General Average & The Importance of Having Cargo Insurance

  • General Average Declared for Cargo ship Ever Given
  • What General Average Means for Shippers
  • The Importance of Having Cargo Insurance

Cargo Insurance

Cargo Insurance: Why it’s important, and why some Shippers Must Pay a Huge Bill to Refloat the Ever Given


GENERAL AVERAGE DECLARED FOR CARGO SHIP EVER GIVEN

Cargo insurance coverage is critical to protect your business from unforeseen dangers inherent in overseas cargo shipping.

In this blog, we highlight how important it is that you know what type of ocean cargo insurance you need and why.

Shoei Kisen Kaisha, LTD, owner of the cargo vessel Ever Given declared General Average last week.

Shippers must now share in the costs related to the ship’s rescue. 

Of course, a shippers’ insurance policy typically covers these charges.

But those who did not opt for cargo insurance coverage are now on the hook.

This means that Ever Given’s uninsured cargo owners need to pay a cash deposit for the vessel’s associated rescue costs before they can recover their goods.

Just as the investigation into the grounding of the Ever Given in the Suez Canal begins, shippers with cargo onboard receive some unexpected (and expensive) news – General Average has been declared.

Two people conducting business at a table.

“General Average means the financial responsibility for the ship itself falls on every cargo owner with goods on that ship.”

What Does General Average Mean for Shippers?

The law of General Average is a principle of maritime law whereby all stakeholders in a sea venture proportionally share any losses resulting from a voluntary sacrifice of part of the ship or cargo to save the whole in an emergency.

Today, when ocean carriers declare General Average they shift the responsibility for cargo loss or damage over to the shippers.

Consequently, the financial responsibility for the ship itself falls on every cargo owner with goods on that ship.

In Ever Given’s situation, the vessel required 11 tugs and two dredgers in a rescue operation that lasted six days.

In addition, the good news is that there is no reported damage to the cargo on board the vessel.

However, the rescue costs and the potential compensation claims to shipping companies and the Suez Canal Authority will no doubt mean a large bill for shippers.

Two people at a desk in front of laptops and business documents.

Why Cargo Insurance Matters

The last time a major container ship declared General Average followed the 2018 fire on board the Maersk Honam.

In this scenario, the adjustor fixed the salvage security at 42.5% of cargo value and 11.5% as a General Average deposit.

As a result, a shipper with a cargo worth $100,000 onboard had to pay a deposit of $54,000 in order to get its shipment released.

Consequently, the potential financial hardship brought on by General Average makes it clear that having the right commercial ocean cargo insurance plan isn’t just smart- it’s essential.

Protect The Value of Your Cargo

BGI offers a free risk assessment of your current cargo insurance plan.

We start with a comprehensive check for any gaps in your coverage.

This will help you understand what your policy covers and what it doesn’t so you can find the best solution for your business.

We answer your questions and identify any issues to minimize potential disruptions in your supply chain.

Our goal is to make sure you are covered from warehouse to warehouse in order to give you the confidence in knowing that your cargo is safe, secure, and free from any liability.


To find out more about other ways we can help, check out the broad range of international freight services and 3PL logistics services on our website.

Based in Signal Hill, California, we work with clients globally.

Experience the Difference…

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Having the right insurance plan isn’t just smart- it’s essential.

Direct Exporting

Developing an Export Strategy for Sales into Export Markets.


When the pandemic struck, businesses everywhere had to adapt to a new world overnight.

If you are just looking into export markets or are currently struggling to grow your exports because buyers lack access to your products overseas, you are not alone.

As the old saying goes, “When life gives you lemons, make lemonade.”

There are several resources available to help you develop an export strategy with ease so that you can focus on selling your products abroad.

Utilizing the combined services of companies like BGI and IBT provides wrap-around services in exportation and marketing that support your exporting business.

Read on to learn how one company overcame the current market challenges to sell its services virtually overseas by using a little creative thinking and some help from export marketing support services to build an export strategy. 

Exporting Virtual Judo Training 


When the pandemic struck, businesses everywhere had to adapt to a new world overnight.

Janna Van Wittbeck is a world-renown judo expert who quickly found that her passion for teaching judo could not survive in its current face-to-face structure.

Janna knew that Judo was well established and popular in countries like France and the United Kingdom.

Wasting no time, she decided to convert her Judo classes into an online product that she could sell internationally.

A TRUE PARTNERSHIP WAS BORN

Janna Van Wittbeck reached out to her local Idaho Chamber of Commerce to make this new international expansion a reality.

They introduced her to International Business and Technology (IBT), a global online marketing firm with years of experience in France and the United Kingdom.

With the help of IBT, Janna Van Wittbeck now has a fully serviced online marketing program that is completely localized into the French and British markets.

She appreciates that IBT is proactive in helping her succeed, so she is now looking to expand into more of IBT’s services.

