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Cold Chain Logistics: Quality Specifications and Export Documentation Elements Defined, The Cold Supply Chain Series Part 2

http://cerasis.com/2013/07/16/cold-chain-logistics/

Cold Chain Logistics: Quality Specifications

and Export Documentation Elements Defined,

The Cold Supply Chain Series Part 2

 

Chuck Intrieri// July 16, 2013

The first article of the Cold Supply Chain series, covered cold chain logistics requirements for temperature, sanitization, and traceability of frozen food at all stages of the cold supply chain. There are many factors in the cold supply chain and in cold chain logistics one must know in order to meet the requirements of your customers, but more importantly of the FDA’s Food and Safety Modernization act.  When working in-house with supply chain colleagues and those in the logistics department, make sure they are aware of the following information, as these are great considerations to understand when working through cold chain logistics.

Quality Specifications in Cold Chain Logistics

  • Quality specifications are set by the exporter or can be part of the customer specifications in the purchase order/agreement.
  • It is relatively easy to measure “stability” of frozen food; the same is not true for quality.
  • Gas chromatography (GC) is used in studying aroma and flavor because it can detect which compounds were responsible for the sensory effects and how much of each component was present. CG is used for flavor and food chemistry.
  • ACS, or your forwarder/US Customs, can check with FDA/USDA for required certification and any quality requirements.
  • The customer will check the temperature and quality as it is received and record this data. If there is a problem the customer will notify the exporter.

Frozen Food Export Documentation Required

In Cold Chain Logistics, you will undoubtedly work with a forwarder to ship your frozen food. The following describes a relationship with a forwarder and their role, as well as a customs broker, and some key definitions and elements in the cold chain logistics process of exporting frozen food:

  • Freight Forwarders: Acts as an agent for the exporter in moving cargo to the overseas destination. These agents are familiar with the import rules of the foreign countries, methods of shipping, government export regulations, and the documents connected with foreign trade. CH Robinson has their own freight forwarder. The supplier has to engage a forwarder for an export shipment. The forwarder can give you export freight chargers, port charges, consular fees, cost of special export documentation and insurance costs as well as their handling fees which help you in preparing price quotations. The forwarder can ensure that all documents are in order for the export to your customer. The freight forwarder can have your goods delivered to the carrier in time for loading on the vessel. They can prepare the bill of lading and any special documentation needed for the customer and country.
  • After shipping they forward all documents directly to your customer or to the bank, if desired by you.
  • The Customs broker works with the freight forwarder and ensures that the goods comply with customs export documentation and regulations. Your forwarder should check with US Customs about export customs requirements for your particular commodity: frozen food, and insure that you are in customs compliance for your export shipment.
  • The Forwarder/US Customs can keep you abreast of the potential dock strike February 7, 2013.
  • In packing items for export, you should be aware of the demands that exporting puts on a package. Four problems must be kept in mind when an export shipping crate is being designed: BREAKAGE, WEIGHT, MOISTURE and PILFERAGE.
  • Moisture is a constant problem because cargo is subject to condensation even in the hold of a ship equipped with air conditioning and a dehumidifier. The cargo could also be unloaded in the rain and some foreign ports do not have covered storage facilities. Unless cargo is adequately protected, theft and pilferage are constant treats. You must use the services of a good freight forwarder to manage these issues for you, the exporter or your Supplier or a 3PL forwarder.

Definitions & Elements in Export Process of Cold Chain Logistics

  • Commercial Invoice: Bill for the goods from the buyer to the seller
  • Bill of Lading: Contract between the owner of the goods and the carrier. The customer needs a copy as proof of ownership of the goods.
  • Consular Invoice: To control and identify goods. The invoice must be purchased from the consulate of the country to which goods are being shipped and usually must be prepared in the  Language of that country.
  • Certificate of origin: A signed statement as to the origin of the export item. You can get this from the local chamber of commerce.
  • Inspection certificate: This attests to the specifications of the goods shipped, typically performed by a third party/independent testing organization.
  • Dock receipt and warehouse receipt: These receipts are used to transfer accountability when the export item is moved by the domestic carrier to the port of embarkation and left with the international carrier for export.
  • Destination control statement: This appears on the commercial invoice, ocean. or air bill of lading to notify the carrier and all foreign parties that the cargo may be exported only to a certain destination.
  • Insurance Certificate: CRITICAL for LIABILITY: If the seller provides insurance, the insurance certificate states the type and amount of coverage.
  • Export license: Ask freight forwarder: only when required.
  • Export packing list: Itemizes the material in each package and indicates the type of package: box, crate, drum, carton, etc. Shows net, legal, tare and gross weights and measurement of each package. This includes package markings. The packing list should be attached to the outside in a waterproof envelope marked, “packing slip enclosed” The details in this list must be precise.
  • Health Insurance certificate: Some countries require health certificates as to the conditions of the goods shipped. Consult with the freight forwarder.
  • Inspection report before crating/shipping shipping: Ask the freight forwarder if required
  • Export declaration: State the value of the cargo/goods if the shipment exceeds $ 2000.
  • FDA/USDA Certification: Check with your forwarder/broker on the essential FDA/USDA Certification required for exporting or call FDA/USDA for the necessary requirements
  • Electronic Export Information (EEI)is the electronic export data as filed in the Automated Export System (AES). This data is the electronic equivalent of the export data formerly collected as the Shipper’s Export Declaration (SED). This information is now mandated to be filed through the Automated Export System. Check with your forwarder or US Customs. The Supplier, forwarder/3PL must have a written authorization from ACS to file this data.
  • File a Shippers Letter of Instruction (form 7525V: available from the Supplier, 3PL, forwarder or US Customs). The forwarder typically finishes the completion of this form for ACS after the basic data is completed by ACS/Exporter of record.
  • Request for Food Consignment Release permit: This permit is required in Dubai to enable ACS to obtain an approval to release food consignment from Dubai ports for local markets: Check with the forwarder/US Customs for this permit

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http://cerasis.com/2013/07/17/cold-supply-chain/

Cold Supply Chain: Liability & Label and Marking Considerations, Final Part in Series of 3

Chuck Intrieri// July 17, 2013

cold supply chain packing

This final part of the series on the Cold Supply Chain, discusses considerations for export liability, as well as label and marking considerations in the import/export process of shipping food and frozen food..

