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Shipping
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Nov 2015
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01-12-2015, 06:25 PM
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01-12-2015, 06:25 PM
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Shipping
Shipping
Shipping is a huge issue that is fairly complicated to understand, especially when you are just starting out.
Shipping Terms
First things first. One of the arrangements you will make with your
wholesale supplier
will be
shipping
terms. You will need to get familiar with what the various
Shipping
terms (incoterms) are so that you know what you are agreeing to in that discussion.
WARNING:
Although incoterms are supposed to be internationally understood, there are some differences in definition by country, so be sure you know what your incoterm means in each individual situation.
Typical terms are:
FOB (Free on board)
A trade term requiring the seller to deliver goods on board a vessel designated by the buyer. The seller fulfills its obligations to deliver when the goods have passed over the ship's rail. However, there is also:
· "
FOB origin
" indicates the buyer pays
shipping
cost, and takes responsibility for the goods when the goods leave the seller's premises.
· "
FOB destination
" designates the seller will pay shipping costs, and remain responsible for the goods until the buyer takes possession.
CIF (Cost, Insurance and Freight)
A trade term requiring the seller to arrange for the carriage of goods by sea to a port of destination, and provide the buyer with the documents necessary to obtain the goods from the carrier.
EX WORKS
A trade term requiring the seller to deliver goods at his or her own place of business. All other transportation costs and risks are assumed by the buyer.
There are a variety of other possible incoterms as well.
GOOD ADVICE:
Wikipedia has an excellent chart and flow diagram describing the incoterms and the responsibilities of each party.
Incoterms - Wikipedia, the free encyclopedia
Shipping Agent
If you are starting to feel a little bit queasy about shipping, be smart and retain a shipping agent. A shipping agent will handle all aspects of getting your cargo from the manufacturer or wholesaler to you. They are experts in negotiating shipping terms, arranging freight forwarding, clearing customs, warehousing and final delivery.
Insiders say that you should shop around since prices vary quite a bit by shipper and the smaller agencies can do just as good a job at sometimes lower prices.
Arrival in Your Country
One of the big issues in getting your product through customs and released to you is making sure that the needed paperwork is all in order. Skip down to the section on clearing customs for more information on required documents.
You should be aware that if your merchandise is arriving LCL (less than a container load) it will go to a bonded warehouse (you will have to pay storage) until the documents clear customs and you pay all fees. Insiders say that storage fees are very high so the faster your cargo clears, the better.
Your shipping agent can handle all of these logistics, including arranging for the cargo to be unloaded and delivered to you.
NOTE:
You may hear the word “devan” in your logistics conversation. This is an esoteric shipping word meaning to unload.
You can also go to the warehouse and unload yourself. You are usually allowed about three hours to unload your cargo. If you need more time, you have to pay for it.
WARNING:
It can take 3-4 days from the time you present all of the documents and make payments for cargo to clear customs, so don’t be surprised.
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