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5 8703.23. Motor Vehicles with NO 6,838 555,889,474
90 a cylinder capacity
exc. 3000 cm3 9,044,526 468,253,769
2 402,878,471
6 9801.00. Original equipment, KG 65,532 323,176,187
40 transport vehicles 5,977,305 316,662,473
7 196,452,017
7 8802.40. Aircraft of unladen NO
00 mass exc. 15 000kg
8 7102.31. Diamonds, CT
00 unworked
9 9801.00. Original equipment, KG
45 goods vehicles
10 8411.12. Turbo-jets of a thrust NO
00 exc. 25KN
SOUTH AFRICA'S WET AND DRY SURFACE PORTS AND INTERNATIONAL AIRPORTS
ARE IDENTIFIED AND A BRIEF DESCRIPTION GIVEN OF THE FREIGHT HANDLING
FACILITIES PROVIDED BY EACH.
South Africa has many international sea and air ports which handle both exports and
imports. Some of these were established for a particular commodity, such as iron ore, coal,
wood or grain, but have now been upgraded to handle all kinds of freight.
Sea ports:
o Cape Town
o Durban
o East London
o Mossel Bay
o Ngqura (Coega)
o Port Elizabeth
o Richards Bay
o Saldanha Bay
Airports (and their airport 3-letter code designator in brackets): Page No: 51
Bloemfontein Airport (BFN)
Cape Town International Airport (CPT)
Durban’s King Shaka International Airport (DUR)
East London Airport (ELS)
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George Airport GRJ)
Johannesburg’s O.R. Tambo International Airport (JNB)
Kimberley Airport (KIM)
Lanseria International Airport (HLA)
Nelspruit’s Kruger Mpumalanga International Airport (MBD)
Pilansberg International Airport [Sun City] (NTY)
Port Elizabeth International Airport (PLZ)
Upington Airport (UTN)
Without going into too much detail we will however have a closer look at each of them,
starting with the sea ports. For the airports, we will only look at the three main airports,
namely Durban, Cape Town and Johannesburg.
Cape Town port
The port is located in Table Bay directly north of the central business district. Cape Town
port is located on one of the busiest shipping corridors in the world and is the second busiest
port in South Africa. It is a vitally important hub for ships in the Southern Atlantic Ocean. It is
connected to Gauteng via rail and road links however Durban is better placed to serve
Gauteng in this respect. Fruit and agricultural produce are shipped from Cape Town port in
bulk. Cape Town port handles about 25% of the national annual total of containers. Besides
containers, Cape Town port can also handle a wide variety of cargo with its multipurpose
terminal.
Durban port
Durban’s port is the busiest cargo port in Africa. It handles cargo as well as passenger
vessels, and containers, breakbulk and bulk cargo. Besides being vital to the Southern
African economy, Durban port sustains the city of Durban by providing employment
opportunities to many of the city’s inhabitants. With the inland province of Gauteng being the
economic hub of South Africa, cargo to and from Gauteng is shipped via Durban port by
means of rail and road.
Durban port handles approximately 25% of the country’s bulk cargo – mainly petroleum and
general bulk cargo. Durban port handles about 60% of South Africa’s containers.
East London port
As with Durban, East London is on the Indian Ocean coast. East London port is located at
the mouth of the Buffalo River and in this feature it is unique as South Africa’s only river port.
East London port has a large grain elevator and this makes it a popular port of grain exports.
The port of East London is smaller than Durban, Cape Town and Port Elizabeth however it
still has facilities such as a dry dock, mobile cranes, electric cranes, tugs, repair quay,
commercial berths, fishing jetty, and commercial berths.
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Besides handling general cargo, break bulk cargo, bulk cargo and containers for import and
export, East London also provides a major service for the export and import of motor
vehicles.
East London is well connected to Cape Town by the national highway the N2, and to
Bloemfontein by the N6.
Mossel Bay port
Mossel Bay is situated on South Africa’s east coast on the Indian Ocean coast, halfway
between Cape Town and Port Elizabeth. Mossel Bay port handles fishing and oil shipments
(Mossgas).
Ngqura (Coega) port
An eighth commercial port, the Port of Ngqura, has being developed coast near Port
Elizabeth in the Eastern Cape. Ngqura is set to be the deepest container terminal in Africa. It
is a crucial part of Coega, one of South Africa's strategic industrial development zones.
Port Elizabeth
Port Elizabeth lies in Algoa Bay on Indian Ocean coast of South Africa and is connected to
Cape Town (to the west) and Durban (to the east) by the N2 highway. It is connected to
Gauteng by rail and road networks via Bloemfontein in the interior. Port Elizabeth is a major
import and export hub for the Eastern Cape handling containers, breakbulk cargo and bulk
cargo. The motor-industry town of Uitenhage is located about 50km inland from Port
Elizabeth and this ensures Port Elizabeth gets a massive boost from shipments of motor
vehicle parts and components, as well as its other shipments of manganese ore, steel,
timber, wool and perishables. Port Elizabeth is the third busiest port handling containers in
South Africa.
Richards Bay port
Richards Bay is situated on the Indian Ocean coastline about 160 kilometres northeast of
Durban. The port of Richards Bay was originally built in 1976 almost exclusively for coal
exports but it has now expanded and handles breakbulk cargo, bulk cargo and a small
amount of containerised cargo - both import and export - but mainly export cargo. The
Richards Bay coal terminal is the largest coal export facility in the world and is the top port in
South Africa for handling bulk cargoes.
Other exports from Richards Bay include titanium, aluminium, ferrochrome, phosphoric acid,
woodchips, paper and paper pulp, and granite and timber from the Eastern Cape and
Northern Cape. There are very good rail links connecting Richards Bay to the provinces of
Gauteng and Mpumalanga. Richards Bay is also connected to Durban, Swaziland and
Mozambique by rail.
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Saldanha Bay port
Saldanha Bay is north of Cape Town and on South Africa’s west coast. It is a natural
harbour (the largest natural harbour in South Africa) and has been developed to handle the
export of iron ore which originates in the Northern Cape Province. A railway line of 800km
connects Saldanha Bay to Sishen in the North Cape. Saldanha Bay port has a multipurpose
quay handling breakbulk cargo imports and exports.
As with the other South African ports, Saldanha Bay port is managed by the NPA (National
Ports Authority) of South Africa.
Cape Town International Airport (CPT)
Cape Town International Airport is the second largest airport in South Africa and has direct
flights to most South African cities as well as to many international destinations.
Cape Town International has the capability to handle all types of shipments from live animals
and general cargo to perishables and dangerous goods.
Durban’s King Shaka International Airport (DUR)
Durban International airport has recently (1st May 2010) become King Shaka International
Airport when operations moved from the old airport location south of the city to the new
airport 35 kilometres north of the city at La Mercy.
The IATA three-letter airport code remains DUR.
King Shaka International was built as an integrated passenger and freight airport alongside
the new Dube Tradeport, which incorporates a 36-hectare trade zone featuring a cargo
terminal, perishables centre, and warehousing and light manufacturing facilities.
The cargo terminal is fully mechanised and automated and is only the second of its kind in
Africa. It offers state-of-the-art airfreight handling facilities, and has the long-term capacity of
processing up to two-million tons a year.
OR Tambo International Airport – Johannesburg (JNB)
This airport was originally called Jan Smuts Airport which then changed to Johannesburg
International Airport. It has now been named OR Tambo International Airport but the three-
letter IATA airport code remains JNB.
OR Tambo International Airport is South Africa's principal airport. It is the busiest airport on
the continent and the air transport hub of southern Africa.
