QUESTION/ANSWER FORUM: INCOTERMS 2010

Transcription

1 QUESTION/ANSWER FORUM: INCOTERMS 2010

2 THE SCARBROUGH GROUP Est International Freight / U.S. Customs Est Own Trucking Fleet Est NVOCC Operations Est NAFTA Truck Brokerage Est Freight Forwarder / Mexican Customs

3 ABOUT THE SPEAKERS Kim Taylor Marketing Director Scarbrough International, Ltd. T: Alyson Schroer Corporate Operations Manager Scarbrough International, Ltd. T: Patrick Colligan Export Operations Director Scarbrough International, Ltd. T:

4 WHAT IS THE ICC? The International Chamber of Commerce is the largest business organization in the world Created to promote global trade and investment Keeps The United Nations & The World Trade Organization in touch with views of international business

5 WHAT ARE INCOTERMS 2010 Incoterms are NOT law a GUIDANCE guide only Represent different ways international shipments are bought and sold RULES OF THUMB The party responsible for transport arrangement and payment of transportation charges is in control of the cargo The more responsibility the party has, the more control they have

6 WHAT ARE INCOTERMS There is always a named point associated with every Incoterm. This named point identifies who is responsible for insurance coverage, transport arrangements, transportation charges, and origin and destination Customs declaration responsibilities. EXAMPLES: FOB Shanghai DAP Kansas City, MO CIF Hamburg DDP Tirat Carmel, Israel

7 INCOTERMS DO NOT Determine ownership or transfer title to the goods, nor evoke payment terms. Apply to service contracts, nor define contractual rights or obligations (except for delivery) or breach of contract remedies. Protect parties from their own risk or loss, nor cover the goods before or after delivery. Specify details of the transfer, transport, and delivery of the goods. Container loading is NOT considered packaging, and must be addressed in the sales contract. Incoterms are not law and there is NO default Incoterm!

8 INCOTERMS: SELLER/BUYER RISKS, COSTS, & OBLIGATIONS TRANSFER Image credit:

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10 EXW EX WORKS Any mode of transport The seller has NO obligation to or payment obligations for the arrangement of transport Buyer has all the control

11 FCA, FAS, FOB FCA Any transport mode FAS, FOB Ocean cargo / inland moves The seller can be involved to arrange and/or pay for some of the transport within their own country

12 CFR, CIF, CPT, CIP Ocean cargo / inland moves The seller is responsible for arrangements for transport and the charges associated with that transport for most of the costs up to named place point in the country (Could be to a port, CY, CFS, or Airport) CIF/CFR are the same except for one thing: CIF insurance is covered by seller. CPT/CIP are the same except for one thing: CIP insurance is covered by seller.

13 DAT, DAP, DDP Any mode of transport The seller is responsible for the transport arrangements and their related charges to the end door destination DAT to terminal DAP to door DDP to door and duties & taxes paid by seller

14 INCOTERMS USED MOST OFTEN WHEN IMPORTING TO THE USA EXW Ex works Buyer pays for transport and takes responsibility from seller s door FOB Free on Board Buyer pays for transport and takes responsibility from named port, once on board ship

15 INCOTERMS USED MOST OFTEN WHEN EXPORTING FROM THE USA CIF Cost, Insurance, Freight Seller pays for transport and takes responsibility up until port of unloading *insurance is on the seller CFR Cost & Freight Seller pays for transport and takes responsibility up until port of unloading *insurance is undetermined

16 INCOTERMS USED MOST OFTEN SMALLER SHIPMENTS, PROJECT, ONE-OFF, SAMPLES, ETC. DAP Delivered at place DDP Delivered, duty paid

17 WHAT TO WATCH OUT FOR Alibaba or other trading houses Negotiated per unit price reflection in shipping costs Shipping costs built into price per unit = duties paid on transportation, not just product Do your homework. Don t let your buyer or seller take advantage. YOU suggest the incoterms. Who is taking care of insurance? Get this in writing. Selling DDP and not addressing VAT/GST Still have liability when exporting on EXW term Most shippers will have a profit in a D or C term

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19 ABOUT THE SPEAKERS Kim Taylor Marketing Director Scarbrough International, Ltd. T: Alyson Schroer Corporate Operations Manager Scarbrough International, Ltd. T: Patrick Colligan Export Operations Director Scarbrough International, Ltd. T: