Shipping office services, helpline, consultancy and supply chain security

Friday 20 September 2013

TALES FROM THE ROAD 42 – CHECK YOUR DOCUMENTS - YOU KNOW IT MAKES SENSE

As an exporter there is only so much that you can do to try and ensure that your goods and services are being distributed by your overseas selling partners in a correct way. We British are mainly very good at following the rules, where we know they exist! We are fortunate to have long-established procedures, with English law being the bedrock on which most countries’ laws are built, with London still regarded as one of the world’s key financial centres, and with UK Customs being one of the most efficient customs authorities. We have a good understanding of procedure and documentation, and the importance of doing things “the right way”. In the time I have been running my own business, and for sixteen years before that when I worked in export roles in different market sectors, my worst payers and most troublesome projects have not been in distant or difficult overseas markets, they have been here in the UK! I believe that is mainly because our regulatory framework and our attitude to compliance is generally good when it comes to trading outside of our own country.

I recall a container load of second hand and reconditioned woodworking machinery being prepared for shipment to Ghana back in the mid-1990s. As the consignment was being inspected in the works yard by SGS, the Ghanaian customer’s British based friend arrived with a Ford Transit engine and four double mattresses that he had been instructed to load into the container. No paperwork, no goods value. Just stuff to add to the load. Well tough! Our documents had already been prepared and it would have frankly been a pain to alter them all at such short notice for this ‘afterthought’, so we declined to load, and it was left for me to explain to the customer’s representative why.

That might seem a bit harsh, but as an exporter it is vital to maintain the integrity of any shipment. It is the exporter’s responsibility to ensure that what is shipped complies absolutely with the documents it is shipped against. Our inspections services, HM Customs, and overseas Customs offices are going to spot significant discrepancy between the two. Then you are likely to experience delays to your consignment, possible demurrage charges or fines. It is probably simpler to comply than to default. And be in no doubt that it is not possible to pass on the responsibility to a third party, such as your freight forwarders, because the responsibility is yours.



There was another instance where a competitive European company shipped a large machine to the USA, where its value had been under-declared on the invoice. It probably would have passed through the system un-noticed but for the fact that the container in which the machine was carried was dropped as it was unloaded from the arriving vessel. And that led to a scrutiny of the load, delays to its onward shipment, and eventually significant fines being levied against the manufacturer that pretty well finished their business.

I recall two other examples where goods had arrived at their ports of destination in Saudi Arabia where the load was found to be discrepant with the documents. The first is funny, largely because it happened to a competitor of mine in the carpet industry who I didn’t especially like! They supplied a container load of bitumen backed carpet tiles for collection by their distributor in the Kingdom. The container was on the high seas for nearly three weeks, and then at the port for a couple of days before it was inspected…in the height of summer! If it was 40+ degrees outside the container, it boggles the mind to wonder what the internal temperature must have reached. And when the doors were finally opened, the top layers were a mash of melted bitumen and carpet fibres. Try checkcing that against documents!

The second example could have happened to me, so I will recount it less flippantly. I was due to ship six pallets of carpet tiles to Saudi Arabia for a one-off project – we rarely had any significant business there. Our distributor was a very tall German guy called Manfred, who I collected from the airport early in the morning after a late night out with our somewhat suspect Irish distributors. Manfred explained exactly how he wanted the pallets and boxes labelled to ensure that any delays due to inspection at the port in Saudi Arabia were kept to a minimum. I followed his advice to the letter, and the consignment smoothed its way through to its final destination. And what it taught me is that clarity both in your documents, and in whatever identifies your physical goods on the outside of the boxes or pallets, will minimise delays and maintain the profitability of your international orders.


Since then, we have had both Lockerbie, 9/11, and a range of other terrorist-based scares and incidents, resulting in increasing and largely necessary pressures on businesses to secure their supply chains. The EU’s Authorised Economic Operator (AEO) and the equivalent CTPAT in the USA have been introduced to create an international trading community of ‘trusted operators’, where every link in an AEO’s supply chain is examined and regularly reviewed to ensure that they merit their trusted operator accreditation. That is the way the world is going, with most Customs authorities already complying to the principles of AEO even if they do not yet have a formal system in operation. If you would like to know more about AEO and how it might benefit your business, either as an exporter or an importer, please do not hesitate to call Strong & Herd LLP. Meanwhile, taking just a little care to get your documents right for every shipment will ensure that you don’t incur unnecessary delays and charges. 

No comments:

Post a Comment