It is equipped to handle all types of outgoing and incoming cargo through a mechanised
cargo terminal.
A perishable goods facility (bigger than those at Cape Town International or King Shaka
International) is available and is equipped with deep-freezes and cool rooms for
pharmaceuticals, vegetables, flowers, meat, fruit and fish.
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More than 50 airlines use OR Tambo International Airport. Facilities and services include a
transit zone (bonded cargo), domestic cargo only, free port/foreign trade zone, aircraft
maintenance, mechanical handling, mortuary, animal quarantine, fresh meat inspection,
livestock handling, health officials, X-Ray equipment, decompression chamber, security for
valuables, fumigation equipment, dangerous goods, radioactive goods, very large/heavy
cargo, express/courier center, a freight agents´ building, refuelling, airline catering (air
chefs), aircraft maintenance.
Storage facilities comprise general cargo storage, transit, bonded warehousing, heated
storage, air-conditioned storage, refrigerated storage, deep freeze storage, and secure/safe
storage for valuables.
APPLY KNOWLEDGE AND UNDERSTANDING OF INTERNATIONAL TRADE
DOCUMENTATION.
TRANSPORT DOCUMENTATION USED IN MOVEMENT OF CARGO BY MEANS OF
SPECIFIC MODES OF TRANSPORT IS IDENTIFIED BY POINTING THEM OUT.
Below are examples of transport documentation such as a bill of lading, air waybill, road way
bill, rail notes, container terminal order (CTO), cargo dues and delivery note. You are
required to recognise these documents and identify them by pointing them out.
Figure 1 below is an example of a bill of lading covering a LCL shipment, partly completed.
Figure 2 is an example of a blank bill of lading for multi-modal (i.e. road-sea-rail) shipments.
Figure 3 is an example of a blank bill of lading which can also be used for multi-modal.
Figure 4 is a blank air waybill. Master air waybills as well as house air waybills use the same
format as this example. This is a neutral air waybill i.e. it does not have the carrier
or airline details or the air waybill number pre-printed on it.
Figure 5 is an example of an international road consignment note such as those used in
Europe.
Figure 6 is an example of a general consignment note which could also be used for road.
Road consignment note do not follow a strict format like air waybills and can vary
from one road transport company to the next.
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Figure 7 is an example of a rail consignment note. These also do not follow a strict format
and can vary from one rail operator or country to another.
Figure 8 is an example of a Container Terminal Order.
Figure 9 is an example of Cargo Dues, partly completed for the payment o 2 x 40 foot
containers.
Figure 10 is a blank sea waybill.
Figure 11 is a delivery note which is generic and can be used for any delivery purpose.
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Figure 1 - Example of a BILL OF LADING for LCL cargo
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Figure 2- Example of a blank BILL OF LADING for multimodal
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Figure 3 - Example of a BILL OF LADING Page No: 59
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Figure 4 - Example of an AIRWAYBILL Page No: 60
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Figure 5 - Example of an international ROAD CONSIGNMENT NOTE (ROAD WAY BILL)
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Figure 6 - Example of a general CONSIGNMENT NOTE Page No: 62
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Figure 7 - Example of a RAIL CONSIGNMENT NOTE
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Figure 8 - Example of a CONTAINER TERMINAL ORDER (CTO)
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Figure 9 - Example of CARGO DUES Page No: 65
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Figure 10 - Example Sea Waybill Page No: 66
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DELIVERY NOTE
Issued by ………………………………………………………...
Name of the Group …………………………………………….
Please receive the following goods in good order and condition.
Item Quantity @ Total
Total
Delivered by …………………………………………………
Received the above goods in good order and condition
Received by …………………..… Signature ……………
Designation ………………………Date …………………
Figure 11 – Delivery Note example
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COMMERCIAL DOCUMENTATION REQUIRED FOR INTERNATIONAL TRADE IS TO BE
IDENTIFIED BY RECOGNITION OF THE DOCUMENT.
NOTE: The F178 is no longer in use.
Below are examples of commercial documents such as a pro-forma invoice, a commercial
invoice, a packing list and a letter of credit. Once again, you are required to recognise these
documents and identify them by pointing them out.
Figure 1 below is an example of a pro-forma invoice.
Figure 2 is an example of a blank commercial invoice.
Figure 3 is an example of a commercial invoice, partly completed and showing the delivery
terms as CIF.
Figure 4 is an example of a commercial invoice, partly completed and showing the delivery
terms as FOB.
Figure 5 is an example of a packing list. This is the packing list for the commercial invoice of
Figure 4 and clearly shows how items from a commercial invoice are displayed on a
packing list.
Figure 6 is an example of a blank commercial invoice typically used by the USA.
Figure 7 is an example of a Letter of Credit.
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Figure 1 - Example of PRO FORMA INVOICE Page No: 69
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Figure 2 - Example of a COMMERCIAL INVOICE
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Figure 3 - Example of a COMMERCIAL INVOICE Page No: 71
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Figure 4 - Example of a COMMERCIAL INVOICE Page No: 72
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Figure 5 - Example of a PACKING LIST Page No: 73
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Figure 6 - Example of a COMMERCIAL INVOICE
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SAMPLE LETTER OF CREDIT
To: Proforma Invoice Number: 1234
Mr. Buyer, overseas address Your Ref and date: Order P6 20-June-2010
We have indicated below those terms and conditions that we would find acceptable in a
letter of credit issued by your bank. Your efforts to gain compliance with these terms and
conditions in the issuance of this letter of credit will ensure prompt dispatch of your order. If
your bank is unable to issue the credit within the following guidelines, please contact us
providing information on those areas that must be altered. This will eliminate needless delay
and costs involved with amendments after the credit has been opened. Only those items [ ]
marked with an “X” will apply (i.e. [X]).
1. [ ] The letter of credit is to be irrevocable and subject to the Uniform Customs and
practice for Documentary Credits, as published and updated from time to time by the
International Chamber of Commerce.
2. [ ] The letter of credit is to be advised [ ] confirmed [ ] by our bank:
Lotsa Money National Bank, Att: Int’l Operations
Telex: 555 777 BANKTLX , Swift No: KEYCASH33, Bank Code: 0130458
3. [ ] The beneficiary is to be shown as: SA Maritime School of Shipping South Africa
4. [ ] The letter of credit is to be payable upon presentation of drafts drawn at:
A. [ ] At sight
B. [ ] days after the date of the transport document (i.e. 90 days after date of
B/L)
C. [ ] days after sight (i.e. 90 days after sight.
D. [ ] Other:
5. [ ] The letter of credit is to be available by negotiation with any bank.
6. [ ] The letter of credit is to be payable in: [ ] U.S. Dollars [ ] Other:
7. [ ] The amount of the letter of credit is to be specific as: [ ] “Not to exceed”
8. [ ] The following documents are normally provided if required in the letter of credit.
Please avoid the requirement for any documents without prior agreement on our part.
A. [ ] Signed commercial invoice, one original and copies.
B. [ ] Packing list in copies.
C. [ ] Negotiable Marine/Air Insurance policy or certificate in duplicate for 110% of
invoice value covering all risks including ware and strike and
.
D. [ ] Full set of clean on board ocean bill of lading issued to orderof:
E. [ ] Clean air waybill consigned to:
F. [ ] Other documents:
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9. [ ] The letter of credit is to specify shipment of:
10. [ ] Shipment is to be:
[ ] FOB [ ] CFR [ ] CIF [ ] EXW [ ]
From: To:
Other: (i.e. FCA, FAS, DDP, CIP, etc)
11. [ ] The Bill of Lading is to be marked: [ ] Freight Prepaid[ ] Freight Collect
12. [ ] Transshipments [ ] Are permitted [ ] Are not permitted
13. [ ] Partial shipments [ ] Are permitted [ ] Are not permitted
14. [ ] Latest shipment date
15. [ ] Latest presentation date of documents to the negotiating bank to be days after
shipment date.
