Incoterms - Are you using them correctly ?

This post doesn't pretend to cover all the related aspects with the Incoterms, but as far as my experience shows me, most of exporters and importers aren't aware of the relevant importance of having the correct Incoterm chosen in their exchanges.

The Incoterms are one of the most important aspects in what international trade is concerned. They define exactly what the responsabilities of both the buyer and the seller are. Through the incoterms you are able to know exactly waht expenses are of your account. For instance if you are selling your product CIF Luanda you have to pay all export cost, freight charges and taxes as well as insurance the goods up to arrival at destination port, but all charges and costs after arrival of goods to the destination Port will be on buyer's account.

Therefore, and in order to avoid unexpected cost it's quite important that when presenting a selling offer to a potential customer, your proforma / offer / quotation clearly states the valid incoterm.

The most common incoterms are:

CIF  (Given place ) - Read Cost Insurance and Freight - meaning that seller has to pay for all costs and insurance up to destination

C+F / CFR (Given place ) - Read Cost and Freight - meaning that seller has to pay for all costs up to destination but, the insurance of goods is on Buyer's account

FOB (Given place ) - Read Free On Board - meaning that seller has to pay for all cost up to goods on Board on transport at a given point

Besides the above mentioned incoterms there are other less know like:

Ex- Works - Goods available at suppliers facilities
FAS           -  Free Along Side Shipp - meaning that supplier deliveres the goods at the side of the vessel
CPT           -  Freight payed up to (given place)
DAF          -  Delivered at Border (given place)
DES          -  Delivered at the Vessel (Destination Port mentioned)

There are several more Incoterms, but all of them were conceived to clearly define where the goods have to be delivered and who's responsible for paying the charges.

For more detailled infomation please call Paulo Nunes Porto - e-mail paulonunes.porto@gmail.com or at the mobile phone: (+351) 96 9446897