Logistics Forwarding: Definition and Complete Explanation
The logistics and freight forwarding industry has been booming recently due to the rise of e-commerce as the preferred choice for people to make purchases. From 2022 to 2023 alone, the freight forwarding and logistics industry is predicted to grow again, given the increasing number of transactions requiring more shipments—and it’s getting easier and easier, you know. But did you know that “freight forwarding” and “logistics” have different meanings? We’ll discuss this in detail in this article, so be sure to read it all the way through. Definitions of Freight Forwarding and Logistics These two terms refer to distinct concepts. Shipping In general terms, “shipping” refers to the act of traveling to reach a specific location. The purpose can vary—it might be for research or to explore a particular area. Do you understand the concept so far? However, when applied to shipping goods, “expedition” refers to a company that specializes in shipping small- to medium-sized shipments to various regions. Shipments using expedition services are considered faster because they offer same-day delivery options. That’s why this service is so popular among the public. This is because these services prioritize speed and offer lower prices compared to other options. Logistics Logistics refers more broadly to the management of various activities related to shipping, procurement, warehousing, and the storage of various types of goods according to clear regulations. When we talk about logistics, a logistics service provider is a company that offers services ranging from shipping and warehousing to management and transportation. So, its scope is broader than that of a freight forwarding service. In this context, logistics can involve long-distance shipping—even to other countries or overseas. Read Also: Indonesia’s Forwarding System: Maximize Your Business with Oaktree Understand the 3 Types of Freight Forwarding and Logistics Services In general, the various shipping categories under freight forwarding or logistics are similar. Check out these 3 examples of logistics and freight forwarding services based on their shipping routes. Sea Freight Well, you should know that shipping via sea routes can be relatively inexpensive and reaches more destinations. However, delivery times are longer, as they depend on the conditions of the sea routes traveled by the cargo ships. When compared to other shipping methods, it does take quite a while, but many choose the sea route because of its more affordable cost. There are several types of ships commonly used for shipping goods through freight forwarders or logistics companies, including fast ships and container ships. There are also specialized cargo ships—known as cargo vessels—and Pelni ships. Land Shipping Freight forwarding and logistics companies frequently use land shipping because the process is simpler and offers greater security regarding packaging and tracking during transit. However, the shipping range is more limited, restricted to interprovincial shipments within a single archipelago. A drawback to consider is that loading goods onto a truck requires waiting until the truck is full. This usually takes a long time, depending on the volume of goods. Air Shipping As for air shipping, it utilizes a fleet of aircraft, offering the advantages of faster delivery times and more streamlined procedures. However, the factor that makes many people think twice about using air shipping is the higher cost, especially when compared to sea and ground shipping. The volume of goods that can be shipped is also limited to medium-scale shipments, due to the aircraft’s limited cargo capacity. Air freight is indeed faster, but it’s also more expensive; most of us opt for the more economical ground shipping. In Indonesia, the growing demand for air freight is now being met by various professional service providers, one of which is MAS Cargo Express. As a trusted shipping company, this Tangerang-based firm offers extensive delivery coverage, supported by a fleet ready to transport goods to major cities across the country. If you want to confirm service coverage before shipping your goods, please check MAS Cargo Express’s shipping routes first to ensure a more organized and efficient shipping process. Well, that’s a comprehensive explanation covering the basics and other important aspects of freight forwarding and logistics. We hope this is helpful for those of you who wish to use these services. Read Also: Expedited Shipping: Learn the Definition and Benefits! Logistics and Freight Forwarding Software? We’ve been discussing freight forwarding and logistics, but did you know there’s actually software that can handle all of this? What is it? Oaktree. Oaktree simplifies logistics and freight forwarding operations because everything is fully integrated. For more information, feel free to ask us here.
Expedited Shipping: Learn About It and Its Benefits!