16. [ ] Expiration date of letter of credit to be
17. [ ] The letter of credit should specify that all banking charges outside the country of the
applicant are for the account of: [ ] applicant [ ] beneficiary
18. [ ] Letter of credit to be transferable
19. [ ] Other special instructions:
Figure 7 – Example of a LETTER OF CREDIT
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REASONS WHY THESE DOCUMENTS ARE USED IS EXPLAINED IN ORDER TO UNDERSTAND
THEIR USES.
Bill of Lading
The bill of lading (often abbreviated to B/L or BOL) is a contract of carriage. It serves three functions:
It is a document of title for the goods
It is a contract of carriage for the goods
It is a receipt for the goods
Air waybill
An air waybill is also a transport document. It is a non- negotiable document and it can be used for
international as well as domestic airfreight shipments.
An air waybill can have multiple functions such as:
evidence of a contract of carriage
a receipt of the goods shipped
a delivery receipt
a freight invoice
certificate of insurance of the goods
a document required to clear the goods through customs
Road waybill
A road consignment note (also referred to as a road consignment note, a road transport document, a
road waybill or a road manifest or simply waybill) is a form of inland Bill of Lading (BOL or B/L). As
road consignment notes can cover cargo moving across borders, it is also a form of “through bill of
lading.”
There is no standard layout for road waybills. These transport documents are usually designed by the
individual road haulage companies and often carry that company’s logo and contact details. There is
a tendency to follow the typical bill of lading used in the case of ocean shipping (i.e. there is document
number, a consignee, a shipper, a description of the goods, weight, dimensions, etc.). They serve as
receipt of goods for carriage, delivery notes and evidence of contract of carriage.
Many have their own standard conditions printed on the reverse. They can be used for local, domestic
or cross-border transport. Road transport covers many different types of shipments from new and
used goods to perishables, household and furniture removals, clothing, supermarket deliveries and
general cargo. Cargo must always be carefully checked upon receipt and all discrepancies, damages
and shortages noted on the road waybill.
The road consignment note is also:
a receipt of the goods for transportation by road
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a contract of carriage
an invoice for the road freight, and showing the shipper, the consignee, a description
of the goods, and the freight amount
a handling guide to the road hauler
a means of clearing the goods through customs in the case of over-border
The road waybill must be accompanied by a commercial invoice, a packing list and all other
documentation relevant for clearing purposes (such as phytosanitary documents, etc.) to clear the
goods through customs.
Rail Note
Rail notes (or rail consignment notes or rail waybills or freight transit orders) are often in the form of
the individual rail operator in overseas countries, or Transnet Freight Rail (formerly Spoornet, in South
Africa’s case) who is primary rail operator in South Africa. Different documents cover different types of
shipments such as bulk cargo and containerised cargo, export over-border or local.
Container Terminal Order (CTO)
The container terminal order or CTO is the primary document used to accept export containers into
the port’s container terminal or to release import containers from the port’s container terminal. A
container will not be allowed into or out of a port – either by rail or by road - unless the CTO has been
processed and accepted by the port authorities.
Cargo Dues
For exports, the shipping lines will not release the bill of lading unless proof or payment of cargo dues
is presented to them in the form of a Cargo Dues Order stamped by the TNPA.
For imports, the cargo dues must first be paid before the Container Terminal Order (CTO) can be
processed.
Delivery Note
A delivery note (abbreviated to D/N) can be in any format. It may include a company’s logo and
details on a pre-printed form or it may be from a delivery note book such as carbon-duplicate delivery
book.
There must always be two copies of the delivery note so that the person receiving the goods keeps a
copy and the person delivering the goods retains a signed copy. The delivery note must provide a
detailed and accurate description of the goods and their condition, and to whom the goods are being
delivered.
The person signing the delivery note should also print their name in block letters (because signatures
are often illegible) and state the date and time of receipt, as well as the gate number or department in
the case of a factory or large establishment.
A delivery note can be used when delivering cargo or it can be used to deliver documents where a
signature is required as proof of receipt.
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Pro-forma invoice
A pro-forma invoice (often just referred to as a pro-forma) may be requested from an exporter (or
supplier) by an importer. A pro-forma invoice is a preliminary invoice and confirms an initial quotation
the importer may have received from the exporter or supplier.
Invoice
A commercial invoice is required by customs at the time of importation in order to assess the value,
the currency, the description, and the purchase terms of the goods. If a pro-forma invoice was issued
then the commercial invoice should be virtually the same.
Many commercial invoices include such information as part numbers, tariff headings, import or export
licence numbers, Incoterms, type of transport e.g. rail, road, air or sea, and payment terms such as 30
days or 90 days. However many others are woefully inadequate in their description of the goods.
Packing List
A packing list (also referred to as a packing declaration) should accompany every shipment. When
the consignee receives his shipment he is then able to check that the correct number of units has
been received. If a consignment is stopped for examination by customs then they will more easily be
able to identify the specific packages and contents thereof. This is especially important with large
shipments, shipments with many small parts, and shipments with goods that are not easily
identifiable.
Letter of Credit
A letter of credit (L/C or LC) is a document issued by the buyer’s bank which guarantees to make
payment to the seller.
Other Forms for Exchange Control
A form NEP is used when something is exported but there will be no foreign exchange proceeds
(NEP = No Exchange Proceeds).
Examples of such instances could be samples, goods sent for repair, household removals, gifts,
goods for exhibitions or trade shows, etc. The NEP is also presented to a bank for attesting prior to
the customs declaration being submitted to customs.
THE IMPORTANCE OF MAINTAINING CONFIDENTIALITY OF THE INFORMATION CONTAINED
IN DOCUMENTATION IS EXPLAINED IN TERMS OF THE CONSEQUENCES IN TRADE.
Client confidentiality is vitally important to maintaining healthy and long-lasting relationships.
If you are an importer you would want the information contained on the commercial invoice you
receive from your supplier to be protected. Your clearing and forwarding agent has access to this
invoice and the information thereon and you would not want him to give that information to your
competitor who may be a rival importer in the same product market.
If you are an exporter you would want to protect the identity of your buyer - not for the sake of your
buyer, but to protect your market. If other exporters of the same product knew who your buyer was
they could approach him and possibly undercut your selling prices.
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If you are a forwarder you would want to protect the information contained on your client database
from other forwarders who would be very keen to approach your clients.
Even innocent looking documents such as packing lists, delivery notes, CTO’s and cargo dues all
contain leading information about importers, exporters, products, buyers and suppliers.
The knock-on effect of losing a large client could result in loss of jobs down the line, one of which
could be yours. Disciplinary or even legal action could also be a consequence for a lack of judgment
by a disgruntled or slack employee.
All documents and all files should be safeguarded and care taken to protect the information therein.
Be careful when faxing or e-mailing documents that the correct fax number or e-mail address is used.
Information on company databases should be protected by passwords. Cyber-crime is a new
phenomenon and a liability that comes with computers and electronic data communication.
Bills of lading provide a wealth of information about the shipper and their details, the importer and
their details, the product or type of cargo and the mode of transport. Air waybills provide similar
information. Commercial invoices top the list of most sensitive documents because these provide
comprehensive details including the prices of the items and the payment terms.
If you can understand that you are part of a greater picture (regardless of what your level in the
hierarchy is) and that a failure on your part has consequences elsewhere, then you have
demonstrated your understanding of the world as a set of related systems.
