Here are five tips to simplify your shipping and ensure you get the best rates and the most effective transport solutions for every consignment.
1. Qualify data on hand: City, Zip Code, Country
Beware of the translation of a city in China to English. Many Chinese cities are named differently in Chinese language but appear the same in English, ensure all data is correct. For the non-metropolitan city, it is generally better to use the province location/zip code.
2. Trading Terms
Trading terms define costs/liability for the shipping arrangements. If you do not know the terms or misunderstand any of the terms, it could trigger disputes which may result in various cost and other liabilities.
The shipping trade rules or International Commercial Terms (Incoterms) are commercial terms published by the International Chamber of Commerce (ICC) to be applied in the International trade.
The Incoterms rules define the tasks, costs, and risks associated with transportation and delivery of goods.
If you import on the terms EXW/Ex Works, the seller should have the goods available at the factory. The buyers are responsible for costs and pick-up arrangement from the factory, make an export clearance, handle insurance and the freight. This term set the full obligation on the buyer.
If you buy on the terms Free On Board / FOB, the sellers bear costs and risks up to the goods that loaded the onboard vessel. The buyers’ cost starts from the delivery onboard vessel at the loading port.
If you buy on the terms Free Carrier / FCA (named place of delivery), the seller should deliver the goods and make an export clearance, at a named place of destination.
The goods will then be delivered to a carrier nominated by the buyer, or to another party nominated by the buyer.
This Incoterm has replaced FOB in modern usage with the critical point at which the risk passes from loading aboard the vessel to the named place of destination. The chosen place of delivery affects the obligations of loading and unloading the goods. Incoterms 1980 introduced the FCA incoterm, FOB should be used for non-containerized sea freight. However, FOB is commonly used for all modes of transport despite potential risks.
To know your trading terms is crucial for correct pricing and proper handling. The above are representative examples, more terms available, please visit the NGL website. You may also find more information at the International Chamber of Commerce (ICC) website by clicking here.
NOTE – Incoterms are being updated for 2020
3. Weight and Dimensions
Transport costs by air, LCL, rail, road and so on are normally based on product measurement and weight. Correct dimensions and weight are important for calculation.
Transit time impact the mode of transport and involved costs to match the required delivery time. Air freight is faster but at a higher cost than ocean freight. Both freight solutions offer various options, different pricing, routes and transit times. Stay alert of the required delivery time.
Be cautious of commodity type, different handling may impact the costs.
Check whether goods are classified as a Dangerous Goods Commodity, require specialized handling, or require a license for handling. Special commodities like batteries may be classified as dangerous depending on battery type. Commodity information is vital to proper handling and correct costs.
If you need insurance for your cargo, ensure you have cargo value/commodity/ HS code on hand to get the correct cover/premium.
If you have any questions regarding your shipment, or shipment bookings, please contact our experienced staff, or check out NGL Blog for more information.