Check out Janna’s Judo classes and product line for more information.

Q&A Interview with Adrian Viller at IBT 


Intrigued by this story, I reached to IBT’s reputable Online Business Development Director, Adrian Viller to learn more about what makes IBT so successful.

BGI: What is IBT and what does it do?

AV: IBT is a business technology company that leverages online technologies to grow sales and exports of small businesses around the world. They utilize an inbound method that builds on the sales discovery process so that they can be an effective solutions provider for their clients.

They believe in building effective partnerships and relationships. By providing affordable and effective solutions for export and international business development, IBT has been award the President’s “E” Award, the highest honor a company can receive, for its contribution to the expansion of U.S. exports worldwide.

BGI: What makes IBT’s localization strategy so successful?

AV: “Our team is really spread out…and remote. We do have offices in Massachusetts, here in Florida, we will be opening an office in Missouri. We also have offices in Europe and the UK.

Our team is really diverse and pretty global. We also have a lot of friends that work for us in Malta and Egypt. Our team extends to Belgium, Hong Kong, and Morocco. We also have local Italian Swiss coverage. We even provide services for the Japanese market.

We do that on purpose you know, [if] we were going to be localization experts and be helpful to companies that are looking to go abroad and establish a digital presence in their top export markets, a diverse team is beyond helpful. So, we try to make it as diverse as we can. We love the diversity in the team.”

BGI: IBT helps American companies enter new markets, but do you help foreign companies directly export to the North American market?

AV:WDM is a large UK company that was looking to expand to the US. It’s one of those companies that we helped set up a digital presence in the United States and Canada. They are engineers that focus on highway safety and directly export to Canada and the U.S.”

IBT is still their trusted partner in providing online marketing coverage in the North American market.

“IBT started 20 years ago…in France. The founders of the company’s goals were to support British companies wanting to do business in continental Europe and assist French businesses wanting to do business in Germany. In time, that had changed and pivoted in a lot of different ways.

We still do a lot of work with British companies wanting to do business in continental Europe and we now have a partnership with Enterprise Ireland, so we are helping Irish companies do business in continental Europe.”

IBT provides first-rate digital marketing and localization strategies for many countries around the world from the U.K., France, and Spain to Brazil and Japan, and much more. They enable companies to realize their global exporting needs. If you are a small business looking to export or are an experienced global company looking to grow their sales or pivot their market online, then check out IBT’s website with the link below.

Online Globally | IBT Online

Resources:

International Trade Administration

State International Development Organizations, Inc. (SIDO)

National Association of District Export Councils (NADEC)

Small Business Development Centers (SBDC)

ExporTech

NASBITE

Global Trade and Export Resources

Featured U.S. Exporters


Shipping regulations are constantly changing and navigating the various rules and regulations for exporting goods overseas can be tricky, new shippers and even experienced shippers would be well advised to call BGI at 800-987-4244 to find out how we can help.

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800-987-4244

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Every day BGI offers reliable and innovative solutions for companies shipping freight internationally.

Freight Forwarding Company

3 Reasons it May Be Time to Change Freight Forwarders

 


Unless your current freight forwarding company is offering rates way outside of what is fair and competitive, then price should never be a primary reason for changing your freight forwarder.

As a business owner, there’s enough to manage without the added burden of changing freight forwarders.

It can quickly turn into a costly and difficult process to bring in a new untested partner.

Even when your current provider is no longer able to meet your needs, it’s still difficult to make the necessary changes because you’ve got more important things to focus on, right?

Not if you want your business to succeed and continue to grow.

Taking all of this into consideration, how do you know that it’s time to start shopping around for a new freight forwarding company?

Below are three reasons that highlight when it may be worth the effort.

1. Internal Changes

-Your company has experienced growth and your current provider does not have the service capabilities that you now need.

GIF of Ted Danson asking "who are these people?"

All freight forwarders are not created equal.

Do you get to speak with the same person that quoted your shipment and knows every detail about your operation?

Or do feel that your provider is a stranger and not a true partner without really understanding or seeming to care about your current and future needs.

Has the scope of your business changed and maybe your current forwarding agent only offers over-the-road freight transport in the United States, but now you need international air and ocean freight services because you are selling and shipping your products overseas.

If one or more of these changes have taken place, now is the time to start identifying any shortcomings.

Once you have identified the issues, make a list of the major pain points that you can use in your initial discussion with the new forwarder.

2. Incompatible Technology

-Times have changed. The days of pouring over stacks of spreadsheets to monitor your supply chain are gone.

Incompetent office worker complaining about incorrect spreadsheet data.

Valuable information should never be more than a click away

If your current forwarder lacks the necessary technology to assist in managing your day-to-day business it is definitely time to select a new forwarder that is more modernized.

At the same time, how can you quickly address an issue if all you have is an avatar from a website messaging service to turn to when you have a problem?

