WHEN IMPORTING TO YOUR COUNTRY.
First find out what shipping term is the shipment. Before you decide what to do next. Below is the list of shipping terms for your easy reference.
In here, I’ll provide advice as a BUYER using the commonly used shipping terms. We will look at shipment from USA(Seller) to Singapore(Buyer).
Commonly USED:
EXW (Ex Works)
FOB (Free On Board)
CFR (Cost and Freight)
CIF (Cost, Insurance and Freight)
DDU (Delivered Duty Unpaid)
DDP (Delivered Duty paid)
Not as Common:
FCA (Free Carrier)
FAS (Free Alongside Ship)
CPT (Carriage Paid To)
CIP (Carriage and Insurance Paid To)
DAF (Delivered At Frontier)
DES (Delivered Ex Ship)
DEQ (Delivered Ex Quay, [Duty Paid])
For the details, please click here:
Shipping Terms or Incoterms
A) When importing under EXW (Ex Works)
In this case, you will need to arrange with your forwarder advising them the place of collection. (Seller’s warehouse) You need to pay for all cost involved to bring this shipment to your warehouse/destination.
~~~ =^.^= ~~~
What you need to pay would be:
i) Trucking pickup cost to USA Port of export
ii) Export duties & Taxes (Example: export permit, export license
iii) Arrange your Carrier & bear the freight charges via air/sea
iv) Insurance coverage(if required)
v) Import duties & taxes. (Example: import permit, GST)
vi) Delivery charges from the port to warehouse.
B) When importing under FOB (Free On Board)
With this term, you can liaise with the seller to delivery to your appointed port of export. Example: FOB HOUSTON. Talk to your forwarder/freight carrier for the best location beforehand.
What you need to pay would be:
i) Export duties & Taxes (Example: export permit, export license
ii) Arrange your Carrier & bear the freight charges via air/sea
iii) Insurance coverage(if required)
iv) Import duties & taxes. (Example: import permit, GST)
v) Delivery charges from the port to warehouse.
C) When importing under CFR (Cost and Freight)
This term makes your life much easier. You will need to have the seller send you the shipping documents & the Bill of Lading(via Sea) or Air Way Bill (Via Air). With the documents, you will be able to purchase your insurance, track the shipment and arrange for clearance when it arrives. Usually, the Seller’s freight forwarder will provide you a notice of arrival(via fax), so that you can engage them to clear your shipment or arrange your own forwarder.
What you need to pay would be:
i) Insurance coverage(if required)
ii) Import duties & taxes. (Example: import permit, GST)
iii) Delivery charges from the port to warehouse.
D) When importing under CIF (Cost, Insurance and Freight)
You will act the same as CFR, except that the insurance is covered by Seller.
E) When importing under DDU (Delivered Duty Unpaid)
With this, you can get lazy. The seller arranged everything, the shipment is delivered to your doorstep. (warehouse/destination)All you need to do is pay the freight forwarder the import taxes. In Singapore, it would be the GST.
F) When importing under DDP (Delivered Duty paid)
Do I need to say more, the term is already self-explanatory. Basically, they don’t need you anymore. This is the same as DDU, except you don’t even need to pay for the import taxes.
by Amanda Pang Si Min
Tuesday, June 30, 2009
Shipping Terms or Incoterms
Below is the simplified explaination of the shipping terms used.
EXW (Ex Works)
Seller arrange for shipment available for Buyer’s collection.
The buyer bears all costs and risks involved in taking the goods from the seller's premises to the desired destination.
~~
FOB (Free On Board)
Seller deliver the goods at named port of shipment and clear the goods for export
The buyer has to bear all costs and risks of loss of or damage to the goods from that moment.
~~
CFR (Cost and Freight)
Seller pays the costs and freight necessary to bring the goods to the named port of destination and clear the goods for export. But the damage of good is transferred to buyer upon onboard of vessel.
The buyer has to arrange for risks of loss of or damage to the goods, import & delivery to destination
~~
CIF (Cost, Insurance and Freight)
Same as under CFR terms, seller has to procure marine insurance against the buyer's risk of loss or damage to the goods during the carriage.
The buyer has to arrange import & delivery to destination
~~
DDU (Delivered Duty Unpaid)
Seller has to bear all cost (excluding duties, taxes and other official charges payable upon importation) as well as the costs and risks of carrying out customs formalities.
The buyer has to pay any additional costs and to bear any risks caused by failure to clear the goods for in time.
~~
FCA (Free Carrier)
Seller arrange for shipment available for Buyer’s collection.
Cleared for export to named place or point by buyer.
Buyer has to bear all costs and risks of loss of or damage to the goods from that moment.
~~
FAS (Free Alongside Ship)
Seller deliver the goods & placed alongside the vessel on the quay or in lighters at the named port of shipment.
Buyer has to bear all costs and risks of loss of or damage to the goods from that moment.
~~
CPT (Carriage Paid To)
Seller pays the freight for the carriage of the goods to the named destination and to clear the goods for export. Risk of loss or damage to the goods is transfer to buyer after custody of 1st carrier/forwarder.
The buyer has to arrange for risks of loss of or damage to the goods, import & delivery to destination
~~
CIP (Carriage and Insurance Paid To)
Same as under CPT terms, but with the addition that the seller has to procure cargo insurance against the buyer's risk of loss of or damage to the goods during the carriage.
The buyer should note that under the CIP term the seller is required to obtain insurance only on minimum coverage. The buyer has to arrange import & delivery at destination
~~
DAF (Delivered At Frontier)
Seller deliver the goods, cleared for export, at the named point and placed at the frontier, but before the customs Terms of Sale border of the adjoining country.
The buyer has to bear all costs and risks of loss of or damage to the goods from that moment.
