Logistics, Trade Administration and Supply Chain

Under this arrangement, the seller gives a certain credit period to the buyer to pay the purchase price of the goods for example 60 days after the shipment of the goods or 30 days from the invoice date and so on. The goods are forwarded directly to the buyer. The invoice, insurance policy and shipping documents like bill of lading, delivery order or airwaybill are also dispatched directly to the buyer to enable him to take delivery of the goods and dispose of them. On agreed due date, the buyer makes payment accordingly. The open account payment method is commonly practiced in trading within the country i.e. local trade. Factors to be considered are: The Buyer Compliance of the contract requirements such as prompt delivery of the goods to third party buyers; prompt payment on the respective due dates to continue good track records, Foreign exchange risk. The Seller Payment made only after shipment or delivery; Buyer's credit risk and integrity; Buyer's country risk - exchange c...

As its name implies, the buyer pays in advance for the purchase of the goods. This payment method is generally practiced in the mail order trade. A typical scenario is in response to an advertisement or a circular brochure, the buyer remits payment together with the purchase order to the seller who subsequently forwards the goods. If the seller has no confidence in the credit or financial standing of the buyer ir the economic or political conditions of the buyer's country, he may not want to extend any credit and insist that the buyer pays in advance for the purchase of the goods. Certain goods may be required to be specially manufactured or assembled to specifications; thus the seller may need the buyer to make a partial payment in advance to meet the heavy tooling and other costs. Factors to be considered are: The Buyer Payment to be made prior to shipment or delivery; Exchange Control or liquidity and cash flow requirements; Seller's integrity and financial standing; Possibi...

In a typical trade transaction, one of the critical decisions facing both the buyer (importer) and the seller (exporter) relates to how and when payment for the goods sold will be made. In practice, there are various methods of trade settlement (or payment) being adopted ranging from payment in advance to payment upon delivery or even payment after a certain period from the date of delivery or shipment. The method adopted in a certain trade transaction will depend on the relationship between the buyer and the seller, and is generally adopted after due negotiation between the said two parties. When determining the appropriate method of payment, both the buyer and the seller would consider the following factors: the nature and extent of relationship between the buyer and the seller; the track record, financial and credit standing and financial needs of the buyer; the financial standing, financial needs and profit margin of the seller; the nature and extent of competition in the particula...

A freight forwarder must ave intimate knowledge of the Customs Act and its Regulations and be able to advise his client accordingly. He also must have good general knowledge of many other areas of commerce or at the very best be in the position to know how to ascertain the information required in any particular situation. There is no doubt that a broader spectrum of knowledge a freight forwarder has will enhance the value of his service to his customers. There is one most important function of a freight forwarder which must not be overlooked and this can be seen by his office rather than outside. Bear in mind that the freight forwarder is entrusted with confidential information about his customer's goods and transactions. He is in possession of negotiable documents. He is handling a large sum of money on behalf of his customers and he is a businessman who offers the expertise to the business community for a price consideration to the value of his service. Clearly, the objective of ...

An agent is probably best described as a person who is entrusted with the business of another (principal) and act on the others' (principal's) behalf. The term "Freight Forwarders" further qualifies this definition limiting the activities of those areas of commerce that deal primarily with importing, exporting and clearance of vessel and aircraft cargoes. The freight forwarder does not normally import or export on his own account but he handles the movement of goods from or to the port and attends to all the necessary documentation required for the inward or outward clearance of goods and carries through "Forwarding". The freight forwarder is in a unique intermediary position acting as a "go-in-between" for his client in dealings with shipping companies, insurance companies and government agencies of all kinds but predominantly of course the Customs Department. It is from this unique standpoint that he can most efficiently act in the best interest...

The responsibilities of Multimodal Transport Operators (MTOs) are many and here are some illustrations: MTOs Liability The MTO: contracts with shipper to move the cargo from one point to another, on a single transport documentation, accepts responsibility for goods in transit, may subcontract some or all transport tasks, takes over risks for the entire transport chain. MTO Liability in Loss or Damage. In event of loss and damage: cargo owner is entitled to claim against MTO, according to the agreed terms and conditions in the MT documentations, in practice, the owner will demand compensation from the insurer, insurer claims against MTO or its liability insurers. MTO Liability - Options: uniform liability - single liability; regardless of where damages occurred; network liability - varying limits; depending on applicable limits; for underlying modes of transport. Network Liability System This liability system incorporates: precise rules to each transport mode if loss or damages can be l...

Rules for any modes of transportation are as follows: EXW - Ex-Works FCA - Free Carrier CTP - Carriage Paid To CIP - Carriage and Insurance Paid to DAT - Delivered At Terminal DAP - Delivered At Place DDP - Delivered Duty Paid Rules for Sea and Inland waterway transportation: FAS - Free Alongside Ship FOB - Free On Board CFR - Cost and Freight CIF - Cost Insurance and Freight The definitions of each Incoterm rules are based on the following: Ex-Works (......name place of delivery) - EXW Carriage of goods to be arrange by the buyer. Risk is transfer from the seller to the buyer when the good are at the disposal of the buyer. The Cost is transfer from the seller to the buyer when the goods are at the disposal of the buyer. Free Carrier (......name place of delivery) - FCA Carriage of goods to be arranged by the buyer or by the seller on the buyer's behalf. Risk transfer from the seller to the buyer when the goods have been delivered to the carrier at the named place. The Cost is tran...