massimiliano di pace1 international transportation the topics are: - international transportation...
Post on 20-Dec-2015
214 views
TRANSCRIPT
Massimiliano Di Pace 1
INTERNATIONAL TRANSPORTATION
The topics are:
- international transportation ways
- Incoterms
Exporters have to choose the carrier, and therefore the mean of transportation, and Incoterms, that is the rule governing the
delivery of goods
Massimiliano Di Pace 2
INTERNATIONAL TRANSPORTATION
The choice of the carrier depend on: - choice of type of shipment (sea, air, land)- destination (what country or continent)
You have to consider that some international carriers may take care of shipment with every means of transportation and to every country in the world, while others are specialized in specific ways of shipment and for specific
destinations
Massimiliano Di Pace 3
INTERNATIONAL TRANSPORTATION
Each way of transportation has advantages:a) Air: very fast and very expensive; it’s suitable only for small and worthy merchandiseb) Sea: very cheap but slow: it’s the only way when shipment has a very far destination, and it’s the best solution for bulk loads (i.e. commodities), or merchandise in containersc) Land: - rail: it has characteristics similar to sea transport, even if it’s faster than sea transport, and it’s useful for medium distances- truck: it’s faster but costlier than rail
Massimiliano Di Pace 4
INTERNATIONAL TRANSPORTATION
The task of shipment is ruled by a carriage contract (i.e. bill of lading), which is governed by the United
Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by
Sea, issued by Uncitral
This convention points out rules about:- transport documents- obligations and liability of the carrier- obligations of shipper- transfer of rights- jurisdiction and arbitration
Massimiliano Di Pace 5
INTERNATIONAL TRANSPORTATION
The carriage contract can include different services:
- loading
- stowage
- shipping
- unloading
Massimiliano Di Pace 6
INTERNATIONAL TRANSPORTATION
Incoterms rules are used in international sale contracts where goods pass across national borders (including inside a trade
bloc as Eu) for determining means of transportation, place of delivery, charges included in the price
Incoterms spell out rights and obligations of the parties of an international contract of sale with respect to the delivery of
goods sold
Incoterms rules indicate:- where and how the goods are delivered - consequently when risk passes from one party to another- how costs of shipment, insurance and duties are allocated between seller and buyer
Massimiliano Di Pace 7
INTERNATIONAL TRANSPORTATION
Incoterms (International Commercial Terms), drafted by Icc, help avoid legal uncertainty by spelling out
clear responsibilities between the buyer and seller in cross-border sales contracts, and have been endorsed by the UN Commission on International Trade Law
They have been foreseen the first time in 1936 and renewed in 2010 (7th edition)
The document specifying rules on Incoterms has to be purchased from Icc
Massimiliano Di Pace 8
INTERNATIONAL TRANSPORTATION
Incoterms are useful to:- protect parties’ interests (making clear which is the place of delivery, when and where there is the transfer of risk)- reduce risks (having agreed modalities of shipment)
Furthermore Incoterms are the trade-union between sale contract and contract with the
carrier, and between sale contract and insurance contract
Massimiliano Di Pace 9
INTERNATIONAL TRANSPORTATION
Incoterms are inserted in contracts as a clause
It’s up to the parties to decide whether an Incoterm has to be used as a provision of the
contract
But once it is adopted, the rules to be respected are the ones of Incoterms, as
indicated by Icc
Massimiliano Di Pace 10
INTERNATIONAL TRANSPORTATION
It goes without saying that the Incoterm adopted must be compliant with other clauses of the contract (i.e. place of delivery, means
of transportation)
Massimiliano Di Pace 11
INTERNATIONAL TRANSPORTATION
The Incoterms are 11, of which 7 are independent from the way of transportation:- EXW (Ex Works)- FCA (Free Carrier) - CPT (Carriage paid to)- CIP (Carriage and insurance paid to)- DAT (Delivered at terminal)- DAP (Delivered at place)- DDP (Delivered duty paid)
Massimiliano Di Pace 12
INTERNATIONAL TRANSPORTATION
The remaining 4 Incoterms, which are specific to transport by cargo are:
- FAS (Free alongside ship)
- FOB (Free on board)
- CFR (Cost and freight)
- CIF (Cost insurance and freight)
Massimiliano Di Pace 13
INTERNATIONAL TRANSPORTATION
EXW - Ex Works
After the abbreviation Exw you have to point out the place of the factory (or the warehouse) where goods have been produced or stored
Under this Incoterm the seller delivers the goods at his location
Therefore the buyer has to collect the goods with his own carrier, and pays all expenses for the transportation and has whole responsibility for
