Incoterms should be looked at prior to purchasing the goods overseas or exported overseas. While people concentrate on the cheapest service, your terms of sale determine what the supplier will bare the cost of regarding international shipping. These international shipping tips will help you to have a thorough understanding of this so you understand the costs involved. You can check out more on what incoterms apply hitting the search button, but most suppliers work off the FOB quote which is fair terms and cheapest movement option.
Important Shipping Tips!
Some key incoterms used are:
Exworks – this is when a supplier has the least amount of responsibility and all responsibility is up to the importer to move the goods by cheapest shipping. This includes all inland costs, export regulations to be adhered to and ensuring that all customs regulations are met prior to export. Importing from China and the USA can become expensive if you use this incoterm.
FOB – Free on board- This will cover your cargo being loaded onto the vessel. Your supplier has responsibility up to this point and all charges are paid for by them.
CFR – Cost and freight. A supplier has bared responsibility up to the point of the vessel discharging at a port of destination. This means supplier has paid for all inland costs including meeting all customs requirements for the origin country. A supplier has paid freight also up to the port of discharge.
CIF– CIF is very similar to the above, but with added marine insurance to your cargo. In case of any natural disasters, damaging of the goods, Causes of War (when cargo ships move in Seas where there are countries disputing these seas e.t.c) Marine insurance is a good bet. This insurance can also be obtained for airfreight goods in Australia.
DDU – Delivery Duty paid means that supplier will arrange the goods and pay for the freight all the way to your door in Australia, except for any government duties or tax’s that the importer still has to pay for to customs upon entry into the country. This is an expensive route.
DDP – Supplier bares all costs and responsibilities including paying all tax’s to customs and quarantine and delivery in the destination country, for example: from China to Australia.
When you get all the incoterms correct. You will find out that this means your shipments can be coordinated with ease. In additional to that, it could also be a possibility to get cheaper rates depending on what your supplier works with in regards to that incoterm. If you have any hesitations or queries on what the incoterm would mean in terms of shipping. Freelance shipping is here to help. You can always contact us to help you understand the terms better which will mean you can negotiate with the supplier on a stronger basis. Every little bit of information and help can become an asset in a long standing relationship and business venture. When in doubt give us a call.