What Is Import-Export Outsourcing? Everything You Need to Know

Import-export entrustment is a service that many businesses are increasingly interested in and commonly choose today. However, not everyone fully understands the concept, role, as well as the necessary procedures involved in the entrustment process. Let’s explore import-export entrustment in detail with 3W Logistics in the article below!

Table of Contents

1. What is import-export entrustment?

Import-export entrustment is an outsourcing service in which a business hires a reputable freight forwarder to organize the export of its goods (on behalf of the entrusting party) to overseas markets, while also handling the import of goods into the domestic market. To ensure clarity and transparency, the entrustment process must be carried out on a proper legal basis in compliance with economic contract regulations.

Import-export entrustment is a third-party outsourcing service that organizes logistics and shipping activities on behalf of the requesting party

2. Who is import-export entrustment service suitable for?

The suitable users of import-export entrustment services include:

Individuals without legal entity status who are unable to transact and sign contracts with overseas partners.
Newly established businesses that do not yet have experience in international trade, customs procedures, or working methods with customs authorities.
Businesses with demand to export or import new or specialized goods.
Businesses that do not fully trust international suppliers and therefore prefer to entrust a third party to conduct supplier verification, negotiation, contract signing, and completion of the import-export document set.

3. What are the benefits and risks of import-export entrustment?

By choosing import-export entrustment services, businesses can gain significant benefits while also facing certain potential risks, specifically:

3.1 Benefits of import-export entrustment

Below are some of the key benefits businesses receive when using import-export entrustment services:

– Cost reduction

Instead of investing in an in-house import-export department, businesses can cooperate with an intermediary logistics company to save costs. Most entrustment service providers are highly experienced in the industry and maintain strong relationships with shipping lines and customs authorities, allowing them to secure more competitive freight rates than self-managed operations.

– Saving time and manpower

When organizing import-export activities, businesses must invest time, facilities, and manpower to understand and handle shipping procedures. Not to mention, documentation errors may occur during the process, requiring repeated amendments and negatively affecting delivery schedules.

Therefore, by using entrustment services, businesses can significantly save time and manpower. Thanks to the expertise of experienced logistics staff, issues related to C/O, Bill of Lading, THC, VGM, customs clearance, phytosanitary inspection, and fumigation can be handled efficiently.

Import-export entrustment services help businesses save significant time, manpower, and operational costs

– Ensuring stable logistics operations

Choosing a reliable entrustment company helps businesses properly maintain critical documentation and cargo records, while ensuring professional packing standards to keep shipments safe and stable throughout the transportation process.

– Improving service quality and efficiency

A reputable freight forwarder provides flexible logistics solutions, helping cargo reach its destination quickly, saving time, and minimizing operational risks.

– Risk sharing

With import-export entrustment services, if unexpected incidents occur, businesses may receive partial compensation for losses from the logistics provider. In addition, reputable forwarders can also advise on suitable cargo insurance solutions to mitigate risks efficiently.

Overall, the benefits of import-export entrustment largely depend on the business’s choice of a reliable logistics partner. In today’s market, businesses can confidently cooperate with experienced and highly specialized providers such as 3W Logistics. We deliver flexible import-export solutions with competitive costs and professional services, ensuring a transparent process that fully complies with customs regulations, thereby helping cargo clear customs smoothly and in the shortest possible time.

3.2 Risks in the import-export entrustment process

In addition to its benefits, import-export entrustment may also involve certain risks, including:

– Risks for the entrustment service provider

As the entrusted party stands in the business’s name on official documentation, it must bear legal responsibility throughout the transportation process. If incidents arise or legal violations occur, this directly affects the entrustment service provider.

– Risks for the entrusting business

The business or individual requesting entrustment must pay service charges to the logistics provider (also known as entrustment commission fees).
Due to relying on outsourced execution, the business may become dependent on the intermediary party, potentially slowing operations compared to the original plan.

4. Understanding the import-export entrustment process

Import-export entrustment includes both export entrustment and import entrustment. Businesses may choose either one or combine both, following the process below:

4.1 For export entrustment

The export entrustment process consists of 5 steps as follows:

Step 1: The entrusting party provides the export cargo list to the entrusted party so that the goods can be reviewed for export feasibility.
Step 2: The entrusting party selects the export method and then signs a contract with the entrusted party.
Step 3: The entrusting party provides all relevant documents and supporting files to the entrusted party.
Step 4: The entrusted party prepares the documentation set (including invoice, packing list, C/O), packs the cargo, and carries out customs clearance procedures.
Step 5: After the cargo is successfully customs-cleared, the entrusting party proceeds with freight payment to the entrusted party according to the contract terms.