the shipment
The seller’s obligations are only to keep goods ready to be loaded and to prepare proper documentation
It’s useful for commodities or semi-manufactured products, for which there is price competition
Massimiliano Di Pace 14
INTERNATIONAL TRANSPORTATION
FCA – Free Carrier
After the abbreviation Fca you have to point out the place where the seller delivers the goods
Under this Incoterm the seller delivers goods to the carrier’s premises (named by the buyer). Therefore costs and risks are born by the seller till the delivery
of the merchandise to the carrier’s custody
The buyer pays freight and insurance, while it’s up to the seller the paperwork and duties for export
formalities (customs clearance)
Massimiliano Di Pace 15
INTERNATIONAL TRANSPORTATION
CPT – Carriage Paid To
After the abbreviation Cpt you have to point out the destination where the seller has to deliver the goods
The seller pays for carriage to the agreed point of destination, but risk passes to the buyer when the
goods are handed over to the carrier indicated by the buyer
This term differs from the previous for the fact that the seller has to pay a part of the shipment
Massimiliano Di Pace 16
INTERNATIONAL TRANSPORTATION
CIP – Carriage and Insurance Paid
After the abbreviation Cip you have to point out the destination where the seller has to
deliver the goods
Under this term the seller pays for carriage and insurance to the named destination point, but risk passes to the buyer when the goods
are handed over to the first carrier
Massimiliano Di Pace 17
INTERNATIONAL TRANSPORTATION
DAT - Delivered at terminal
The risk passes to the buyer when the carrier has arrived at the terminal of destination (harbour, airport, or station), and
the goods made available for unloading to the buyer
The seller pays the same freight and insurance costs as he would under a Cif arrangement, but unlike this term, the
seller has agreed to bear not just cost, but also risk up to the arrival of the cargo at the named terminal
Costs for unloading the goods and any duties are in charge of the buyer
This Incoterm is used for bulk commodities (i.e coal, grain)
Massimiliano Di Pace 18
INTERNATIONAL TRANSPORTATION
DAP - Delivered at place
You have to specify which is the place of destination
The seller delivers the goods to the buyer to the named place of destination
Under this term the goods are placed at the disposal of the buyer on the arriving means of transport,
ready for unloading at the named place of destination
Cost ands risks are in charge of the seller as in DAT term
Massimiliano Di Pace 19
INTERNATIONAL TRANSPORTATION
DDP - Delivered duty paid
You have to specify which is the place of destination
The seller pays for all transportation costs and bears all risk until the goods have been delivered and the duty paid
This is the most comprehensive term for the buyer, and on the other hand it’s the most expensive for the seller
In most of the importing countries, taxes, such as Vat and excises, should not be considered prepaid, being handled as a
"refundable" tax (Vat and excises usually are not a direct cost for the importer since they will be recovered against the sales on the
local market)
Massimiliano Di Pace 20
INTERNATIONAL TRANSPORTATION
FAS - Free alongside ship
It’s only for maritime transport
The seller must place the goods at the docks alongside the ship at the named port
The seller must clear the goods at the customs for export, and he bears risks until the merchandise is placed next to the ship,
ready to be loaded
This term is typically used for heavy-lift or bulk cargo
Massimiliano Di Pace 21
INTERNATIONAL TRANSPORTATION
FOB - Free on board
The seller must load the goods on board the ship nominated by the buyer, who is in charge of cost and
risk once the goods are loaded on board
The seller must clear the goods for export at the customs
Only for maritime transport
The buyer must instruct the seller on details of the vessel and port where the goods are to be loaded
Massimiliano Di Pace 22
INTERNATIONAL TRANSPORTATION
CFR - Cost and freight
The seller must pay the costs and the freight to bring the goods to the port of destination. This entails that the choice of
the carrier is a seller’s task
The risk is transferred to the buyer once the goods have crossed the ship's rail
It’s a term only for maritime transport
Insurance is at buyer’s charge, but he must receive the bill of lading from the seller
Massimiliano Di Pace 23
INTERNATIONAL TRANSPORTATION
CIF - Cost insurance and freight
The seller must pay the costs, including insurance and freight, and he is in charge of delivering goods to the port of
destination
The seller has to choose the carrier and the insurance company
The risk is transferred to the buyer once the goods have been loaded in the ship
It’s a term only for maritime transport