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INCOTERMS 2000
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INCOTERMS 2000

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  • Bullet point number 3 on page 14 of the presentation indicates 'title for the goods changes ownership'. This is an inaccurate statemtent, as INCOTERMS do not designate title transfer, only assignment of risk, and the point at which the risk of loss changes from seller to buyer.
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  • hi frnd i want freight forwarding process and customer stastisfaction ..pls send me
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  • 1. DOCUMENTATION & SHIPPING TERMS INCOTERMS 2000
  • 2. WHAT IS EXPORT DOCUMENTATION?
    • The paperwork that is required for an export sales transaction
    • The means by which the shipping process is facilitated and performed.
    • Documentation is essential for moving goods through the channels of distribution, transferring responsibility or possession, clearing goods through customs, and effect payment according to the agreed contractual obligations.
  • 3. WHAT IS THE PURPOSE OF EXPORT DOCUMENTATION ?
    • Export documentation provides evidence that the negotiated terms between the buyer and the seller have been complied with.
    • Export documentation provides important information that is used by the seller, the freight companies, governments, and the buyer.
    This is essential if the seller wishes to get paid
  • 4. THE KEY INFORMATION CONTAINED IN EXPORT DOCUMENTS
    • Description of the goods
    • Mode of transportation
      • rail, air, ocean
    • Terms of sale
      • Who pays for what?
    • Origin of the goods
    • Identity of the seller/shipper
    • Identity of the buyer
    • Terms of payment
    • Shipping instructions
    • Evidence of shipment
  • 5. COMMON EXPORT DOCUMENTS
    • Pro forma invoice
    • Bill of Lading
    • Certificate of Origin
    • Packing List
    • Commercial Invoice
    • Shipper’s export declaration
    • Consular Invoice
    • Inspection certificate
    • Insurance certificate
    • Dock/warehouse receipt
    • Letter of credit
    • Draft
  • 6. DEFINITIONS
    • Pro forma invoice - basically a price quote. Describes the type and quantity of the goods to be shipped, value of the goods, total cost of the transaction based on the terms of sale, and other specifications.
    • Bill of lading - a contract between the seller and the carrier. The BOL is usually prepared by the carrier of forwarder. It documents the condition of the goods upon the carrier’s acceptance. It is negotiable when it is consigned “to order of” meaning the buyer is allowed to take possession of the goods.
    • Certificate of Origin - a statement required by some countries that certifies the origin of the exported goods (eg. The NAFTA certificate of origin)
    • Packing List - An itemized list describing the contents of each package in a shipment. Used in determining the total weight and volume of a shipment and for verifying the cargo.
    • Commercial Invoice - Basically a bill for the goods from the buyer to the seller
  • 7. DEFINITIONS ...
    • Consular Invoice - A document required by some foreign governments for identifying and controlling imported goods
    • Inspection Certificate - a document required by some foreign governments that certifies that the goods imported conform to the order
    • Insurance Certificate - the document providing proof that the cargo (goods shipped) have been properly insured. (amount and type of insurance)
    • Dock/warehouse receipt - this document transfers accountability from the seller to the carrier.
    • Letter of Credit - a letter from your customer’s bank to you, in which the importer’s bank guarantees payment, provided that all the terms stated in the letter are met.
    • Draft - An unconditional order in writing from the drawer to the drawee that directs the drawee to pay a specified amount to a named drawer at a fixed or determinable future date.
  • 8. A GUIDE FOR DOCUMENT PREPARATION
    • To ensure accurate document preparation, the services of a freight forwarder should be sought.
    • However, the exporter should understand the essentials of document preparation and at least review the prepared documents.
    • Seek explanation and instruction from the freight forwarder.
  • 9. A GUIDE FOR DOCUMENT PREPARATION...
    • To determine the required documents for a given country and transaction, an exporter can:
      • solicit the services of a freight forwarder
      • consult the “Exporter’s Encyclopedia” or the National Trade Data Office
      • contact commercial attaches in the target markets
        • INTERNATIONAL CHAMBER OF COMMERCE PARIS http://www.iccwbo.org/iccdbibc/index.html
  • 10. WHAT IS A FREIGHT FORWARDER?
    • The freight forwarding professional advises clients of the best rates, routings and modes of transporting goods to or from any area in the world. The forwarder is the exporter’s agent and provides the traffic and documentation services consistent with the exporter’s needs, arranging for carriage with vessel operators, trucking companies and airlines specializing in the consolidation of container-load shipments.
    • Using the many resources at their disposal, forwarders find the “right match” of services available so that products are moved by the most timely and cost-effective means.
    • “” Customized” services to fit the clients’ operational needs are forwarder’s specialty. Forwarders coordinate arrangements for storage, pick-and-pack operations, consolidations or full container movements as well as inland transportation to provide clients with true door-to-door service.
    • From assisting with initial quotations or preparation of proforma invoices, to banking clients’ documents for collection, the professional ocean and or air freight forwarder is and essential component in the facilitation of international trade.
  • 11. STEPS IN THE DOCUMENTATION PROCESS
    • Receive the order under accepted terms & consult with a banker or a freight forwarder.
    • Begin organizing information for required export documents and export license applications.
    • Evaluate modes of transportation, requirements for perishable products, and cost of various alternative modes.
    • Prepare goods for shipping (marking/labeling, packing, consolidating/containerizing, insuring)
  • 12. STEPS IN THE DOCUMENTATION PROCESS ...