An online freight service may not be right for your business model either. 

If you find yourself having to explain your issue over and over because you get a different person on the phone every time you call, that ends up wasting not just your time but your customer’s time as well.

if they can’t provide you with a dedicated team or even just a reliable point of contact it may be time to find a new forwarding company 

3. Service Standards

-Customer service is more than just a polite voice on the other end of the phone.

Annoyed Customer

Are you being blindsided by calls from clients regarding late or damaged deliveries?

Are you experiencing longer than usual transit times or your invoices are often different than the quotes you receive?

Pretty much all freight forwarders can provide a logistics solution for moving a box from point A to point B., but what about on-time performance and proactive reporting?

Are you receiving accurate updates promptly?

If you have very little communication despite ongoing problems, this could mean that they are unwilling to address existing issues or simply don’t care because they can just take advantage of the next customer in the pipeline.  

Is the claims process quick and painless or are you having to fight your own provider for resolution?

Does your forwarder express an eagerness to provide stellar service and is committed to constant improvement?

If not, these are some major red flags that indicate you should be getting more from your forwarding company.

If you are suffering from any of these transportation services shortcomings then it is time to get busy finding a new forwarder right away.

Many of you may be thinking “What about price?” Well, unless your current provider is offering rates way outside of what is fair and competitive, then price should never be a primary reason for changing freight forwarders.

Remember, your time is money too.

Are you really saving your companies resources if you are spending time away from your primary responsibilities chasing after updates, following up on claims, or resolving billing issues?

If this is happening then it may be time to change freight forwarding companies. 

The Bottom Line

What you should be looking for, in any freight forwarding company or logistics service provider, is value.

Value is having a partner that can offer competitive rates without sacrificing the highest level of quality, customer service, and modern age technology.

Value is honesty and integrity in all transactions.

It is a provider that takes time to get to know you and the unique needs of your supply chain while offering the flexibility and expertise to accommodate changes in your organization.

But most of all, value is having a freight transportation provider that wants to help you and your company grow and succeed every single day.

Switching freight service providers may seem like a hassle, but the right one should make the transition seamless and make you look like a star.

If having a dedicated point of contact for all of your shipping needs and working with a forwarder that believes in creating long-term partnerships sounds like a breath of fresh air, give BGI Worldwide Logistics a chance to show you that not all freight forwarding companies are equal.

EXPERIENCE THE DIFFERENCE

Got questions? Call 800-987-4244

Or check out what our clients say about us first!

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Rena cargo ship ran aground and sinking.

“Stuff happens. Cargo insurance (sometimes called freight insurance ) Even reputable, conscientious carriers cannot protect against calamities..”

cargo insurance should be a priority If you engage in international commerce


Freight insurance is a vital part of the shipping process. Protecting your freight through globally respected insurance carriers can save you from a partial or total loss of your investment.

While INCOTERMS® Rules  clarify responsibility for various charges, they do not preside over loss or damaged goods cases.

Here are a few questions and answers about this important insurance.

1) What is cargo insurance and do you have to have it?

a. Cargo insurance protects the shipper’s products (toys, tractors, electronics, etc.) against loss and damage during international and domestic transport.

b. You do not have to have cargo insurance. If you choose not to insure separately, there is minimal international coverage that was set forth by the Warsaw Convention in 1929.

It is $20/kg for international or domestic air cargo, and ocean freight coverage is $500 per bill of lading.

If the value of your shipment is above either, then we highly recommend full coverage to protect your investment.

2) What cannot be insured under a standard insurance policy?

Diamonds, gold, and cash cannot be insured under a standard cargo insurance policy. There are underwriters that may insure these products, like Lloyds of London, but these are separate policies. Loss of life and acts of God are not insured.

3) How much is Cargo Insurance and are there limits?

a. It depends. What is the cargo? Where is it going? Who is the insurance carrier? The insurance underwriters for cargo have parameters just as insurance companies for homes, cars, etc.

b. There are limits. Maximum cargo insurance (also called Shipper’s Interest or All-Risk coverage) is 110% of the CIF Value (Commercial Invoice Value + Insurance + Freight) and will pay for the full value OF THE GOODS THAT ARE LOST OR DAMAGED.

To compare: Damage to a ten-year-old Honda would not be reimbursed at a new Mercedes rate.

4) Where can I buy it?

a. Your existing business insurance policy may completely cover you for all shipping property damage, or it may cover up to a certain amount. It is up to you, the shipper, to know the limits of all of your policies. Some companies buy “gap” insurance. That’s the difference between what their business insurance policy covers and the maximum allowed. IF YOU ALREADY HAVE SOME SHIPPING INSURANCE on your business policy, there’s no reason to pay twice. Equally, THERE IS NO REASON to underinsure. A loss is a loss.

b. You can buy insurance policies from various companies that specialize in this type of insurance.

5) Who is best to buy from?

a. The agent and company can make a difference in the same way that automobile and home insurance companies can vary.

b. It is often good to buy from a reputable forwarding company like BGI. Not only do they use solely A-rated insurers, but they can also offer special rates because of the volume of business they do with the insurance companies.

c. The other advantage of buying from the logistics company is convenience. They’ll do the shopping for you by comparing different companies and their rates for the shipping mode and the specific products you’re transporting.

d. Freight forwarding companies with experience develop sensitivities toward risk. BGI insisted an artist insure his painting going overseas. When the painter balked, BGI found a workaround that made the insurance + shipping costs equal to the shipping costs alone from another quote. Unfortunately, the piece of art had a forklift driven through it in a warehouse accident. Though there is no replacement for the artist’s work, at least the dollars were recouped.

Choose the right insurance and the right logistics company to protect against loss. You’ll sleep better.

Experience the BGI difference.

 Please call our offices at 800-987-4244 for more information.

Get A Quote

Cargo container being lifted from a container truck.

 

Merchandise Processing Fee and Harbor Maintenance Fee



When you must pay a Merchandise Processing Fee or Harbor Maintenance Fee, the last thing you want to do is make a mistake.

Two of the most important fees that we often get questions about are the Merchandise Processing Fee (MPF) and the Harbor Maintenance Fee (HMF).

The MPF and HMF are two of the most common maintenance fees you will come across when dealing with customs brokerage for imported cargo.

If you are new to importing goods in the US, there are many regulations, requirements, restrictions, and fees to consider.

Read on to learn all about how to calculate Harbor Maintenance fees and Merchandise Processing fees for your import shipments.

What is The Merchandise Processing Fee?


The Merchandise Processing Fee is an “Ad valorem” tax, meaning that it is based on the assessed value of goods. The MPF is calculated as proportionate to the estimated value of the goods or transaction.

This is a payment that must be tendered to the U.S. Customs and Border Protection (CBP) when importing freight to the United States. It is one of the fees paid along with the duties and taxes on your shipment’s entry summary. So it is important to remember to factor the MPF into your freight expense. 

However, there are several exemptions to the rule like importing cargo under the many Preferential Trade Programs the U.S. has with certain countries.

If you are unsure about whether you qualify for an exemption, you can check the list of preferential trade agreements or visit the World Trade Organization website.

The MPF is required When:

  • Importing Air cargo
  • Ocean freight Imports

The MPF fee is determined by the “entered value”, or “declared value” of your merchandise.  It is in proportion to the fee calculated for formal entries at 0.3464%.

Formal entries simply mean commercial cargo valued at $2,500 or more.

When you are calculating the MPF you do not include the following:

What is The maximum MPF?


The maximum amount of the Merchandise Processing Fee is $528.33 and the minimum is $27.23 so, when calculating your MPF, if you exceed $509, you only pay this maximum amount.

Additionally, there are individual fees for informal entries, ranging from $2.00, $6.00, or $9.00 per shipment.

An informal entry may also include personal use imports but will always be valued at less than $2,500, and generally do not require a CBP bond. 

You can figure out if you owe the MPF processing fee by checking the MPF Table per the U.S. Customs and Border Protection agency.

What Is The Harbor Maintenance Fee (HMF)


The Harbor Maintenance Fee was borne out of the Water Resources Development Act approved by Congress in 1986.

The main purpose of the WRDA act was to help the U.S. government cover the costs of maintaining our nation’s ports and harbors by sharing the costs with the U.S. government.

Money taken from the HMF fee is put into the Harbor Maintenance Fund which is controlled and distributed by Congress.

The main purpose of the Harbor Maintenance Fee is to help cover the costs of maintaining our nation’s ports and harbors.  

According to the US Customs and Border Protection, the Harbor Maintenance Fee is required at certain ports for the following types of cargo:

  • Imported freight
  • Domestic shipments
  • Foreign-Trade Zone (FTZ) admissions
  • Passengers

How Much Is The HMF Fee?


The chargeable amount for the HMF is 0.125% of the value of the cargo in transit.

The Harbor Maintenance Fee is not charged on air freight, and it is interesting to note that the HMF fee has not been collected on exported freight since 1998.

How To Calculate the Harbor Maintenance Fee


When you must pay a Merchandise Processing Fee or Harbor Maintenance Fee, the last thing you want to do is make a mistake.

Take care when calculating the fees to ensure that they are correct.

If in doubt, choose BGI Worldwide to manage your import shipments and Customs brokerage.

You will get a dedicated and experienced team of logistics specialists specialists to help guide you through the maze of import regulations, fees, and requirements.

You Can Depend On BGI


To find out more about other ways we can help, check out the broad range of special freight services and logistics services on our website.

BGI offers International freight forwarding services, over-the-road shipping including less than truckload (LTL) and Full Truckload (FTL) trucking, intermodal rail, and oversized freight, as well as FBA imports to Amazon ,warehousing, distribution, and cross-border cargo.

Based in Signal Hill, California, we work with clients globally.

Experience the Difference…

Get A Quote

Call Toll-Free: 800-987-4244

Tug boats guiding a cargo ship to port.

How to choose between Air Freight Vs. Ocean Freight

Choosing between shipping by air freight vs ocean freight can be more complicated than it sounds.

Everyone is working on tight deadlines because brick-and-mortar retailers, online sellers, wholesalers, and manufacturers across the supply chain are trying to keep their inventories razor thin.

Acquisition costs must be kept to a minimum, so ocean freight shipping is often the best solution.

Meanwhile, if you’re new to the online Amazon “jungle,” you might be floating small margins to build your business. At the same time, you cannot have products arrive too soon or too late. Late shipments lose sales so air freight shipping might be right for you.

Historically shipping costs for air freight have been calculated based on the gross weight or actual weight in kilograms or pounds. But it’s not that easy these days.

Questions about Air Vs. Ocean Freight

Q:  If I ship by Ocean will my shipment make it in time for my customers’ or my own just-in-time deadlines?

A:  Great question. And many times, your freight forwarder is the best person to ask! There are certainly “standard” or “average” shipping times, but these can vary. Weather affects transit times, of course.  And while the Hanjin Shipping bankruptcy is an example of a well-publicized delay, port strikes and other events affect ocean freight shipping as well.

Q:  If I ship by air won’t it be more expensive?

A:  Maybe, maybe not! See below.

Q: Can I still get FBA products to Amazon in time to resell for holiday seasons?

A: IF YOU ALREADY HAVE AN ACCOUNT, yes. It depends on what and where you’re importing from and many other factors.  If you are cutting it close, air freight might be your best bet.

Our experienced shipping specialists can answer all these questions and more. For general questions about importing to Amazon, here’s a good place to start: Amazon Import Checklist. We’ve helped many customers with shipping to Amazon, and we can help you avoid costly mistakes… and even help you keep from going broke! Below are some things to consider about air freight.

Air Freight Benefits

Import shipping by air decreases shipping time and generally results in the superior condition of goods upon arrival, allows for greater inventory control for just-in-time manufacturing and stocking, and for certain commodities, lower shipping costs. How can this be?

Calculating Shipping Costs

Historically shipping costs for air freight have been calculated based on the gross weight or actual weight in kilograms or pounds. But it’s not that easy these days.

There are two kinds of weight calculations: 1) Gross weight or actual weight and 2) Dimensional weight. [More about both of these below.] As you can imagine, by charging only by actual weight, low-density packages become unprofitable for air freight carriers due to the amount of space they take up in an aircraft. For example, if a carrier charged the same for shipping a pound of feathers as they do for a pound of produce or electronics, it would be unprofitable. Feathers take up a lot more room.

Dimensioning

If a shipment is less than the minimum density of the industry standard, then the actual weight is not relevant and the freight carrier will charge based on dimensional weight. Dimensional Weight is calculated as length x width x height / dimensional factor. Dimensional weight is also known as DIM weight, volumetric weight, and cubed weight. Furthermore, while weight is certainly a factor in the price of different sea carriers, their charge is usually based on the size of the shipment.

So if you are shipping less than a container load, your price is often determined by the cubic meter. With larger and heavier shipments, it is often much cheaper to ship by ocean freight. However, as the shipment gets smaller, the margin between the prices gets smaller, and sometimes shipping by air freight will even end up less expensive. [The answer is false.  Sometimes shipping by air is less.]

Yes, this sounds complicated, but because we have been in the business for over 20 years, we can help you make the very best choice between ocean vs. air freight for shipping your products to arrive in time for any time of the year at the best price.

Reasons to Call the Experts

If you are having trouble deciding between air vs ocean freight, especially new or nearly-new shippers should call us and experience our hands-on, personalized service. Even experienced shippers would be well advised to call for our guidance. Shipping regulations change all the time and we are always up to date on international freight rules and documentation as well as domestic shipping guidelines!

To see the other ways we can help, check out the various logistics services on our website to read about the many other reliable and innovative solutions we provide to get your goods to or from nearly any destination worldwide. We provide a unique personalized service that you will not find with other companies.

Got questions? Please call us at 800-987-4244

Or fill out our online form to get a free quote.

Get A Quote

Excavator moving dirt for oversized shipment.

If you’re an old pro at shipping oversized freight overseas, or if you’re a newbie.

Even if you’ve shipped the same thing to the same place before, international shipping rules can change and you need to make sure you don’t make a big (had to say it) mistake.

If you’re looking at a monster object in your warehouse, three things come to your anxious mind:

  1. It’s so big
  2. It’s odd-shaped
  3. It’s going overseas

“International shipping rules can change and you need to make sure that you don’t make a costly mistake.”

7 Questions We Get Most From Clients Shipping Oversized Freight Overseas

You have a lot of choices when shipping across the continental U.S. However, there are fewer companies that can help when it comes to sending out-of-gauge (OOG) or heavy machinery (like bulldozers and excavators) or artwork, furniture, trucks, buses, and more to foreign ports.

It’s more complicated and requires expert, creative problem-solving. These are the questions we get most. The answers are below.

 

  1. It’s not going to fit in a container. Now what?
  2. How do I get the cargo to or from the port from the middle of the U.S.?
  3. Someone said I needed a flat rack. Do I need to load or secure the cargo to the flat rack or can you take care of that?
  4. How do I measure my cargo correctly?
  5. Should I take out extra insurance? It’s expensive.
  6. How long will it take to get there?
  7. How do I get the shipment to an inland customer once it’s shipped to the overseas port?

01

It’s not going to fit in a container. Now what?

We receive many calls from people who suddenly realize they’ve built or need to ship something overseas that will not fit in a High Cube, Dry, or Open Top container.

Here are descriptions and container specifications for reference. One choice is to dismantle the product and ship it in separate containers, which will require re-assembling on the other end.

If dismantling your oversized shipment is not a viable option, there are other ways to ship a large item in one piece: Flat Rack, Roll On Roll Off (RO/RO), Lift On Lift Off (LO/LO), and breakbulk. Weight vs. measurement affects charges.

Ports and terminal fees differ. Call our office for help in determining the best course.

02

How do I get the cargo to and from the port if I am in the middle of the U.S.?

Make sure you call trucking companies you trust for rates and availability. Or rely on a logistics company like BGI that can arrange for transport to and from many domestic locations using one of our dependable trucking partners.

If your shipment is REALLY BIG (like wind turbine blades) the logistics companies that handle this type of shipment need to be resourceful and creative to find the best way to get the piece to or from the port.

When people call us, we remind them to measure their item properly to make sure the trucking company will quote the overland drayage correctly. Be careful here. People have made costly mistakes. See the information in #4 below.

03

Do I need to load or secure the cargo to the flat rack or can you take care of that?

Since we have reliable partners and service providers at most ports we can take care of having the flat racks loaded for you.

It’s important to have someone you trust to handle the oversized shipment, as not everyone knows the intricacies of managing larger, sometimes oddly shaped cargo.

04

How do I measure my cargo correctly?

We get this one all the time. Most people outside the industry measure differently than those people inside the industry!

As you see below, you can make a mistake (usually on the low side) because you didn’t unscrew the exhaust pipe on a bulldozer or fold in mirrors on a bus.

A dimensioned view of an excavator.

05

Should I take out extra insurance? It’s expensive?

It’s not as expensive as losing your item with no compensation. If you haven’t insured the cargo beyond the minimum, you will hate yourself if something happens.

As we say, “You’ll sleep better at night if you have insurance.” Please see our recent blog about cargo insurance. If you still have questions, call us.

It’s very important to insure yourself against risk. It’s also important to know that logistics companies like BGI work with insurance companies, and we are often able to achieve a much better rate for you than what you might be able to secure on your own.

06

How long will it take to move my cargo?

Weather, port congestion, labor, mechanical issues, etc. affect your ocean shipments. While much is out of your control, we know some things that are within your control: Paperwork is one!

Make sure you work with companies that know the current customs laws for the countries you’re shipping to. With almost two decades in the business, we have a proven track record of assisting our clients with their documents when shipping heavy machinery, buses, farm equipment, etc. all over the world.

07

How do I get the shipment to an inland customer once it’s arrived at the overseas port?

Make sure your logistics company is well connected. We have partners all over the world that can efficiently and carefully transport your out-of-gauge or heavy project cargo to your customer.

Our favorite shipment in the oversized category is the  “Forever Marilyn” statue that is 26 feet tall and weighs 40,000 pounds. We have helped her arrive safely to locations in both inland China and Australia from her sculpture birthplace home in New Jersey.

Summary:

Shipping oversized cargo overseas requires knowledge and a firm handle on both the domestic and the international requirements for moving oversized freight on the ocean and to and from the port successfully.

Not every company that does it can do it well, nor are they able to provide personalized service and creative solutions.

Besides forwarding freight, the company itself should be one you respect and that you like working with. Call us, but check out what our clients say about us first!

Oversized cargo should not create oversized headaches!

Choose the right logistics company.

Experience the BGI difference

Please: Call our offices at 1-800-987-4244 for more information.

Or

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Amazon Prime shipment box.

