Carriage of the goods. Методические рекомендации

A SAMPLE BILL OF LADING

$__________________ per_______________

The carrier shall not make delivery of this shipment without payment of freight and all

other charges. ________________________

(Signature of Consignor)

FREIGHT CHARGES: ________ FREIGHT PREPAID for fewer than 4 cylinders

32

INCOTERMS 2000

Trading between countries is fraught with difficulties. In order to facilitate exporting, several international "sets of rules" have been created. In the area of sending goods and responsibility for delivery and customs clearance, most countries recognise Incoterms.

INCOTERMS 2000 were published by the International Chamber of Commerce (ICC). This set of definitions was first published in 1936 and is now in its 6th revision. Incoterms can be purchased from your Chamber of Commerce or on-line bookseller. Every exporter's office should have a copy.

Incoterms define responsibilities for carriage, customs clearance and risk, including who pays for loading onto and from transport, and the production of documents. The risk of the various modes of transport is assigned to the customer or seller in Incoterms. It follows that the party taking the risk will buy insurance for the risk of loss or damage in transit.

The choice of the term of delivery will depend upon local custom and practice, letter of credit requirements, the goods involved, the mode of transport and destination. Incoterms are not law. They are a set of definitions. Exporters can use them in the contract of sale to define what is meant by delivery, referring to a particular version (e.g. Incoterms 2000). Incoterms shorten the contract of sale: simply refer to the term of delivery and the Incoterms edition (e. g. FOB Incoterms 2000).

The commonest terms of trade for sea transport are FOB and CIF. FOB and CIF terms are appropriate where there is sea transit. The exporter arranges local transportation, documentation and customs clearance in his country, with the customer doing the same at the other end. Each can use local knowledge to achieve this efficiently and cost effectively.

The advantages of FOB and CIF terms:

The customer does not get possession of the shipping documents and therefore cannot take up the goods, until he has paid for them or accepted a bill of lading.

The exporter knows where the goods are going to (with an ex-works sale, the customer can take delivery of the goods at the exporter's warehouse, and take them to

any country).

However, there is a problem with FOB, known as the "FOB trap". This occurs if the nominated ship does not call at the nominated port within the timescale allowed by the

33

contract or letter of credit. Ideally, fall-back terms of delivery should be negotiated, such as FAS, or there should be an agreement to deliver to warehouse. However, the documentation will then be quite different. Ex Works and are widely used for intra-European transport where customs harmonisation (таможенная унификация - международные усилия по унификации таможенной деятельности) is in place. Ex Works requires the customer to undertake all transport, clearances and insurances for the journey.

EX. Answer the following questions.

1.What are INCOTERMS?

2.What was the purpose of creating INCOTERMS?

3.In what area of business are INCOTERMS internationally recognized?

4.What kind of difficulties do INCOTERMS reduce?

5.What kind of responsibilities do INCOTERMS define?

6.What does the choice of INCOTERMS depend on?

7.What are the commonest terms of trade for sea transport?

8.What arrangements does the exporter do under FOB and CIF terms?

9.What arrangements does the customer do under FOB and CIF terms?

10.What are the advantages of FOB and CIF terms?

11.Why are Ex Works terms widely used in Europe?

12.What problems can we have with FOB terms?

13.What responsibilities does the customer undertake under Ex Works terms?

TRANSPORT AND DELIVERY TERMS

In accordance with the responsibilities of the parties in respect of the expenses of delivery and the risk of accidental damage to the goods or loss of the goods there may be various terms of delivery.

Ex Ship (a port of destination) « с судна» The term means that the Seller shall make the goods available to the Buyer on board at the destination named in the sales contract. The Seller pays for all charges up to and including the placing of the goods at the disposal of the Buyer on board the vessel at the port of destination. The risk passes accordingly.

Ex Quay (a port of destination) « с пристани» The term means that the Seller shall make the goods available to the Buyer on the quay at the destination named in the sales

34

contract. As compared with Ex Ship, the Seller pay for unloading the goods and the risk does not pass until the goods are placed on the quay in the port of destination.

