And avoiding “where’s my stuff?!?”
Today’s post is from our SafeSourcing Archives
Freight Terms: The world’s least sexy topic, second only to App Store terms and conditions. However, if you and your buyer/seller have a completely different understanding of how and when your goods are getting from point A to point B, where ownership is taken over, or what fees are included and which aren’t for example, the results can be disastrous. Sometimes even dangerous, depending on how vital the products you are moving are to their recipients, in the case of medical supplies for example.
The major international freight terms have been standardized by the international chamber of congress, into a set of rules designated as INCOTERMS®. These terms went into effect in 2011, most of which have 3 letter designations, and are regularly updated. More of these terms and additional details can be found at www.export.gov.
Here are a few of the more commonly used international freight terms which understanding can make your life a lot easier. The last two terms are not considered INCOTERMS®, however are common practices important to understand:
DDP: Delivery Duty Paid
(Port or destination must be named) This term signifies that the price invoiced includes all freight, insurance, duties, and taxes up to the agreed upon destination point. After which point the buyer takes on all ownership and risk.
DES: Delivered Ex Ship
(Port and ship must be named) In this instance, the seller bears all costs associated to getting the product to the port identified, but their obligations are fulfilled at the point of arrival, and the buyer takes on ownership and responsibility before it leaves ship.
Importer Of Record
Identifies the entity responsible for ensuring legal compliance, completing duty entry and associated documents, and paying the taxes and import duties for those goods.
B/L: Bill of Lading:
This document, issued by the carrier, acts as the contract for carriage, as well as the buyers proof of ownership and receipt for accepting delivery. This document often includes the freight costs, item list, date of departure and arrival, departure and arrival locations, and the names of the buyer and seller.
For more information on how SafeSourcing can assist your team with this process or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative. We have an entire customer services team waiting to assist you today.