The shipping industry’s ability to offer economical and efficient long-distance transport has placed the sector at the center of the world economy. Billion tons of goods and materials are ferried via ship each year from one destination to another for its consumption. Although shipping is regarded as a convenient mode of transportation, exporters must grasp the numerous procedures and formalities associated with it for smooth day-to-day operations. To understand it all and simplify the hurdles in the shipping process, Drip Capital, in association with Mr. Hemant Kulkarni, organized this webinar You can watch the webinar here - https://youtu.be/rdn4dWnBK4Q

1. Shipping:
Formalities, Procedures
and Documentation
Presented by
Hemant Kulkarni
Foreign Trade Specialist, Trainer and Advisor

2. Discussion points in today’s webinar
1. The technical meaning of the term ‘exports’
2. Shipping formalities and documentation with respect
to the movement of goods for exports.
3. The total cost impact on the shipping industry.
4. Other important matters related to shipping.

3. 1. Technical meaning of the term Exports
• Goods moving out of Indian Territorial waters beyond 12 nautical miles.
• In international law, that area of the sea immediately adjacent to the shores of a
state and subject to the territorial jurisdiction of that state.
• A nautical mile is 1,852 meters, or 1.852 kilometres.

4. 2. Shipping formalities and documentation
with respect to the movement of goods for exports
Here's a checklist of the most common export documents you need to
include with your shipment when sending goods to another country:
• Export declaration
• Commercial invoice
• Bill of lading
• Packing list
• Export license if any
• Certificate of origin

5. • The objective of this Standard Operating Procedure (SOP) is to summarize requirements
for the packaging, marking / labelling, and shipping of environmental and hazardous
materials samples.... Samples collected by REAC personnel for approval for shipment with
other goods.(Regulatory Enforcement and Control.)
• Exporters declaration: "I/We undertake to abide by provisions of Foreign Exchange
Management Act, 1999, as amended from time to time, including realization/ repatriation
of foreign exchange to / India."
• “I /We hereby declare that I/we @am/are the seller/consignor of the goods in respect of
which this declaration is made and that the particulars given above are true and that the
value to be received from the buyer/third party represents the export value contracted
and declared above.”
Adhere to SOP

6. • The shipping industry is the backbone of international trade and the largest enabler of globalization
3. Total Cost Impact
on the Shipping Industry
• The shipping industry at present is facing a huge turmoil due to the current pandemic, further fuel to fire
got added with huge tragedies of Suez Canal in March 21 and fire explosion in May 21.
• Suez Canal Tragedy - 1312 foot “Ever Given” Vessel having 20000 teu’s on board remained stuck for 6
days-- 12 % of Global Trade and was holding up trade value of USD 9 billion per day. USD 400 million
worth of trade per hour.
According to the United Nations Conference on Trade and Development (UNCTAD),
80% global trade by volume and 70% international trade by value happens by sea.

7. • Similarly in May 21, cargo vessel MV Xpress Pearl carrying consignment of Chemicals and raw materials
caught fire. Apart from 325 mt of fuel in its tank it was loaded with 1486 container carrying 25 ton of
hazardous nitric acid. These two incidents have added huge cost impact to the shipping industry.
• Impact: The impact is – about 2 percent of the container ships, fleet has been taken away temporarily. The
trade between Asian and Europe, North America and East coast of United States and Canada are the ones
which have experienced supply chain disruptions and about 400 ships are waiting in the queue.
• Apart from above, bunching of vessels are expected beyond control thus disrupting the time frame of
delivery of cargoes worldwide.

8. • Owing to the current pandemics the Freight cost has increased more than four to
five times.
• Earlier the validity period for the freight quote was minimum one month but of
late the period has shrunken to mere 10 days.
• As regards the logistics, there is a tremendous delay in transportation of goods.
Availability of vehicles has become more challenging.
• Sectors such as agriculture commodities which operates on low margins is badly
affected. Their profits have got eroded. Owing to their prior commitment with the
buyers, they are just fulfilling it by exporting goods to the buyer.
Analysis of freight in Shipping and Logistics

9. The main factors in determining the freight rate are:
• Mode of transportation, weight, size, distance, points of pickup and delivery,
and the actual goods being shipped.
• In general, the more the goods you transport, the cheaper it is. This is an
most important factor in analysing the freight rate.
• One more important factor is the proper stowage of goods in the container.
Analysis of freight in Shipping and Logistics

10. Marine Insurance
• It is utmost important to pay your attention towards the documents and information being provided to the insurance
company while we cover for Marine Insurance for our goods.
• The Bill of lading should show the correct FOB notation with the proper name of the vessel along with its voyage
number. The no of packages, Product description, Gross weight , Net weight should be correct.
House Bill of Lading (HBL) and Master Bill of Lading (MBL)
• A House Bill of Lading (HBL) is issued by an NVOCC operator (Non Vessel Owning Common Carrier), or a Freight
Forwarder to their customers.
• A Master Bill of Lading (MBL) is issued by the Shipping Line (Carrier) to the NVOCC Operator, or Freight Forwarder.
Shipment Advise
• It is the most important document to be sent to Buyer.
4. Other important matters related to Shipping

11. Most Common Container Types:
• General Purpose Containers
Also known as a "dry container".
• Flat Rack Containers
• Open Top Containers
• Double Door Containers
• High Cube Containers
• Open Side Containers
• ISO Reefer Containers
• Insulated Containers
Container Sizes:
General-purpose containers are 8.5 feet (2.59m) high and 8 feet
(2.43m) wide. They come in two lengths; 20 feet (6.06m) and 40 feet
(12.2m). Commonly the height of a container will be 8ft 6” . A 40ft
high-cube shipping container or extra tall shipping containers are
available at 9.5 feet (2.89m).

12. Types of vessels:
• Broadly there are two types of vessels. Breakbulk and Container.
• Break bulk carry goods in its hatches. The goods are Hot rolled coils, Cold rolled coils etc. Further bulk carrier loads
goods like coal, iron ore etc.
• Container vessel carry all type of general cargo and hazardous cargo too.
Other important matters related to Shipping:
Sizes of bulk carrier ships:
• Small ships – 10k to 25k.
• Handymax- 40k to 60k.
• Panamax- 60k to 1 Lac.
• Cape size- 1 Lac to 2 Lac.
• Very large bulk carrier- More than 2 Lac

13. Oil Tanker vessel Container Ship

14. Cruise Ship Oil Tanker
Roro Ship Hatch of the break up Bulk Ship

15. Thank you