Frequently Asked Questions
What does ‘Incoterms’ mean?
Incoterms, short for ‘International Commercial Terms’, is a set of sales terms defined by the International Chamber of Commerce (ICC). They are widely used as a standard for international trade because they clarify the responsibilities between buyer and seller.
Do I need cargo insurance?
Cargo insurance provides cover for any physical loss or damage during transit. Since many carriers (e.g. planes, trains, trucks, ships, etc.) will have terms limiting their liability for damage during transit, cargo insurance is highly recommended. Please contact us for more information.
Can you arrange for shipments to be picked up from our factory/warehouse?
Yes, we can facilitate door-to-door pickup and delivery, to and from anywhere in the world.
What is an International freight forwarder?
Change Freight Forwarding + Consulting is an international freight forwarding company that arranges movement of cargo worldwide.
Our expertise allows us to process all the difficult documentation associated with transferring your goods, such as commercial invoices, shipper’s export declarations, bills of lading and any other documents required by the carrier or country of export, import or transshipment.
Who will take respond for freight charges in Incoterm 2010?
How can I know that I have to have export/import license for shipment?
A licence is not required to export goods from Australia, however, a permit is required for some goods.
The export of goods from Australia is controlled by laws and Government policies to:
- prohibit the export of certain goods either absolutely or conditionally
- adequately record Australia’s international trade
Total prohibition applies to the export of protected wildlife, some heritage items, selected weapons and other dangerous goods. Goods that are conditionally prohibited from export may not be exported unless all necessary export permits are obtained from the relevant permit issuing agency/agencies.
Whilst there is no general licence required for importing, Australian Customs will need to clear your goods on import. You’ll need to know:
- what import permits, quarantine permits and treatments apply to your specific category and type of imported goods
- and whether they are subject to mandatory safety or information standards.
If you don’t follow the correct steps and regulations, you will risk breaking the law and not receiving your imports.
Do I need to apply for Certificate of Origin?
A Certificate of Australian Origin is often required:
- To export certain goods from Australia
- For customs clearance at the port of delivery
- As stipulated in a letter of credit.
The certificates are used for customs clearance at the destination country. Certificates of Origin can also be requested by the overseas buyer or the business receiving your goods. In some instance the company receiving the goods will require a Certificate of Origin before authorising their bank to issue a letter of credit and thus payment.
In accordance with some free trade agreements, Certificates of Origin are required as part of the application for preferential tariffs. For example, Australian exports must be registered under the Thailand-Australia Free Trade Agreement (TAFTA) and accompanied by a TAFTA Certificate of Origin in order to qualify for the preferential rates.
Who is responsible to provide a Verified Gross Mass?
The regulation clearly stipulates that the shipper is responsible, being further defined as the shipper noted on the Bill of Lading (BOL). Since this can also be the freight forwarder, clear agreements as to the responsibility should be made between the parties involved. In the case of a consolidation, only the consolidator, which is not the original shipper, is in the position to provide the final weight.
How can VGM be determined?
There are two ways to determine a VGM in accordance with the new SOLAS regulation:
- Method 1: Weighing the container after it has been completely packed and sealed. The weighing can be performed by the shipper or by a third party contracted by the shipper. Any scale, weighbridge, lifting equipment or other devices used to verify the gross mass of the container must meet the applicable accuracy standards and requirements of the state in which the equipment is being used
- Method 2: Calculating All packages and cargo items may be weighed individually (including the mass of pallets, dunnage and other packing and securing material) and must be added to the tare of the container visible on the exterior of the container. The method used for weighing the container’s contents is subject to the certification and approval as determined by the competent authority of the state in which the packing and sealing of the container were completed. Any weighing equipment used to weigh the contents of the container must meet the applicable accuracy standards and requirements of the state in which the equipment is being used.
What is the different between Shipper Letter of Instruction and Forwarding Instruction for export shipment?
A Shipper’s Letter of Instruction (SLI) is an important legal document/contract created between the shipper and the freight forwarder that is organising the export and logistics for your shipment. It is a detailed document used in import/export and International trade to provide all details relating to your export shipment. A Forwarding Instruction is a similar document that the shipper completes and sends directly to the shipping line if they are not dealing with a freight forwarder. The SLI is a detailed document which gives your freight forwarder all specific instructions relating to the export of your goods. The freight forwarder will use the Shipper’s Letter of Instruction to correctly arrange the transport of your cargo.
Which Incoterm should I choose?
Sellers and buyers seldom reflect on the choice of an Incoterms rule for every transaction. Normally, the choice is determined by their business strategy. As noted, the choice of the maritime terms in most cases depends on the type of the cargo and the buyer’s intention to sell the goods in transit. Here, the choice between any of the F-terms rather than the C-terms depends on the ability of sellers and buyers to obtain the most favourable contract of carriage.
In countries where the seller has good possibilities of procuring maritime transport, or where he is induced to use a national shipping line, he may prefer to use CFR or CIF. Where the buyer for the same reasons has good possibilities to procure the transport, he is likely to insist on the choice of FAS or FOB. In the same manner, the choice between CFR and CIF depends on the seller’s and the buyer’s insurance arrangements and their possibilities to arrange insurance at the most competitive rate.
In principle, the same considerations apply with respect to the sale of manufactured goods. In this case, however, sellers, in order to remain competitive, frequently have to sell on extended terms using either DAT, DAP or DDP. But when a small exporter sells goods to a sizeable wholesaler or department store, these buyers may find it more advantageous to arrange for transport in order to ensure just-in-time deliveries at the most competitive price. In such cases, the buyer may prefer to use EXW or FCA.
CPT or CIP may be appropriate when the buyer prefers that the seller procure carriage (CPT), or carriage as well as insurance (CIP), but nevertheless agrees to bear the risk of loss of or damage to the goods when in transit. It should be added that the term CIP, if unamended is inappropriate with respect to manufactured goods, since the insurance cover is then far too restrictive and additional insurance is required. Normally, the most extended cover available (e.g., Clause A of the Institute Cargo Clauses LMA/IUA) is appropriate.
What is the different between Bill of Lading and Waybill?
Bill of Lading is frequently used for multimodal transport. Transferable Document of Title allowing buyer to sell or pledge goods while in transit by transferring the documents at any rate where made out “to order”.
Sea Waybill is known by many names: Cargo Quay Receipt, Non-negotiable Bill of Lading, Liner Waybill. Non-Transferable. Seller may alter delivery directions until discharge, unless the SWB contains a NO DISP clause preventing such change.