Efficient logistics is critical for profitability, reliability, and customer satisfaction in import-export. SMEs often face:

• Delays due to documentation errors

• High shipping costs reducing margins

• Customs clearance complications

• Risk of damaged or lost cargo

Understanding freight, shipping options, and customs procedures ensures smooth and predictable operations.

Table of Contents

1. Freight Basics for IMPEX SMEs

2. Freight Forwarders & Logistics Partners

3. Export Documentation & Customs Clearance

4. Import Documentation & Customs Clearance

5. Packaging & Labeling

6. Cost Management in Freight & Shipping

7. Tracking & Risk Mitigation

Freight Basics for IMPEX SMEs

1. Modes of Transport

   • Sea Freight: Cost-effective for bulk shipments; slower transit (20–40 days for long routes)

   • Air Freight: Faster delivery, higher cost; ideal for small, high-value shipments

   • Courier / Express Logistics: Small parcels, often used for sample shipments or low-volume exports

2. Incoterms (International Commercial Terms)

   • Define responsibilities between buyer and seller

   • Key terms for SMEs:

     • EXW (Ex Works): Buyer handles transport and insurance

     • FOB (Free on Board): Seller clears goods at port, buyer handles freight

     • CIF (Cost, Insurance, Freight): Seller handles transport and insurance to destination port

Actionable Tip: Choose Incoterms based on control, risk tolerance, and cost strategy.

Freight Forwarders & Logistics Partners

1. Role of Freight Forwarders

   • Coordinate shipping, documentation, and customs

   • Provide advice on best transport mode, carriers, and costs

2. Choosing the Right Partner

   • Verify experience with SMEs and specific products

   • Check insurance coverage, references, and reliability

3. Digital Freight Solutions

   • Platforms like Freightos, Flexport provide online rate comparison and shipment tracking

Actionable Exercise: Identify 2–3 freight forwarders and request rate quotes and service details for your shipment type.

Export Documentation & Customs Clearance

1. Key Documents for Export

   • Commercial invoice

   • Packing list

   • Bill of Lading (sea) / Airway Bill (air)

   • Certificate of Origin (if required)

   • Insurance certificate

   • IEC & GST details

2. Customs Procedures

   • File Shipping Bill on ICEGATE

   • Goods assessed for duties, if applicable

   • Inspection may occur based on risk profiling

3. Tips to Avoid Delays

   • Double-check HS codes and product descriptions

   • Ensure export declaration and licensing requirements are complete

   • Maintain digital copies for easy submission

Actionable Tip: Create a customs checklist for each shipment, including documentation, packaging, and freight details.

Import Documentation & Customs Clearance

1. Key Documents for Import

   • Bill of Lading / Airway Bill

   • Commercial invoice

   • Packing list

   • Insurance certificate

   • Bill of Entry (submitted to Customs)

   • IEC & GST details

2. Customs Clearance Steps

   • File Bill of Entry electronically on ICEGATE

   • Goods assessed for customs duty & taxes

   • Inspection if required, release granted upon duty payment

3. Tips for Smooth Clearance

   • Verify HS codes and classification

   • Confirm compliance with BIS, FSSAI, or other regulatory bodies

   • Pre-arrange bank instruments for duty payment

Actionable Exercise: Document the step-by-step import clearance workflow for your product, including costs and time estimates.

Packaging & Labeling

1. Export Packaging Standards

   • Protect products from physical damage, moisture, and tampering

   • Use international packaging norms (ISPM 15 for wooden crates, shock-proof materials for electronics)

2. Labeling Requirements

   • Product name, HS code, weight, origin, handling instructions

   • Country-specific labeling compliance (EU, USA, etc.)

SMEs can reduce loss and rejection rates by investing in high-quality packaging and accurate labeling.

Cost Management in Freight & Shipping

1. Components of Freight Costs

   • Base freight charges

   • Fuel surcharges

   • Terminal handling charges

   • Customs clearance fees

   • Insurance

2. Tips to Reduce Costs

   • Consolidate shipments where possible

   • Negotiate with multiple freight forwarders

   • Choose optimal Incoterms to share cost and risk

Actionable Tip: Maintain a freight cost tracker per shipment to identify cost-saving opportunities.

Tracking & Risk Mitigation

1. Shipment Tracking

   • Use digital tracking tools provided by freight forwarders

   • Regular updates reduce risk of lost or delayed shipments

2. Cargo Insurance

   • Protects against theft, damage, or transit loss

   • Choose coverage based on shipment value, mode, and destination

3. Contingency Planning

   • Maintain alternate suppliers, shipping routes, and forwarders for high-value shipments

SMEs should integrate tracking, insurance, and contingency planning into every shipment.

SME Case Example

Scenario: SME exporting handloom textiles

• Mode: Sea freight (bulk), air freight (urgent orders)

• Freight Forwarder: Verified partner with ICEGATE clearance support

• Strategy:

  • Prepared all export documentation in advance

  • Used proper packaging and labeling

  • Tracked shipments digitally

• Outcome:

  • Zero shipment delays

  • Reduced freight costs by 12% by consolidating monthly shipments

  • Improved buyer satisfaction and repeat orders

Key takeaway

Well-planned logistics and customs compliance improve efficiency, reduce costs, and enhance credibility.

Actionable SME Checklist

1. Select appropriate shipping mode per product & market

2. Verify freight forwarder and insurance coverage

3. Prepare all export/import documentation in advance

4. Ensure packaging and labeling meet international standards

5. Track shipment digitally and have contingency plan

6. Record costs for future optimization

Following this checklist ensures timely and cost-effective execution of IMPEX operations.

Let us now understand how to manage payments, currency and forex risk to protect profits in international trade.

Read: Payments, Currency & Forex Risk Management