Transport, Incoterms and standards

Any company selling products must ensure that its’ good arrive undamaged and on time to their final destination (with the right goods at the right place at the right time)

Transport means

  • Road: Fast and flexible
  • Rail: Recommended for long distance and bulk expeditions
  • Sea: Cost easier to bear
  • Air: the fastest but often more costly
  • Multiple means: Transport via several means

The following are the factors to consider when choosing your transport mean:

  • Nature of goods and packaging
  • Distance to cover
  • Goods quantity
  • Transport cost
  • Transit time
  • Risks
  • Company strategy

Transport process

  1. Pre-shipment activities
  • Packaging and labelling
  • Freight forwarders quotes
  • Prepare proforma invoice
  • Written importer approval & confirmation
  • Certifications eg: SPS, Certificate of origin, etc,
  1. Choice of shipping methods
  • Select the method
  • Book cargo & inform freight forwarder in writing
  • Receive written confirmation
  • Communicate details to importer
  1. Document preparation
  2. Shipment
  • Goods to freight forwarder
  • Goods to carrier
  • Complete documentation
  • Advise importer
  1. Payment
  2. Delivery
  • Incoterms and clearing agent

International commercial terms (Incoterms 2010)

Incoterms define risk, cost and responsibility for both the seller and the buyer during the transportation of the cargo from the exporter to the importer

These rules for international trade are used internationally to agree on the terms and, if need be, settle trade disputes between sellers and buyers

E- Terms

EXW-Ex works: the seller makes the good available, packed and ready for collection at the place of receipt/ factory

F-Terms

FAS- Free Alongside Ship: the seller is responsible to deliver the goods alongside the ship on the quay in the port of loading, having cleared the goods through customs in the exporting country

FOB-Free On Board: the seller is responsible for delivering the goods/cargo on board the ship at the named port of loading

FCA- Free Carrier At: the seller is responsible of delivering the goods into the custody of the transport carrier at the named point, having cleared the goods through customs in the country of export

C-Terms

CFR-Cost and Freight: the seller is responsible of delivering the goods/cargo on board the ship at the named port of loading or alongside the side in the port of loading

CPT-Cost Paid To: the seller is responsible for delivering the goods into the custody of the transport carrier at the named point, having cleared the goods through customs in the country of export

CIF-Cost, Insurance &Freight: the seller is responsible for delivering the goods/cargo on board the ship at the named port of loading or alongside the side in the port of loading.

CIP-Cost, Insurance Paid To: the seller is responsible for delivering the goods into the custody of the transport carrier at the named point, having cleared the goods through customs in the country of export

D-Terms

DAT-Delivered at Terminal: the seller is responsible for delivering the goods to a terminal in the country of import discharged from the carrier but not cleared through customs

DAP-Delivered At Place: the seller is responsible for delivering the goods to a terminal in the country of import not discharged from the carrier but not cleared through customs

DDP-Delivered At Duty Paid: the seller is responsible for delivering the goods to a named place in the country of import cleared through customs

It is important that the chosen incoterms should be in accordance with the contract of sales

If selling on an E and F terms, the buyer would pay the main carriage of the freight

If selling on a C and D terms, the seller would pay the main carriage of freight

 

Standards

 A standard is an established norm or requirement in regard to technical systems. It is usually a formal document that establishes uniform engineering or technical criteria, methods, processes and practices. In contrast, a custom, convention, company product, corporate standard, and so forth that becomes generally accepted and dominant is often called a de facto standard.

The Sustainability Standards module offers comprehensive, verified and transparent information on standards for environmental protection, worker and labour rights, economic development, quality and food safety, as well as business ethics.

Practitioners from many sectors and backgrounds use the website to identify relevant standards, compare information through tables and charts, and run self-assessments of their performance against standards’ requirements.The site currently covers more than 230 standards initiatives applicable to more than 80 sectors and 180 countries.