Freight forwarder is key to exports.
international marketplace has become an important factor in the continue growth of the U.S. wine industry. Effective participation in this marketplace depends greatly upon the services provided by a freight forwarder.
As a working partner of the wine industry, the freight forwarder must possess a working knowledge of this industry. The freight forwarder becomes a very important intermediary between seller and buyer as the transaction is not complete until the product moves between the two parties as per the terms of their agreement. It is the forwarder who is responsible for moving this product from seller to buyer.
It becomes important to select the right" working partner to handle the transportation of product from one country to another. A number of basic factors should first be considered in this selection process:
* does the forwarder possess experience
in the wine industry?
* does the forwarder possess an
extensive and diverse network to address
the specific needs of the customer?
Beyond these basic considerations are more important factors to be explored as the specific area of expertise maintained by a freight forwarder can be of invaluable service to a winery or wine industry-related company.
Is the forwarder a full-service forwarder? Does the forwarder possess the capability of moving shipments of any size and weight to any location in the world, whether by air or sea? The freight forwarder must maintain company-owned or affiliated offices throughout the world to efficiently move cargo from origin to destination. Requests for wine products often originate from remote locations. The transportation of a shipment of wine into a foreign port is often complex. The forwarder must possess an advanced knowledge of the laws, regulations and documentation requirements needed to secure proper exit from U. S. ports as well as to secure proper entry into destination ports. In the U. S., the forwarder must be experienced in working with such governmental agencies as FDA, USDA and BATF. Strict and proper compliance with both entry and exit requirements reduces costly delays in transit and payment.
Does the forwarder know about letters of credit? This factor becomes important as international transactions most often call for payment by letter of credit. The exporter may depend upon the forwarder to negotiate and/or advise an international letter of credit. A letter of credit is an instruction to a bank setting forth the terms and conditions which must be complied with before monies can be transferred from buyer to seller. Letters of credit often set forth dates of delivery of goods; failure of seller to deliver said goods on or before the date specified in the letter of credit may result in penalties or failure of the letter to be drawn upon. Therefore, transit time is particularly important when moving wine. A shipment delivered to a foreign port unaccompanied by proper documentation will sit at the pier or airport until said documentation has been provided. Wine by the very nature of the cargo should not sit too long at a port or airport unprotected from temperature or theft. Moreover, the forwarder must have the personnel with an advanced knowledge of the international banking process to advise or to negotiate those terms that best match the needs of the exporter.
Does the forwarder have electronic data transfer capabilities? The advancement in modern technology has had its impact upon the transportation industry as well. In many instances, documents, licenses and other compliance measures can be transmitted electronically. The forwarder must possess the state-of-the-art equipment to participate in this form of data transmission and, thereby, better serve his clients.
Does the freight forwarder possess transportation expertise? The exporter must rely upon the international transportation expertise of his freight forwarder. The forwarder must have expertise in and maintain facilities to perform such functions as cargo packaging and storage. Most importantly, the forwarder must be able to determine the routing and means which best match the needs and requirements of the exporter. For example, when shipping by ocean, the forwarder must know how to load the container in a manner that reduces or eliminates damage to the cargo. The forwarder must know when to select an all-water route over a mid-land bridge routing (i.e., both by land and sea). When arranging shipments by air, the forwarder must know when to ship by direct routing (i.e. the earliest available departing flight), or by consolidation routings departing on specific days of the week. Cost and total transit time are the determining factors in this decision.
Does the forwarder possess knowledge of the key export markets? Europe, the Far East and Canada are the key export markets for U.S. wines; Mexico is an emerging export market. Any freight forwarder handling wine shipments must have an advanced knowledge of as well as coverage in these markets. When shipping to Europe, the forwarder must know that the shipment must be accompanied by a VI-1 form yet shipments of wine to Japan must be accompanied by both the VI-1 form and a chemical analysis. The VI-I form is comparable to the European "Certificate of Origin" or Acquit" and requires a chemical analysis of wine by a certified laboratory. The forwarder must also possess a working knowledge of the U.S.-Canadian Free Trade Agreement enacted January 1, 1990 when shipping wine into Canada; this act serves to substantially reduce the Canadian duty rates on imported U.S. wines.
To effectively and efficiently transport wine, the freight forwarder must have a good working knowledge of the wine industry. The most important consideration is the level of communication maintained by the forwarder with the exporter coupled with the forwarder's ability to respond to the exporter's diverse and changing needs. The exporter should treat his forwarder as a working partner, as an extension of his operation. Visit the forwarder's facility, meet the key personnel and become familiar with his functions. In turn, encourage your forwarder to visit your facility and learn more about your business as well. This can only help to provide for mutual understanding and foster a good, solid working relationship.
(Bob Herndon is vice president, transportation division, at Hoyt Shepston, Inc., San Francisco custom-house brokers and forwarding agents since 1850.)
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|Publication:||Wines & Vines|
|Date:||May 1, 1990|
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