~~
DDP (Delivered Duty paid)
Seller deliver the goods at the named place in the country of importation. The seller has to bear the risks and costs, including duties, taxes and other charges of delivering the goods thereto, clear for importation.
Buyer do not need to bear any cost.
(this term is the opposite of EX-WORK TERM)
~~
DES (Delivered Ex Ship)
Seller to deliver the goods on board the ship, all the costs and risks involved in bringing the goods to the named port destination.
The buyer has to arrange import, duties & taxes & delivery at destination
~~
DEQ (Delivered Ex Quay, [Duty Paid])
The seller has to bear all risks and costs including duties, taxes and other charges of the goods to the buyer on the quay (wharf) at the named port of destination, cleared for importation.
The buyer has to bear all costs and risks of loss of or damage to the goods from that moment.
EXW (Ex Works)
Seller arrange for shipment available for Buyer’s collection.
The buyer bears all costs and risks involved in taking the goods from the seller's premises to the desired destination.
~~
FOB (Free On Board)
Seller deliver the goods at named port of shipment and clear the goods for export
The buyer has to bear all costs and risks of loss of or damage to the goods from that moment.
~~
CFR (Cost and Freight)
Seller pays the costs and freight necessary to bring the goods to the named port of destination and clear the goods for export. But the damage of good is transferred to buyer upon onboard of vessel.
The buyer has to arrange for risks of loss of or damage to the goods, import & delivery to destination
~~
CIF (Cost, Insurance and Freight)
Same as under CFR terms, seller has to procure marine insurance against the buyer's risk of loss or damage to the goods during the carriage.
The buyer has to arrange import & delivery to destination
~~
DDU (Delivered Duty Unpaid)
Seller has to bear all cost (excluding duties, taxes and other official charges payable upon importation) as well as the costs and risks of carrying out customs formalities.
The buyer has to pay any additional costs and to bear any risks caused by failure to clear the goods for in time.
~~
FCA (Free Carrier)
Seller arrange for shipment available for Buyer’s collection.
Cleared for export to named place or point by buyer.
Buyer has to bear all costs and risks of loss of or damage to the goods from that moment.
~~
FAS (Free Alongside Ship)
Seller deliver the goods & placed alongside the vessel on the quay or in lighters at the named port of shipment.
Buyer has to bear all costs and risks of loss of or damage to the goods from that moment.
~~
CPT (Carriage Paid To)
Seller pays the freight for the carriage of the goods to the named destination and to clear the goods for export. Risk of loss or damage to the goods is transfer to buyer after custody of 1st carrier/forwarder.
The buyer has to arrange for risks of loss of or damage to the goods, import & delivery to destination
~~
CIP (Carriage and Insurance Paid To)
Same as under CPT terms, but with the addition that the seller has to procure cargo insurance against the buyer's risk of loss of or damage to the goods during the carriage.
The buyer should note that under the CIP term the seller is required to obtain insurance only on minimum coverage. The buyer has to arrange import & delivery at destination
~~
DAF (Delivered At Frontier)
Seller deliver the goods, cleared for export, at the named point and placed at the frontier, but before the customs Terms of Sale border of the adjoining country.
The buyer has to bear all costs and risks of loss of or damage to the goods from that moment.
~~
DDP (Delivered Duty paid)
Seller deliver the goods at the named place in the country of importation. The seller has to bear the risks and costs, including duties, taxes and other charges of delivering the goods thereto, clear for importation.
Buyer do not need to bear any cost.
(this term is the opposite of EX-WORK TERM)
~~
DES (Delivered Ex Ship)
Seller to deliver the goods on board the ship, all the costs and risks involved in bringing the goods to the named port destination.
The buyer has to arrange import, duties & taxes & delivery at destination
~~
DEQ (Delivered Ex Quay, [Duty Paid])
The seller has to bear all risks and costs including duties, taxes and other charges of the goods to the buyer on the quay (wharf) at the named port of destination, cleared for importation.
The buyer has to bear all costs and risks of loss of or damage to the goods from that moment.
Sunday, June 28, 2009
What this blog is about?
This blog is created to help those who is fresh from school and for those who is working in an administrative supporting roles.
No matter you are in which department of a company, there are times when you need to do some admin duties but did not know how to start. Example: sending that urgent letter using courier services or speed post, receiving your first and only import shipment via sea fright and even trying to get a freight quote for that Customer enquiry from Libya?
I've been supporting & helping people like me working in administrative roles. Recent years, I found that more fresh from school have little or no idea of the simplest admin duties like mailing a letter. I blame the technology-internet emailing for that. In a business environment, an official letter/original is still required to do a proper process in companies. While others may have gone through the internet system uploading for tender & release of their orders. Many fresh from school have the slightest idea of the correct business flow too. Mixing up Purchase order as quotation, delivery orders and collection notes, etc.
So here's the some business letters samples, shipping reference and flow which I will provide which few compiled over the years....hope they helps...
Amanda Pang Si Min
June 2009
No matter you are in which department of a company, there are times when you need to do some admin duties but did not know how to start. Example: sending that urgent letter using courier services or speed post, receiving your first and only import shipment via sea fright and even trying to get a freight quote for that Customer enquiry from Libya?
I've been supporting & helping people like me working in administrative roles. Recent years, I found that more fresh from school have little or no idea of the simplest admin duties like mailing a letter. I blame the technology-internet emailing for that. In a business environment, an official letter/original is still required to do a proper process in companies. While others may have gone through the internet system uploading for tender & release of their orders. Many fresh from school have the slightest idea of the correct business flow too. Mixing up Purchase order as quotation, delivery orders and collection notes, etc.
So here's the some business letters samples, shipping reference and flow which I will provide which few compiled over the years....hope they helps...
Amanda Pang Si Min
June 2009
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