1. TRADE & INVESTMENT KWAZULU-NATAL
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Incoterms and Costing
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TRADE & INVESTMENT KWAZULU-NATAL

2. International Commercial Terms - Incoterms ® 2010 Fundamentals
Tasks, costs and risks.
It is not the contract of sale – just part of a sales contract.
No connection between Incoterms and contract of carriage
Incoterms say nothing about: -
The price to be paid
Method of payment
Transfer of ownership of goods
Consequences of a breach of contract.
The contract of sale should deal with the above
Incoterms and Costing

3. International Commercial Terms - Incoterms ® 2010F C D
Group E
Departure term
EXW (ex works)
Goods are made available to the buyer at the seller’s premises
Group F
Main carriage unpaid
FCA (free carrier)
FAS (free alongside ship) - Suitable for BULK (sea freight)
FOB (free on board) - Suitable for BREAKBULK (sea freight)
Seller must deliver the goods to a carrier appointed by the buyer
Group C
Main carriage paid
CPT (carriage paid to)
CIP (carriage & insurance paid to)
CFR (cost and freight) - Suitable for BULK or BREAKBULK (sea freight)
CIF(cost, insurance and freight) - Suitable for BULK or BREAKBULK (sea freight)
Seller contracts the carriage of the goods without assuming risk of loss or damage to the goods and additional costs due to events occurring after shipment. Seller must deliver to carrier.
Group D
Delivered (arrival)
DAT (delivered at terminal)
DAP (delivered at place)
DDP (delivered duty paid)
Seller bears all costs and risks required to bring the goods to the place of destination.
Incoterms and Costing

4. Examples of supplier/exporter invoice costs
Price paid or payable for goods
Packing
Commission
Royalties and license fees
Research and development costs
Warranty charges
Interest
Cargo Insurance
Incoterms and Costing

5. Examples of land leg charges1 2 3 4 5 6 7 8 9 10
Per container/carton
Per CBM/KG
Per shipment
Surcharge
(% of fuel charge)
% of disburse-ment
% of value of goods
Per document
Fixed charge
Per day
Combin-ation
Fumigation
Cargo dues (port tax)
Inland freight
Fuel surcharge
Inland insurance
Depot charges
Port storage
Forwarding charges (handling fee; communication; labelling; house bill of lading fee)
Certificate of origin
Customs clearance – export (customs documentation fee; agency; facility/finance fee)
Terminal handling
Hazardous cargo fee/surcharge
Hazardous cargo handling fee
Trem (transport emergency) card
Courier charges
Incoterms and Costing

6. Examples of shipping line charges1 2 3 4 5 6 7 8 9 10
Per container/carton
Per CBM/KG
Per shipment
Surcharge
(% of fuel charge)
% of disburse-ment
% of value of goods
Per document
Fixed charge
Per day
Combin-ation
Master Bill of lading fee
Ocean freight
Bunker adjustment factor (BAF)
ISPS (security surcharge)
PIRACY fee (on certain routes)
Other charges (release fees; service fee; manifest security fee on certain routes)
Incoterms and Costing

7. Examples of destination charges1 2 3 4 5 6 7 8 9 10
Per container/carton
Per CBM/KG
Per shipment
Surcharge
(% of fuel charge)
% of disburse-ment
% of value of goods
Per document
Fixed charge
Per day
Combin-ation
Port charges
Shipping line charges
Landside charges
Duties and VAT
Customs clearance
Incoterms and Costing

8. Unloading (discharge port)
Incoterms and cost allocation
Inco-
terms 2010
Customs clearance
Inland transport
Unloading of truck
Loading on vessel
Carriage
Insurance
Unloading (discharge port)
Loading on truck
Landside transport
Duties and taxes
Who pays
EXW
Buyer
FCA
Seller
FAS
FOB
CPT 1
CFR
CIF 2
CIP
DAT 3
DAP
DDP
Buyer or Seller depending on the contract of carriage
Seller must obtain minimum cover only
Seller and Buyer
The risk when selling EXW (VAT laws)
The risk when selling DDP (customs legislation)
Incoterms and Costing

9. Incoterms and Costing

10. Incoterms and Costing FCL Cost estimate charged by 1 X 20ft 1 X 40ft 1
Freight rate per container
Shipping line 2
IPS, ISS, SEAL 3
Master bill of lading fee per shipment
USD 40.00 4
Courier fees (if Master Bill is required)
Courier Company 5
Terminal handling charge per cont.
Transnet Port Terminal
ZAR 1,699.00
ZAR 2,509.00 6
Shipping line charges per container
ZAR
ZAR 7
Cargo dues per container
Transnet National Ports Authority
ZAR
ZAR 1,272.07 8
Inland transport per container
Transporter 9
customs brokerage per shipment
Customs broker 10
agency per shipment 11
Pre-Export Verification of Conformity (PVoC) if applicable
SGS, Intertek, etc. 12
Cargo Insurance
Insurance company
EXAMPLES OF GROUPAGE COSTS
1) Ocean freight (all-in) per freight ton
2) Cargo dues (port tax) - per freight ton
3) Handling (THC, packing, etc) per freight ton
4) Courier fee
5) SOLAS VGM fee
6) Inland transport
7) Customs Brokerage
8) Agency
9) Other costs (PVOC, insurance, etc)
Incoterms and Costing

11. Are there any questions?
Incoterms and Costing

12. Why buy from www.ABCkings.co.za
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