Deck 14: Packaging for Export

Question 1

What are the consequences of improper packaging for the exporter? Does your response depend on the Incoterm used? Does it depend on the insurance policy in force?

Answer 1

The outcome of improper packaging is that cargo can be damaged because it was left susceptible to environmental exposure or damage in handling (during loading or off-loading). The three main objectives that packaging should achieve are to protect the goods from the risks that accompany shipping (ocean, land, or air), to ease the handling and transport of cargo while they are in transit, and to promote customer service. Any deficiency in any of the three areas can result in the direct loss of goods due to damage of goods in transit and future loss in revenue for a company because they failed to care for customer needs.
Packaging should take into consideration the routes a shipment would take and the type of Incoterm being used. The manner in which a shipment will be loaded, off-loaded, shipping options and conditions, and the type of storage available will affect how a shipment should be packaged. Each Incoterm denotes the responsibilities for either the exporter or importer at any point of the cargo's transit; thus, it is in the best interest of the parties to possess an interest in the manner in which each shipment is packaged in order to safeguard against adverse situations. Land, ocean, and air transport each have their own challenges and shippers should bear in mind the risks within each Incoterm used.
Packaging should also take into account the insurance being used as a means to adequately package cargo, not to poorly package the cargo and risk loss (for exporter) and gain insurance payouts (for importer). Rather, packaging should ideally be done to promote good business, with insurance being only a secondary objective.

Question 2

What are the different alternative means of packaging products that are not containerized?

Answer 2

The various options for packaging goods that are not containerized are the following: crates and boxes, bags, and drums. Crates and boxes enable less-than-container-load (LCL) cargo to be arranged together in a specialized manner determined by their dimensions and weight. These forms of packaging are ideal for break-bulk cargo and other cargo that cannot easily or sufficiently fit into conventional containers. Bags are also used to transport break-bulk cargo. Bags that are specially constructed of various materials to be durable and contain large amounts of goods are also used; these bags are known as flexible intermediate bulk containers. Lastly, drums are available in three forms steel, polymer, and fiber. Drums are used to package liquid or solid cargo and can help facilitate transport of various types of cargo.

Question 3

What are some of the issues and risks that international packaging face and that are not present in a domestic shipment?

Answer 3

Some risks and concerns connected specifically to international packaging that domestic packaging does not have to deal with are the need for clarity in markings on packages for customs while bearing in mind language barriers. Packages must also be packaged in a means to be protected through long transit and exchanges in handling at several loading and off-loading points. Additionally, variations in domestic conditions transnationally present challenges for how cargo will be removed from tertiary packaging down to secondary packaging, and further distributed within the importing country. An international shipper must ensure that the goods are not only received at the port of destination, but also survives distribution until it reaches the consumer.

Question 4

Use a product of your choice and ship it from one country to another in a multimodal shipment. What packaging methods would you use? Why?