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The International Chamber of Commerce (ICC) published their latest version of Incoterms in 2020. These Incoterms came into effect on January 1 2020 and are still being used in 2022 and beyond.

It’s critical that both buyers and sellers have a clear understanding of the Incoterms and their obligations throughout the supply chain.

ISS has provided an overview of the 11 Incoterms 2020 below.

EXW (Ex-Works or Ex-Warehouse)

  • Ex-works is when the seller places the goods at the disposal of the buyer at the seller’s premises or at another named place (i.e., works, factory, warehouse, etc.).
  • The seller does not need to load the goods on any collecting vehicle. Nor does it need to clear them for export, where such clearance is applicable.

FCA (Free Carrier)

  • The seller delivers the goods to the carrier or another person nominated by the buyer at the seller’s premises or another named place.
  • The parties are well advised to specify as explicitly as possible the point within the named place of delivery, as the risk passes to the buyer at that point.

FAS (Free Alongside Ship) 

  • The seller delivers when the goods are placed alongside the vessel (e.g., on a quay or a barge) nominated by the buyer at the named port of shipment.
  • The risk of loss of or damage to the goods passes when the products are alongside the ship. The buyer bears all costs from that moment onwards.

FOB (Free On Board) 

  • The seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment or procures the goods already so delivered.
  • The risk of loss of or damage to the goods passes when the products are on board the vessel. The buyer bears all costs from that moment onwards.

CFR (Cost and Freight) 

  • The seller delivers the goods on board the vessel or procures the goods already so delivered.
  • The risk of loss of or damage to the goods passes when the products are on board the vessel.
  • The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.

CIF (Cost, Insurance and Freight) 

  • The seller delivers the goods on board the vessel or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the products are on the ship.
  • The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.
  • The seller also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage.
  • The buyer should note that under CIF the seller is required to obtain insurance only on minimum cover. Should the buyer wish to have more insurance protection, they will need either to agree as much expressly with the seller or to make their own extra insurance arrangements.

CPT (Carriage Paid To) 

  • The seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such site is agreed between parties).
  • The seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination.

CIP (Carriage And Insurance Paid To) 

  • The seller has the same responsibilities as CPT, but they also contract for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage.
  • The buyer should note that under CIP the seller is required to obtain insurance only on minimum cover. Should the buyer wish to have more insurance protection, they will need either to agree as much expressly with the seller or to make their own extra insurance arrangements.

DAP (Delivered At Place) 

  • The seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination.
  • The seller bears all risks involved in bringing the goods to the named place.

DPU (Delivered At Place Unloaded) 

  • DPU replaces the former Incoterm DAT (Delivered At Terminal). The seller delivers when the goods, once unloaded are placed at the disposal of the buyer at a named place of destination.
  • The seller bears all risks involved in bringing the goods to, and unloading them at the named place of destination.

DDP (Delivered Duty Paid) 

  • The seller delivers the goods when the goods are placed at the disposal of the buyer, cleared for import on the arriving means of transport ready for unloading at the named place of destination.
  • The seller bears all the costs and risks involved in bringing the goods to the place of destination. They must clear the products not only for export but also for import, to pay any duty for both export and import, and to carry out all customs formalities.
For additional support, contact the ISS team.
  • 4 min read

What is Air Freight?

Air freight is a type of transportation in which packages and goods are delivered by air.

Air freight is one of the safest and fastest methods of shipping goods and packages. It is most often used for time sensitive deliveries or when the distance to be covered by the shipment is too large for other delivery modes such as ocean shipping or rail transport.

Who Uses Air Freight?

Generally, air freight is utilised by businesses that need to transport goods internationally. It is commonly used for transporting expensive items that are time-sensitive, have a high value, or are not able to be shipped by other means.

Air freight is also a viable option for those who need to transport cargo quickly (i.e express shipping).

What Can be Sent Via Air Freight?

Most items can be shipped by air freight, however there are some restrictions surrounding ‘dangerous goods’.

Items such as acids, compressed gas, batteries, bleach, explosives, flammable liquids, ignitable gases, and matches and lighters are considered ‘dangerous goods’ and cannot be transported via airplane.

Why Ship by Air?

There are a number of benefits to shipping via air. Most notably, air freight is significantly faster than sea freight or trucking. It is the top choice for international express shipping, as goods can be transported on a next-day, same-day basis.

Air freight also allows you to send your cargo almost anywhere. You are not limited by roads or shipping ports, so you have much more freedom to send your products to customers all around the world.

There is also generally more security surrounding air freight services. As your products won’t have to go from handler-to-handler or truck-to-truck, the likelihood of theft or damage occurring is much less.

Getting Started with Air Freight

If you want to transport your goods via air freight, there are a number of documents you need. These include commercial invoices, consular invoices, a certificate of origin, an inspection certificate and more.

Your best bet for ensuring you have all the required documentation and certification is to give ISS a call. We can help guide you through the process and ensure your goods are suitable for air freight. We will also help you get the best rate as well a s the fastest shipping time to keep your customers satisfied!

  • 2 min read

ISS is currently looking for a Victorian State Manager to oversee our small dedicated branch in Melbourne.

This exciting role is newly created and will be strongly supported by our ISS head office and staff, located in Sydney.

We are looking for a motivated and ambitious person with extensive experience in International Freight Operations, Sales and Logistics.

To qualify, you must have a sound understanding of local processes for International Freight Forwarding business operations, as well as the ability to maximise profitability of overall operations.

If you are interested in applying or want to discuss this exciting opportunity further, send your resume to zilic@issshipping.com.au or call Zoran Ilic on (02) 8566 7700.

  • 1 min read

Freight & Shipping FAQ

Freight is the shipping of goods across the world. It is the largest industry in the world, with over 7 trillion USD spent on freight every year. Freight services are used by many companies of all sizes to transport their goods from one location to another.

Freight calculation is the process of estimating the cost of transporting something, which can be done by breaking down your shipment into its components. Such components include weight, size, destination location etc.

There are often hidden costs associated with freight and shipping. Some of these include shipping and handling fees, brokerage fees, import duties and taxes, fuel surcharges, and storage fees. In some cases, these are not one-time costs but rather a series of costs that will accrue as more products are shipped or the product travels through the supply chain.

The best way to get an accurate idea of the true cost of shipping your products is to communicate with your shipping company’s Account Manager. They will be able to provide you with an estimate of your total shipping costs and keep you updated on any additional fees or taxes that may pop up.

Oversized items are generally items that are large and heavy. They can be anything from a vehicle to a piece of furniture. Oversized items often incur more costs due to the extra care required in handling and transport.

Dangerous goods are items or substances which can pose a risk to health, safety, property, or the environment. These include a wide range of items such as weapons, ammunition, toxic chemicals, flammable liquids, and gases.

Transporting these types of goods often takes more care as there is greater regulation around them.

A custom broker is a person or company that arranges transporting goods internationally.

Custom brokers can offer several services to make the process of international shipping easier and more affordable. They provide logistical support and coordinate with different parties. They also make sure that all regulatory requirements are met and go over the documentation needed for customs clearance.

It is recommended that businesses consult a custom broker prior to shipping their products. This will likely save them time and money and prevent the occurrence of common issues associated with freight.

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