Rome Path

Nine ideas · three pages

The basics.

Page 1 of 3

The shipment chain

Five parties, one box. Shipper hands over the goods. Forwarder books. Carrier moves it. Consignee receives it. Notify party is told it arrived.

Picture

A line: shipper, forwarder, ship, consignee. A bell over the consignee: notify party.

Example

Genoa seller, Italian forwarder, the line's ship, Dubai buyer. Under a bank's credit, the buyer is the notify party.

Said at the table

"Who is the shipper on this, the factory or a trader?"

"Who is the real buyer behind this consignee?"

The bill of lading

The B/L is the carrier's paper for sea cargo. It does three jobs: a receipt for the goods, proof of the contract to carry, and title. Whoever holds an original can claim the cargo.

Picture

One sheet with three stamps: RECEIPT, CONTRACT, TITLE.

Example

The line issues it once the box is on board. The bank holds it until the buyer pays.

Said at the table

"Do you need originals on this, or a waybill?"

"Is it under a letter of credit? Then we hold for originals."

Master B/L and house B/L

One box, two papers. Master: the line's bill, origin agent to destination agent. House: the forwarder's own bill, exporter to real buyer.

Picture

Two bars over one box. Top: origin agent to destination agent. Bottom: exporter to buyer.

Example

At Jebel Ali we take the line's delivery order on the master. The buyer pays us and shows the house bill. We release.

Said at the table

"Consign the master to us and send the pre-alert."

"We release to your consignee on your word, never on his."

Page 2 of 3

Telex release and sea waybill

Telex release: originals were issued, then handed back at origin, so the issuer emails the release. Sea waybill: no originals at all, the named consignee just collects. Either way, the release comes from the issuer, never the consignee.

Picture

Three doors: originals (key), telex (key returned), waybill (open).

Example

Seller already paid? Telex. Related firms? Waybill.

Said at the table

"Is this telex release or a waybill?"

"Please send the surrender message before arrival."

FCL, LCL and the CFS

FCL: one shipper takes a whole box, priced per box. LCL: small lots share a box, priced per cubic metre, packed and unpacked at a CFS, a port warehouse.

Picture

One box, one colour (FCL). One box, five colours, a warehouse each end (LCL).

Example

Five Chinese shippers, one box, one master, five house bills.

Said at the table

"Is your Gulf flow mostly FCL or LCL?"

"Do you run your own consoles, or co-load?"

Incoterms: who pays the main freight picks the forwarder

Who pays the main freight picks the forwarder. EXW, FCA, FOB: the buyer pays and picks the origin agent. CIF, CPT, DAP, DDP: the seller pays and picks the destination agent.

Picture

A road, seller to buyer. E and F stop at the ship; C and D pass it.

Example

FOB Genoa to Dubai: our buyer pays, we pick the Italian agent.

Said at the table

"Is this FOB cargo? Then who appoints the forwarder?"

"Your exporters sell CIF to the Gulf? Nominate us at destination."

Page 3 of 3

Nominated or free-hand

Nominated: a partner abroad handed you the job. Its customer stays its customer; you follow its routing order. Free-hand: you won the customer, so you pick the agent abroad.

Picture

Two arrows between two agents: free-hand is what you give, nominated is what you ask for.

Example

Our Dubai buyer buys FOB Genoa: free-hand for us, nominated for the Italian agent.

Said at the table

"Is most of your Gulf business nominated or free-hand?"

"Your customers stay your customers."

How agents earn on a file

Three ways. Buy-sell: each side adds its own hidden margin. Profit share: revenue minus all costs, split as agreed, often half each. Handling fee: a fixed fee per B/L for doing the other side's work, paid whatever the margin.

Picture

Three jars: hidden margin, shared pot, fixed coin.

Example

File sold for 3,000, costs 2,550: profit 450, 225 each. Illustrative.

Said at the table

"Do you work buy-sell or profit share?"

"The split itself, my Director signs that off."

Notes, the statement and credit

Did the work or paid costs? Send a debit note: you owe me. Owe a share or refund? Send a credit note: I owe you. All open notes go on one statement of account, netted to one payment.

Picture

Two arrows crossing into one box: SOA, one payment out.

Said at the table

"Do you settle on a monthly statement, netted off?"

"Longer terms, my Director signs that off."

The five words people mix up Five

  • Shipper

    Hands the goods to the carrier. Usually the seller; on the master, the origin forwarder.

    Holds: The goods, then the original B/L until paid.

    Wants: Paid, and the box loaded on time.

  • Consignee

    The party the carrier delivers to. The buyer, a bank, or on the master the destination agent.

    Holds: The right to collect, against an original or a release.

    Wants: Cargo released fast, no storage.

  • Carrier

    The line that runs the ship, or an NVOCC, a carrier without ships, that issues its own bill.

    Holds: The cargo, and the master B/L.

    Wants: Freight paid, box back on time.

  • Forwarder

    Organises the move for its own customer and books with the line.

    Holds: The booking and its house B/L.

    Wants: Its customer, and its margin.

  • Agent

    A forwarder at the other end, working for a partner.

    Holds: The pre-alert, the delivery order, the cargo at its end.

    Wants: Nominations, its fee, paid on time.

The trick: the names change by layer. On the master the forwarders are shipper and consignee; on the house bill the real seller and buyer are.

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