A Guide to the Ocean Import Process – Part 1Freight arrives in Canada every day by land, air and sea. In comparison to air and ground shipments, freight arriving by sea requires a few extra steps in the import and delivery process. Let’s take an in-depth look at the process that you, as a Canadian widget importer, may go through when you purchase a shipment of widgets from China, as well as some common potential pitfalls of the process.
Here is the usual order of events when you import a shipment by sea:
- You purchase a shipment of widgets from Best Quality Widget Express in China.
- Best Quality Widget Express will hire a freight forwarder in China who arranges the movement of the freight on a container vessel. Your goods may fill an entire shipping container, or you may have a less-than-container load of widgets. This Chinese forwarder is probably paid by Best Quality Widgets, and part of their job is to create a Bill of Lading (BOL).
- When the goods are en route to Canada, the Chinese freight forwarder will surrender the Bill of Lading to a Canadian freight forwarder. The Chinese forwarder will probably have agreements with forwarders all over the world who they work with regularly, and they will pick their favourite Canadian agent.
- The handover of the Bill of Lading from one forwarder to the other is called “releasing” the Bill of Lading. This can be done digitally by the Chinese forwarder, which is called “telex releasing” or “express releasing”, or it can be done using the original paper documents. If you have the option, telex releasing the bill of lading is much quicker and easier!
- The Canadian forwarder will contact the importer—and the customs broker, if they know who they are—and send copies of the BOL, an arrival notice with more details about the shipment, and probably an invoice for their own fees.
- Hopefully, when Best Quality Widget Express hired the Chinese forwarder to create the BOL, they asked them to put your customs broker’s name on the BOL as the “Notify Party”. That makes everything easier.
- You can either pay the Canadian forwarder’s fees yourself, or your customs broker can pay them and bill them back to you. It’s often easier to have your broker pay them, but be aware that they may charge a fee for doing that.
- The customs broker will submit a customs declaration. Now we wait for your widgets to arrive at the port. There are two ways the process can go from here, depending on whether you bought a whole container of widgets (Full Container Load, or FCL) or only a partial container load (Less Than Container Load, or LCL). Let’s look at what would happen if you bought a full container (FCL) shipment first:
- The vessel arrives and the container is craned off the ship. The port tells CBSA that the container has arrived, and CBSA releases your goods. That means that the customs broker’s declaration is approved and you are allowed to go pick up your stuff.
- A carrier who you have contracted to deliver the container to you will call the port and make an appointment to pick up the container. They have to hurry, because you only have a couple of days pick up the container before the port starts charging you storage!
- If you don’t have a carrier you regularly work with, ask your customs broker if they can arrange this for you. Many customs brokers have freight carrier contacts in their area.
- The carrier will bring the container to your address. The driver then goes for a walk and stretches her back while you and your staff quickly unload the container, probably with a forklift.
- The trucker returns the container to port as soon as she can; again, you only have a couple of days before the shipping line starts charging you for holding up their container.
Now, maybe Best Quality Widget Express didn’t have any of your favourite purple widgets in stock, so you’re only going to buy a half-container of widgets for now. Let’s go back a few steps and see what will happen if you are importing a less-than-container load (LCL) shipment:
- The vessel arrives and the container with your widgets is craned off the vessel. The Canadian forwarder will arrange for the container to be taken to a warehouse and unpacked, and the warehouse will sort out each importer’s goods. They will report how many units they received to CBSA, and as long as that matches up with what the customs broker has reported in their declaration, customs will release the freight.
- The warehouse will charge for their work, usually around $50, plus a little extra if they needed to put your boxes on to pallets to move them. Just like the Canadian forwarder, you can either pay the warehouse’s charges directly to them or your customs broker can pay them and bill you back.
- You have to arrange for a carrier to go get your goods. Usually the warehouse will hold your freight for free for five days, and then they start charging you storage.
- Again, if you don’t want to arrange this yourself, ask your customs broker if they can make delivery arrangements.
Easy, right? Everyone knows what they are doing, all these experienced professionals are taking care of your precious widgets, and everything is moving like a well-oiled machine.
Most of the time.
With a process this complex, there are a number of opportunities for things to go wrong.
In our next post, we’ll look at a couple of the most common ocean importing problems and how to avoid them.
By Robin Smith, M.A., CCS. – Robin is a trade industry professional based in Victoria, BC.
