International Logistics: Incoterms, Shipping Documents and Inventory Planning

Incoterms (International Commercial Terms)

• Ex Works (EXW): Makes goods available on its own premises to be picked up.
  • EXW: Ex Works
• Free: Delivers goods to a carrier paid for by the buyer.
  • FCA: Free Carrier
  • FAS: Free Alongside Ship
  • FOB: Free on Board
• Carriage: Pays for the shipping but does not assume risks or costs after loading and dispatch.
  • CFR: Cost and Freight
  • CIF: Cost, Insurance, and Freight
  • CIP: Carriage and Insurance Paid to
• Delivered: Assumes all costs and risks until reaching the destination country.
  • DAT: Delivered at Terminal
  • DAP: Delivered at Place
  • DDP: Delivered Duty Paid

Shipping Documentation

1. What are some types of documents that accompany a shipment?

There are many types of documents that accompany shipments. One that is included with almost every shipment is a packing list. The packing list includes a description of the items in the shipment and how much they cost. Another document is a certificate of inspection. This gives a description of the cargo being shipped. Certificates of inspection may be requested by buyers or required by some countries. Another type of document is a dangerous goods declaration. This document is needed if the materials being shipped are hazardous.

2. Why do shipping documents need to be completed accurately?

Shipping documents need to be completed accurately so there is no problem with the shipment being received. Incomplete or inaccurate documents may result in shipments being returned to the sender. In addition, incomplete or inaccurate documents can result in customs refusing clearance or confiscating shipments. Documents not prepared correctly can also lead to fines. It is important for documents to be filled out correctly in order to prevent the loss of time and money.

Supply Chain & Order Management

1. What are some things to consider when planning orders?

You have to foresee the different situations that can happen, such as a breakdown, a strike, or a delay.

2. Why is it important to have a safety stock?

Because if you have a problem with your suppliers, you will still have stock available in your warehouse.