Author: smartsites

Incoterms are comprised of guidelines pertaining to what sellers and buyers must do to fulfill their part of the transaction. Established by the International Chamber of Commerce (ICC), incoterms are part and parcel of international ocean freight services. Since incoterms can be used to resolve disagreements in the event of a dispute, the chosen incoterm must be decided and agreed upon by both buyer and seller. In order to prevent misuse of these rules and guidelines, this post aims to highlight several common incoterms mistakes that can be avoided. Read on to find out more!

Incoterm Didn’t Meet Bank’s Security Requirements for Payment

This mistake may occur when international payment methods such as a Letter of Credit is used. LOCs state that payments can only be made/received after the necessary documents are submitted to the bank (to inform officials that the conditions of the transaction have been met). Due to its safe and secure nature, there seems to be a lack of complete trust between the seller and buyer.

It is important to note that F-incoterms should not be used to address these issues because the buyer will be held responsible for transporting the merchandise. This means that this party has the power to intervene by issuing a Bill of Lading, which prevents the seller from getting paid.

If you are the seller, and the payments are to be made via a Letter of Credit, consider using C-incoterms instead. The two most important documents required to effect payment: the commercial invoice and the Bill of Lading, will be in your control.

Not Considering how EXW Incoterm (EXW) may Affect Export Procedures

Under an EXW incoterm, the seller has the least responsibilities, which often ends after the merchandise has been packaged. From then on, the buyer takes over by exporting the goods from the origin country and maintain communications with export authorities. This process, however, may not be straightforward for the buyers, especially if they are unfamiliar with the export process of the country of origin.

Another potential problem is that shippers may not always permit non-authorized personnel facilitate loading on their grounds due to liability reasons. As a result, the shipper may have to take charge of the loading, which is contrary to EXW’s stipulations. If the cargo gets damaged in the process, determining the responsible party may prove to be challenging. At the end of the day, having the buyer take control of this may then be impractical and unrealistic for certain transactions.

Rushing to Commit to DAP Incoterm and DDP Incoterm

Under DAP Incoterm (Delivered at Place) and DDP Incoterm (Delivery Duty Paid), the seller is often responsible for paying arrival expenditures at destination, including local taxes and duties like VAT, GST, among others. In most countries, it is simply more efficient to have the consignee handle the customs clearance process. They are, however, not legally obliged to do so and that responsibility may fall back onto the seller. If you are the consignee, it is best to err on the side of caution in case of clearance issues caused by shipper’s error. This means that it could result in a delay in cargo delivery as well.

If you are looking for a team that can simplify ocean shipping for your company, you have come to the right place. Don’t hesitate to schedule a consultation with STC Logistics to learn more!

GlobalShop is the world’s largest retail design and merchandising trade show, and GlobalShop 2019 continues the tradition while innovating to bring together more than 20,000 industry attendees to explore leading trends in visual merchanting, store design and construction, and retail design products.

Held at McCormick Place Convention Center in Chicago, this year’s GlobalShop @ RetailX delivers a colocation of the nation’s top three retail events through a collaborative partnership with Retail TouchPoints. If you are looking for the most comprehensive experience in the retail industry, this is it!

As a leading supply chain provider in helping retail businesses manage retail space opening or remodeling, STC Logistics will be there at GlobalShop 2019 to showcase how our logistics and installation teams can provide a Total Source Solution for retail rollout or installation projects.

Looking For Your Logistics To Go The Extra Mile?

Then you have to experience the white glove services offered by STC Logistics. Our logistics professionals make sure that you enjoy the very best customer service before, during, and after delivery. Whether it’s removing debris offsite, securing your high-price point items with blanket wrap and straps or cross dock and storage services, we are fully confident that we can fulfill even the most demanding and unique white glove logistic needs.

STC Logistics is pleased to announce the launch of our redesigned website that aims to better inform our customers about our shipping and logistic capabilities as well as provide easy access for them to track packages, schedule pick-ups, and more. Our website is more user-friendly than ever, easier to navigate, and features fast loading speed so that we can establish our brand in a stellar way online.

At STC Logistics, we are fully capable of managing a wide range of transportation needs from domestic transportation to international transportation to truckload brokerage and more. On our website, we have invested in an exclusive web-based communication system where our customers can enjoy pin-point tracking capabilities. When you work with us, you are guaranteed to experience a Total Source Solution for all of your logistics needs.