Small businesses and suppliers of raw materials often have the need to transport their goods and products to foreign shores. Smaller parcels and goods would be best transported through known logistics service companies. Bulk materials would be best sent as bulk freight through shipping agencies, though. Whichever the case, you would inevitably have to sign an agreement with the logistics service company or the shipping agency, which pertains to the terms of transporting your goods to their destination.
A shipping agency agreement would stipulate the terms and conditions that a shipper and the shipping corporation would agree upon, with regard to the goods being transported from shore to shore. These would include the following information:
- Items being shipped - This information ensures that both shipper and shipping agency are aware of the goods being transported, and that these are allowable by international laws.
- Packing and shipping marks - This includes information that will identify how the shipped items are to be handled. These can include "handle with care," "keep away from moisture," "This side up," and such.
- Value of the goods being shipped - This information is used in determining the customs tariffs or taxes that the shipper would have to shoulder
- Tariffs that each party would have to pay - This item makes it clear which party would have to shoulder tariffs and taxes, and to which extent.
- Origin and destination of the shipment - This item shows the starting and end point of the shipment.
- Time of shipment - This is a reasonable estimate of the duration of the shipment, based on the standard shipping time as determined by the shipping company. This is important to note, so that the cost for any reasonable delays would have to be shouldered by the shipping company.
- Terms of payment - This stipulates how much a shipper has to pay, and the terms thereof. Most shipping companies allow for an advanced payment, and then followed by the full payment when the shipment arrives at its destination.
- Insurance - This indicates the insurance bond that a shipper should pay, and up to what amount will be covered by the shipping agency's insurance company in the event of losses or damages.
- Penalties - This information states how much a shipping company would have to pay in the event of late shipments or losses, and whether it the company or the insurer will be liable for these penalties.
- Force majeure and other losses - This section stipulates whether force majeure is covered under insurance, and what particular instances would be considered force majeure. Oftentimes, this would include natural calamities like storms and earthquakes.
- Arbitration - This section states which jurisdiction any lawsuit or legal complaint would be covered. Most of the time, it would be the shipping company's originating country.
A shipping agency agreement is intended for the protection of both shipper and shipping company. This is only one of the documents required to be signed by and between both parties, as there are other legal documents that need to be processed, such as the bill of lading, delivery order, and waybill.
Sample shipping agency agreements can be found on websites that cater to providing pro forma documents to small businesses. Some examples include:
Apart from shipping agency agreements, these websites also provide other sample agreements relating to shipping, such as forwarding agreements, and the like.
Shipping products and materials is a regular activity that businesses-small and big alike-often encounter. In this regard, managers who are directly responsible for having goods shipped should be familiar with existing shipping agreements, and how to use these to one's advantage.