Ex Works – « франко-завод». The Seller‘s only responsibility is to make the goods available at his premises. In particular he is not responsible for loading the goods in the vehicle provided by the Buyer, unless otherwise agreed. The Buyer bears the full cost and risk involved in bringing the goods from the factory gates to the destination.

Freight /Carriage Paid To – « фрахт/ провозная плата оплачена до …»The Seller must pay the cost and freight necessary to bring the goods to the destination. The risk of loss of or damage to the goods is transferred from the Seller to the Buyer when the goods have been delivered into the custody of the first carrier ( not at the ship’s rail (рей-

линг судна)).

The Buyer bears the risk of accidental damage to or loss of the goods after the goods have been delivered into the custody of the first carrier.

Freight / Carriage and Insurance Paid To – « фрахт/ провозная плата и

страхование оплачены до …» The term is the same as Freight Carriage Paid To but with the addition that the Seller has to procure transport insurance against the risk of loss of or damage to the goods during the carriage. The Seller contracts with the insurer and pays the insurance premium.

C&F ―cost and freight‖ – « стоимость и фрахт »The Seller must pay the cost and freight necessary to bring the goods to the destination, but the risk of loss of or damage to the goods is transferred from the Seller to the Buyer when the goods pass the ship‘s rail.

The Buyer bears risk involved in bringing the goods from the port of shipment (after the goods pass the ship‘s rail) to the destination.

CIF ―cost, insurance, freight‖ – « стоимость, страхование, фрахт. » This term is basically the same as C&F but with addition that the Seller has to procure marine insurance against the risk of loss of or damage to the goods during the carriage. The Seller contracts with the insurer and pays the insurance premium.

FOB ―free on board‖ – « свободно на борту судна» The Seller places the goods on board the ship at a port of shipment named in the sales contract. The risk of loss of or damage to the goods is transferred from the Seller to the Buyer when the goods pass the ship‘s rail.

35

The Buyer bears the full cost and risk involved in bringing the goods from the port of shipment ( after the goods pass the ship‘s rail) to the destination.

The terms described below are based on the same main principal as FOB except that the Seller places the goods not on board the ship.

Free Carrier ( named port) « свободно у перевозчика ( в поименованном порте) »The Seller fulfills his obligation when he delivers the goods into the custody of the carrier at the named port.

FOR – ―free on rail‖ These terms should only be used when the goods are to be de-

livered by railway.

FOB Airport The Seller fulfils his obligation by delivering the goods to the air carrier at the airport of departure.

FAS ―Free alongside Ship‖ « свободно вдоль борта судна». The Seller‘s obligations are fulfilled when the goods have been placed alongside the ship on the quay or in lighters.

EX. Find the equivalents of the following phrases in the text.

Риск утраты или повреждения; порт отгрузки; порт разгрузки; транс-

портное средство; выполнять обязательства; хранение; страхователь; страхо-

вая премия (страховой взнос); нести расходы; передавать обязательство;

INCOTERMS (Group E – Departure)

The Incoterms (International Commercial Terms), also known as terms of delivery, are standard trade definitions most commonly used in international sales contracts.

There are currently 13 Incoterms in use and they are categorised in four groups, designated by the first letter of the term (acronym), as follows:

Group E – Departure

Group F - Main Carriage Not Paid By Seller

Group C - Main Carriage Paid By Seller

Group D - Arrival

All the current Incoterms are described below.

Group E – Departure

EXW – Ex Works (... named place)

36

Under Ex Works the seller minimises the risk by only making the goods available at his own premises. EXW represents the seller‘s minimum involvement and the maximum involvement of the buyer in the arrangement of the transportation of the goods from your premises (factory, warehouse etc.)

When EXW is used, the seller should remember that the export of the goods is NOT guaranteed and the buyer may, for example, keep the goods in the seller‘s country and/or re-sell it to a third party.

It is common that the seller would load the goods on a truck without charging a loading fee, although under EXW the buyer is responsible for the loading costs.

