The transportation of goods is one of the main conditions for the successful development of a business in the field of trade. The industry nowadays has practically no geographic boundaries – you can buy products and sell them anywhere. Therefore, forwarding services are popular – specialists not only help to competently organize the transportation of goods, but also provide customers with all the accompanying services necessary for the development of a trading business.
The procedure for carrying out transport and forwarding activities is regulated by the legislation of Ukraine. The Civil and Commercial Codes reflect the fundamentals governing the relationship between the customer and the forwarder, the latter’s responsibility for the delivery of the cargo and the preservation of its integrity.
Transportation, storage of products, loading and unloading operations and additional services must be indicated in the employment contract, which is concluded between the customer and the forwarder. Only an official legal document protects both parties from possible fraud and negligence, which can entail considerable losses. Subsequently, the payment of compensation is appointed by the court on the basis of the conditions specified in the forwarding act , upon the fact of the established material losses associated with their violation.
According to the legislation, the freight forwarder may be liable to the client for:
- weight of the cargo, if control weighing was carried out before loading;
- for the form of packaging and delivery corresponding to the characteristics of the goods;
- for the preparation of accompanying documents for the expedition, corresponding to a specific type of product;
- for the fulfillment of all the conditions specified in the concluded employment contract.
Transportation of cargo is carried out in two stages: the first is to move it in space, the second is to preserve it until it is handed over to the direct recipient. If at any stage the forwarder engages third parties in the work, he is responsible for all their actions. At the same time, he is obliged to prepare all the necessary documents, invoices, which will indicate the price of the received “help”. On the basis of the papers, the client pays for the full package.
The document is drawn up at the discretion of the parties – duties and the degree of their responsibility are not clearly regulated by law.
The active development of sea, road, rail and air transportation has led to the emergence in the legal industry of the concept of liability insurance of a transport forwarder – in the event of force majeure, the insurance company will pay compensation for the lost cargo. Freight forwarders who provide quality service have a competitive advantage in the international transportation market.
The essence of freight forwarding services
Freight forwarding service is the organization and provision of transportation of export, import, transit or any other type of cargo specified in the contract, as well as its maintenance.
It is worth using the help of specialized companies for those entrepreneurs who, during the export and import of goods, want to save themselves from such hassles as product insurance, the preparation of all the necessary permits, the conclusion of contracts with all participants in the process.
The forwarder assumes a lot of obligations:
- organizes the transportation of products, concluding contracts, ensuring the shipment and acceptance of cargo, its preservation until transfer to the recipient;
- worries about the correct packaging and collection of the package of documents necessary for legal activity;
- provides an additional service, the terms of which are necessarily prescribed in the contract.
The forwarder can be an individual or a company that, on behalf of the client and at his expense, perform all the transport services specified in the contract. This may be the carrier himself, if he has the appropriate registration, and the ability to carry out such activities.
The specialist can act on his own behalf or on behalf of the client – this condition is additionally prescribed in the documents. Also, in the process of delivering goods, he has the right to attract third parties.
The list of transport services, in addition to the carriage of goods, may include:
- chartering ships or engaging other vehicles to ensure the delivery of products in a timely manner and in full integrity;
- work on the completion or sorting of goods, their warehousing and storage;
- maintaining the reporting necessary for the implementation of trading activities;
- organization of product protection;
- organization of examination of goods;
- loading and unloading;
- payment of customs duties, taxes, fees and expenses on behalf of the client;
- fulfillment of other formalities during customs clearance.
Cargo insurance may also be the responsibility of the freight forwarder.
Direct contract: accounting party
When entering into official cooperation with a freight forwarder or a company providing such a service, several types of contracts can be signed:
- direct assumes that the contractor for the entire range of services is directly the forwarder;
- intermediary type – the company acts as an intermediary between the client and the direct service providers, which are involved third parties, it only organizes the fulfillment of all obligations specified in the act.
By law, a document is drawn up in electronic and written form in several samples. The conclusion of an act is necessary in cases where one of the parties has monetary obligations to the other, that is, guarantees payment for the services provided in a certain amount.
It is important for the client to ensure that the paper is legally binding. Therefore, in order to avoid problems, it is worth contacting specialists for help. It is necessary that the following are clearly marked:
- list of documents prepared by the forwarder;
- order and list of services provision;
- quality standards for their implementation.
The client, for his part, is obliged to instruct the contractor about the requirements for the conditions of the content of the product, its transportation. Also in his area of responsibility is the preparation of all the necessary papers for the goods to pass sanitary and customs control. An important condition is the obligation to pay. The client’s rights also include an individual choice of route and transport for the carriage of goods. The carrier, in turn, has the right to check the information provided by the client for accuracy.
The knowledge of both parties allows us to enter into cooperation with maximum benefit and security for both parties. It is not difficult to find a good forwarder – it is only important to pay attention to the officiality of his activities, as well as to the list and quality of the services provided by him.
When it comes to a direct contract, all funds received for the work performed belong directly to the forwarder. Therefore, no peculiarities in paying the necessary taxes, including on profit, are provided.
Carrying out work under the contract, the freight forwarding company also takes into account the VAT taxation rules, which vary depending on the type of services provided. Separate rules for the payment of taxes apply to:
- transportation of goods;
- auxiliary service (loading, unloading products, storage);
According to the law, VAT at a rate of 20% is subject to the work that is provided by a resident carrier with a permanent establishment in the customs territory of the country. If the carrier is not a resident, payment for the obligations fulfilled by him is not subject to taxation.
When concluding an intermediary document, according to which transport and forwarding services are provided, tax accounting is kept in accordance with the provided accounting data. That is, no special adjustments are required.
With an intermediary agreement, forwarding acts as an intermediary operation – the forwarder, as it were, buys work for a specific customer, and then resells it to him. The VAT rate depends on the type of services provided and the place of their delivery.
It is not so easy to understand all the intricacies of legislation and taxation, especially for a novice businessman. Therefore, you should turn to professionals for help. You can get advice on issues of interest to the conclusion of an agreement, taxation and other nuances in the “Sea Way” company .
The company provides a wide range of services for the transportation and customs clearance of goods. When ordering a complex, you do not have to worry about finding a good and responsible forwarder, as well as about the quality of transportation of products – specialists will take care of all the troubles. Affordable cost and high-level service are the benefits of cooperation that every Sea Way client can take advantage of .