Page 71 - Electronic Commerce

Chapter 1

international freight carriers, bonded warehouses, and importers to navigate the maze of
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paperwork that must be completed at every step of the transaction to satisfy government
and insurance requirements. A freight forwarder is a company that arranges shipping and
insurance for international transactions. A customs broker is a company that arranges the
payment of tariffs and compliance with customs laws for international shipments. A
number of companies combine these two functions and offer a full range of export
management services. A bonded warehouse is a secure location where incoming
international shipments can be held until customs requirements are satisfied or until
payment arrangements are completed. The multiple flows of information and transfers of
physical objects that occur in a typical international trade transaction are illustrated in
Figure 1-14.

Seller Domestic freight
(exporter) carrier

Freight
forwarder

Customs
Seller’s office
bank
International
freight
carrier

Customs
Buyer’s
bank broker

Learning

Buyer Domestic freight Port or bonded
(importer) carrier warehouse Cengage
2015
Physical flow Information flow ©
FIGURE 1-14 Parties involved in a typical international trade transaction
As you can see in Figure 1-14, the information flows can be complex. Domestic
transactions usually include only the seller, the buyer, their respective banks, and one
freight carrier. International transactions almost always require physical handling of goods

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