HOW TO ARRANGE A SHIPMENT?

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.
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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