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Ways to Ship Products

Ways to Ship Products

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Ways to Ship Products

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  1. Ways to Ship Products Ocean Freight: Rates based on cubic measure, destination, traffic going to that area, and the frequency of trips made to that area. Air Freight: Rates depends on destination, traffic, and frequency of trip. Offer better rates for dense, heavy cargo. Freight Forwarder: May offer cheaper rates by combining shipments of several exporters headed for the same destination. Cost of transportation is usually predetermined in the terms of sale.

  2. Freight Forwarder • Act as an agent for the exporters in moving cargo to the overseas destination. • Assists and advise exporters • Knowledgeable in import, export rules and regulations and require documentation of foreign countries. • When order is ready to ship, they should be able to review all export documentations. • Once cargo arrives at the port of export, they make arrangement with custom brokers, and take care of letter of credit.

  3. The National Customs Brokers and Forwarders Association of America National trade association of U.S Assist in locating a local freight forwarder.

  4. What Are INCOTERMS • International Commercial Terms (INCOTERMS) are acronyms used in shipping documentation that provide clear international understanding for the party involved regarding terms of sale, point of origin, destination, and the responsibility of the party in a certain condition. • Specify who is responsible for the cargo and at what point, and define buyer and seller costs.

  5. 13 INCOTERMS • Group E- Departure Terms- Buyer possession at seller’s Premises EXW:Ex Works: the seller makes the goods available at his named premises.

  6. 13 INCOTERMS • Group F- Carriage unpaid-Main Carriage Freight prepaid-Seller selects Carrier FCA:Free Carrier: Seller hands over the goods, cleared for export, into the custody of the first carrier (given by the buyer) at the named placed. (term suitable for all modes of transportation) FAS:Free Alongside Ship: Seller must place the goods alongside the ship at the named port. The buyer must clear the goods for export. (Maritime only) FOB:Free on Board: Seller must load the goods on board of origin the ship nominated by the buyer, the cost and risk being divided at ship’s rail. The seller must clear the goods for export. (Maritime transportation only)

  7. 13 INCOTERMS • Group C- Carriage Paid- Main Carriage Freight Prepaid- Seller Selects Carrier. CFR:Cost and Freight: Seller must pay the cost and freight to bring the goods to the port of destination. However, risks is transferred to the buyer once the goods have crossed the ship’s rail. (Maritime only) CIF:Cost, Insurance and Freight: Same as CFR except that the seller must procure and pay for the insurance for the buyer. (Maritime only) CPT:Carriage Paid To: The seller pays for carriage to the named point of destination, buyer will be responsible for cargo insurance, import customs clearance, duties and taxes, and other costs and risks. (Air) CIP:Carriage and Insurance Paid: Seller pays for carriage and insurance to the named destination point, but risk passes when the goods are handed over to the first carrier. (Air)

  8. 13 INCOTERMS • Group D- Arrival Terms- Seller Delivers to Destination Point DAF: Delivered At Frontier: Delivery of goods to the port of destination at the seller’s expense (Suitable for rail/road Transportation) DES:Delivered Ex Ship: Seller will pay for the delivery of the goods to the port of destination, but the buyer must be responsible for the unloading fee, import custom clearance, custom duties and taxes, insurance and other costs and risks. DEQ:Delivered Ex Quay: The delivery of goods to the port at destination at the seller’s expense. Seller is responsible for import clearance. Cargo insurance and other costs and risks is buyer’s expense.

  9. 13 INCOTERMS DDU:Delivered Duty Unpaid: Seller must deliver the goods all the way to a named place in the country of destination. However, the buyer must clear the goods for import and pay the necessary duties. DDP:Delivered Duty Paid: Maximum obligation for the seller: Seller pays for all costs, charges, and official formalities up to destination.

  10. Seller-Export-Manufacture, Consignor (Seller) FOB Custom FAS EXW Export FCA Port of Shipment DAF CPT CIP DES CFR(INS) CIF DEQ Import Port of Destination Custom DDU DDP Buyer-Importer, Consignee

  11. International Insurance • Insurance is necessary in international trade because there are risks in any export transaction • Insurance is use as a risk management tool.

