Monday night, and part of my studies tonight is covering Risk management.
Intro to Shipping Internationally
For those of who you have travelled internationally whether it be for business or pleasure, what’s the first thing you need to show before boarding your flight?
– Your airline ticket and Passport
To travel internationally and pass through airline security, customs & immigration barriers, you must provide all the right documents. The basic set of documents you would need; is your ticket to travel and your passport. However, you may also require visas, health cards and/or any other special documents dependant on the country you are going to.
When cargo travels internationally, there is no difference. Your cargo must also have a “ticket” to travel. In the freight industry, we call this a Bill of Lading, or Sea/Air Waybill. Your cargo will also require further documentation to pass through customs and quarantine barriers.
A basic set of documents required will include;
the Bill of Lading or Waybill,
and Packing Declaration
However special documents may also be required which will be dependent on the nature of the goods and the destination.
Here is some examples of these special documents;
Weight & Measurement declarations;
New & Unused declaration,
Certificate of Origin,
Free Trade Agreements,
Dangerous Goods declarations and so on.
Going back to my analogy, there is one main difference between people traveling internationally and your cargo traveling internationally and that is, we can communicate when we need something or when something goes wrong and generally there is an airline host or hostess to attend to our needs.
So bearing this in mind, cargo must be handled correctly and right from the start. Having suitable packaging, timing and routing arrangements, clearance and compliance and correct documentation will all be necessary to ensure that a smooth journey for your cargo is achieved.
Did you know, not only will your cargo travel across at least two governmental and possibly cultural barriers, there is many geographical, climatic and handling hazards that may be encountered too?
That’s where the team at Personalised Freight Solutions comes in, let us assist you in this process. We can co-ordinate the documents, duty and tax implications, size and weight restrictions, special permits, route and schedule limitations, letter of credit stipulations and many other factors that require precise detail, timing and dedicated attention.
A guide to Incoterms
You will note our short guide to Incoterms in the side bar of our services pages, here is more of what you need to know & why it’s so important to get Incoterms right from the start!
Are you looking at buying goods from overseas to re-sell in Australia? Has the supplier or factory given you a quote for the goods and told you that the terms are FOB / EXW / CIF etc. Are you thinking … what do these 3 letters mean?
What are Incoterms®?
The term, Incoterms® is an abbreviation for International Commercial Terms.
Incoterms® are a set of rules which outline the responsibilities of sellers and buyers for the delivery of goods under a sales contract. They are published by the International Chamber of Commerce (ICC) and are widely used in International commercial transactions.
The first Incoterms® were issued in 1936. The most current version of Incoterms® is Incoterms® 2010, which were introduced in September 2010 and became effective January 1, 2011.
Incoterms are also known as Delivery terms
What are Incoterms® used for?
Incoterms® provide a common set of rules to clarify the responsibilities of sellers and buyers for the delivery of goods under sales contracts (An example of a sales contract – is the invoice your supplier just gave you).
Incoterms distributes the transportation costs and responsibilities relating to the delivery of goods between buyers (importers) and sellers (exporters) and mirrors the modern-day transportation practices. Establishing the incoterm significantly decreases any misunderstandings among the buyer and seller and thereby minimizing trade disputes and litigation.
What are the Incoterms® 2010?
There are now two main categories of Incoterms® 2010 which are grouped by the modes of transport.
These can be used in international as well as in domestic contracts, the new groups aim to streamline the drafting of contracts and assist with avoiding misunderstandings by clearly stipulating the responsibilities of buyers and sellers.
Group 1 – Incoterms® that apply to any mode of transport are:
- EXW – Ex Works
- FCA – Free Carrier
- CPT – Carriage Paid To
- CIP – Carriage and Insurance Paid To
- DAT – Delivered at Terminal
- DAP – Delivered at Place
- DDP – Delivered Duty Paid
Group 2. Incoterms® that apply to sea and inland waterway transport only:
- FAS – Free Alongside Ship
- FOB – Free on Board
- CFR – Cost and Freight
- CIF Cost, Insurance, and Freight
The movement of cargo across international boundaries, by necessity, requires the involvement of a number of service providers and authorities. These parties include Customs and other Permit Issuing Agencies, Transport Operators (Forwarders, Carriers, and Brokers), Insurers and Banks.
The delivery terms assist with telling either party at least;
- who is responsible for taking certain action and who is to pay for it
- where the risk in transit transfers from seller to buyer
If you need further assistance with your individual circumstances please feel free contacting us anytime!
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