When you have goods to ship, there’s no time to waste. Especially since PwC’s Global Consumer Insights Survey shows that expectations for fast, flexible, and reliable shipping are higher than ever. The good news for shippers is that shipping doesn’t have to be complicated, and time constraints are exactly why you might be interested in expedited shipping. Still unfamiliar with the concept? In this post, we’ll address the most common questions about expedited shipping to help you decide if this option is right for you. What is expedited shipping? Expedited shipping is a delivery method where goods are shipped faster than usual. To speed up the process, trucks carrying expedited shipments rarely stop along the way. Expedited shipments travel directly from pickup to delivery. Typically, trucking companies offering this fast freight service use a single truck with two drivers who work in shifts to reduce transit time. How fast is expedited shipping? If it normally takes five days for your package to arrive, anything shorter than that is considered expedited. However, while it varies by company, the average expedited delivery time is 2 to 3 days, saving you one or two days compared to standard shipping. To facilitate shipping and ensure fast delivery, we recommend that shippers consider the following: Expedited shipping rates. Expedited shipping rates may be higher than standard rates. Online shipping service providers can help you find the best and most competitive shipping rates. Online tracking. Make sure the carrier you use allows you to track your package. This way, you can see where your shipment is and anticipate any issues that may arise. Shipping options. Understanding your shipping options is important. Will the cargo fit on one or two trucks? Do you need a full truckload or just a partial load? Proper preparation can be very helpful, and a 3PL company can assist with planning and executing the shipment. Is expedited shipping worth the cost? If you need your shipment delivered on time, then expedited shipping is worth the money. Regardless of size, all shipments can be expedited when urgency is a factor. Here are some examples where expedited shipping is a viable option: Medical facilities need equipment and supplies for emergency care. Lead times require timely restocking. When critical equipment fails during mining operations, replacement parts are needed to keep operations running. The scenarios above are typical, but expedited services can be used whenever you need express shipping. The additional cost provides the benefits of speed, fewer processing steps, real-time shipping updates, and added security for your items. Expedited Shipping vs. Standard Shipping Standard shipping is typically the most affordable shipping option for online stores and their customers. Depending on the fulfillment provider and carrier used, standard shipping means it takes between three and seven business days from the time the order is shipped until it arrives at the customer’s doorstep. Some shipping companies tout two-day delivery as their standard, while others clarify that standard shipping means you’ll have to wait a bit to receive your order. Stores in the latter category generally offer expedited shipping alternatives, such as 2-day or next-day delivery, for customers who need their orders faster. It’s important to note that most sellers calculate shipping times based on when the order is shipped, not when it’s placed. This means that if an order is placed with 2-day shipping selected, those 2 days may not necessarily include order processing time—especially if that time falls on a weekend or holiday. Fast Shipping vs. Express Shipping Depending on the retailer and carrier involved, “fast shipping” and “express shipping” can have different meanings or be used interchangeably. Generally, when both express and expedited shipping options are offered, express shipping is faster—often meaning 2-day or next-day delivery—while expedited simply means “faster than standard.”
HS Code: Definition and How to Use It
Among industrial classification systems, the Harmonized System (HS) Code is commonly used throughout the entire process of exporting goods. The Harmonized System is a standardized numerical method for classifying traded products. It is used by customs authorities worldwide to identify products when assessing duties and taxes and to compile statistics. Understanding the HS Code An HS Code is a six-digit code specific to various classifications and commodities. Countries are permitted to add longer codes to the first six digits for further classification. The HS Code is managed by the World Customs Organization (WCO) and updated every five years. It serves as the basis for the export and import classification systems used in the United States and by many trading partners. The HS uses 10-digit codes to classify products for export, known as Schedule B numbers, with the first six digits being the HS number. There is a Schedule B number for every physical product, ranging from paper clips to airplanes. Schedule B is administered by the Foreign Trade Division of the U.S. Census Bureau. How to Use HS Codes The HS uses numerical codes to classify goods. These numerical codes are a systematic description of the goods. The HS numbering system is divided into Chapters (2 digits), Headings (4 digits), and Subheadings (6 digits), as explained below: For example, the HS code 0101.11.xx.xx is taken from the BTBMI (10 digits) 01 01 11 xx xx __ Chapter 1 _____ Position 01. 01 ________ Subposition 0101. 