Put yourself in the shoes of the other person/importer/exporter/agent/bank
/seller/buyer/shipper/carrier and consider how you would want the confidential information contained
in your documents to be treated if you were them.
THE IMPORTANCE OF MAINTAINING CONFIDENTIALITY OF THE INFORMATION CONTAINED
IN DOCUMENTATION IS EXPLAINED IN TERMS OF THE CONSEQUENCES IN TRADE.
Bill of Lading
The bill of lading (often abbreviated to B/L or BOL) is a contract of carriage. It serves three functions:
It is a document of title for the goods
It is a contract of carriage for the goods
It is a receipt for the goods
Air waybill
An air waybill is also a transport document. It is a non- negotiable document and it can be used for
international as well as domestic airfreight shipments.
An air waybill can have multiple functions such as:
evidence of a contract of carriage
a receipt of the goods shipped
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a delivery receipt
a freight invoice
certificate of insurance of the goods
a document required to clear the goods through customs
Road waybill
A road consignment note (also referred to as a road consignment note, a road transport document, a
road waybill or a road manifest or simply waybill) is a form of inland Bill of Lading (BOL or B/L). As
road consignment notes can cover cargo moving across borders, it is also a form of “through bill of
lading.” There is no standard layout for road waybills. These transport documents are usually
designed by the individual road haulage companies and often carry that company’s logo and contact
details. There is a tendency to follow the typical bill of lading used in the case of ocean shipping (i.e.
there is document number, a consignee, a shipper, a description of the goods, weight, dimensions,
etc.). They serve as receipt of goods for carriage, delivery notes and evidence of contract of carriage.
Many have their own standard conditions printed on the reverse. They can be used for local, domestic
or cross-border transport.
Road transport covers many different types of shipments from new and used goods to perishables,
household and furniture removals, clothing, supermarket deliveries and general cargo. Cargo must
always be carefully checked upon receipt and all discrepancies, damages and shortages noted on the
road waybill.
The road consignment note is also:
a receipt of the goods for transportation by road
a contract of carriage
an invoice for the road freight, and showing the shipper, the consignee, a description
of the goods, and the freight amount
a handling guide to the road hauler
a means of clearing the goods through customs in the case of over-border
The road waybill must be accompanied by a commercial invoice, a packing list and all other
documentation relevant for clearing purposes (such as phytosanitary documents, etc.) to clear the
goods through customs.
Rail Note
Rail notes (or rail consignment notes or rail waybills or freight transit orders) are often in the form of
the individual rail operator in overseas countries, or Transnet Freight Rail (formerly Spoornet, in South
Africa’s case) who is primary rail operator in South Africa. Different documents cover different types of
shipments such as bulk cargo and containerised cargo, export over-border or local.
Container Terminal Order (CTO)
The container terminal order or CTO is the primary document used to accept export containers into
the port’s container terminal or to release import containers from the port’s container terminal.
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A container will not be allowed into or out of a port – either by rail or by road - unless the CTO has
been processed and accepted by the port authorities.
Cargo Dues
For exports, the shipping lines will not release the bill of lading unless proof or payment of cargo dues
is presented to them in the form of a Cargo Dues Order stamped by the TNPA.
For imports, the cargo dues must first be paid before the Container Terminal Order (CTO) can be
processed.
Delivery Note
A delivery note (abbreviated to D/N) can be in any format. It may include a company’s logo and
details on a pre-printed form or it may be from a delivery note book such as carbon-duplicate delivery
book. There must always be two copies of the delivery note so that the person receiving the goods
keeps a copy and the person delivering the goods retains a signed copy. The delivery note must
provide a detailed and accurate description of the goods and their condition, and to whom the goods
are being delivered.
The person signing the delivery note should also print their name in block letters (because signatures
are often illegible) and state the date and time of receipt, as well as the gate number or department in
the case of a factory or large establishment.
A delivery note can be used when delivering cargo or it can be used to deliver documents where a
signature is required as proof of receipt.
Pro-forma invoice
A pro-forma invoice (often just referred to as a pro-forma) may be requested from an exporter (or
supplier) by an importer. A pro-forma invoice is a preliminary invoice and confirms an initial quotation
the importer may have received from the exporter or supplier.
Invoice
A commercial invoice is required by customs at the time of importation in order to assess the value,
the currency, the description, and the purchase terms of the goods. If a pro-forma invoice was issued
then the commercial invoice should be virtually the same.
Many commercial invoices include such information as part numbers, tariff headings, import or export
licence numbers, Incoterms, type of transport e.g. rail, road, air or sea, and payment terms such as 30
days or 90 days. However many others are woefully inadequate in their description of the goods.
Packing List
A packing list (also referred to as a packing declaration) should accompany every shipment. When
the consignee receives his shipment he is then able to check that the correct number of units has
been received. If a consignment is stopped for examination by customs then they will more easily be
able to identify the specific packages and contents thereof. This is especially important with large
shipments, shipments with many small parts, and shipments with goods that are not easily
identifiable.
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Letter of Credit
A letter of credit (L/C or LC) is a document issued by the buyer’s bank which guarantees to make
payment to the seller.
Other Forms for Exchange Control
A form NEP is used when something is exported but there will be no foreign exchange proceeds
(NEP = No Exchange Proceeds). Examples of such instances could be samples, goods sent for
repair, household removals, gifts, goods for exhibitions or trade shows, etc. The NEP is also
presented to a bank for attesting prior to the customs declaration being submitted to customs.
THE IMPORTANCE OF MAINTAINING CONFIDENTIALITY OF THE INFORMATION CONTAINED
IN DOCUMENTATION IS EXPLAINED IN TERMS OF THE CONSEQUENCES IN TRADE.
Client confidentiality is vitally important to maintaining healthy and long-lasting relationships.
If you are an importer you would want the information contained on the commercial invoice you
receive from your supplier to be protected. Your clearing and forwarding agent has access to this
invoice and the information thereon and you would not want him to give that information to your
competitor who may be a rival importer in the same product market.
If you are an exporter you would want to protect the identity of your buyer - not for the sake of your
buyer, but to protect your market. If other exporters of the same product knew who your buyer was
they could approach him and possibly undercut your selling prices.
If you are a forwarder you would want to protect the information contained on your client database
from other forwarders who would be very keen to approach your clients.
Even innocent looking documents such as packing lists, delivery notes, CTO’s and cargo dues all
contain leading information about importers, exporters, products, buyers and suppliers.
The knock-on effect of losing a large client could result in loss of jobs down the line, one of which
could be yours. Disciplinary or even legal action could also be a consequence for a lack of judgment
by a disgruntled or slack employee.
All documents and all files should be safeguarded and care taken to protect the information therein.
Be careful when faxing or e-mailing documents that the correct fax number or e-mail address is used.
Information on company databases should be protected by passwords. Cyber-crime is a new
phenomenon and a liability that comes with computers and electronic data communication.
Bills of lading provide a wealth of information about the shipper and their details, the importer and
their details, the product or type of cargo and the mode of transport. Air waybills provide similar
information. Commercial invoices top the list of most sensitive documents because these provide
comprehensive details including the prices of the items and the payment terms.
If you can understand that you are part of a greater picture (regardless of what your level in the
hierarchy is) and that a failure on your part has consequences elsewhere, then you have
demonstrated your understanding of the world as a set of related systems.
Put yourself in the shoes of the other person/importer/exporter/agent/bank/
seller/buyer/shipper/carrier and consider how you would want the confidential information contained in
your documents to be treated if you were them.