The export entrustment process requires the entrusting party to prepare all necessary documentation so the entrusted party can complete the required customs procedures

4.2 For import entrustment

For import entrustment, the implementation process is carried out in the following 5 steps:

Step 1: The entrusting party drafts an official request asking the entrusted party to import goods as required, while attaching documents related to the product specifications and samples.
Step 2: The entrusted party places the order with the overseas supplier. The supplier then sends confirmation together with the product specification list and detailed quotation.
Step 3: The entrusted party informs the entrusting party. If the entrusting party agrees, the entrusted party drafts the contract. Both parties then discuss the terms and finally sign the import entrustment agreement.
Step 4: The entrusted party signs the contract with the overseas supplier on behalf of the entrusting party. Next comes the preparation of all necessary import documentation and files.
Step 5: The entrusted party carries out customs clearance for the imported goods, including detailed customs declarations, invoice and packing list submission, product inspection, phytosanitary procedures, and tax payment to customs authorities. Finally, the goods are transported to the warehouse for storage and the entrusting party is contacted for cargo handover.

5. Important notes when carrying out import-export entrustment

To ensure the import-export entrustment process runs smoothly, both the entrusting company and the entrusted service provider should pay close attention to the following points:

5.1 Regarding the import-export entrustment contract

The import-export entrustment contract is a type of service agreement that includes payment terms, as well as the rights and responsibilities of both parties. Therefore, both the entrusting party and the entrusted party must strictly comply with the agreed terms to avoid disputes or complications later on.

5.2 VAT in import-export entrustment

During the import-export entrustment process, two taxable transactions may arise: the commercial transaction and the entrustment service transaction.

For the commercial transaction: VAT includes import-export duties or special consumption tax, depending on the type of goods.
For the entrustment service transaction: VAT is calculated as part of the service fee, specifically at 10%.

In addition to entrustment commission fees, VAT may also arise during the service execution process

5.3 Clearly understanding the responsibilities of both parties

To protect the interests of both sides and avoid unwanted disputes, both the entrusting party and the entrusted service provider must clearly understand their respective responsibilities.

– For the entrusting party:

Provide complete cargo information, including model numbers and technical specifications, so the entrusted party can place the order accurately.
Coordinate with the entrusted party in negotiating contracts with overseas partners.
Transfer funds so the entrusted party can settle payment with the supplier.
Pay the import-export entrustment service fee.

– For the entrustment service provider:

Carefully review all documents and paperwork related to import-export activities.
It is advisable to receive the entrustment shipment directly at the entrusting party’s warehouse under EXW terms. This helps ensure accurate cargo declarations and confirms the goods are not on any prohibited goods list.
Negotiate, sign foreign trade contracts, and arrange payment to overseas suppliers.
Prepare a complete set of documentation, declarations, and tax settlements, including import duty, special consumption tax, and VAT for imported goods.
Maintain all import-export records, including the entrustment contract, foreign trade contract signed with the overseas partner, Commercial Invoice, Packing List, Bill of Lading issued by the shipping line or airline, customs declarations, and tax payment receipts (if any).

5.4 Choosing a reputable import-export entrustment service provider

As mentioned above, choosing a reliable logistics provider helps businesses optimize costs, save time, and ensure cargo safety. Currently, 3W Logistics is one of the professional import-export entrustment service providers offering efficient solutions and competitive pricing for businesses.

With many years of experience in freight forwarding and logistics, we help your cargo clear customs smoothly and provide numerous advantages, including:

3W Logistics handles key cargo categories such as agricultural and seafood products, garments, consumer goods, as well as wood and furniture products.
Support for shipping cargo to the United States and Canada with ease. As an OTI-NVOCC with FMC license and bond, 3W Logistics can independently issue HBL, file AMS/ISF (for U.S. shipments), and submit E-Manifest (for Canada shipments) using our own SCAC code.
Advise businesses on suitable transportation solutions, assist with documentation preparation, certificates of origin, quarantine permits, customs clearance, cargo insurance consulting at competitive rates, as well as fumigation and wooden crating support.
Support in validating C/O documents or directly arranging C/O issuance through 3W Logistics.
Competitive pricing and stable service quality thanks to partnerships with most major shipping lines, airlines, and transport companies in the market.
A highly experienced operations team dedicated to closely monitoring the import-export process.
Competitive cargo insurance solutions for businesses.

Reliability, professionalism, and efficiency are the core values 3W Logistics focuses on when delivering import-export entrustment solutions for businesses.

Overall, import-export entrustment services help businesses move cargo smoothly, save both time and costs, and minimize difficulties related to documentation and customs procedures. In addition to paying close attention to contracts, rights, and responsibilities, businesses should choose a reputable freight forwarder such as 3W Logistics for fast support and to ensure the import-export process remains efficient, secure, and on schedule.

For detailed consultation and a full cost estimation for import-export operations, businesses may contact 3W Logistics through:

Head Office:

Sohude Building, 2nd Floor, 29 Thang Long Street, Ward 4, Tan Binh District, Ho Chi Minh City, Vietnam.
Phone: +84 28 3535 0087.

Hanoi Branch:

Ngoc Khanh Building, 5th Floor, 37 Nguyen Son Street, Ngoc Lam Ward, Long Bien District, Hanoi, Vietnam.
Phone: +84 243 202 0482.

Hai Phong Branch

Son Hai Building, 452 Le Thanh Tong Street, Van My Ward, Ngo Quyen District, Hai Phong, Vietnam.
Phone: +84 022 5355 5939.

Email: info@3w-logistics.com.