  12. Insurance is Available against…. • Shipping risk • Purchased from warehouse to warehouse, and policies are purchased on a shipment-by-shipment basis. • Available through freight forwarder, and insurance agent. • Air cargo rates cost less than ocean cargo because of the length of time, distance and the level of risks. • Commercial risk • Covers losses due to nonpayment by the buyer. • Political risk • War, currency, seizing of property without permission.

  13. Some things to keep in mind about insurance • Both buyers and sellers should buy insurance. • Don’t be cheap with insurance coverage. • Insurance can be obtain through the Export-Import Bank or the Foreign Credit Insurance Association (FCIA)

  14. Reliable Source to Ensure Shipment Comply with Export and Import Regulation • The editor recommended a highly reputable export service company Unz & Co. Website:

  15. Export Documentation • Particular documentations that are require by the U.S government and the government of the importing countries.

  16. Export Documentations • Bill of Lading: Contracts between the owner of the goods and the carrier. • Documents shows the owner of the goods that the transportation carrier have received the goods and that it is placed on board in a particular vessel to go to a specific destination.

  17. 2 Types of Bill of Lading 1)Non-negotiable: Transportation carrier must only deliver the goods to the consignee (Buyer) named in the bill of lading • Acts as a receipt for the goods and the agreement to transport goods to a specific destination

  18. 2)Negotiable: Shipper’s order bill of lading • Can be bought, sold, or traded while goods are in transit. • Used for letter-of-credit transaction (collection and payment through banking channel) • The buyers usually needs a copy as proof of ownership to take possession of the goods.

  19. Export Documentations • Certificate of Origin: Certain nations require for certain commodities for tariff purposes. • Shows a authenticity of the origin of the export item in order to monitor import tariffs and quotas. Must be certified by the chamber of commerce. • Can be obtain from local U.S Department of Commerce office, Freight forwarder, or a local chamber of commerce. • North American Free Trade Agreement (NAFTA)

  20. Export Documentations • Commercial Invoice: Is a bill for the goods from the seller to the buyer. • A commercial invoice should include a description of the goods, address of the shipper and seller, and the delivery and payment terms. • The buyers needs the invoice to prove ownership and arrange payment. • Some government agencies might use the invoice for customs duties.

  21. Export Documentations • Consular Invoice: Required by certain nations and used to identify goods. • Description of the goods, weights, value, • Must be error-free, and accurate • Purchased from the consulate of the importing country.

  22. Export Documentations • Destination Control Statement: This statement appears on the commercial invoice, bill of lading, and SED to let the carriers and all parties knows that the good may be exported to only a certain destination.

  23. Export Documentations • Export Packaging List: It is a list that itemizes the material in each individual package, and shows the individual net, legal, tare and gross weights. • List is attached to the outside of the package in a clearly marked waterproof envelope. • The list determines the total shipment weight and correct cargo. • Customs officials may use it to check the cargo at inspection point.

  24. Export Documentations • Inspection Certificate: Some purchasers and countries may require a certificate of inspection. • Inspection performed by an independent testing organization.

  25. Export Documentations • Insurance Certificate: It is use to assure the buyer that the seller has insurance to cover loss or damage of the cargo.

  26. Export Documentations • Shipper’s Export Declaration (SED): Authorizes the export of freight. • Must be prepared and submit to customs agent for shipment by mail that are value more than $500 • By all other shipment that are value at more than $2,500. • Must submit when export requires an export license. • SED is used by U.S government for developing export statistic and export control.

  27. How to obtain Export Processing Forms • Government Printing Office store, Business supply stores and mail order services or a freight forwarder. • Call the U.S. Department of commerce Trade Information Center or contact the National Council on International Trade Documentation (low-cost publications on specific documentation)

  28. Special Certificate for Exporting Agricultural Goods • Licensing/inspection • Some countries require U.S products be certified to certain standards. • An inspection of the goods will meet requirement, Agricultural Market Service will certify products for a fee. • Shipping • Livestock and fresh produce requires special attention • USDA information Desk provides informative handbooks on shipping

  29. ATA Carnet • International customs document issued by a member country in the ATA Carnet System. • Permits the holder to carry or send merchandise for one year to other member countries for display or demonstration. • No duties, taxes or fees for import, or normal customs documents. • Valid in 50 countries throughout Europe, North America, Asia, and Africa.

  30. List of member countries: http://www/ • Application can be obtain through the U.S council for international business offices. • The processing fee is determined by the value of the shipment.

  31. Thank You