation and payments (including import duties, shipping costs, etc), ABC keeps the good sin their huge warehouse in Durban and shops order their supplies of XYZ electronic equipment from the ABC warehouse. ABC will arrange the delivery of the equipment to the shops on behalf of XYZ. This saves the individual shops from having to handle all the ordering and importing procedures from Korea. Instead of XYZ in Japan receiving dozens of different orders for electronic equipment, it will receive one order (from ABC) and will make one shipment instead of dozens of shipments to a number of different shops.