INCORTEMS 2013-ADECO CLEARING AND FORWARDING IN DURBAN SOUTH AFRICA

CARGO CLEARING AT THE PORT OF DURBAN-UNDERSTANDING TRADING TERMS :

This article serves to inform you, our client about some of the most used terms in International Trade, normally referred to as INCORTERMS in the Industry of Trade, Customs Clearance and Forwarding.

Simply put, Incoterms refers to a set of three letter words or terms mostly used in International contracts of sale of goods. It is of paramount importance that you become aware of these terms of trade prior to the shipment of your Cargo. Understand them depending with your position in International Trade, you could be a Buyer or Seller or Clearing and Forwarding Company.

• E.X.W - Ex Works - In this case or when this term is used, that means the Seller's only responsibility is to make the goods available at the Seller's premises. The buyer bears full costs and risks of moving the goods from there to their intended destination.
• F.C.A - Free Carrier - If you come across this term, that means the Seller delivers the goods, Cleared for export to the Carrier selected by Buyer. The Seller loads the goods if the carrier pickup is at the Seller's premises. From that point the Buyer bears the costs and risks of moving the goods to their intended destination.
• C.P.T- Carriage Paid To - This is another commonly used Incoterm. In this case, it is the Seller who pays for the movement of the goods to their intended destination. However, the Buyer bears the risks of damage or loss as from the moment the goods are transferred to the first carrier.
• C.I.P- Carriage and Insurance Paid To - If this term is used or quoted on an item, before you make the decision to buy, you should be aware of the fact that the Seller also pays for moving the goods to destination and the seller also purchases Insurance for the Cargo. However the Buyer bears the risks of loss or damage from the time the goods are transferred to the first Carrier.
• D.A.T- Delivered At Terminal - The Seller delivers the goods at a named or agreed terminal. In this case terminal may mean various places, for example a warehouse, container yard or road, rail or air cargo terminal. In this case, the seller bears all risks involved in bringing the goods to and unloading them at the terminal, at the named port or place destination.
• D.A.P- Delivered At Place - The Seller delivers the goods at a named place. The Seller bears all risks involved in bringing the goods to the named place.
• D.D.P- Delivered Duty Paid - After the deal has been sealed, the Seller has to deliver the goods, Clears them for export/Import to the Buyer at a named place or agreed destination. The Seller bears all risks and all costs of moving the goods to destination, including the payment of Customs duties and taxes.

THE FOLLOWING ARE MARITIME ONLY INCOTERMS :

The terms below are mostly found and used in Ocean freight by Importers/Exporters or Buyers/Sellers, International Customs Clearing and Forwarding Companies and International Trade Organizations.

• F.A.S - Free Alongside Ship - The Seller delivers the to the origin port, from which point the Buyer should bear all costs and risks of loss or damage.
• F.O.B - Free On Board - The Seller delivers the goods on board the ship and Clears the goods for export. From that point, the Buyer bears all costs and risks of loss or damage.
• C.F.R- Cost and Freight- The Seller clears the goods for export and pays the costs of moving the goods to destination. The buyer takes responsibility of all risks of loss or damage.
• C.I.F - Cost Insurance Freight- When this Incoterm is used, the Seller Clears the goods for Export, and pays the costs of moving the goods to the port of destination. The Buyer bears all risks of loss or damage. However, the Seller purchases Cargo Insurance.

These are the Incoterms used in International Trade and International Cargo Clearing and Forwarding. Understand them before the shipment of your Cargo so as to avoid unnecessary and often nasty surprises.

Thank You.