Exporting Fact Sheet - Transport Your Product to Foreign Markets

Summary

Methods of Transport
Packing
Marking and Labelling
Insurance
Documents
How Freight Forwarders Can Help You
Transportation Links

Methods of Transport
There are four basic ways to transport your goods:

• Truck
  A popular option for shipments within North America because of the extensive system of highways and quality of the roadways. It can also be used when delivering the goods from a foreign port of entry to another region (i.e. the goods arrived by ship but are ultimately destined for a city 300 miles away). Options include general carriers, specific-commodity carriers, and private carriers. Costs are based on truckload and less-than-truckload quantities.

• Rail
  Another common option when transporting goods within North America. It is also used frequently to transport goods to a port for shipping overseas and when the goods arrive at the foreign port of entry and must carry on to another destination. It is more popular than transporting by truck in many countries as the roads are not always in good condition. Prices are based on the carload -- a full carload will be cheaper than a partial carload.

• Air
  The most costly of all transport methods. There are also length and weight restrictions for air freight. However, the higher costs may be offset by faster delivery, lower insurance and warehousing costs, and better inventory control.

• Ship
  Large items, bulk commodities and items that do not require fast delivery can be shipped economically by sea. However, there are minimum weight requirements for ocean freight which may be three to four times greater than air requirements. With ocean freight, your goods are shipped in 20 foot and 40 foot containers or in crates. The container charge will be less if you are able to fill one completely. If you don't have a full container load, your can lower your cost by "piggy backing" onto another partial shipment.

Minimum weight charges apply to freight arrangements. Therefore, compare various combinations of ocean and land transport. You will also be responsible for specifying the packing requirements.

Be prepared for the possibility of delays when transporting your goods by sea. This can occur when shipping containers are full before your goods are ready to be loaded. However, the volume of goods you ship will reflect the amount of influence you have with carriers. If you are a frequent customer who pays the bills on time, you'll have more influence over when your shipment leaves. This is an important factor as shipping delays can be as long as four weeks.

Packing
The decision as to how you will pack your product so it arrives safely at its destination is going to be based on the type of product (i.e. Is it perishable? Will temperatures that are too hot or too cold affect it in some way? Will moisture damage it?), it's size, shape, weight and fragility. You will also have to consider the method of shipment and how the package will be handled. It can be dragged, dropped, thrown down a chute, pushed, rolled, or stacked on top or below other items. If the goods are sent by truck, the ride could be bumpy - keep in mind not all roadways in foreign countries are in the same condition as those in Canada. If sent by ship, the goods are subject to moisture and humidity. They may also get tossed around if the weather is rough. Some foreign points may not have the facilities for storage and the goods can be left outdoors where they are subject to the environment or pilferage.

You have the option of packing the goods on your own, hiring a company to do the packing, or using the services of a freight forwarder.

Marking and Labelling
The marking on your packages is for shipping purposes and must conform to the commercial invoice/bill of lading. Items to be marked include weight, special instructions (i.e. cautionary remarks such as "this side up" along with the corresponding international pictorial symbols), buyer's name, point of entry into the country of import, and country of origin (i.e. "Made in Canada"). These are just a few examples.

The labels on your packages must be in English and the language of the country you are shipping to in order to alleviate any confusion. Most importantly, the labels must meet the customs regulations of the country of entry but also have to include other details such as where the product was made or manufactured, name of the producer or shipper, and certain product details (i.e. weight, ingredients, etc.) but yet be vague enough to conceal the actual product's identity in order to protect the goods from theft. Again, this list is not a complete one, however, a freight forwarder can look after all marking and labelling requirements for you ( see section below).

Insurance
Whether you use the services of a freight forwarder or arrange for the delivery of the goods on your own, you must insure your cargo. Transport companies will only assume limited liability if your goods are damaged or lost. As the exporter, you are responsible for getting the product in good condition to your foreign buyer.

Marine insurance covers not only ocean cargo but air cargo and connecting land transportation. Generally, the policy will be special cargo indicating that only the one shipment is covered, or open cargo which will cover all shipments made by an exporter. The latter is generally used by exporters who frequently ship in large volume.

The three main types of coverage are:

1. FPA - Free of Particular Average which provides minimal coverage;
2. WA - With Average offers more complete protection; and
3. All Risk which offers the most comprehensive protection.

As with any insurance policy, there are many terms, conditions and exceptions so make sure you understand exactly what kind of coverage you are getting. You can arrange your insurance independently with an insurance company or go through your freight forwarder. However, if you do decide to arrange it independently, keep in mind that they may be Canadian owned and licensed or foreign owned with no underwriting facilities in Canada. Certain types of insurance are also available through the Export Development Corporation  Insurance Solutions .

Documents
There are many documents associated with exporting but these can be divided into two basic categories - shipping documents and collection documents. The shipping documents, which are prepared by freight forwarders if their services are retained, include all the paperwork necessary to get your product out of Canada, transported to their destination and through the foreign Customs office. The collection documents are the ones you need in order to collect payment. For more information, see the document  Exporting Fact Sheet - Payment Options

How Freight Forwarders Can Help You
Freight forwarders specialize in handling and shipping goods to foreign countries. They can provide estimates of transportation and shipping costs as well as inform you of other costs associated with shipping your product to foreign markets.
Examples of their services include:

• negotiating and arranging the best method of transport for your product to get to the target market
• coordinating the movement of your goods to their destination
• preparing the necessary paperwork
• providing advice on packing, labelling and marking of goods
• arranging warehouse storage and cargo insurance

The two main types of freight forwarders are air freight forwarders and ocean freight forwarders. A number of them specialize in arranging shipments to certain countries or areas of the world while others focus on particular types of products. Because shipping can incur significant costs, finding a good freight forwarder can save you money and help you keep your product's export price competitive. Freight forwarders are not government organizations. They are privately-owned businesses and are therefore competitive so contact more than one and do a cost comparison. Charges are based on the weight, distance, and type of goods being shipped.

For detailed information on freight forwarders as well as guidelines on how to evaluate their services prior to retaining them, read "International Freight Forwarding in Canada" at:   International Freight Forwarding .

Transportation Links

• For online listings of freight forwarders and other transportation resources, visit Transport Canada's trade links to air, rail, marine and trucking services as well as transportation authorities, world ports, trade corridors, and more at:  Transport Canada .

• Freightnet  provides an on-line worldwide directory of freight forwarders.

• Incoterms  are 13 standard trade definitions commonly used in international contracts. Developed by the International Chamber of Commerce, they are accepted around the world. Incoterms are limited to matters relating to the rights and obligations of the parties to the contract of sale with respect to the delivery of goods sold. A description of these Incoterms is available on ICC's web site  Incoterms .

• Guides and tips for international cargo shipments  

For further information regarding exporting, see the document Exporting Info-Guide, visit the Trade and Export section on our Web site  Canada-Saskatchewan Business Service Centre  or contact the

Canada-Saskatchewan Business Service Centre
#2 - 345 3^rd Avenue South
Saskatoon, Saskatchewan
S7K 1M6
Phone:(306) 956-2323
Toll-Free: 1-800-667-4374
E-mail: saskatchewan@cbsc.ic.gc.ca
Web site: http://www.cbsc.org/sask

Prepared by: Canada/Manitoba Business Service Centre