Explore the importance of Incoterms in international trade and their impact on the European logistics market. Incoterms is an international standard on the rights and obligations of the buyer and seller in the international transportation of goods.
Incoterms, or International Commercial Terms, play a crucial role in defining the responsibilities and liabilities of buyers and sellers in global trade. In the European logistics market, understanding and correctly applying Incoterms is essential for seamless and cost-effective international transactions. These terms, including EXW, FOB, CIF and DAP, govern everything from the point of origin to the final destination of the goods. For example, EXW and FOB give buyers more control over the transportation process, while other terms imply that sellers take charge. Interestingly, CIF prices are often quoted initially, but there is flexibility to offer prices based on different terms. Neele-Vat, with its extensive experience in international logistics, recommends choosing EXW or FOB, allowing maximum control while using our expertise to manage transportation to your specified destination. We will elaborate on each Incoterm and offer valuable insights for navigating the European logistics landscape.
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The ICC Incoterms® rule Free Carrier (FCA) goes one step further than Ex Works (EXW). Here, the seller loads the goods aboard the buyer's designated vehicle at its premises, or arranges and pays for (pre-)transport to an agreed location.
The risk of damage to or loss of the goods passes from the seller to the buyer as soon as the goods are handed over to the carrier appointed by the buyer at the named place (FCA ...), after the goods have been loaded on board the vehicle. From that moment, the seller has fulfilled his obligation to deliver.
FCA is suitable for all forms of transportation.
Characteristics:
Delivery: the seller delivers the goods to the buyer in one of the following two ways: a. If the agreed place is the seller's premises, then the goods are considered delivered as soon as they are loaded on the vehicle organized by the buyer. b. If the agreed place is another location, then the goods are delivered as soon as they are made available to the buyer on the arriving vehicle and ready for unloading.
Transportation risk: the risk of damage to or loss of the goods in transit shall be borne by the buyer as of delivery.
Transportation costs: the costs of transportation from the agreed place of delivery shall be borne by the buyer. Until delivery, the costs shall be borne by the seller.
Customs formalities: the seller must take care of all customs formalities arising from the export. For his account are also the costs, duties and taxes arising therefrom. Customs formalities, costs, duties and taxes shall be borne by the buyer in the case of transit through other countries and importation into the country of destination.
Transportation insurance: neither party is required to obtain insurance for the goods.
Specification of place of delivery: the delivery condition must specify the place of transfer of goods. In FCA, this is indicated by: (... agreed place (... named place)).
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