Overseas shipping of goods

Sea freight is a cost-efficient way of shipping goods across continents and there is multiple carriers out there ready to take on your goods.

There are two options when booking overseas shipping. You might have goods that needs to be shipped as less than container loads (LCL) or if you can fill a container it´s called ‘full container loads (FCL).

LCL
It´s suitable when the volume of your goods is less than a container load.  Your goods are loaded with other goods and you only pay for the volume of goods that you ship.

FCL
Full container loads consist of shipments of full 20- or 40-foot containers. All goods in the container are listed on a single Bill of Lading The conditions for the transport of goods by sea are laid down in the transport agreement, called a Bill of Lading (B/L), and as such are owned by a single party. It does not matter how full the container is. Payment is made on the basis of a full container. 

What is Incoterms?
Whether you are importing or exporting or both it is very important to master the Incoterms and their interaction with the sales contract and the underlying contracts (shipping, insurance, customs), to build an efficient and successful supply chain.
Incoterms is the international rules defining the respective responsibility of seller and buyer concerning to the supply of goods. They specify the division of risks and costs between exporter and importer.

They were created by the International Chamber of Commerce (ICC) in Paris in 1936 and the latest version, the Incoterms 2010, came into effect on January 1st, 2011. Since they have been revised on a regular basis, they have kept up with changes in international trade. The ICC have begun consultations on a new revision of Incoterms, to be called Incoterms 2020; the new Incoterms are expected to appear in the last quarter of 2019 to enter into force at the beginning of 2020.

Example on conditions covered in Incoterms

  • Who will pay transportation, insurance and other costs.
  • To which location the transport should take place.
  • If loading and unloading is included.
  • When the risk passes from the seller to the buyer.
  • Information about deadlines, limitation periods and limits.

The most common Incoterms 

  • Ex Works (EXW)
    A door-to-door shipment. When shipping on EXW-terms The seller makes the goods available at their premises, or at another named place. This term places the maximum obligation on the buyer and minimum obligations on the seller
  • FCA
    The seller delivers the goods, cleared for export, at a named place (possibly including the seller's own premises). The goods can be delivered to a carrier nominated by the buyer, or to another party nominated by the buyer.

    If delivery occurs at the seller's premises, or at any other location that is under the seller's control, the seller is responsible for loading the goods on to the buyer's carrier. However, if delivery occurs at any other place, the seller is deemed to have delivered the goods once their transport has arrived at the named place; the buyer is responsible for both unloading the goods and loading them onto their own carrier.
  • FOB
    Only used in sea freight and stands for "Free On Board".  When you trade on FOB-terms your supplier is responsible for all local charges, including transport to the port. As soon the goods are aboard the are aboard the ship the transport responsibility shift from the supplier to you as an importer. A FOB shipment requires that the seller declare and make the goods ready for export. The shipping document will be transferred when the goods are loaded on the ship.

Got some questions about Incoterms? Feel free to contact our Operations team here.

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