    • Transport goods to a port of export.
    • Transfer goods to carrier.
    • Ship goods and forward appropriate export documents .
    • Unload goods at foreign port.
    • Clear customs.
    • Transport goods from foreign port to intermediate and/or ultimate consignee.
  • 13. THE TERMS OF SALE…… INCOTERMS
    • Understanding the INCOTERMS , also called the terms of sale, is the first step in responding to a trade lead or starting to prepare a quote.
    • Definition : An international rule for pricing terms which represent different levels of financial responsibility for the buyer and seller in an export transaction.
  • 14. INCOTERMS
    • The INCOTERMS establish :
      • the geographical location where the buyer becomes responsible for the goods
      • payment of shipping, handling, insurance, inland freight, etc.
      • the point where ownership of the goods or the title for the goods changes ownership
  • 15. THE THIRTEEN INCOTERMS
    • EXW - EX WORKS
    • FCA - FREE CARRIER
    • FAS - FREE ALONGSIDE SHIP
    • FOB - FREE ON BOARD
    • CFR - COST AND FREIGHT
    • CIF - COST, INSURANCE, FREIGHT
    • CPT - CARRIAGE PAID TO
    • DAF - DELIVERY AT FRONTIER
    • DES - DELIVERED EX SHIP
    • DEQ - DELIVERED EX QUAY
    • DDU - DELIVERED DUTY UNPAID
    • DDP - DELIVERED DUTY PAID
  • 16. EXW: EX-WORKS
    • EXW (geographical location)
    • EXW signifies a precise location where the product is made ready to the buyer.
      • When offering a EXW quotation: the price includes only those costs involved up to an agreed point of origin, usually the shipper’s factory. The shipper/seller places the product at the control of the buyer at a concurred place, date, time, etc.
  • 17. EXW: EX-WORKS ...
    • EXW COSTS CAN INCLUDE:
      • Raw or processed product
      • Standard packaging
      • Pallets, banding, shrink-wrap, slip sheets, slings, one-ton-big-bags
      • Special labeling
      • Translation and printing
      • Inspection certificates (Phytosanitary, Health, Quality, or Export License)
      • Bracing or inspecting a container
      • Export packaging
  • 18. FCA: FREE CARRIER
    • FCA (geographical location)
    • FCA signifies a precise location where the product is turned over to a carrier or person who will ensure carriage, and the goods are cleared for export.
    • When offering a FCA quotation: the price includes those costs involved up to that agreed point, including transportation and loading if required.
  • 19. FCA: FREE CARRIER...
    • FCA COSTS CAN INCLUDE ( IN ADDITION TO THE EXW COSTS):
      • Loading on board carrier
      • Transportation to the carrier
      • Insurance coverage to carrier (optional)
  • 20. FAS: FREE ALONGSIDE SHIP
    • FAS (port of exit)
    • FAS signifies a precise ocean port location where the product is turned over to a carrier, and the goods are cleared for export
    • When offering an FAS quotation: the shipper/seller places the product alongside the vessel
  • 21. FAS : FREE ALONGSIDE SHIP
    • FAS COSTS CAN INCLUDE (IN ADDITION TO FCA COSTS):
      • inland transportation (from your plant to the port)
      • port charges (including Terminal Handling or Receiving Charges, or stevedore, forklift, off-load, etc.)
  • 22. FOB: FREE ON BOARD
    • FOB (OCEAN SHIP AT PORT OF EXIT)
    • When offering an FOB quotation: the shipper/seller places the product over the ship’s rail. FOB only applies to sea or water transportation
  • 23. FOB: FREE ON BOARD
    • The costs associated with FOB include:
      • loading on board ship
      • heavy lift charges
    • These costs are correct in theory, but actually the loading and heavy lift charges will be included in the shipping cost from the port to the final destination which the buyer will pay.
  • 24. CFR: COST AND FREIGHT
    • CFR (FOREIGN PORT OF ENTRY)
          • (CFR PORT OF ENTRY, COUNTRY)
    • CFR signifies that the seller loads the product on board a carrier, clears the goods for export, arranges and pays the ocean freight and other charges.
    • The risk during carriage is transferred to the buyer, and the goods change hands when they pass the ship’s rail at the port of shipment. (the final destination)
  • 25. CFR: COST AND FREIGHT
    • The charges associated with CFR include (in addition to the FOB costs):
      • Ocean Freight
      • Fuel Adjustment Factor
      • Currency Adjustment Factor
      • Destination Delivery Charges or Container Service Charges
  • 26. CIF: COST , INSURANCE, AND FRIEGHT
    • CIF (FOREIGN PORT OF ENTRY)
          • (CIF PORT OF ENTRY, COUNTRY)
    • CIF signifies that the seller loads the product on board a carrier, clears the goods for export, arranges and pays the ocean freight and other charges.
    • The seller insures the shipment, and the goods change hands when they pass the ship’s rail at the port of shipment.
  • 27. CIF: COST, INSURANCE, AND FRIEGHT
    • COSTS ASSOCIATED WITH CIF INCLUDE (IN ADDITION TO CFR);
      • marine cargo insurance
  • 28. DISCLAIMER :
    • The previous definitions and list of costs are general. These definitions, terms, shipping regulations, legal framework often change.
    • For these reasons, it is highly recommended that the services of a freight forwarder are enlisted, as freight forwarders are aware of any changes.