Amazon Associates participating in the Amazon Affiliate Program makes hundreds of thousands of dollars each year by buying products from overseas and then shipping them to Amazon fulfillment centers to deliver to their customers. By this means, Amazon Affiliates leverage the unquestionably huge reach of the Amazon marketing behemoth selling through FBA (Fulfillment by Amazon), and make sliding scale commissions based on the sale price of each item and their volume of sales…that is if they do it right and don’t make a lot of mistakes along the way.

While you can make big money in the Amazon Affiliate program, you can also lose money. Competition is fierce.

“One of the biggest mistakes you can make in deciding to participate in the Amazon Affiliate Program is not taking time to learn everything you can about the business.”

Starting out is slow. Plus, if you think shipping in and around the U.S. is tricky, wait until you see the pitfalls of importing products for the Amazon Affiliate program or FBA, which might just as well stand for “Fundamentally Bewildering Activity.” Why?

It’s complicated.

3 Ways to Avoid Going Broke with Amazon FBA.

  1. Proceed with caution and patience.
  2. Know what you need to know.
  3. Know that you don’t need to know it all, but that someone you trust does.

#1. Proceed with caution and patience.

One of the biggest mistakes you can make when deciding to participate in the Amazon Affiliate Program is not taking time to learn everything you can about the business. You can start by looking at the big picture by checking out the following (1) Amazon’s rules for shipping to Amazon; (2)  United States laws for importing into the U.S. (3)  Importing and Exporting Inventory advice from Amazon.

#2. Know what you need to know.

In addition to being cautious and knowing the big picture, you should be aware of how you can lose money when selecting products to sell on Amazon. Here are some examples: (1) Not studying the market you’re selling into; (2) Not knowing the product you’re selling; (3) Not vetting the manufacturer or exporter (their rules for doing business, language barriers, etc.); (4) Not insisting on product quality; (5) Not knowing about tariffs, classes, carriers, base rates and tons of other logistics considerations.

#3. Know that you don’t need to know it all, but that someone you trust does.

You can do your homework on the market, products, manufacturers, etc., but learning about shipping and logistics especially shipping to Amazon FBA warehouses will really challenge your patience. Instead, don’t blow all your hard-earned capital on mistakes made on mismanaged first, second, and third shipments to Amazon.

By finding a logistics company that fits your company’s style, sense of urgency, and values (see our white paper “5 Tips: Choosing the Best 3PL for Your Shipping Needs”), you can start to know what you’re seeking in a freight forwarding company.  Then, by having an expert supply-chain management company like BGI Worldwide Logistics, Inc. on your team, you can feel comfortable that someone does know how to do this right the first time.

You can try to learn all of the laws yourself, but as we said, it’s complicated.  Here’s how you’ll know you can trust us:  (1) We have handled many successful Amazon Affiliate import shipments and have developed a reputation as the “go-to” company in this niche. (2) We have saved businesses and individuals that experienced big problems from other companies.  (3) We have facilitated Amazon Affiliate importing transactions by taking care of customs clearance and logistics.

Conclusion:

To avoid going broke selling products on Amazon, do your homework. Proceed with caution and patience. Know your customer, your product, and the players. Find a trusted freight forwarder with a proven track record in this niche to help you with importing.

BGI Worldwide Logistics, Inc. will help you get it right the first time.

Got questions? Call 800-987-4244 for more information.

Use our essential Amazon Import Checklist to assist you with filling out the rate request form.

 

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Incoterms Chart of Responsibility 2020

Incoterms® 2020 Update

The Incoterms 2020 update is in and the rules have been updated for 2020. These are the regulations that define the responsibilities of buyers and sellers operating in international trade.

Incoterms rules are used to determine how freight costs and risks are allocated to each party involved.

Incoterms rules are regularly incorporated into contracts for the sale of goods worldwide and have become part of the daily language of trade.

What’s New for Incoterms in 2020

International Chamber of Commerce (ICC) has launched the Incoterms 2020 update that contains the rules for use of the 11 Incoterms trade terms.

It considers the latest developments in commercial practice and updates the rules to make them more accessible and easier to use.

The new rules became effective on 1 January 2020. As of this date, all sales contracts should make reference to the Incoterms® 2020 rules as the latest version of the Incoterms.

Incoterms 2020 Compared to Incoterms 2010:

  • The Incoterms FCA (Free Carrier) now provides the additional option to make an onboard notation on the Bill of Lading prior to loading the goods on a vessel.
  • The costs now appear centralized in A9/B9 of each Incoterms® rule.
  • CIP now requires at least insurance with the minimum cover of the Institute Cargo Clause (A) (All risk, subject to itemized exclusions).
  • CIF requires at least insurance with the minimum cover of the Institute Cargo Clause (C) (Number of listed risks, subject to itemized exclusions).
  • The Incoterms rule Free Carrier (FCA), Delivered at Place (DAP), Delivered at Place Unloaded (DPU), and Delivered Duty Paid (DDP) now take into account that the goods may be carried without any third-party carrier being engaged, namely by using its own means of transportation.
  • The rule Delivered at Terminal (DAT) has been changed to Delivered at Place Unloaded (DPU) to clarify that the place of destination could be any place and not only a “terminal”.
  • The Incoterms® 2020 now explicitly shifts the responsibility of security-related requirements and ancillary costs to the seller.

Additional Incoterms Information

Incoterms 2020 does not constitute a complete contract of sale, but rather becomes a part of it. For its application, the following structure should be used:

“[The chosen Incoterm® rule] [Named port, place or point] Incoterms® 2020”

Example: “CIF Shanghai Incoterms® 2020” or “DAP 10 Downing Street, London, Great Britain Incoterms® 2020“.

If there is no year stated in the Incoterms then the following applies:

**Until December 31st, 2019 the Incoterms® 2010 apply.
**From January 1st, 2020 the Incoterms® 2020 apply.

If a different year is stated, e. g. Incoterms® 1980, then respective terms apply.

Download Incoterms® 2020 Rules Chart

BGI is a certified, licensed, and bonded expert in freight transportation and logistics: Licensed by the Federal Maritime Commission (FMC) as a Non-Vessel Operating Common Carrier (NVOCC), Ocean Transportation Intermediary (OTI), Ocean Freight Forwarder, Licensed by the Department of Transportation (DOT), Licensed Property Broker. BGI is a certified member of the International Air Transportation Association (IATA), and Cargo Network Services (CNS).

More information on Incoterms 2020 or BGIWorldwide Logistics:
Call 800-987-4244 or email BGI Sales for more information.

Flattened image of a blue globe on vertical on glass with illuminated transit lines.

INCOTERMS Rules 

International Commercial Terms, or Incoterms®, are a series of defined commercial terms published by the International Chamber of Commerce and intended to clearly communicate the tasks, costs, and risks associated with the international sale and transport of goods.

The original Incoterms rules set in 1936 were divided into four categories, whereas the 2010 update simplifies the list by separating the eleven terms into two categories: rules for any mode of transport, and rules for sea and inland waterway transport. The latest Incoterms rules 2020 was released in January with Incoterms updates and new rules.

Incoterms 2020 rules for freight transportation can be found here:

Download Incoterms® Rules

A common misconception is that Incoterms have to deal with ownership and title transfer when in reality it deals with the dividing of costs and risks.

Buying and Selling International Goods

When buying or selling international goods it is of primary importance to have a clear understanding of the responsibilities of both parties.

While there are several common mistakes that can cause issues with a shipment, one of the most common and easiest to avoid is being vague or unspecific with the shipment details.

For example, using abbreviated words or failing to specify the actual destination port can delay your shipment.

Not specifying where the place of risk will transfer, or putting vague or a wrongly named place after the three-letter Incoterm could lead to misdirected shipments and/or extra expenses for both the buyer and the seller.

Incoterms Rules for purchasing or selling goods that will be transported globally

When purchasing or selling goods that will be transported globally, it is crucial to identify where the title passes from the seller to the buyer.

A common misconception is that Incoterms rules have to deal with ownership and title transfer when in reality it deals with the dividing of costs and risks.

Title and ownership transfer should always be outlined in the sales contract before beginning shipment. Along with the title comes liability exposure and the need for marine insurance.

While commonly used, the DDP Incoterm can cause confusion.

Often sellers will quote DDP without knowing how to get goods into the buyer’s country – or the buyer will accept the DDP terms without checking to see if their supplier is registered as an importer or if they have sorted out any potential tax issues.

The difficulties surrounding DDP can be more problematic and even costlier to the seller when something goes wrong, especially as sometimes complex taxes are involved.

In some cases, taxes can only be paid by companies who are known to the authorities in the buyer’s country, which is often the case with VAT and local customs authorities.

In addition to potential tax and importer filing status issues, it is up to the DDP assigned responsible party to clear the goods through customs, meaning it is important that the party knows about import regulations in that specific country.

Any issues, such as goods being improperly declared or unpaid taxes can put an entire transaction at risk, so if unsure about DDP and the risks involved, it’s best to speak to an Incoterms expert.

Paying attention to the details, and ensuring that the right rule is chosen for the shipment will benefit both the buyer and seller mutually and avoid any errors in the shipment of international goods.

Since shipping regulations change all the time and navigating Incoterms rules can be tricky, new shippers and even experienced shippers would be well advised to call for our guidance. After all, we handle international freight on a daily basis!

To see the other ways we can help, check out our logistics services or our freight forwarding services to learn about the reliable and innovative solutions we provide to get your goods to or from nearly any destination worldwide.

We provide a unique personalized service that you will not find with other companies.

Our experienced specialists are ready to help clear up any confusion you might have. Please call us at 800-987-4244 for questions about Incoterms® or international freight shipping.

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