The internation road consignment note

• EXW: if the price quoted ex-works it covers the cost of the goods at the seller's warehouse.
• FCA:if the price quoted free carrier it covers the cost of the goods and the transport of the goods to the carrier.
• FAS(free alongside sheep): if the price is quoted FAS it covers the cost of the goods and the transport to the port of departure without loading the goods on to the ship.
• FOB(free on board): if the price quoted FOB is similar to FAS and also it cover the costs of loading of the goods on to the ship and clear the goods for export.
• CFR(cost and freight): if the price quoted CFR it covers the cost of the goods, the transport of  the goods in the port of destination and the unloading of the goods.
• CIF(cost insurance and freight): if the price quoted CIF is similar to CFR but it cover the insurance.
• CPT(carriage paid to): if the price quoted CPT it covers the cost of the goods and the transport at the point agreed as the destination, without  customs duties.
• CIP(carriage and insurance paid to): if the price is quoted CIP is similar to CPT and also it covers the insurance.
• DAF(delivered at frontier): if the price quoted DAF it covers the cost of the goods and the transport until of the frontier of destination.
• DES(delivered ex ship): if the price is quoted DES it covers
• DDU(delivered duty unpaid):it covers the transportation of the goods to a named destination without taxes of frontier
• DDP(delivered duty paid):is similar to DDU but it covers the taxes of frontier.

THE INTERNATION ROAD CONSIGNMENT NOTE

The international road consignment note is usually completed by the carriers and serves as:

• A receipt for the goods and a contract of carriage between the consignor and the carriers

The international road consignment note contains:

• Details about the consignor, carriers and consignee
• A description of the goods
• Details about where the goods should be picked up and delivered.

THE RAILWAY CONSIGNMENT NOTE

The railway consignment note is a document stating that the goods have been handed over to the rail authorities. It is issued at a local railway station and copies must also be distributed to the customs authorities and to the departure and arrival station. It contains:

• The names and addresses of the consignee
• The consignor and both stations
• A description of the cargo
• The carriage charges.

THE BILL OF LADING

The bill of lading is the most important document in sea transport. It is:

• A document of title declaring who is the legal owner of the goods. The consignee doesn't receive a copy of the b/l until he has paid for the goods.
• A receipt for the goods confirming that they have been loaded and also what condition they are in.
• A contract by the shipping company to carry the goods to their port of destination.

There are two types of b/l:

• A clean b/l when the carrier states that the goods were received in a good condition
• A foul b/l when the carrier states that the goods were received in a bad condition

A combined b/l includes the use of road and/or rail shipment at either end of the sea journey.

THE AIR WAYBILL:is a consignment note for goods transported by air.

It serves as: a recept from the airline, a contract between the shipper and the airline for moving the goods, a customs declaration, a bill for the freight.

Export financing: the exporter can go to his bank with the export contract and ask for an overdraft. The bank will take into consideration the exporting company's financial status and its ability to carry out the order.

Factoring: the exporter sells his invoice for less than the total amount to the a group of banks (factor). The banks  then collects the full amount from the importer. Recourse means that if the banks fails to collect, banks seeks repayment of the debt from the exporter.

Leasing: refers to the rental of capital goods and consumer durables. The international leasing company pays the exporting company in advance for the goods.the ownership of the goods then passes to the leasing company which leases the goods to the importer. In return for the right to use the asset, the leasing company pays leasing instalments.

Cheque: in internation trade payment,by cheque usually occurs in small orders. In lock box service, cheque are sent to a post office box number,collected by a bank in the importer's country, which transfers the amount to the exporter's account in his own country.

Credit card: are issued by companies that guarantee payment for the goods and service that the carholder buys. The cost is charged to the cardholder's account and paid the following month. There are a serious risk of fraud. it used only for small orders.

Bank transfer: is an irrevocable and unconditional order of payment issued by the debitor's bank to a correspondent bank in the creditor's country. SWIFT is the most popular option for international money transfers. It is a non-profit organisation, there are in 192 countries. The computer system employed by swift  allows banks to make same-day international exchanges.

Bill of exchange: is a document that orders a bank to pay a sum of money on demand or on a certain date to the company specified. There are 3 parties involved:

-the drawer:the company that orders the draft

-the drawee: the company that receives the draft and who will pay

-the payee: the person to whom the payment is made (drawer).

A draft can be: at sight draft, at 30-60-90 days or at a fixed date.

The drawee accept the draft by signing it, returning it to the drawer and honouring it.

The importer's bank agrees to pay the sum of money if the importer fails to do.

Cash with order (CWO): is the safest method of payment for the exporter. The importer pays for the goods when placing the order nd then waits for the exporter to fill the order and ship the goods.problems may arise if the goods that are delivered are late or do not correspond to description. cwo is only used for small purchases.

Cash on delivery (COD): the goods are delivered to the importer at the exporter'a expense, together with an invoice. the importer pays the invoice when the goods arrive. Cod used in trade within the EU. Cod involve some risk for the exporter, who, after he has delivered the goods.

Open account: is the least secure means of foreign sales for the exporter. The exporter delivers the goods without any pre-payment. The importer has immediate access to the goods and can control repayment, in the case of repeated delivery of goods the customer will receive a statement of account.

Documentary collection or cash against documents (CAD): in the case where exporter is confident about the relationship with the buyer, cad can provide a good solution.

There are 2 types:

- Documents against payment (D/P)      

- Documents against acceptance (D/A)    

The d/p procedure operates as follows: the exporter sends his bank the shipping documents, which must be paid immediately. The bank sends the documents to the importer's bank. The importer's bank contacts the importer to advise that the documentation have arrived. Payment is made immediately.

D/a involves a bill of exchange on which payment is due at a future date.the buyer accepts the exporter's bill of exchange.

Letter of credit (L/C) or documentary credits: protects the interests of both theexporter and the importer. There are 2 type of  l/c: revocable and irrevocable.

A revocable letter of credit may chaged by the buyer without reference to the exporter.

An irrevocable letter of creditcannot be altered without the consent of all the parties involved. For complete protection the exporter needs to have the l/c both irrevocable and confirmed. The l/c is an expansive method of payment involving several  costly bank service.

1. the exporter and importer agree on l/c as the method of payment
2. the importer ask the issuing bank to open a l/c in favour of the exporter
3. the l/c is issued and sent to the advising bank
4. the advising bank advises the exporter that a l/c has been opened in his favour
5. the exporter send the goods to the importer and gives the document to the advising bank
6. the bank checks the documents and pays the exporter
7. the advising bank sent the documents to the issuing bank
8. the issuing bank checks the document and reimburses the advising bank
9. the issuing bank debits the amount  from the importer's account
10. the issuing bank gives the documents to the importer
11. the importer uses the shipping documents to take possession of the goods.