Get to Know the Logistics Laws in Singapore

November 20, 2017

Picking the right freight forwarding services for your company can help you focus on improving and expanding your business, but besides considering the types of services that a logistics company offer, you should also be aware of some of the laws in importation, exportation, trade and clearance documentation and permits, licensing and warehousing, the free trade zones, the fees, offences, errors and penalties, and the list of prohibited goods. On top of that, you should at least have an idea about international transportation if you need air freight or sea freight for your international freight needs.

Sounds complicated, right? But knowing all these can also help you find the right freight forwarder in Singapore, because you understand what your company specifically needs. Let’s start by defining the terms you will often hear from your logistics company.

    1. Freight Forwarder

    A freight forwarder is ideal for small to medium-sized businesses that want to transport goods that will fit in one full container. This is much easier than utilizing postal or delivery services which will cost you more if you need to deliver more goods. Freight forwarding services after all is affiliated with shipping lines, air freight, and both local freight and international freight. They can arrange all the paperwork for you and negotiate prices for the transportation of goods with other logistics services. They can also perform other tasks for you, such as Customs clearance, insurance, warehousing, and inventory.

    2. Shipping Line

    The shipping line should be obvious. It is a freight forwarding Singapore company that operates ships and containers to transport goods around the world. Shipping lines are mostly employed by large companies, although small-time clients can book one container for cargo. So, why not contact a shipping company directly instead of going through a freight forwarder in Singapore? The shipping company usually charges full for each container regardless if you can fill each container or not. Through freight forwarding services, however, you can get competitive prices instead.

    3. Shipping Company

    A shipping company, also called an exporter, is the party responsible for the transportation of your goods, but they could also be the manufacturer, the seller, or the company where the point of origin of the product is to be picked up.

    4. Consignee and Customer

    The consignee refers to the party that receives the goods at its place of destination and is also called the receiver or importer, while the customer is the party that is responsible for booking and paying for the shipment of items. The customer contacts a freight forwarder in Singapore and the freight forwarder in turn arranges the shipment with a company that offers logistics services to move the merchandise efficiently from one place to another.

Defining which is which is important when fulfilling the requirements for importation and exportation of goods, because that will also determine your rights, responsibilities, and liabilities. Don’t worry though, because the freight forwarding services is well-versed in both local freight and international freight, and it is their task to make the process easier for you.

How International Shipping is Done

Singapore imports goods from various parts of the world, whether it’s for a small-time business or international corporations. This is also perhaps the most complicated part of the transportation of goods because a lot of parties are involved to complete it.

The logistics company is trained to deal with the shipping company, Customs brokers, air freight, sea freight, and other parties to make the shipment of goods easier. Small shipments that will fit in one standard ocean shipping container (less than 20 cubic meters), also called Less than Container Load (LCL), go through the following process: haulage (origin), handling (origin), Customs clearance (for exportation), sea freight, Customs clearance (for importation), handling (destination), and haulage (destination).

It should be clear in the contract which one will be paying for each step (yes, there are fees and documents for each), as well as establishing which one is liable for the items transported. That way, if something happens to cargo, someone will pay for the damage.

Import Procedure in Singapore

The Singapore Customs website contains all the necessary information needed for importation in Singapore, so this section will just be an overview of what you should expect during the freight forwarding process.

All the items that are imported into the country are subject to the regulations of the Customs Act, Regulation of Imports and Exports Act, and Goods and Services Tax Act.

The importer or the receiver of the goods is required to get a Customs permit regardless if the importer is an individual or a company. The receiver is specifically required to prepare the declaration requirements and the taxes for the goods, whether it’s a non-dutiable goods or dutiable goods, based on the insurance, cost, and freight values.

Import Requirements in Singapore

Besides the Customs permit, the commercial invoice is also needed to determine which party is the consignee and the importer of the items. You are also required to do the following:

    1. Check if the imported merchandise is prohibited
    2. Pay for the GST (Goods and Services tax) and other duties
    3. Deposit the merchandise in free trade zones in Singapore, regardless if it was transported through sea freight or air freight
    4. Provide containerised cargo documents for clearance

Documents should be kept within the next five years as reference if any issue arises. These will include the books of accounts, commercial invoice, packing list, air waybill, bills of lading, certificate of origin and analysis, insurance certificate, and other related documents.

Standard Trading Conditions of Freight Forwarders

The Singapore Logistics Association website contains details about the standard trading conditions that are practiced by the freight forwarding services in Singapore.

The document includes the obligations of the customer, instructions in the handling of goods and the services, indemnities and charges, rights of the company, liabilities, compensation, and laws and jurisdiction. There are currently over 500 members which follow these standards of logistics services.