Франко-завод в ... (указанное место). Продавец считается выполнившим свое обязательство по поставке товара с момента передачи его Перевозчику, указанному Покупателем, в пункте, где товар был произведен или хранился (фабрика, завод,

склад Продавца). С этого момента Покупатель должен нести все расходы и риски утраты или повреждения товара. На Покупателя возлагается обязанность по выпол-

нению всех таможенных формальностей. Доставка на условиях EXW возлагает на Продавца минимальные обязательства.

EX. Translate the text.

The obligations of the buyer under the EXW term:

Inland freight in the Seller‘s country; delivery to the carrier or frontier

Export customs clearance

Payment of customs charges and taxes in the Seller‘s country

Loading to the main carrier and port charges

Main carriage/freight

Cargo (marine) insurance

Unloading from the main carrier and port charges

Customs clearance in Buyer's country

Payment of customs duties and taxes in Buyer's country

Inland freight in Buyer's country

Other costs and risks in Buyer's country

37

INCOTERMS (Group F - Main Carriage Not Paid By Seller)

Under F Terms the seller arranges and pays for the pre-carriage in the country of export.

In Incoterms the point of transfer of responsibilities under FOB is described as the point ―when the goods pass the ship’s rail‖. Literally, that means that if during the loading onto the ship, the goods would fall on the wharf or into the water, the Seller is responsible for losses, but if the goods fall on the deck of the ship, the losses are the buyer‘s responsibility.

FCA – Free Carrier (...named place)

FCA requires the Seller to take responsibility for all risks and costs until the goods are delivered to the named place and collected by the carrier nominated by the buyer. Under FCA the seller is responsible for the export customs clearance. Under FCA the carrier may be responsible for collecting the goods from the seller‘s premises or the seller may be responsible for delivering the goods to the carrier, dependent on the agreed conditions. If the Seller‘s premises are the ―named place‖, the Seller must load the goods onto the truck; otherwise, the buyer is responsible for loading the goods.

FAS Free Alongside Ship (...named port of shipment)

Under FAS (formerly known as FOW – Free On Wharf (Incoterms 1990)), the Seller must deliver the goods to the named port and place them alongside the ship. The Seller is responsible for the export customs clearance and the buyer - for loading the goods onto the vessel.

FOB Free On Board (...named port of shipment)

FOB is one of the most common terms used in international trade. Under FOB the Seller is responsible for delivering goods to the named port, export customs clearance and loading them onto the vessel.

When the F Terms are used, we should remember that:

FAS and FOB are mono-modal terms and can only be used when the main carriage is by sea freight. The term ―FOB Canberra‖, meaning the delivery of the goods on board the plane, is incorrect.

Under FOB the seller is responsible for handling, loading, stowage and other port

charges, while under FCA, these charges are for the buyer's account.

38

EX. Translate the texts.

A.Франко-перевозчик в ... (пункт назначения). Продавец считается выполнившим свое обязательство по поставке товара с момента передачи его Перевозчику. Пе-

ревозчик любое лицо, которое на основании договора перевозки обязуется обеспечить выполнение перевозки товара одним из видов транспорта.

B.Свободно вдоль борта судна в ... (порт отгрузки). Продавец считается выполнив-

шим свое обязательство по поставке, когда товар размещен вдоль борта судна на причале или на лихтерах в согласованном порту отгрузки. С этого момента По-

купатель должен нести все расходы и риски утраты или повреждения товара. По условиям FAS на Покупателя возлагается обязанность по выполнению таможен-

ных формальностей, необходимых для вывоза товара. Условия FAS могут ис-

пользоваться только при морской перевозке или перевозке внутренним водным транспортом.

C.Франко-борт, Свободно на борту в ... (порт отгрузки). Продавец считается вы-

полнившим свое обязательство по поставке с момента перехода товара через по-

ручни судна в согласованном порту отгрузки. Если момент перехода товара через поручни судна не имеет практического значения, например, при перевозках на условиях ролл-он или ролл-офф целесообразно применять условия FCA.

INCOTERMS (Group C - Main Carriage Paid By Seller)

Under C Terms the Seller arranges and pays for the main carriage but without assuming the risk of the main carriage.

