Frequently Asked Questions

 

What services does a Freight Forwarder offer?

• Licensed to export goods
• Completes export documentation and shipping
• Compliance with U.S. laws
• Provides pro-forma quotes

What will the Freight Forwarder do for me?

• Arranges for pick up
• Delivers the goods to the vessel or airplane
• File AES Documentation (U.S. Export compliance required)
• Processes the Bill of Lading or Air Way Bill (Transport document required)
• Processes additional documents (ie: Certificate of Origin, Insurance Certificate, Notarization, etc)

Questions to ask yourself and/or your client before exporting goods:

• Can I sell my product to the particular country?
• Do I need a license?
• What are the terms of the sale? Refer to Incoterms 2010. (ie: CIF, DDU)
• Will you be using a Letter of Credit? Open Account? Direct Collection Letter?
• Are there any special documents required by the buyers country?
• What is the commodity and/or Harmonized Commodity Code?
• Is your product breakable?
• Is your product temperature sensitive?
• Is your product time sensitive?
• Is your product full container or just a few pallets (less than container load)?
• Is your product hazardous?
• Is your product super-heavy or over-sized?
• Are there any other special arrangements your product requires?

What information does the Freight Forwarder need in order to give me an accurate quote?

• Pick up address
• Delivery port or address
• Commodity and/or commodity code
• Total Gross Weight
• Dimensions of the pallets or container size required (ie: 20' container, 40' container)
• Mode of transportation (Air or Ocean)
• Value of the shipment - if legalization of documents is required
• Special documents required - if applicable
• Letter of Credit Requirements - if applicable
• Special requirements (ie: hazardous, temperature sensitive, flat bed delivery, etc.)

What documents do I need to prepare?

• Seller - Pro-forma Invoice - a quote between you and your client in the foreign country to get the goods from your warehouse or office to their port or door.
• Seller - Commercial Invoice - this states the total amount due to you as the seller of the goods.
• Seller - Packing List - a list of what is in the packages, cartons, pallets or container. Information on the packing list typically includes: description of the goods, gross weight, number of pieces, etc.
• Freight Forwarder - Any other required documents; including legalization, Chamber of Commerce signatures, notarizing, etc.

What is a Letter of Credit?

• A promise from your client's bank that they will pay your bank after all of the documents are in compliance with the Letter of Credit. The Freight Forwarder will prepare the documents and will send them to your bank in the U.S. Once all of the documents are approved, the bank will send you a check for the goods sold.
• What to send your freight forwarder when working with an L/C:
• The Letter of Credit from the foreign bank
• Commercial Invoice
• Packing list

What are the Incoterms? (INCOTERMS 2010)

• CLICK HERE for more information on Incoterms

Rules for Sea and Inland Waterway Transport:

• FAS - Free Alongside Ship: Risk passes to buyer, including payment of all transportation and insurance costs, once delivered alongside the ship (realistically at named port terminal) by the seller. The export clearance obligation rests with the seller.
• FOB - Free On Board: Risk passes to buyer, including payment of all transportation and insurance costs, once delivered on board the ship by the seller. A step further than FAS.
• CFR - Cost and Freight: Seller delivers goods and risk passes to buyer when on board the vessel. Seller arranges and pays cost and freight to the named destination port. A step further than FOB.
• CIF - Cost, Insurance and Freight: Risk passes to buyer when delivered on board the ship. Seller arranges and pays cost, freight and insurance to destination port. Adds insurance costs to CFR.

Rules for Any Mode or Modes of Transportation:

• EXW - Ex Works: Seller delivers (without loading) the goods at disposal of buyer at seller’s premises. Long held as the most preferable term for those new-to-export because it represents the minimum liability to the seller. On these routed transactions, the buyer has limited obligation to provide export information to the seller.
• FCA - Free Carrier: Seller delivers the goods to the carrier and may be responsible for clearing the goods for export (filing the EEI). More realistic than EXW because it includes loading at pick-up, which is commonly expected, and sellers are more concerned about export violations.
• CPT - Carriage Paid To: Seller delivers goods to the carrier at an agreed place, shifting risk to the buyer, but seller must pay cost of carriage to the named place of destination.
• CIP - Carriage and Insurance Paid To: Seller delivers goods to the carrier at an agreed place, shifting risk to the buyer, but seller pays carriage and insurance to the named place of destination.
• DAT - Delivered at Terminal: Seller bears cost, risk and responsibility until goods are unloaded (delivered) at named quay, warehouse, yard, or terminal at destination. Demurrage or detention charges may apply to seller. Seller clears goods for export, not import. DAT replaces DEQ, DES.
• DAP - Delivered at Place: Seller bears cost, risk and responsibility for goods until made available to buyer at named place of destination. Seller clears goods for export, not import. DAP replaces DAF, DDU.
• DDP - Delivered Duty Paid: Seller bears cost, risk and responsibility for cleared goods at named place of destination at buyers disposal. Buyer is responsible for unloading. Seller is responsible for import clearance, duties and taxes so buyer is not “importer of record”.