The clearing and forwarding industry is a crucial part of international trade, with billions of dollars worth of goods being cleared and forwarded every year. According to the Nigerian Ports Authority, the total volume of cargo handled in Nigerian ports in 2020 was 75.8 million metric tons, an increase of 2.3% compared to the previous year. [1]
The Nigerian Shippers’ Council reported that the total freight forwarding and clearing charges paid by shippers in Nigeria in 2020 was $1.3 billion. [2]
Clearing and forwarding are two essential processes involved in international trade and logistics. These processes are critical to ensuring that goods are transported smoothly and efficiently across borders. In this article, we will explore the major steps involved in clearing and forwarding and why they are important for businesses that engage in international trade.
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Preparing the shipment
The first step in clearing and forwarding is to prepare the shipment for export, which includes identifying the appropriate HS code for the goods. The exporter must classify the goods according to the appropriate HS code, which is used to identify the nature of the goods and to determine the applicable customs duties and taxes, as well as any regulatory requirements or restrictions that may apply to the goods.
In addition to identifying the HS code, preparing the shipment also involves packing the goods properly and obtaining the necessary documentation such as commercial invoices, packing lists, bills of lading, and any other required permits or certificates. Proper packing is essential to ensure that the goods are protected during transit and that they arrive at their destination in good condition. The documentation is necessary to comply with regulatory requirements and to help ensure that the shipment is processed smoothly through customs.
The first step in clearing and forwarding is to prepare the shipment for export. This involves packing the goods properly and obtaining the necessary documentation such as commercial invoices, packing lists, bills of lading, and any other required permits or certificates. Proper packing is essential to ensure that the goods are protected during transit and that they arrive at their destination in good condition. The documentation is necessary to comply with regulatory requirements and to help ensure that the shipment is processed smoothly through customs.
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Shipping
Once the shipment is ready, it is transported to the port or airport for export. The shipping method will depend on the nature of the goods and the destination country as well as the stakeholder’s choice based on how soon the goods are needed. For example, air freight may be preferred for perishable goods or time-sensitive shipments, while sea freight may be more cost-effective for bulk shipments.
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Documentation for Clearing and Forwarding
At the port or airport, the exporter will need to submit the necessary documentation to the relevant authorities to obtain clearance for the shipment. This may include customs declarations, export licenses, and other permits. The documentation is critical to ensure that the shipment is compliant with all applicable regulations and laws.
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Customs clearance
The customs authorities will inspect the shipment to ensure that it complies with all relevant regulations and laws. This may involve checking the contents of the shipment, verifying the documentation, and assessing any applicable fees or taxes. Customs clearance is a critical step in the process of clearing and forwarding as it ensures that the shipment is legal and compliant with all relevant regulations.
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Freight forwarding
After customs have cleared the shipment, it is transferred to a freight forwarder who will arrange for its transport to the destination country. The freight forwarder will handle all the logistics and documentation for the shipment, including customs clearance in the destination country. Freight forwarding is essential to ensure that the shipment is transported efficiently and cost-effectively to its destination.
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Delivery
Once the shipment arrives in the destination country, it will need to be cleared by customs again before it can be released for delivery. The importer will need to provide the necessary documentation and pay any applicable fees or taxes before the shipment can be released. Delivery is the final step in the process of clearing and forwarding, and it is critical to the success of the shipment.
When it comes to clearing and forwarding, it’s essential to work with a reliable and experienced partner to ensure that your shipments are handled properly and efficiently. That’s where G-line Logistics comes in. Clearing and forwarding agents play a key role in the industry, helping importers and exporters navigate the complex regulatory environment and ensure that their shipments are handled properly.
The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) estimates that the cost of clearing and forwarding services in Nigeria can account for up to 40% of the total cost of goods imported into the country. [3]. The Nigerian Customs Service generated a total revenue of N1.6 trillion in 2020, an increase of 13.2% compared to the previous year. [4]
The World Bank’s 2020 Doing Business report ranked Nigeria 131st out of 190 countries in the “trading across borders” category, which measures the time and cost required to complete import and export procedures. [5]
The process of clearing and forwarding is complex and involves several critical steps. Proper preparation of the shipment, documentation, customs clearance, freight forwarding, and delivery are all essential to ensure that the shipment is processed smoothly and arrives at its destination on time and in good condition.
Businesses that engage in international trade must work with experienced and reliable partners to ensure that their shipments are handled properly at every stage of the process. By doing so, they can minimize the risk of delays, damage, or other issues that can arise during the transportation of goods across borders.
G-line Logistics is committed to providing businesses with hassle-free shipping. Our expertise in clearing and forwarding, combined with a focus on customer satisfaction and competitive pricing, ensures that our clients’ shipments are handled with care and delivered on time. With a range of air and sea freight options, businesses of all sizes can trust us to handle all aspects of the shipping process, from documentation to delivery. By partnering with G-line Logistics, businesses can rest assured that their shipments are in good hands and will arrive at their destination on time and in good condition.
References:
- Nigerian Ports Authority. (2021). Port Statistics 2020.
- Nigerian Shippers’ Council. (2021). Freight Forwarding and Clearing Charges in Nigeria.
- NACCIMA. (2018). Cost of Clearing and Forwarding in Nigeria.
- Nigerian Customs Service. (2021). 2020 Performance Report.
- World Bank Group. (2020). Doing Business 2020.
- International Federation of Freight Forwarders Associations (FIATA)
- World Customs Organization (WCO)
- International Air Transport Association (IATA)
- International Chamber of Commerce (ICC)
- Council of Supply Chain Management Professionals (CSCMP)
