TRANSPORTATION BEST PRACTICES MANUAL - …

1 DISCLAIMER This publication, entitled " TRANSPORTATION Best PRACTICES MANUAL " was prepared by PF Collins International Trade services under contract to Canadian Manufacturers and Exporters Newfoundland and Labrador Division to provide information about TRANSPORTATION considerations for the import, export and domestic trade processes. The information contained herein was compiled based on the current legislative environment at the time of writing and is subject to change as international trade legislation and procedures evolve. A list of resources is provided on the last pages of this document. It is important for readers to refer directly to this legislation and the supporting materials listed for full and complete information. Because legislation, legal interpretation and current TRANSPORTATION procedures never remain static, PF Collins cannot warrant or guarantee the long-term accuracy of information contained herein.

2 Neither can we guarantee that following the advice or recommendations contained herein constitutes an absolute assurance that the shipper will be compliant with all current legislation and will encounter no TRANSPORTATION hindrances or negative financial impacts based on the advice herein contained. Shippers are therefore encouraged to exercise due diligence in matters impacting their international trade PRACTICES . TABLE OF CONTENTS INTRODUCTION Overview of TRANSPORTATION logistics considerations i PART 1: BEST PRACTICES LOGISTICS 10 best PRACTICES for your TRANSPORTATION strategy 1 PART 2: TRANSPORTATION STRATEGY CONSIDERATIONS An Overview of the Import Process 5 An Overview of the Export Process 6 Bonding Issues for Exporters 7 Negotiating Rates 8 Insurance and Liability 11 E-Logistics and the Internet 16

3 PART 3: IMPORT AND EXPORT DOCUMENTATION REQUIREMENTS Overview of commercial documents 19 Commercial Invoice 19 Consular Invoice 22 Packing List 22 Certificates of Origin 22 Permits of Export and Import of Goods 24 Revenue Canada Export declarations (B-13a) 25 Cargo Control Documents 26 Other Commercial Documents 26 Distribution of Commercial Documents 28 PART 4 - AIRFREIGHT Introduction 29 Documents 29 The Air Waybill (AWB)

4 30 Moving Goods by Air 33 Export Packaging 37 Air Cargo Handling, Delivery 39 The Role of IATA 40 Shipping Dangerous Goods by Air 41 Glossary of Airfreight Terminology 42 PART 5 OCEANFREIGHT Documents 47 Containers - FCL/LCL 51 Handling the Ocean Freight Shipment 53 Shipping Dangerous Goods by Ocean 55

5 PART 6 ROAD TRANSPORTATION Introduction to Road TRANSPORTATION 58 Provincial Jurisdiction: Trucking/Highway Regulations 58 Canada/USA Border Issues " FAST" 59 Documents 60 The Truck Bill of Lading 60 Standard Trucks 62 Specialized Trucks 63 Service Options for Truck Transport 64 Shipping Dangerous Goods by Truck 64 LTL/FTL Shipments 65 Trucking Rates and Tariffs 65

6 A Checklist of Trucking Considerations 66 Border Security Issues 66 PART 7 RAIL TRANSPORTATION Introduction : Shipping Goods by Rail in Canada 67 CN, CP and Other Railway Lines 67 The Railway Bill of Lading 68 Rail Equipment 69 Moving Dangerous Goods by Rail 70 Over Dimensional and Heavy Lift Cargo by Rail 70 PART 8 INTERMODAL TRANSPORT Introduction 71 Shipping goods intermodally 71 Documentary Considerations 71 Other Considerations 72 PART 9 INCOTERMS

7 2000 What Are Incoterms? 73 Transfer of Liability 73 Incorporating Incoterms into the Contract of Sale 74 How are Incoterms Structured? 74 o The "E" Terms 74 o The "F" Terms 74 o The "C" Terms 74 o The "D" Terms 76 How Does Mode of Transport Relate to Incoterms? 77 Incoterms 2000 In Detail 77 PART 9 INTERNATIONAL PAYMENT TERMS Settlement 80 Open Accounts 80 Advance Payment 81 Documentary Collections 81 Letters of Credit (LC)

8 82 Other Resources for Settling International Transactions 86 PART 10 YOUR SUPPLY CHAIN PARTNERS Your Freight Forwarder 87 Your Customs Broker 89 Your Carrier 90 Your Warehouse Operator 91 Your Financial Institution 92 Government Departments and Organizations 92 Sources for Export Assistance 94 Appendices "A" Institute Cargo Clauses for Insurance "B" Canadian Chamber of Commerce Security Border Checklist "C" Glossaries Glossary of International Trade Terms Glossary of TRANSPORTATION Terms "D" TRANSPORTATION Issues of Special Concern to Newfoundland and Labrador BIBLIOGRAPHY AND INTERNET REFERENCES Introduction If one were to identify a single defining thread linking the commercial world today, it would no doubt be the emerging global approach to commerce.

9 Increased international connections have linked the world electronically and have resulted in an ever-growing demand for businesses to establish and maintain international supply chain networks. To remain competitive in a global context, careful consideration must therefore be given to import, export and TRANSPORTATION programs as well as supply chain management. A key component of any logistics program is TRANSPORTATION management and economics - essentially, the logistics and costs associated with the movement of your supplies and products from A to B. Managing your TRANSPORTATION program has never been more crucial to business success. In terms of logistics, your competitive advantage depends on an ability to maintain production schedules and the efficient delivery of product to international markets. In terms of cost, TRANSPORTATION constitutes the single largest segment of overall logistics cost and must be managed carefully to avoid negative impact on your firm's bottom line.

10 The aim of this TRANSPORTATION Best PRACTICES MANUAL is to offer practical guidance to any business operator or individual considering the TRANSPORTATION of commercial commodities. While this TRANSPORTATION Best PRACTICES MANUAL was developed with the international trader in mind, its concepts apply equally to anyone moving goods to and from markets domestically or nationally. In particular, the MANUAL will attempt to address the TRANSPORTATION issues particular to Newfoundland and Labrador that result from our unique geography and location. The "Best PRACTICES " identified in this MANUAL were developed to help you assess your TRANSPORTATION operations towards increased logistics efficiency while discovering opportunities for saving time, expense and hassle. Overview of TRANSPORTATION Logistics Considerations Webster's Dictionary defines "logistics" as: 1 : the aspect of military science dealing with the procurement, maintenance, and TRANSPORTATION of military materials, facilities, and personnel 2 : the handling of the details of an operation Today, the strict military definition has been expanded to include commercial logistics, or the operations details, procurement and TRANSPORTATION of commercial goods.