Freight arrives in Canada every day by land, air and sea. In comparison to air and ground shipments, freight arriving by sea requires a few extra steps in the import and delivery process. Let’s take an in-depth look at the process that you, as a Canadian widget importer, may go through when you purchase a shipment of widgets from China, as well as some common potential pitfalls of the process.
Here is the usual order of events when you import a shipment by sea:
- You purchase a shipment of widgets from Best Quality Widget Express in China.
- Best Quality Widget Express will hire a freight forwarder in China who arranges the movement of the freight on a container vessel. Your goods may fill an entire shipping container, or you may have a less-than-container load of widgets. This Chinese forwarder is probably paid by Best Quality Widgets, and part of their job is to create a Bill of Lading (BOL).
- When the goods are en route to Canada, the Chinese freight forwarder will surrender the Bill of Lading to a Canadian freight forwarder. The Chinese forwarder will probably have agreements with forwarders all over the world who they work with regularly, and they will pick their favourite Canadian agent.
- The handover of the Bill of Lading from one forwarder to the other is called “releasing” the Bill of Lading. This can be done digitally by the Chinese forwarder, which is called “telex releasing” or “express releasing”, or it can be done using the original paper documents. If you have the option, telex releasing the bill of lading is much quicker and easier!
- The Canadian forwarder will contact the importer—and the customs broker, if they know who they are—and send copies of the BOL, an arrival notice with more details about the shipment, and probably an invoice for their own fees.
- Hopefully, when Best Quality Widget Express hired the Chinese forwarder to create the BOL, they asked them to put your customs broker’s name on the BOL as the “Notify Party”. That makes everything easier.
- You can either pay the Canadian forwarder’s fees yourself, or your customs broker can pay them and bill them back to you. It’s often easier to have your broker pay them, but be aware that they may charge a fee for doing that.
- The customs broker will submit a customs declaration. Now we wait for your widgets to arrive at the port. There are two ways the process can go from here, depending on whether you bought a whole container of widgets (Full Container Load, or FCL) or only a partial container load (Less Than Container Load, or LCL). Let’s look at what would happen if you bought a full container (FCL) shipment first:
- The vessel arrives and the container is craned off the ship. The port tells CBSA that the container has arrived, and CBSA releases your goods. That means that the customs broker’s declaration is approved and you are allowed to go pick up your stuff.
- A carrier who you have contracted to deliver the container to you will call the port and make an appointment to pick up the container. They have to hurry, because you only have a couple of days pick up the container before the port starts charging you storage!
- If you don’t have a carrier you regularly work with, ask your customs broker if they can arrange this for you. Many customs brokers have freight carrier contacts in their area.
- The carrier will bring the container to your address. The driver then goes for a walk and stretches her back while you and your staff quickly unload the container, probably with a forklift.
- The trucker returns the container to port as soon as she can; again, you only have a couple of days before the shipping line starts charging you for holding up their container.
Now, maybe Best Quality Widget Express didn’t have any of your favourite purple widgets in stock, so you’re only going to buy a half-container of widgets for now. Let’s go back a few steps and see what will happen if you are importing a less-than-container load (LCL) shipment:
- The vessel arrives and the container with your widgets is craned off the vessel. The Canadian forwarder will arrange for the container to be taken to a warehouse and unpacked, and the warehouse will sort out each importer’s goods. They will report how many units they received to CBSA, and as long as that matches up with what the customs broker has reported in their declaration, customs will release the freight.
- The warehouse will charge for their work, usually around $50, plus a little extra if they needed to put your boxes on to pallets to move them. Just like the Canadian forwarder, you can either pay the warehouse’s charges directly to them or your customs broker can pay them and bill you back.
- You have to arrange for a carrier to go get your goods. Usually the warehouse will hold your freight for free for five days, and then they start charging you storage.
- Again, if you don’t want to arrange this yourself, ask your customs broker if they can make delivery arrangements.
Easy, right? Everyone knows what they are doing, all these experienced professionals are taking care of your precious widgets, and everything is moving like a well-oiled machine.
Most of the time.
With a process this complex, there are a number of opportunities for things to go wrong.
In our next post, we’ll look at a couple of the most common ocean importing problems and how to avoid them.
By Robin Smith, M.A., CCS. – Robin is a trade industry professional based in Victoria, BC.
