Flexible Trade Solutions

As an experienced and one of the most prestigious business company, we have solutions to all problems of our partners. We offer different types of trade solutions for each specific problem. The most crucial part of our solution is that, it is totally flexible. Being flexible means to keep up with changing or new requirements. Iran2africa monitors all process and any minor change is going to be observed by our specialists regularly. Our team always have best solutions to any trade problems. One of the important parts of the trade, which should be considered is incoterms. Let’s take a brief look at them.

Incoterms 2021

As a trader, you have to know about incoterms. Incoterms define who is responsible for what in the supply chain during shipping goods. Incoterms(International Commercial Terms) are the standard contract terms used in sales contracts with importing/exporting to define responsibility and liability for shipment of the goods. Let’s explain it in a simple way: how far along the process will the supplier ensure that the goods are moved, and at what point does the buyer take over the shipment process.

Different types of incoterms

The most familiar types of incoterms are FOB (Free On Board), EXW (Ex Works) and FCA (Free Carrier).

These terms are legal and written from a legal perspective, so can be confusing or easily misunderstood. Be careful, making the wrong choice will turn your shipment into a costly nightmare. Some freight forwarders prefer only using a favored set of incoterms because they “seem to work.”

Therefore don’t be surprised if some forwarders push back on your selection of incoterm, despite it being the most appropriate incoterm for your shipment. Here are some of them:

EXW: The buyer arranges the full shipment, from the supplier’s warehouse to the cargo’s ultimate destination.

FCA: the seller arranges most or all of the export country stages (e.g. customs, trucking within the export country). The buyer arranges all other stages to the cargo’s ultimate destination.

FAS: the seller arranges all export country stages. The buyer arranges all other stages to the cargo’s ultimate destination.

FOB: Among 11 different incoterms that are currently used in international freight, Free on Board (FOB) is the one that you will encounter most frequently. FOB shipping means that the supplier retains ownership and responsibility for the goods until they are loaded ‘on board’ a shipping vessel. Once on the ship, all liability transfers to the buyer. Note that, the FOB incoterm is only applied to shipments being sent by sea or waterway.

CIP: means that the seller is responsible for delivery, delivery costs, and insurance costs of the goods until they are transferred to the first carrier tasked with transporting the goods. Once this delivery takes place, the buyer takes on all responsibility.

DPU: the seller arranges all export country charges and international transit. The buyer arranges the rest.

DAP: the seller arranges the entire shipment, except import customs.

DDP: the seller arranges the entire shipment, including import customs.

Do you know, which parts are not included in incoterms?

Incoterms do not cover property rights, possible force majeure situations and breach of contract. It is advised to include these within the contract of sale. Similarly, all incoterms except the C terms do not assign responsibility for arranging insurance. Cargo insurance is, therefore, a separate cost for buyers.

Different incoterms, different shipping costs

Always remember, different incoterms will impact your freight cost. For instance, when shipping EXW, you’ll be responsible for the added cost of getting your goods from your supplier to the seaport or airport. So, pay attention to the type of incoterms that you choose all the time.

 Important notes about incoterms

Letters of credit are used when there is limited trust between the seller and the buyer. That rules out EXW, because the supplier will be paid before pickup. F terms require trust because if the buyer cancels the international transit, the supplier won’t have a bill of lading to present to the bank. D terms require trust because the seller is bearing all of the transport costs. That leaves the four C terms as the best options to use with a letter of credit.

Finally, remember Iran2africa provides the best solution to each specific problem all the time. Our team ensures you that everything will be all right in the blink of an eye. Let us be your guide and at the end you will arrive your destination easily and without any difficulty. Be part of us and benefit from a win-win game.