11 ___________ Subheading ASEAN, ASEAN Harmonized Tariff Nomenclature (AHTN) ______________ To the Indonesian Customs Tariff Book (BTKI) Explanation: Chapter, where the classification is represented by the first two digits; the example above shows that the goods are classified under Chapter 1. The next two digits, or the first four digits, indicate the heading within each chapter; in this example, the goods are classified under heading 01.01. The first six digits indicate the subheading of each heading and chapter. In the example above, the goods are classified under subheading 0101.11. The first eight digits are the heading from the AHTN text. The ten digits indicate the national tariff heading taken from the BTKI; the tariff heading specifies the amount of the levy (BM, PPN, PPnBM, or import duty) and trade regulations. Benefits of the HS Code The HS uses a six-digit numbering system for classification. Each country that has signed the HS Convention or a contracting party may develop a more specific six-digit classification in accordance with its respective government’s policies, while remaining within the provisions of the six-digit HS system. In Indonesia, the classification system uses a 10-digit numbering system in the Indonesian Customs Tariff Book (BTKI), which provides a further breakdown of the subheadings in the six-digit HS. You will need the foreign country’s version of the HS code for your products during the export process. You can use it to: Classify physical goods for shipment abroad; Report shipments in the Automated Export System (AES) if the value exceeds $2,500, or if the items require a license; Complete the required shipping documentation, such as a shipper’s instruction letter, commercial invoice, or certificate of origin; Determine import duties and find out whether a product qualifies for preferential rates under a free trade agreement; Conduct market research and obtain trade statistics;
Meaning of FOB: Definition, Origin, and Destination of Free On Board
FOB is a general term used for all types of shipping, both domestic and international. Shipping orders and contracts often specify the time and place of delivery, payment terms, when the risk of loss transfers from the seller to the buyer, and which party pays for shipping and insurance costs. Vendor-client transactions define the FOB terms in purchase orders. The FOB status does not determine ownership—which is specified in the bill of sale or agreement between the buyer and seller—but rather determines which party is responsible for shipping, whether at the Country of Origin, where the shipment begins, or at the Destination, where the shipment ends. Each party must have a solid understanding of Free on Board (FOB) to ensure the smooth transfer of goods from the vendor to the client. Regardless of whether the transfer occurs domestically or internationally, FOB terms can affect inventory, shipping, and insurance costs. What Is Free on Board (FOB)? Free on Board (FOB) is a shipping term that defines the point in the supply chain at which the buyer or seller assumes responsibility for the goods being transported. The purchase order between the buyer and seller specifies the FOB terms and helps determine ownership, risk, and transportation costs. “FOB Origin” or “FOB Shipping Point” means the buyer assumes title to the goods at the shipping point and bears all risks after the seller ships the products. The buyer is responsible if the goods are damaged or lost during transit. “FOB Destination” means the seller retains title to the goods and all responsibility during transit until the goods reach the buyer. FOB Origin vs. FOB Destination FOB Origin, or the shipping point, means the buyer assumes title to the goods they purchased when shipment begins. The seller’s responsibility ends when the goods are handed over to the carrier, and the buyer must ensure the goods reach their final destination on time and undamaged. For FOB Destination, the seller retains ownership of the goods and is responsible for replacing any damaged or lost goods until they reach their final destination. For international shipments—especially for companies ordering large inventories for global shipment by ship and container—international contracts establish and outline the terms, including the time and place of shipment, payment terms, and the FOB designation to determine when the risk of loss transfers from the seller to the buyer and which party pays for freight and insurance. Since there is more than one set of rules, and the legal definition of FOB may vary from country to country, the parties to the contract must specify which governing law applies to the shipment. What Are FOB Costs? Costs associated with FOB may include transporting the goods to the port of shipment, loading the goods onto the vessel, freight, insurance, and unloading and transporting the goods from the port of arrival to the final destination. Who Pays the Freight for FOB Origin? There is an English term, “FOB origin, Freight Collect,” which means the buyer is responsible for shipping costs. If the terms include “FOB origin, Freight Prepaid,” the buyer is responsible for the goods at the point of origin, but the seller pays the shipping costs. What Is the Difference Between FOB and CIF? CIF (Cost, Insurance, and Freight) and FOB (Free on Board) are two widely used INCOTERMS. Although the definitions of these two terms may vary by country and are ultimately determined by each vendor-client contract, historically, FOB transfers responsibility from the seller to the buyer when the shipment reaches the port or other facility designated as the point of origin. Under a CIF agreement, the seller pays the costs and bears the liability until the goods reach the port of destination selected by the buyer. Other Shipping Terms While FOB is the most commonly used delivery term, others include: FAS. Free Alongside means the seller must deliver the goods alongside a vessel of a specified name, close enough that the vessel can use its lifting equipment to load them aboard. FCA. Free Carrier means the seller is obligated to deliver the goods to the airport, seaport, or rail terminal where the buyer operates and can take delivery there. DES. Delivered Ex Ship requires the seller to ship the goods to a specific port of shipment, where the buyer will take delivery upon arrival. EXW. Ex Works, which only requires the seller to make the goods available for shipment from their location. The buyer is responsible for arranging shipment and picking up the goods. This is highly advantageous for the seller. As a buyer negotiating with a seller located far from your place of business, it is generally in your best interest to ask the seller to be responsible for shipping your order as close to your business as possible. Conversely, when you are selling to an overseas buyer, it is in your best interest for the buyer to assume responsibility as soon as the goods leave your loading dock. That covers the meaning of FOB, its definition, and the origin and destination of Free On Board.
