Section 8b. The Value Chain of International Shipping

Go to The Move

Once you know what you want to ship, the next thing is to decide what kind of service provider you want.  When you think about it, shipping your goods from source to destination consists of the following piece parts:

1. You need to pack your items well so that they can sustain the long trip and arrive at their destination undamaged.
2. You will decide on whether to insure your shipment - and if so, the insured value and deductible.
3. Your items need to be loaded to a truck.
4. The truck should take your shipment by road (or rail) to the nearest shipping port.
5. The shipment must obtain necessary customs clearances before it can be loaded onto the ship.
6. The shipment must be loaded onto the ship.
7. The shipment should travel by ship to its destination port in India (say, Mumbai or Chennai).
8. Your container should be unloaded from the ship and placed on a truck to be transported to a storage facility belonging to Indian Customs.
9. Your shipment should be examined by Indian Customs and the appropriate duties must be paid.
10. Once cleared, your items should transfer from the international container to a domestic truck.
11. The truck should deliver the items to your home in India.
12. The items must be unpacked at your home.
13. All associated debris must be removed from your home.

The shipping industry is so mature and competitive that you have a menu of options to choose from.  At the one end of the spectrum, you can decide on a full-service shipper who will take responsibility to do all of the above tasks with little involvement from you.  All you need to do is supervise the move.  The shipper will serve as your “single throat to choke” - a single point of contact who will be with you throughout the relocation until the last box is unpacked and arranged in your home in India.   Obviously, this option is the most expensive and may be applicable to “corporate clients” - when your company bears the cost of your relocation.

At the other end of the spectrum, you could do many of the shipping value chain items yourself.  You could pack, load and even drive your own rented U-Haul down to the shipping yard.  You could call up shipping companies and shop for the best rate, retaining a shipping agent to do the minimum paperwork acceptable both to the shipping line and customs.  And you could do the same on the India end.  Again, while this option may save you money, the physical effort required can be enormous.  And because you are not experienced in the shipping business and you don’t have the volume to negotiate discounts, you could well end up paying more than you think.

Or you could do something in between:  hire a moving company affiliated with the International Association of Movers (IAM) and negotiate the price of each of the above task elements.  For example, you could physically pack all of your belongings in moving boxes yourself but hire a local packer to professionally pack furniture and electronics only. [If you are a budget shipper, you could save even on the cost of moving boxes by requesting your neighborhood big-box (Walmart, Costco) store managers to save boxes for you.  These are generally free - your only cost would be to make repeated trips to fetch these boxes home].  The packer would load the entire shipment to the truck dispatched by the moving company.  The moving company’s responsibility starts at this point of the chain and depending upon the deal you negotiate, you could have it handle the move until the very last step - i.e. unpacking the items at your India home.  This may make sense because you are taking advantage of cheap labor in India to do labor-intensive tasks at the India end but you are limiting the use of expensive professional labor in the West to only those tasks that you cannot do yourself (such as packing that dresser mirror in your bedroom).

No matter which menu option you choose, remember that your service provider will only quote for “standard” conditions - those which represent 90% of the relocation business.  If non-standard conditions exist, you will pay more.  These include:

• Where a destination location is inaccessible by the destination agent’s delivery vehicles; 
• Parking permits for difficult access areas, hoisting/outside crane for difficult access buildings;
• Delivery to more than two floors without elevator;
• Unloading during weekends or holidays;
• Quarantine inspections by port authorities; duties; import taxes or fumigation fees;
• Customs expenses due to the property owner’s failure to comply with governmental regulations at ports of entry in foreign countries; 
• Unforeseen fumigation; duties; import fees/taxes;
• Random inspections conducted by US Customs/US Port Authorities.  These impact about 2% of all shipments but if your container is one of the unlucky ones chosen for random inspection, you will bear the cost of unloading items from the container, repacking and reloading back to the ship. 

Shipping companies will try to sell you, somewhat disingenuously, a full service package by warning you that items packed by owner (PBO) run a higher risk of running into inspections by the US Customs and Border Protection (because the government does not know what's in the boxes).  They will tell you that the government is more likely to believe the authenticity of the full service company’s bill of lading - a legal document between you and the carrier detailing the type, quantity and destination of the goods being carried - rather than one filled out by you when you pack things yourself.  Don’t fall for this warning.  US Customs does not require professional packing.  If you can maintain a detailed inventory of what is in every box, this should more than satisfy a curious customs official.