KEY TAKEAWAYS

1.
2.
3.
4.

Incoterms 2010
Shipping Documents
Cargo Insurance
Payment Modes/ Letter Of
Credit
5. Import/ Export Procedures

1. INCOTERMS

 International Commercial
Terms
ICC- International Chamber
Of Commerce, 1936.
(Revised in later years)
Spells out responsibility of
importers & exporters
- Documentations
- Cost
- Risk
Uniform set of role,
reduces misunderstanding
and disputes, overcome
diversity of interpretations
But, it is NOT LAW

INCOTERMS 2010

1. Ex Works
EXW
2. Free Carrier
FCA
3. Carriage Paid To
CPT
4. Carriage & Insurance Paid
CIP
5. Delivered At Terminal
DAT
6. Delivered At Place
DAP
7. Delivered Duty Paid
DDP
8. Free Alongside Ship
FAS

9. Free On Board
FOB
10. Cost & Freight
CFR
11. Cost Insurance & Freight
CIF

PRICING QUOTATION
Cost OF Goods
10,000
Packing & Markup
500
Ex Works
10,500
Transport, Port Charges
500

 FAS
11,000
Loading Cost
500
FOB
11,500
Ocean Freight
1,000
CFR
12,500
Cargo Insurance
500
CIF
13,000

CASE STUDY
You are the exporter, Your
factory is
situated
100 km from the port. Products
can be moved by rail to port for
loading. Port facilities are good.
Insurance is easily arranged. Your
country is stable. Ships are
available for shipment. What
delivery terms would you suggest
for sales of your products to each
of the following countries?

2. Shipping Documents
Basic Types Of Documents: Carriers
- Bills of Lading
- Airway Bills
Seller
- Invoice
- Packing List
- Certificate Of Origin
Application Of Shipping
Guarantee

SHIPPING DOCUMENTS

 Bill Of Lading
Bill Of Exhange
Issued by shipping
company showing
that goods are
loaded
Evidence of contract
Negotiable
document
Document OF Title
Common type of B/L
- Clean
- Dirty
- Stale
- Through/Transhipment
- Combine
Transport
- Master
- House
Airway Bills

 For air consignment

Issue by carrier and
authorized agents
Evidence of contract
Not a negotiable
document
Not a document of
title
Proof of
receipt/booking
Certificate of
insurance
Handling, dispatching
and delivering the
consignment

 Invoice
Indicates the value of
cargo and relevant
details relating to
payment
Custom duties,
insurance claims,
declaration of permits
& L/C negotiation
Types OF Invoice
- Commercial
Invoice
- Proforma Invoice
- Consular Invoice
- Custom Invoice
- Non-commercial
value Invoice

 Packing List
Indicates the content
and description of the
cargo
Use for permits,
customers &insurance
claims
Essential Claims
- Description
- Measurement
- Quantity
- Weight

CARGO INSURANCE

 Reasons for insurance

- Protection against
risk
- Prevent financial
loss
- Requirement by
bank eg. L/C term
- Selling on certain
terms eg. CIF
- Carriers limited
liability
- Reduces business
anxiety

 Claims Procedure

K LH