What Is a Freight Forwarder? Duties and Tips for Choosing a Forwarder!
What Is a Freight Forwarder? A freight forwarder is an individual or company that can help you navigate the complexities of logistics when it comes to managing the shipment, export, and import of goods. Freight forwarders use their logistics expertise, customs knowledge, and network of shipping partners to help companies ship goods from point A to point B while optimizing shipments for speed and cost. Freight forwarders come in all shapes and sizes. Smaller forwarders may specialize in just one type of shipment or only a few shipping routes where they have established relationships with local partners. Some may offer shipping services by sea or air, or both. Larger forwarders are essentially global freight forwarders. Some freight forwarders use their own vehicles and warehouses, but there are also forwarders that operate without owning these assets by selecting the best operators for each leg of the shipment. For example, Janio specializes in international freight shipping to and throughout Southeast Asia. Its services range from international air and ocean freight across major markets such as Singapore, Malaysia, Indonesia, Thailand, Vietnam, and the Philippines to facilitating imports from countries like the United Kingdom and Australia. Cross-border trucking services between Malaysia and Singapore are also available. Roles & Functions of a Freight Forwarder Definition of a freight forwarder, what they do, and the benefits of using a freight forwarding company If you’re starting to expand internationally and aren’t familiar with the ins and outs of international shipping, mistakes can be costly. Having your shipment held up at customs can wreak havoc on your operations and be difficult to resolve. Freight forwarders act as intermediaries between shippers and the necessary shipping partners at every step to get their shipments from point A to point B. They can be thought of as travel agents for cargo. In the process of managing your international shipments, freight forwarders essentially handle customs clearance on your behalf and coordinate and manage your shipments to achieve the most cost-effective results. Freight Forwarders Navigate Export and Import Customs The customs process can be complex, especially in regions like Southeast Asia where each country has its own customs procedures and requirements. Many international freight forwarders provide customs brokerage services, handling customs documentation and procedures in both the importing and exporting countries on your behalf. Experienced freight forwarders are well-versed in the customs processes of these various countries and help ensure your shipments remain compliant. They will advise you on which documents to obtain when arranging this so that all necessary paperwork is submitted on time. This is especially important in Southeast Asia, where customs can be complex because each country has its own customs regulations and requirements. Working with a freight forwarder that has established regional customs brokerage experience can help ensure your shipments move smoothly from point A to point B. Especially for new shippers, working with the right freight forwarder can save your company valuable time that would otherwise be spent learning these procedures from scratch. The time saved through this is part of the reason why even more established companies rely on freight forwarders. Freight Forwarders Optimize and Manage Shipments Whether your chosen freight forwarder has its own fleet or not, it will advise you on which mode of transportation best suits your current shipping needs and then arrange everything necessary to carry out the shipment through its network of partners. Freight forwarders typically do the following to assist you: Select the right carrier for each leg of the journey to ensure the fastest and most economical route—whether by sea, air, or land Negotiating bulk shipping rates to get you better prices Handling customs documentation Tracking cargo status—especially if they have an online portal that handles international shipments Troubleshooting – Freight forwarders also step in if there’s a potential issue with your shipment Large carriers can provide excellent service to many countries, but at a high cost. To get great service at a reasonable price, you need relationships with several local specialty carriers. Especially if you’re shipping to multiple countries, maintaining relationships with many of these types of carriers can be a challenge. By working with a freight forwarder, you can benefit from their cost and speed optimizations—which stem from their strong relationships with carriers—without having to build these relationships from scratch. How to Get the Most Out of a Freight Forwarder’s Services If this is your first time working with a freight forwarder, the initial meeting typically covers the following: They’ll cover everything you need to know about the shipment and answer any questions you may have about the route and your shipment. They’ll also advise you on the key shipping documents you might need, or whether any special documentation—such as permits or licenses—is required for your shipment They’ll offer advice and suggest options that