Like all rules, shipping regulations are critical to the success of shipping operations. However, navigating them can be a pain for many shippers. And like most rules in society, failure to comply comes with punishment in varying degrees. Ultimately, in the shipping world, these penalties culminate in two things shippers and supply chains dread — potential supply chain disruptions and financial costs to the bottom line.
Navigating shipping regulations starts with understanding that shipping regulations were not set up to make operations more difficult. Imagine a world where shipping was like the Wild West. There would be a lot of losers and very few winners. It's not a world where most supply chains would thrive. But with navigation rules for the industry, regulators have ensured that as the shipping industry continues to change, all shippers and other stakeholders can continue to enjoy success.
So, if the rules are a recipe for success, the question plaguing the shipping world is — how do we navigate these rules to be successful? It starts with knowing and understanding the rules, which we will answer in the course of this article.
Why are Shipping Regulations Important?
Shipping plays a crucial role in supply chain management, and it is especially critical for connecting the operation to its consumers, whether on a national or international scale. It allows businesses to reach the world from one location. However, when the shipping regulation is not adequately controlled, it can have ripple effects that will harm the economy. The following is how it prevents this.
1. Safety
Shipping regulations protect lives and cargo by establishing operating standards that impact various stakeholders. For carriers, this could mean vessel construction, maintenance, operation, and crew training. For shippers, it could mean acceptable types of cargo for import and export and handling procedures to ensure a seamless shipping experience. In this way, shipping regulations can also regulate the handling and transportation of dangerous goods to prevent accidents and environmental damage.
2. Security
The shipping world has been plagued by high-level threats, from cargo thefts to constant attacks on the Sea, which affect the safe commute of cargo. With shipping regulations, stakeholders can address security concerns like piracy, terrorism, and smuggling. Today, vessels must have security plans and the capacity to implement security measures and cooperate with authorities to protect ships and ports.
3. Environmental Protection
Sustainability continues to impact and affect supply chains, including the shipping process. More regulators are eager to limit pollution, including air emissions and oil spills, to improve the environment. And they can do this by encouraging stakeholders to integrate cleaner fuels and technologies to minimize shipping's environmental impact.
4. Fair Competition
Competition sparks innovation, but the one condition for this is that the competition has to be fair. This is another reason shipping regulations are critical. Through these rules and regulations, regulators can prevent unfair practices, such as price fixing and discriminatory treatment, creating an environment that efficiently protects the interests of shippers and consumers. The shipping industry thrives under fair competition because more players can disrupt the system, ensuring everyone is always putting their best foot forward.
5. Trade Facilitation
Trade is crucial to the success of any economy, so the government is invested in ensuring it is much more efficient and predictable. To achieve this, the government leverages shipping regulations to ensure everything goes smoothly. These regulations can establish standardized procedures for customs clearance, documentation, and cargo handling.
How Shippers Can Effectively Navigate Shipping Regulations
Various stakeholders across the shipping industry ultimately struggle to navigate shipping regulations, so shippers are no exception. However, shippers are often the most impacted by these regulations, making effective navigation necessary. So, how can they achieve this seamlessly?
1. Partner with Experts
Shippers do not have to navigate the complex world of shipping alone. It can lead to mistakes that could impact their shipping operations for a long time. Some have had to end it as quickly as it began. However, one way to avoid that is to partner with experts such as freight forwarders and customs brokers.
Freight forwarders like Silq specialize in international shipping operations and have a team of experts and resources to guide the shipper through the complexity of customs regulations, documentation (especially for LCL shipments), and compliance procedures.
Customs brokers help shippers, particularly importers, streamline the customs clearance process, ensuring seamless shipping operations.
2. Stay Informed
Information is the bedrock of a seamless shipping process. Therefore, shippers must always stay on top of domestic and international regulatory updates to catch and explore opportunities on time. This allows them to prepare for the future, especially when a major change to regulations and policies occurs.
Beyond staying abreast of the current information and trends guiding the shipping world, shippers must also be familiar with relevant trade agreements that can impact tariffs and trade rules. An example of such a trade agreement is the USMCA (United States-Mexico-Canada Agreement).
Staying informed will necessitate exposure to information, and one key way to achieve this is by subscribing to industry newsletters, attending webinars, and consulting with experts.
3. Leveraging Technology
Over the years, shipping regulations have accumulated, and keeping up with them has become increasingly complex. This is why leveraging technology solutions is so critical for modern shippers. Many shippers have invested in comprehensive shipping software or platforms to automate documentation, track shipments, calculate duties and taxes, and provide real-time updates on regulatory changes for effective compliance. On the other hand, there are also online tools and resources that shippers can use for guidance on specific regulations.
4. Proactive Planning
Shipping requires effective and proactive planning to be successful. Shippers should thoroughly research regulations that impact their specific shipping operations. For instance, the regulations guiding an auto importer will differ from those guiding a food and beverage importer. When researching, consider product restrictions, labeling requirements, and licensing obligations.
Part of the planning process involves ensuring adequate documentation and suitable transportation vehicles. The documentation will typically include commercial invoices, packing lists, and certificates of origin. Accurate and complete documentation during shipping will help avoid delays and potential penalties that could derail operations.
5. Building Strong Relationships
Relationships are always critical to ensuring success in the shipping operation. Building relationships with reliable carriers and shipping facilitators, like freight forwarding companies, that have a proven track record of compliance will be a useful advantage.
Shippers should always try to connect and learn from other shippers, especially those with groundbreaking success or experience in their respective industries. They can do this via industry associations and trade organizations.
How Thompson Textiles Was Able to Turn Shipping Regulations into a Pathway to Success With Silq
Thompson Textiles struggled with complex international shipping regulations, causing delays, penalties, and supply chain disruptions. The situation was bad, and the company's leadership toyed with limiting their international shipping operations. However, at a logistics conference, one of the executives met a representative from Silq, a freight forwarding platform. The representative convinced the executive to allow Silq to help the company turn things around.
Thompson Textiles received expert guidance from a dedicated team that streamlined the Coast Guard and Customs processes, provided regulatory updates, including updated rules and navigable waters, and introduced advanced shipping software. Silq also connected Thompson Textiles with reliable carriers and industry associations. Within a year, the company saw significant improvements in shipping operations, expanded successfully into new markets, and gained new customers. The partnership with Silq transformed shipping regulations from an obstacle into a pathway to success.
Navigating Shipping Regulations With Silq
Navigating shipping regulations may be complex, but with Silq, it doesn’t have to be. The Silq Platform allows you to manage, track, and simplify your supply chain and shipping operations. We know that the best way to ensure compliance is through effective planning, so we have made it possible by leveraging our platform to ensure you have unfettered access to all your shipping projects, allowing for seamless planning and coordination of each one.