CFR Cost and Freight (...named port of destination)

CFR is formerly known as C&F and/or CAF (Incoterms 1990). Under CFR, the Seller is responsible for export customs clearance, delivering the goods to the named port of destination and unloading the goods from the ship, including all port charges.

CIF Cost, Insurance and Freight (...named port of destination)

CIF is very similar to CFR with the addition of insurance to the Seller‘s responsibil-

ities.

39

CPT Carriage Paid To (...named place of destination)

CPT represents the Seller‘s responsibilities to deliver the goods to any place nominated by the buyer in the country of destination.

Although the Seller is responsible for inland freight in the buyer‘s country, the buyer is responsible for the import customs clearance and all duties, taxes and other costs in the country of destination.

CIP Carriage & Insurance Paid to (...named place of destination)

CIP is very similar to CPT with the addition of insurance to the seller‘s responsibilities.

CFR and CIF are mono-modal terms and can only be used when the main carriage is by sea freight. It is a common mistake when, under these terms, the place located in a middle of continent is named as a port of destination. Terms ―CFR Vienna‖ and/or ―CIF Moscow‖ are incorrect terms.

CIF and CIP are the only two terms, under which the seller is compulsorily responsible for insurance. Under all other terms, the buyer considers insurance as an optional responsibility.

C Terms are quite different from other Incoterms. They are the only terms when the point of transferring costs responsibilities and the point of transferring risks are segregated. In other words, although the Seller is responsible for costs until the goods arrive to the named port or place of destination, the risks shift to the buyer at the port of loading or even earlier, when the goods are delivered to the carrier . If it was agreed that the carrier is collecting the goods from the Seller‘s premises then the risks transfer to the buyer at that point.

From these perspectives, the C Terms are much more beneficial for the seller than for the buyer, as the seller selects the carrier and controls the costs and timing of the main carriage without undertaking any risks, while the buyer takes all risks for a period of main carriage during which he has no means of controlling or limiting those risks. EX. Translate the texts.

A.(CFR or C&F). Стоимость и фрахт оплачены до ... (порт назначения). Продавец обязан оплатить расходы и фрахт, необходимые для доставки товара в согласо-

ванный порт назначения, однако риск утраты и повреждения товара переходит с

40

Продавца на Покупателя в момент перехода товара через поручни судна в порту отгрузки. По условиям CFR на Продавца возлагаются обязанности по выполне-

нию таможенных формальностей, необходимых для его вывоза.

B.(Carriage Paid To ...) Перевозка оплачена до ... (пункт назначения). Продавец оп-

лачивает фрахт за перевозку товара до согласованного места назначения. Риск утраты, повреждения товара, а также любых дополнительных расходов, возни-

кающих после передачи товара Перевозчику переходит с Продавца на Покупате-

ля, когда товар передан в распоряжение Перевозчика. Согласно условиям CPT, в

обязанности Продавца входит выполнение таможенных формальностей, необхо-

димых для вывоза товара.

C.(CIF) Стоимость, Страхование и Фрахт оплачены до ... (порт назначения). Прода-

вец несет те же обязанности, что и согласно условиям СFR (Стоимость и Фрахт оплачены до), но с тем дополнением, что Продавец должен обеспечить морское страхование от рисков утраты и повреждения товара. Продавец заключает дого-

вор страхования и оплачивает страховку.

D.(CIP) Перевозка и Страхование оплачены до ... (пункт назначения). Продавец не-

сет те же обязанности, что и согласно условиям CPT (Перевозка оплачена до), но с тем дополнением, что Продавец должен обеспечить транспортное страхование от рисков утраты и повреждения товара.

INCOTERMS (Group D – Arrival)

Under D Terms the seller‘s cost/risk is maximised because he must take the goods available upon arrival at the agreed destination.

DAF Delivered At Frontier (...named place).

DAF is a mono-modal (land only) term

DES Delivered Ex Ship (...named port of destination)

DES by meaning and costs responsibilities involved is very similar to CFR. However, unlike CFR, under DES the seller undertakes all risks until the goods arrive at the named port of destination.

DEQ Delivered Ex Quay (...named port of destination)

41