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This Chapter relates to the below:
SAQA US UNIT STANDARD TITLE
ID
252272 Perform the processes and procedures required for the administration of export
transactions
THE END OF CHAPTER 3
Chapter 4
Demonstrate an Understanding of
Security and Confidentiality Awareness
Procedures
Reference Material
Global Maritime Learning Solutions
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PURPOSE OF THE CHAPTER
The person credited with this chapter is able to identify areas in their work environment in which cargo
may be vulnerable or at risk and to follow procedures to report possible breaching of security.
The qualifying learner is capable of:
Explaining the international measures for security of internationally traded goods.
Implementing procedures required for the prevention of cargo theft and fraud.
Explaining the consequences of neglecting cargo security and confidentiality measures.
EXPLAIN THE INTERNATIONAL MEASURES FOR SECURITY OF INTERNATIONALLY TRADED
GOODS.
THE NECESSITY FOR IMPOSING INTERNATIONAL SECURITY MEASURES IS EXPLAINED
WITH EXAMPLES FOR INTERNATIONALLY TRADED GOODS.
The attacks of 11 September 2001 on targets in New York and Washington have raised awareness
among the global community of the need to monitor the cross-border movement of people and goods
more strictly. Although South African officials had taken note of this trend, the tightening of border
controls and other security measures at international ports of entry both air and sea had begun long
before 2001.
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After the first democratic elections in South Africa in April 1994, the country opened up internationally
and was exposed to global trends - economic, political and social. It was also affected by
transnational crime to a far greater extent than previously. This had an impact not only on the policing
of the borders but also on the activities of organised crime, which ranged from the smuggling of drugs,
illegal immigrants, firearms and other goods into the country to the illegal export of stolen cars and
endangered species.
Security measures and standards for goods inspections and the movement of people are governed by
a number of international conventions and treaties. These are currently administered and monitored
by international organisations affiliated to the UN. For sea and air ports of entry the relevant
organisations are the International Civil Aviation Organisation (ICAO) and the International Maritime
Organisation (IMO). Both are governed by conventions that set out the required regulatory
frameworks and standards to which international sea and air ports must conform if they want to be
accredited and recognised as international entry and exit points.
THE INTERNATIONAL SECURITY MEASURES ARE IDENTIFIED FOR AIR-FREIGHTED GOODS.
International Civil Aviation Organisation
Part 108 of the Civil Aviation Regulations
Part 108 is an addition to the Civil Aviation Regulations of 1997 covering air cargo security and the
requirements for carriage by air of cargo in an environment in which modern day terrorism threatens
air safety. It is a preventative security programme which sets out measures and procedures to be
implemented to safeguard against acts of unlawful interference with air cargo.
Following the loss of the Helderberg in 1987, the 1988 Lockerbie disaster, and the Twin Towers
attack on 11 September 2001, increasing priority and focus has been placed by ICAO (International
Civil Aviation Organisation) on contracting states to introduce stringent and effective air cargo security
measures.
Known cargo principle in the security chain
‘Cargo’ means any property, excluding mail, stores or unaccompanied baggage, carried on an aircraft
in a commercial air transport operation (including charter operations).
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The essence of the regulations turns on the concepts of “Known” and “Unknown” Cargo. No Air
Carrier (Airline) or Charter Operator may carry “Unknown Cargo” which is cargo from an unknown
consignor (sender) to which the appropriate security measures, prescribed in Part 108, have not been
applied. This affects domestic, regional and international air cargo. In the security chain, “Known
Cargo” is a consignment from a “Known Consignor” (sender) or Regulated Agent to which appropriate
security measures have been applied.
This cargo must be collected, transported, and processed in secure premises, by a “Regulated
Agent”, before an air carrier will accept the cargo without further security controls. Under certain
circumstances the “Known Consignor” may themselves transport the cargo by secure road transport
to the “Regulated Agent” or Air Carrier. “Unknown Cargo” can become “Known Cargo” only after
prescribed security controls, in terms of the regulations, have been applied to that cargo.
The “Known Consignor” is the sender of cargo for carriage by air, who can demonstrate that the
consignment is processed and stored in a secure environment (i.e. cannot be interfered with) by those
personnel who have received Air Cargo Security Familiarisation training and criminal checks, who are
authorised to have access to, and to handle air cargo and shipping documentation. Background
checks, if not conducted during the initial employment process, must be conducted.
Exempted cargo
Security controls required by the regulations will not be applicable in respect of transshipment cargo
(if subjected to acceptable minimum security measures at origin, en route and at transit points),
human remains, live animals, lifesaving materials, medical supplies, human organs, blood plasma, or
similar materials, and nuclear materials (only if tendered by a Regulated Agent who must
nevertheless perform certain security measures to exempt cargo).
The “Regulated Agent” provisions of Part 108 apply to all persons or entities engaged in acceptance,
forwarding, storage and carriage of cargo by air.
The regulations consequently apply to freight forwarding and courier agents, air carriers, charter and
charter airlines, ground handling agents and other suppliers of material to be loaded on board an
aircraft.
THE INTERNATIONAL SECURITY MEASURES ARE IDENTIFIED FOR SURFACE FREIGHTED
GOODS.
Seaports face a daunting challenge—to protect our ports' seaside and landside areas from
unauthorized intrusions and potential terrorist activities. For freight seaports, this means monitoring
containers, maintaining fence protection systems, ensuring cargo remains safe and sanitized, and
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controlling incoming rail and truck traffic. These challenges had to be overcome in order for the Port to
comply with the International Safety Regulations code. The security threats were identified as the
following:-
cargo theft
illegal or undocumented immigrants and stowaways
vehicle theft
drug smuggling
trade fraud (such as under-valuations and sale of counterfeit goods)
Firearms smuggling.
The International Ship and Port Facility Security Code
In essence, the Code takes the approach that ensuring the security of ships and port facilities is
basically a risk management activity and that to determine what security measures are appropriate,
an assessment of the risks must be made in each particular case.
The IMO has introduced a series of measures to improve shipping safety and related maritime issues.
These include the prevention of sea pollution; the facilitation of ship traffic; the marking of load lines;
the introduction of maritime distress and search and rescue systems; the safe carriage of dangerous
goods; and container security. Maritime legislation is still the IMO’s main concern.
Around 40 conventions and protocols have been adopted by the Organisation. Most of them have
been amended several times to accommodate the changes taking place in world shipping.
But while the IMO sets maritime safety standards, the adoption and implementation of treaties remain
the responsibility of governments.
The IMO has encouraged states to introduce port control systems that adhere to the safety
regulations, and also undertakes inspections of ships to ensure they meet IMO standards. Unlike the
ICAO, the IMO does not have specific security and safety manuals relating to port side security (that
is, the securing of restricted areas and goods).
These responsibilities are left to the local port authorities, the cargo and warehouse operators or their
agents, and the border police and customs and excise inspectors at harbours.
IMPLEMENT PROCEDURES REQUIRED FOR THE PREVENTION OF CARGO THEFT AND
FRAUD.
THE CAUSES OF THEFT BY FRAUD AND ROBBERY ARE EXPLAINED IN THE
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INTERNATIONAL FREIGHT-FORWARDING ENVIRONMENT.
Many people blame theft and fraud on the recession and the resulting financial predicaments of
individuals. Many people are losing their jobs or experiencing cuts in wages, benefits, or hours. As
their take home pay declines, people have less money available for daily expenses such as food and
fuel. The rise in interest rates and the price of petrol, transport and basic foodstuffs is blatant
testimony that many are just not keeping up with their financial obligations.
Several businesses also site a reduction in the number of employees as another contributing factor.
