World trade publishers Incoterms Essay
This is a document which states in which country the goods were produced. Mainly it is required while making claims for duties. This document may be required b the importing country for their authorities to identify where the goods were manufactured. This is important in assessing if the goods are qualified for preferential tariffs. The country of export issues a credible certificate of origin for the purpose of indicating the origin where the goods were manufactured and is required by customs authority alongside other document.
It is important in clarifying classification of goods as stated by the customs regulations of the country which is importing the goods hence it defines how much duty should be paid. It can be used for statistical purposes as well as for the records of the importing country. Functions of a certificate of shipment This is a document which is issued by a shipping agent to confirm that the stated consignment has been shipped to its destination. It states that the goods have been shipped on a recorded date and on a specified time.
The exporter delivers the goods for shipment from where the goods are shipped to their destination once this has taken place the shipping
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In the book by Donald A. B (1990), a sea way bill evidences the terms of the contract of carriage. They stipulate the conditions and terms of carriage contract the goods covered and their condition. The right accruing to the exporter under the contract evidence by a sea waybill is transferable to the importer. It allows the importer to have a reasonable proof of identity for the goods to avoid delays. Functions of a Standard shipping note This is a document which contains all the standard consignment. It contains accurate, timely and complete data at each movement stage.
The shipper completes one document which is standard for all of the consignment. This document hears accurate and timely data which provides the interested parties in the consignment with all the adequate information in all he movement states of the goods until when the goods are loaded on the shipping vessel. It accompanies the general cargo from the exporter’s warehouse to all other cargo terminals. This document is a document from the exporter stating on information on how to handle the goods. Also it is used at the port for receiving cargo. Functions of an Export cargo shipping instruction
This is a document which is issued to a freight forwarder by an exporter stating the type of goods, terms and conditions for all the movement of the goods and also it states the cost allocation. The document bears information where the exporter indicates prompt instruction. It gives specific instruction on export services required and also the responsibility for the charges. Its main purpose is to manage the phycical movement of the goods. It has instructions to the forwarder or carrier from the exporter information on the goods being transported, their route as well as destination and any other requirements as customs information.
The document also states on who is to receive what and also states the allocation of costs. Functions of a sea way bill This is a non negotiable receipt issued by the carrier to the consignor for acknowledging receipt of goods in the stated condition. It is issued in order to state that the exporter delivered the goods for shipping in a good condition this also exempts him from liability for damages of goods that may occur afterwards. In the book by Donald A. B (1990), a sea way bill evidences the terms of the contract of carriage.
They stipulate the conditions and terms of carriage, contract, the goods covered and their condition, the port of discharge, and the importer to whom delivery is made, The right accruing to the exporter under the contract evidence by a sea waybill is transferable to the importer. It allows the importer to have a reasonable proof of identity for the goods to avoid delays. Official export and import procedures and documents required The exporter should enter into a sales contract with the importer. As stated by the book Thomas E. J (2002) export/import procedures.
Once they have entered in a sales contract in which cast e the exporter is selling a truck to the importer and they have already enterer into a sales contract, the terms of delivery is also stated as well as the terms of payment as well as the delivery date. The price, net weight and delivery date are noted in an invoice. Also noted are the modes of transport, in our case, road and also sea transport. The sales contract should be very clear with an emphasis on the trade terms as well as the payment terms. In the payment by a letter of credit the documents are forwarded by the importers bank to a corresponding bank near the exporters business.
The bank in this case takes up the responsibility of paying for the cargo on behalf of its client in which case is the importer. The exporter then gets an export licence while the buyer checks for import tariffs from customs as well as other taxes as may be deemed fir. He is obliged to pay for these import documents once the goods arrive. He should also have a certificate of origin which basically states the county of manufacture where the goods were manufactured. The exporter loads the goods for transport to the port where they are supposed to load on a shipping vessel.
During transit any damage or risks that the goods may incur are the responsibility of the seller. When the goods arrive and are loaded on the shipping vessel a bill of lading is the provided to the exporter to verify that the goods are in good order and state as they area leaded aboard the shipping vessel from where all the liability of the damage shifts to the buyer and once the goods are aboard the ship the importer is notified by the exporter. The bill of lading clears the exporter of any damages as it clarifies that when the cargo was loaded onto the vessel it was in good condition.
When the shipping vessel arrives to the importers end he produces his import document to the customs department and he claims for this goods. He pays all the required import taxes and tariffs and takes s his goods. Physical risks The transportation of the dump truck faces the real risk of loss or damage. As stated in the book import/export (2000), damages may occur during the handling of the goods especially in the loading and in our case the dump truck is being transported by road and the by sea. It therefore faces another risk of damage during transit.
Damage can be caused due to inadequate packing, whereby the dump truck is not packed adequately or it can be damaged due to bad handling during transport. Another physical risk is whereby during transport the dup truck may be diverted to the wrong location. Diversion means that the goods may end up in the wrong expected location or may be stolen deliberately. This risk can be minimized by ensuring that the goods are insured against the risks. One of the covers which is appropriate in our case is the cargo insurance since the dump truck will be transported by road and then by sea. It would also be ideal to take a marine cover.
Commercial risks One of the commercial risks is a case where there is delayed payment by the foreign bank. Payment by an irrevocable letter of credit ensures that the importers bank advices a corresponding bank near the exporters business to honor the payment once the cargo has been delivered and received by the importer. There could be delayed in the payments considering that the exporter is dealing with a foreign bank. This can be minimized by gaining credible information on the banking institution that the mode of payment is being made through. The importer may be unwilling to pay the debt.
Incase the payment does not go through as agreed we could have cases where the foreign buyer is unwilling to pay the debts. This risk can be reduced by ensuring that the importer forwards a letter of credit through his bank to an accessible bank near the exporter in order to ensure that he receives payments for the cargo as agreed. The importer may be declared bankrupt. This is where the buyer in the course of the transfer of cargo in transit he is declared bankrupt and hence may not be able to pay the exporter. It is important for the exporter to take insurance cover in policies that may protect him against such incidents.
The exporter should also follow the correct export procedure as well as the documentation. This is noted in the book Kenneth D. W (1987) The ship closest to the sailing date is known as TRISTAN. The port is ORIGIN PORT SOUTHAMPTON 31/01/2009 is the departure date and the destination is Manzanillo on 14/02/2009, voyage ED905-TST and the transit is 14 days. This is found in the website www. 2wglobal. com
References: Alan E. B (1986), Dictionary of shipping international trade, California. Witherby press Carl A. N (2000) import/export. New York. Mc Graw Hill publishers David M. S, H. O. M (1984), CIF and FOB Contracts.
U. S. University of Virginia press Donald A. B, Wendell H. M (199O), International business introduction and essentials, U. S. A. University of Virginia publishers Edward G. H, SIBYLLA P (2005), Dictionary of International trade. New York. World trade publishers Incoterms 2000(2000) official rules for the interpretation of trade terms, England. ICC press Kenneth D. W (1987) Building an import/export business, New York. Wiley publishers Thomas E. J (2002) Export/import procedures and documentation, U. S. A. American management association publishers Wallenius wilhelmsen logistics, www. 2wglobal. com