It takes a special expertise to pull off the cold supply chainwith skill and accuracy all while maintaining costs and mitigating risks. It’s vital to understand the entire process, best practices, and considerations within the cold supply chain in order to stay in line with the FDA’s requirements in the Food & Safety Modernization Act.

Export Liability, Physical Export Requirements, and Label & Marking Considerations in the Cold Supply Chain

Export Liability

Export shipments are insured against loss, damage, and delay in transit by CARGO INSURANCE. Depending on the terms of sale, the cargo insurance may be made by either the buyer or seller. The responsibilities of the buyer and seller are based on the negotiated incoterms: If the customer purchases FOB (Free on Board): ex-works, the customer pays for the insurance, freight and all other export costs. If other FOB arrangements are made, the seller pays the insurance: FOB CIF: Cost, Insurance and Freight.

Damaging weather conditions, rough handling by carriers, and other common hazards to cargo make MARINE INSURANCE important protection for exporters. If the terms of sale make the firm responsible for instance, it should either purchase its own insurance policy or insure cargo under the freight forwarders policy for a fee. Even if the insurance burden is on the buyer, the seller should not assume (or take the buyer’s word) that adequate insurance has been obtained. If the buyer neglects to obtain insurance coverage or obtains too little, damage to the cargo may cause major financial loss to the exporter of record.

Insurance coverage has to be on a door-to-door basis to protect you if you are responsible for insurance coverage to protect the shipment.

  • Shelf lifeand staying within the temperature requirementsto avoid frozen food damage.
  • An “inside” hint from experience in import/export: When negotiating with the insurance company/ forwarder/vessel ask for “bottom stowage” on the vessel. This will eliminate container “wash out” on the vessel in high seas storms and can reduce your insurance rates if you send a letter to the insurance company requesting “bottom stowage.”

The terms and conditions of the purchase agreement: Purchase Order/ Purchasing Agreement,should have detailed Terms and Conditions to protect ACS in a court of law should that ever occur.  If the Supplier has terms and conditions in their documents, and you do not, the case will be automatically won by the supplier.

*See theft/pilferage avoidance below under physical export requirements.

Meet FDA/USDA Certification requirements: Electronic Export Information (see above under export food documentation).

Shelf life considerations: temperature management to insure proper shelf life of the frozen food. Breakage, weight, moisture and pilferage

All necessary documentation outlined above.

Physical Export Requirements in the Cold Supply Chain

Since proper packing is essential in exporting, often the customer specifies packing requirements. If the buyer does not so specify, be sure the goods are prepared with the following considerations in mind:

  • Pack in strong containers, adequately sealed and filled when possible.
  • To provide proper export bracing (called dunnage) in the container, regardless of size, make sure the weight is evenly distributed: work with the forwarder/vessel personnel as the container could rock back and forth.
  • Goods should be packed in ocean going containers, if possible, or on pallets to ensure greater ease in handling. Packages and packing filler should be made of moisture-resistant material.
  • To avoid pilferage, avoid mentioning contents or brand names on packages. In addition, strapping, seals, and shrink wrap are effective means of deterring theft.
  • You can consult with your marine insurance/ freight forwarder/supplier/carrier on their ideas for packaging of frozen foods. (There may be a moderate cost for this consultation.)
  • High test (at least 250 pounds per square inch) cardboard or tri-wall construction boxes are more than adequate.
  • Because transportation costs are determined by volume and weight, special reinforced and lightweight packing materials have been devised for exporting. Care in packing goods to minimize volume and weight while giving strength may well save money ensuring that goods are properly packed.
  • Know the weight (lbs. or kgs) and dimensions (in. or cm) of the cartons/boxes/pallets you are exporting.  Always state the commodity on all necessary documentation.

Export Labeling & Markings Considerations in the Cold Supply Chain

cold supply chain export liability 300x225 Cold Supply Chain: Liability & Label and Marking Considerations, Final Part in Series of 3

  • Specific marking and labeling is used on export shipping cartons and containers to: meet shipping regulations and, ensure proper handling.
  • Labels are used to conceal the identity of the contents.
  • Labels help receivers identify the shipment.
  • At times your customer has specific labeling instructions. If they do not give them to you, you should ask the customer about their labeling and packaging specifications/instructions.
  • Export marks: Shipper’s mark, country of origin (exporter’s country 0. Weight marking (in pounds and in kilograms), number of packages and size of cases (in inches and centimeters), handling marks (international pictorial symbols), cautionary markings, such as (“this side up, or “use no Hooks” (in English and in the country of destination), port of entry and labels for hazardous materials.

Because the goods are being shipped by unknown carriers to distant customers, the exporter must be sure to follow all shipping requirements to help ensure that the merchandise is packed correctly so it arrives in good condition, labeled correctly to ensure that goods are  handled properly and arrive on time and at the right place, documented correctly to meet local and foreign government requirements as well as proper collection standards and insured against damage, loss and pilferage, and in some cases, delay.

 

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