As operating budgets get squeezed, businesses have been forced to cut back on their workforces,
and that means fewer watchful eyes.
But most employees do not steal from their employer because of need. Theft usually occurs because
an opportunity has presented itself, especially if the chances of getting caught are low.
The other reasons why employees steal include low morale at the workplace. This is also a major
reason why businesses suffer from low production. Some employees will steal when they feel they
are not appreciated for the “hard” work they do.
Others steal because they know the firm has no punitive policies regarding employee theft. If there
are no set consequences to employee theft, then employees will continue to steal, because they know
they won’t be punished.
In practice only an estimated four per cent of cargo is physically inspected. Moreover, inspections rely
on risk assessment and profiling, which means that most cargo is cleared on the basis of an
examination of its documentation—where the ‘known shipper’ principle comes into operation.
Customs trust these registered shippers to check the contents of cargo, pack them properly and
complete all the required documentation correctly. Accordingly they pass such cargo on receipt of all
the documentation without physically inspecting the contents.
INSTANCES OF THEFT AND FRAUD ARE IDENTIFIED IN ORDER TO TAKE PREVENTATIVE
AND CORRECTIVE ACTION.
Cargo theft creates substantial economic losses, however many incidents are not formally reported
and media attention is rare. Cargo theft occurs in freight-forwarding yards, warehouses and during
transportation in trucks, as airfreight and on ships. Cargo can be stolen either by employees or by
external offenders.
The modus operandi can involve hold-ups, theft from freight yards, theft from containers, theft off
trucks, or documentary fraud. Cargo is particularly vulnerable while in the process of being loaded or
unloaded from trucks, or through documentary fraud. The cargo can be legitimately in transit, already
illegally in the possession of other offenders, or being transported in a way that avoids excise duty or
other taxes.
Theft of “hot products” is common. “Hot products” are those that are easily disposed of yet retain a
high black market value, such as computers, entertainment equipment, name brand clothing and
footwear, perfume, jewellery, cigarettes and prescription drugs. The resale of “hot product” cargo may
be as lucrative as drug dealing but has far fewer risks.
Organised crime is responsible for a large part of cargo losses. Indirect costs - such as investigation
and insurance payments - can cost between two and five times the direct losses.
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Because reported cargo thefts can be recorded in several ways, it is difficult to produce accurate
statistics. Under-reporting is widespread as freight-forwarders may prefer to protect their supply of
customers and fear bad publicity. Many find it cheaper to absorb small losses. Because much cargo
crime remains undiscovered until non-arrival at destination, offenders usually have time to dispose of
goods before the loss is discovered. (Most stolen goods are disposed of within 24 hours.) These
delays make recovery less likely. Some insurance companies may only follow through if the loss is
significant. The formal reporting of cargo loss may cost more time and effort than the returns warrant.
THE PROCEDURES USED TO COMBAT THEFT ARE IDENTIFIED WITHIN A PARTICULAR
WORK ENVIRONMENT.
At an airport the first layer of physical security is perimeter fencing and specific restricted areas (those
for baggage handling and airside areas such as the apron and hangars). This consists of thefollowing:
Access control gates and screening: A system of reverse screening, which means that personnel,
goods and equipment are screened on entrance and exit. The access control guards on a 24-hour
two-shift system, and the number of personnel at each gate is dependent upon the volume of traffic
flow.
Perimeter fence patrols and electronic fence monitoring - 24-hour vehicle patrol. Perimeter fence
electronically monitored – with control centre to mobilise reaction vehicles. Ensuring fence is
maintained.
The purpose of both access control and perimeter fence patrolling and monitoring is to prevent any
breaches. They represents the last line of checks and screening for any possible smuggling of goods
and any tampering with or stealing from outgoing or incoming cargo.
Parking areas, cargo and airport terminals access: Patrolling parking areas as well as access to
restricted areas at the cargo terminal and in the airport terminal building. This is done by checking
permits at points controlling entry and exit. Anything and everything that people carry is physically
examined. In addition, outgoing persons taking anything with them must have a note authorising them
to remove that object from the premises. Personnel going through these entry/exit sites or going onto
the apron are also subject to x-ray screening.
The food that caterers bring in is checked all along the chain. It is prepared in a warehouse separate
from the airport premises, checked, packed into containers, sealed and locked. The food comes
through the gates of the airport in a sealed truck. The seal numbers are checked by the guards.
Customs and Excise regulations allow for spot checks on food intended for international flights.
Cargo security
Cargo handlers usually work on the principle of ‘known shipper’. This means that a registered agent
or freight forwarder with whom the cargo handling company has built up a long association over
regular shipments and can trust to implement all the security screening and Customs and Excise
requirements, will be allowed to consolidate cargo without supervision. The shipper is allowed to
combine parcels and smaller consignments from different exporters or clients into one big
consignment, and to pack it onto a full loading pallet.
A known shipper company is permitted to do consolidation, customs inspection, and weighing and
sealing (in other words, clearing for export) at the company’s own warehouse. Such a load will then
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be ‘pre-accepted’, so that it can be put through the cargo handler’s acceptance processes much more
quickly.
AT THE VALUABLE CARGO ACCEPTANCE AREA THERE ARE ARMED GUARDS WHO
MONITOR THE ACCEPTANCE OF VALUABLE GOODS AS AND WHEN SUCH GOODS ARE
PRESENTED. THE WHOLE VALUABLE CARGO AREA IS UNDER CAMERA SURVEILLANCE.
VALUABLE CARGO IS ACCEPTED UNDER GUARD, PROCESSED AND PLACED IN THE
STRONG-ROOM VAULT (WHICH IS ALSO MONITORED BY A CCTV CAMERA INSIDE).
WHEN A CONSIGNMENT OF VALUABLE CARGO IS READY TO SHIP, IT IS TAKEN OUT TO THE
HOLDING AREA UNDER GUARD, TRANSPORTED TO THE AEROPLANE ON THE APRON, AND
LOADED INTO THE HOLD. THE GUARDS REMAIN ON THE APRON UNTIL THE AEROPLANE
HAS TAKEN OFF. THE VALUABLE CARGO STAFF ALL ARE SPECIALLY TRAINED AND VETTED.
PREVENTATIVES AND CORRECTIVE ACTIONS ARE DEMONSTRATED IN GIVEN SITUATIONS.
1. Security requires transparency throughout the supply chain. Securing cargo has always been a
prime concern for international traders. Piracy, theft, and drug smuggling can wreak havoc on
your company's revenue, resulting in lost sales or hefty penalties. Since the 2001 terrorist attacks,
the stakes to keep your cargo secure have risen dramatically. Today, failing to secure your cargo
can result not only in monetary loss 1 but loss of life as well. Complete transparency throughout
the supply chain is an absolute requirement of doing global business in a post-9/11 world.
2. Participate in trade-government partnerships. Getting your goods where they need to be when
they need to be there means life or death for commercial enterprise. Private sector partnership
with government enforcement agencies to thwart terrorist activities is becoming a business
necessity. Those that voluntarily join the government’s efforts win continue to prosper. Those that
don't will end up with costly delays and disruptions in their business activities.
3. Make the most of new security measures. By employing better practices with regard to security;
your company will likely benefit from increased efficiencies and lowered costs. Better inventory
management increased accountability, documentation accuracy, and tightening controls can
result in benefits to bolster your company's bottom line.
4. Secure your data. Take affirmative steps to manage data vulnerabilities by investing in
comprehensive security solutions, restricting sensitive data, initiating vigilant employee
screenings and creating information management plans. The privacy and protection of customers
data is paramount in the cyber theft struggle and has become a competitive differential.
