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Sales management. Delivery terms. Case study.

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Presentation Transcript
sales management

Sales management

Delivery terms

slide2

Case study

You are selling for the first time to a new customer in Eastern Europe. The business was brought to you by a broker in London, to whom you send the invoice. The goods have to be shipped to Rumania through the port of Genua. Italy. The broker wants you to deliver DDP (Delivered Duty Paid) Bucarest.

What are the issues in terms of risk management ?

slide3

DDP Bucarest

CIF Genua

slide4

Sales – delivery terms

  • Transport : who pays what ?
    • Costs : who has the lowest ?
  • Documents : who produces which
    • Exporter : who is the exporter?
  • Risk control : until when/where ?
    • Problems : can you handle them?
slide5

“Incoterms 2000”

  • Agreement between buyer and seller
  • No agreement between seller - transporter
  • Does not substitute sales contracts
  • Incoterms deal with three issues :
    • costs of transport
    • transfer of risks
    • obligations of seller and buyer
slide6

Available at

  • ICC, Paris
  • ICC office country
  • Local Chambers
  • Approx € 50,=
slide7

Incoterms

EXW Ex works FCA Free carrier FAS Free alongside ship FOB Free on board CFR Cost and freight CIF Cost, freight, insurance CPT Carriage paid to CIP Carriage, insurance paid

DAF Delivered at frontier DES Delivered ex ship DEQ Delivered ex quay DDU Delivered duty unpaid DDP Delivered duty paid

DEPARTURE CONTRACTS

ARRIVAL CONTRACTS

slide8

Case study

You have sold goods to a customer in Europe. Delivery terms are FOB Honduras. Payment terms are “documentary collection 30 days after b/l”. Just after transshipment in Miami a hurricane sweeps some containers overboard, including yours.

What are the obligations of seller/buyer ?

Same situation, but this time the goods are sold CIF Rotterdam.

slide9

Incoterms - specifics

From seller

to buyer

slide10

DEPARTURE CONTRACTS

EXW FCA FAS FOB CFR/CIF

DES DEQ DDU DDP

CUSTOMS

CUSTOMS

ARRIVAL CONTRACTS

slide11

EXW – ex works

CUSTOMS

CUSTOMS

RISK

COST

DOCS

Loading costs of truck for account of buyer

This is not an export transaction, but a local sale

slide12

FCA – free carrier

CUSTOMS

CUSTOMS

RISK

COST

DOCS

Loading costs of airplane for account of buyer

slide13

CPT – carriage paid to …..

CUSTOMS

CUSTOMS

RISK

COST

DOCS

Costs of transport to ………. for account of seller

CPT most common; CIP includes insurance

slide14

FAS – free alongside ship

CUSTOMS

CUSTOMS

RISK

COST

DOCS

Loading costs of ship for account of buyer

slide15

FOB – free on board

CUSTOMS

CUSTOMS

RISK

COST

DOCS

Loading costs of ship for account of seller

slide16

CIF – cost, insurance, freight

CUSTOMS

CUSTOMS

RISK

COST

DOCS

Loading costs of ship for account of seller Unloading costs ship for account of buyer

CFR for countries where local insurance is mandatory

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