best suit your shipment and your current logistics needs Your freight forwarder’s representative will also keep you informed about the progress of your shipment or if there is a risk of significant delays. Some may also offer technological solutions, such as a shipping portal that provides regular updates on all your international shipments. It’s also helpful to prepare the following information to make the meeting more efficient and effective: Incoterms – e.g., whether you’ve agreed to FOB or CIF terms with your buyer (import) or seller (export) Commodity – the type of product you wish to ship HS Code (if applicable) – the Harmonized System code used to identify the type of goods you are shipping Port of Origin Port of Destination Quantity – the number of goods being shipped Gross and volumetric weight – Gross weight is the actual weight, and volumetric weight is the amount of space the goods occupy Dimensions – length x width x height Cargo Readiness Date – estimated date when the cargo will be ready for shipment Are you shipping dangerous goods (DGR)? Commercial invoice and packing list Pickup address Delivery address That concludes the information about freight forwarders; we hope you find it useful.
Logistics Administrator: Definition, Duties, and Responsibilities
A logistics administrator is responsible for managing a company’s logistics administration—so what exactly does this job entail? It can involve managing goods, such as procurement, storage, and maintenance. Those of you involved in the world of freight forwarding may be more familiar with the role of a logistics administrator. In this article, we’ll explain the definition of the role, the tasks and responsibilities involved, the typical salary for a logistics administrator, and tips for hiring one. Next, let’s discuss the logistics administrator role below: Duties and Responsibilities of a Logistics Administrator Here are the duties and responsibilities of a logistics administrator: 1. Procuring and Processing Goods In their work, logistics administrators typically handle the procurement process, which usually involves preparing goods for shipment. Additionally, they must understand the supply chain for goods, assets, and the shipping system. This is because the shipping process involves systems and shipping logs that must be filled out by the administrator. 2. Operating Logistics Software and Monitoring A logistics administrator is usually supported by software designed for this purpose; one such software is oaktree.id. For record-keeping, they typically use ERP software or other tools that support the work of a logistics administrator. A logistics administrator must be able to operate shipping software to track the delivery system, ensure on-time delivery, and prevent any shipping issues. They must also maintain communication with couriers to avoid delivery errors and optimize the shipping process. 3. Updating inventory records and item locations For every job or location where goods are typically stored, there will always be updates regarding stock levels and the quantity of goods or their locations. Usually, at specific intervals, the company will conduct a physical inventory count, commonly known as a stock take. 4. Preparing administrative reports For every task performed, logistics administrators are required to prepare administrative reports, as this is essential to ensure the warehouse can accommodate incoming goods and organize them according to product categories. This includes arranging goods and verifying whether they fit, allowing for an analysis of whether inventory levels are sufficient relative to orders and available space. 5. Always Coordinating with Internal Staff and Communicating with Vendors Performing work requires coordination across departments—whether it’s the marketing, operations, or finance departments. This facilitates our efforts to achieve the company’s or organization’s goals. 6. Reviewing incoming and outgoing warehouse correspondence and transactions Processing documents and transactions is a core responsibility of an administrator—particularly a logistics administrator—and is essential for managing logistics operations. We believe this role requires meticulous attention to detail, as it directly impacts a company’s legal compliance. Average Salary for According to Indeed, the average salary in Indonesia is 3,792,811, though this depends on where you live, as salaries can vary from place to place. See Also: Customs: Definition and 2 Examples of Goods Software for Logistics Administrators We all know that work requires software to support daily operations, so we’d like to share a bit about Oaktree. Oaktree is software capable of managing various departments, including marketing, operations, finance, and accounting. All of the administrative tasks and responsibilities mentioned above can be handled by Oaktree. Correspondence is automatically processed, and recipients will receive a notification when they receive a message. When it comes to categorizing goods, everything can be easily handled with Oaktree—you don’t need to worry about it. For more information about Oaktree software, please contact us on WhatsApp. Thank you for reading this article. We hope you found it helpful, and we wish you good health!