5. Keep your personnel secure. Initiate a crisis management plan to ensure the safety of your
employees when overseas. Consider investing in Kidnap and Ransom insurance and hiring
security protection for employees and executives travelling in danger zones.
6. Cargo is vulnerable when procedures break down, rules are not followed and errors are made.
Sound management is needed to forge the chain that will link together all the parts of an
operational security system. Comprehensive prevention requires target-hardening, procedural
and inventory controls.
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EXPLAIN THE CONSEQUENCES OF NEGLECTING CARGO SECURITY AND CONFIDENTIALITY
MEASURES.
THE DAMAGES CAUSED THROUGH INTERNATIONAL PERCEPTIONS OF AN INSECURE
CARGO ENVIRONMENT ARE DESCRIBED IN THE SOUTH AFRICAN CONTEXT.
The United Nations Interregional Crime and Justice Research Institute have conducted research on
the victims of crime in the country, which shows the picture of South African crime as more typical of a
developing country.
These statistics show that South Africa has lower rates of violent crime than most African and South
American countries, but due to the fact that South Africa is often compared to the developed world,
the crime rate is considered high when measured against the likes of England, the US, Italy, Germany
and other first world countries.
There is no doubt that overseas perception of crime in South Arica is restraining economic growth in
the country.
Crime reduces economic growth in the long term by discouraging new investment due to the
perceived risk of losses. South Africa’s reputation for crime is dampening the business climate,
leading investors to withhold their capital. A business that has the perceptions that South Africa is an
insecure cargo environment, will also believe the following:
Crime imposes costs on business (direct losses plus the costs of security and prevention) that
reduce profits and divert funds that could be invested in productive capacity.
Crime induces government to spend money on law enforcement, crime prevention, and the
administration of justice that would otherwise be available to stimulate growth.
Crime erodes human capital by encouraging emigration and by injuring and killing skilled workers
Crime keeps workers out of the labour market by discouraging them from accepting jobs in off-
hours and far from home
Crime disrupts schooling and other public investments to support long-term growth (such as
public transport), blunting the effectiveness of these investments
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THE POTENTIAL EFFECTS OF LOSSES CAUSED BY THEFT OF FRAUD ARE DESCRIBED FOR
IMPORTERS, EXPORTERS AND INSURERS
Crime has both direct and indirect costs. The direct costs are made up of the value of money or goods
stolen and/or the cost of damage to property and goods. Indirect costs include the cost of the
disruption to business/lost work hours owing to staff time off work, loss of necessary equipment or
temporary closure of the business, medical expenses, loss of staff, and increased insurance
premiums. Businesses also incur security costs, which can comprise a significant proportion of
turnover for small firms. They must also contend with the opportunity costs of crime – which may see
businesses limiting growth or staff numbers, or shortening operating hours, to try to reduce their risk
of crime.
In addition to these substantial direct and indirect costs, businesses must dip into their profits to make
provision for security measures against crime. Security costs are an unproductive investment, driving
up costs for businesses of all sizes and potentially diverting money away from expansion of, or
investment in the business.
The impact of crime goes beyond monetary costs. Perceptions of high levels of violent crime, together
with businesses’ actual experience of serious crimes such as robbery and burglary, create
considerable opportunity costs for individual enterprises and the broader economy. Because of crime,
many businesses limit their operations, and are reluctant to expand. This reluctance to grow is then
also reflected in employment figures. It may also lead to retrenchments and shorter working weeks.
THE LIABILITY OF THE FREIGHT FORWARDER FOR DAMAGES IS EXPLAINED IN THE CASE
OF NEGLIGENT AND DISREGARD FOR ADEQUATE SECURITY
Goods being transported internationally are under the constant threat of being stolen, damaged,
pilfered, sent to an unplanned destination, loaded into the wrong container, placed on an incorrect
vessel, or merely left behind. Damage may occur because of poor or inadequate packaging, careless
or irresponsible handling, or accidents involving the carrying vehicle. The misdirection or the incorrect
loading of goods may result from insufficient marking and labelling, or mistakes made by container
depot staff or stevedores.
Goods may be stolen because of lax security arrangements or the simple ingenuity of the thieves.
Whatever the precautions taken to avoid these discrepancies, importers and exporters are faced with
the risk of cargo loss or cargo damage. The risk of suffering cargo loss or damage can be reduced by
ensuring that the packaging used is sufficient to withstand the type of transport selected. For
example, cargo transported by rail generally will be subject to rougher handling than cargo
transported by road. Wooden packaging is likely to prevent pilferage more than cardboard is.The use
of appropriate labels such as “fragile” and “this side up” can help to encourage careful handling but
are no safeguard against damage. It is important that details such as the consignee’s address and
port of destination are correctly marked on the external packaging to facilitate the identification and
selection of the goods at the time of loading. Protection against the financial risks associated with
cargo damage and loss is available in the form of marine insurance, a subject that will be touched on
briefly in the first part of this course. Once loss or damage has occurred, certain essential steps have
to be taken in order to protect the interests of the cargo owner and other participants in the
international transport chain. This module on Lost, Discrepant and Damaged Cargo Procedures
provides the student with the opportunity to study this particular subject.
References
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©This Reference material is the property of GMLS and may not be copied, sold or distributed to any
third party without the express written permission of GMLS.
Stone, C. 2006. Crime, Justice, and Growth in South Africa: Toward a Plausible Contribution from
Criminal Justice to Economic Growth. CID Working Paper No. 131. Harvard University Center for
International Development Working
Travis, T. 2007. Doing business Doing Business Anywhere. John Wiley and Sons, Inc. New Jersey.
www.6000.co.za/south-africa-guide-crime-safety
www.aic.gov.au/documents/B/B/0/%7BBB0D4DB9-5290-46E5-8438-486632808090%7Dti214.pdf
www.c3ss.co.za/security-projects-harbour.htm
www.imo.org
www.issafrica.org
www.prisk.co.za
www.securitydriver.com/aic/stories/article-56.html
This Chapter relates to the below:
SAQA US ID CHAPTER TITLE
252374
Demonstrate an understanding of security and confidentiality awareness
procedures
THE END OF CHAPTER 4
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Chapter 5
Apply the Basic Skills of Customer
Service
Reference Material
Global Maritime Learning Solutions
PURPOSE OF THE CHAPTER
This Chapter provides a broad introduction to customer services and includes both internal and
external customers. The focus is knowledge, skills, values and attitudes in relation to the learner's
own context and experience of the world of work.
The qualifying learner is capable of:
Explaining customer service.
Engaging in an interaction with a customer.
Demonstrating communication skills in responding to a customer.
Processing a query in order to respond to a customer need.
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EXPLAIN CUSTOMER SERVICE IN A FINANCIAL SERVICES ENVIRONMENT
THE CONCEPT OF GOOD CUSTOMER SERVICE IS EXPLAINED WITH REFERENCE TO A
BUSINESS SECTOR AND AN ORGANISATION'S COMPETITIVE EDGE
Customer service defined
Customer service is defined in many different ways, and each definition contains a little part of the
real meaning of customer service:
Customer service is the ability to provide a service or product in the way that it has been
promised.
Customer service is about treating others as you would like to be treated yourself.
Customer service is an organisation's ability to supply their customers' wants and needs
Customer Service is a phrase that is used to describe the process of taking care of our
customers in a positive manner
Customer Service is any contact between a customer and a company that causes a negative
or positive perception by a customer
Customer service is a process for providing competitive advantage and adding benefits in
order to maximize the total value to the customer
Customer Service is the commitment to providing value added services to external and
internal customers, including attitude knowledge, technical support and quality of service in a
timely manner
Customer service is a proactive attitude that can be summed up as: I care and I can do.
