Transport and logistics

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Transport and logistics is about transporting a product from one place to another. It can be a simple door-to-door delivery or a more complicated delivery in several stages where the product has to be reloaded, held in a store and sent to several different customers.

When you export or import you must, for example, know about shipping documents for different modes of transport, delivery terms for international transport, transport insurance cover, customs clearance and other export and import administration.

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Carrier or forwarding agent?

The most common approach is to engage a traditional carrier or a forwarding agent. A traditional carrier mainly performs the transport itself, generally without any special associated services.

A forwarding agent arranges land, air and sea transport or a combination of these services depending on your needs. Forwarding agents also offer various logistics services, such as storage and administration. Many forwarding agents control their own means of transport and can themselves handle the transports.

It you are uncertain about whichat transport solution suits your delivery, a sensible step is to contact a forwarding agent. Forwarding agents can help you to arrive at the best solution taking account of the type of product, costs, urgency and so on. If you are, for example, importing or exporting small or few products, the best approach may be to use parcel post. There are also messenger and courier companies that can assist with items of mail to and from other countries.

Read more about carriers and forwarding agents on the Business Sweden website (in Swedish)

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Choice of forwarding agent

The particular country you are going to do business with will influence which forwarding agent you should choose. Large forwarding agents have offices in many countries, while small forwarding agents may specialise in a few countries. Forwarding agents may also specialise in different areas or modes of transport, or in different types of products, for instance food products. You should therefore compare the offers of different forwarding agents.

One piece of advice is to get the assistance of a forwarding agent that can help you with the whole of the delivery chain from door to door, instead of involving several parties.

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Logistics services

In addition to the transport itself, a forwarding agent can handle all or part of the logistics required to deliver products to Sweden or the export country and send them out to customers. This can involve storage and administration, like dealing with export and import customs clearance and handling all the documents necessary for export and import. Consequently, forwarding agents can act partly as a customs representative. However, the company  still has a responsibility for the information given to the Swedish Customs in its name.

Forwarding agents are usually also able to help out with matters like customs warehouses, legalisation and stamps at consulates, customs rules, regulations for the transport of dangerous goods and the packaging and marking requirements that apply to the transport of your products.

Many small and medium-sized enterprises contract out their logistics since doing so can be cheaper and more flexible. Instead they are able to focus on their core business.

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Delivery terms and cargo insurance

It is important that the seller and buyer of the products agree on the delivery terms for the transport. This can involve who is going to order and pay for the transport and who is responsible for the product during the transport and therefore has reason to insure it.

Incoterms

In international trade the most common delivery terms are Incoterms, which have been drafted by the International Chamber of Commerce (ICC).

Read more about delivery terms on the ICC website (in Swedish)

Incoterms consist of 11 standard rules adapted to different modes of transport. The rules regulate the position between the seller and buyer regarding costs, risks and undertakings during the transport. That is, whether it is the seller or buyer who has to deal with the risk, freight cost and insurance. Delivery terms according to Incoterms 2010 should always be stated in the agreement.

Read Incoterms’ 11 standard rules (in Swedish)

It is you who are responsible for the products when you bear the risk and therefore you should obtain cargo insurance to protect yourself. The risk can pass from the seller to the buyer when the product is dispatched by the seller, when it is received by the buyer or at some point during the transport.

There is always a risk that products will be damaged or disappear during transport, loading or unloading. You should therefore make sure that the products are insured. This is often a condition of a sales agreement or letter of credit.

Combiterms

Combiterms have been produced in Sweden and are a cost distribution key. Combiterms are based on Incoterms and show who has to bear different types of cost when an Incoterms rule has been chosen.

Incoterms do not regulate the liability of the carrier or the forwarding agent. That liability is governed by rules in the agreement you sign with the carrier or forwarding agent. That agreement often refers to general terms and conditions - their own or NSAB2015.

Read more about NSAB2015 on the website of the Swedish Confederation of Transport Enterprises (Transportsindustriförbundet)

Under national and international transport rules, a limited liability applies, for example, to the handling by forwarding agents, carriers, ports and stevedoring companies of goods on behalf on another party. There can also be different liability rules in different parts of the transport. It is therefore important that you take cargo insurance cover if you are responsible for the goods in any part of the transport.

Read more about delivery terms and insurance cover on the Business Sweden website

Keep in mind

Before you obtain tenders from forwarding agents you should be clear about what part of the freight you will have to pay.

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