Customer Service = Loyalty = Sales!
Customer service vs. customer satisfaction
Customer service is determined from the view of the Company, e.g. what services should we render
to the customers. Customer satisfaction however, is expressed from the perspective of the customer.
To delight a customer we cannot only focus on the service we render, but must give careful attention
to the way every employee can enhance customer satisfaction - the way we deliver those services.
Having a customer-oriented approach is essential in achieving this aim.
The companies that are achieving the greatest successes share the same obsession: making the
customer the centre of everything they do. And it's not enough anymore to merely satisfy the
customer; customers must be "delighted" – surprised by having their needs not just met, but
exceeded.
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If you think about it from the point of view as a customer, you want everything: a wide assortment of
good quality merchandise; the lowest possible prices; guaranteed satisfaction with what you buy;
friendly, knowledgeable service; convenient hours; free parking; a pleasant shopping experience.
A customer-oriented approach
Having a customer-oriented approach means that you believe the customers have hidden needs that
represent opportunities. Opportunities that can be uncovered through a problem solving approach –
listen to and question customers in order to identify needs and come up with sound solutions.
Solutions that are a sign of deep product knowledge, insight into the customer’s needs, will address
the customer’s problems, add value to their operations, take their needs and concerns in account and
renders proof of the efficiency and reliability of your organisation.
The very satisfied, or the delighted, are the real revenue providers, the loyal ones, the ones that come
to us first when they need a product or service we might have.
Different types of customer are identified within a specific organisation.
Who are your customers, really? We usually limit our definition of customer to those people who buy
from us - the purchaser or end-user of our products or services. These people are, however, more
accurately called external customers.
External customers are people you deal with either face-to-face or over the telephone, who buy
products or services from you. They are the customers in the traditional sense of the word. Without
them…… no sales, no business, no pay cheque! But this is only half the picture.
Just as important are the internal customers. These are people within the organisation that are
supplied with products or services by others in the same organisation, e.g. the people for whom a
secretary types are her customers.
Every interaction with an internal customer is an important link in a chain of events that will always
influence the quality of service rendered to the external customer.
Everybody and every department have a customer. Even if you never come into direct contact with
external customers you still have customers of your own. Your customers are the people who depend
on your work to perform their jobs.
The word customer is simply a word which describes who a person's work goes to, regardless of
whether the customer also works for the organisation or not. What this means is that everyone in a
business is both a supplier and a customer.
You have a dual role to play. You are a customer to other people who supply you with products or
services. From now on we will use the word customer to mean both the internal and the external
customer. There should be no distinction between them. What is important is ensuring quality by
meeting or exceeding customer expectations.
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THE CONSEQUENCES OF POOR SERVICE ARE IDENTIFIED WITH REFERENCE TO THE
CUSTOMER, THE EMPLOYEE AND THE ORGANISATION.
Poor customer service is a universal problem that impacts on the bottom line and profit margins in all
types of industries, businesses and services throughout the world. All of us have personally
experienced bad customer service numerous times. To narrow down what is the primary cause of bad
service is not an easy task. Poor customer service is principally caused by one or more of the
following:
Poor product or service – can relate to quality, presentation, price, etc
Bad after sales service – can relate to delivery, replacement of faulty item etc.
Being placed on hold by an automated voice and told to wait
Having your phone call lost or transferred unnecessarily
Unhelpful and impolite staff
A ‘can’t be bothered’ attitude of staff
Waiting in a line of people to be served because of insufficient or careless staff
Poorly trained staff lacking knowledge and skill
THE PROCEDURE FOR ESCALATING QUERIES IS EXPLAINED WITH REFERENCE TO OWN
LIMIT OF AUTHORITY.
You should always try to resolve a query at the first contact with the customer. Sometimes, however,
the query cannot be resolved at your level.
You should escalate a query when:
A solution to the query is outside your delegation.
A customer is complaining about a price, product or policy and is not satisfied with your
response. They are persistent and will not accept your offer of a solution.
A customer is not happy with your response and asks to speak to someone in authority.
A customer is extremely upset, or abusive.
A customer wishes to complain about another staff member. They may be complaining about
the way they were spoken to, or how the staff member handled their enquiry.
ENGAGE IN AN INTERACTION WITH A CUSTOMER Page No: 98
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AN INTERACTION WITH A CUSTOMER IS OPENED WITH REFERENCE TO AN
ORGANISATION'S INTERNAL STANDARDS
When you engage in an interaction with a customer, the following steps are important:
The interaction with a customer is opened according to your own organisation's standard
Information is requested to clarify the need
The customer's needs are identified and reflected back to the customer to confirm
understanding
Non-verbal communication clues are used to determine an approach to the interaction
The interaction is closed with reference to an organisation's internal standards
Let us look at each of these steps in more detail. Once again, getting to know your own organisation’s
standard policies and procedures is very important. The guidelines offered here are best practices,
but you need to follow the procedures that your employer prescribes.
INFORMATION IS REQUESTED TO CLARIFY THE NEED
You already know that the customer is always right, right? But these days - given the speed and
interactivity of the Internet, the explosion of customer choice, the appearance of new competitive
pressures, and the constant expansion of customers' expectations for service - just giving customers
what they want isn't enough. You also have to anticipate needs, to solve problems before they start,
to provide service that wows, and to offer responses to mistakes that more than make up for the
original error.
Asking questions is designed to do two things. Obviously to give you more detailed information about
the specific complaint so that you can put this in perspective. Also, asking questions allows you to see
a way through to a possible solution to the problem. The questions you ask a customer are important
as they determine what sort of information they will give you. Use the following types of questions to
obtain information:
These usually lead to yes or no answers or short specific answers from the customer. They are used
to direct or control the customer and they do not encourage elaboration.
THE CUSTOMER'S NEEDS ARE IDENTIFIED AND REFLECTED BACK TO THE CUSTOMER TO
CONFIRM UNDERSTANDING
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Knowing and understanding customer needs is at the centre of effective customer service. This
understanding forms the base for an effective interaction with the customer.
The main customer needs are:
satisfaction
price
performance
reliability
presentation
Most of the time, customers don't know what they want and do not
know what their problems are. This means they don't really know what they are looking for, or that
they even need a particular product. This is where you as a salesperson come in, armed with problem
defining questions that will let the customer know that they do indeed need a particular product or
service and that yours is the right one to purchase.
One of the best ways to show the customer that you have listened to and understood their needs is to
reflect or paraphrase the content back them. The reflection should be short, simple and easy to
understand. It must summarise what the person said, cutting through the waffle and just highlight the
key points or core of what they need. It does not mean simply repeating what they said – parrot
fashion!
A reflective sentence usually starts with the following:
So it sounds like…
Let me see if I understand you….
In other words….
So what you are saying is…..
By reflecting the customers’ need back to them to ensure you understand it correctly and you give
them an opportunity to verify the accuracy of your understanding. This verification or feedback
process is what distinguishes active listening and makes it effective.
NON-VERBAL COMMUNICATION CLUES ARE USED TO DETERMINE AN APPROACH TO THE
INTERACTION
We communicate non-verbally (without words), as well as verbally (with words).
Nonverbal communication ranges from tone of voice, gestures, facial expressions, eye contact and
body posture and use of space. Nonverbal communication is the single most powerful form of
communication. More than voice or even words, nonverbal communication cues you in to what is on
another person’s mind. The best communicators are sensitive to the power of the emotions and
thoughts communicated nonverbally.
People in professions with a high level of customer interaction receive customer cues all the time.
However, many only consider verbal cues. The customer cues they tend to miss include:
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