Shipping Lines Term

General:

The Terms are from the perspective of the shipping line and define which services (for example loading of the vessel, unloading of the vessel, stowage of the cargo in the vessel, trimming of the cargo in the vessel, etc) are included and which services are not included.

Only the text version published by the shipping line is binding

FILO (Free In Liner Out):

The cost of loading the vessel at the port of loading are not included (Free In) and the cost of unloading the vessel at the port of destination are included (Liner Out).

FIO (Free In Out):

The cost of loading the vessel at the port loading and the cost of unloading the vessel at the port of destination are not included.

FIOS (Free In Out Stowed):

How FIO and additional are the stowage cost in the vessel excluded.

FIOST (Free In Out Stowed Trimmed):

How FIOS and additional are the trimming cost in the vessel excluded.

FIOT (Free In Out Trimmed):

How FIOS but includes the trimming cost in the vessel.

FLT (Full Liner Terms):

The cost of loading the vessel at the port loading, the stowage- and the trimming costs are included. The cost of unloading the vessel at the port of destination are included.

LIFO (Liner In Free Out):

The cost of loading the vessel at the port loading are included (Liner In) and the cost of unloading the vessel at the port of destination are not included (Free Out).

Incoterms 2010 International Trade for Export & Impor

The International Chamber of Commerce (ICC ) has published revisions to its International Commercial Terms, also known as INCOTERMS®, that take effect on January 1, 2011.

The revised rules, designated "INCOTERMS 2010", contain a series of changes, such as a reduction in the number of terms to 11 from 13. The DAF, DES, DEQ, and DDU designations have been eliminated, while two new terms, Deliv ered at Terminal (DAT) and Delivered at Place (DAP), have been added. INCOTERMS 2010 also attempt to better take into account the roles cargo security and electronic data interchange now play in international trade

The two main categories of Incoterms® 2010 are now organized by modes of transport. Used in international as well as in domestic contracts for the first time, the new groups aim to simplify the drafting of contracts and help avoid misunderstandings by clearly stipulating the obligations of buyers and sellers.

Group 1. Incoterms® that apply to any mode of transport are:

• EXW Ex Works
• FCA Free Carrier
• CPT Carriage Paid To
• CIP Carriage and Insurance Paid To
• DAT Delivered at Terminal
• DAP Delivered at Place
• DDP Delivered Duty Paid

Group 2. Incoterms® that apply to sea and inland waterway transport only:

• FAS Free Alongside Ship
• FOB Free on Board
• CFR Cost and Freight
• CIF Cost, Insurance, and Freight

Group 1.

EXW - EX WORKS (... named place of delivery)

Means that the seller delivers when he places the goods at the disposal of the buyer at the seller’s premises  or another named place (i.e. works, factory, warehouse, etc.) not cleared for export and not loaded on any  collecting vehicle. This term thus represents the minimum obligation for the seller, and the buyer has to bear all costs and risks involved in taking the goods from the seller’s premises.

FCA - FREE CARRIER (... named place of delivery)

Means that the seller delivers the goods, cleared for export, to the carrier nominated by the buyer at the named place. The buyer must contract at his own expense the carriage of the goods from the named place.

CPT - CARRIAGE PAID TO (... named place of destination)

Means that the seller delivers the goods to the carrier nominated by him but the seller must also pay the cost of carriage necessary to bring the goods to the named destination. This means that the buyer bears all risks and any other costs occurring after the goods have been so delivered. If multiple carriers are used for the carriage to the agreed destination, the risk passes when the goods have been delivered to the first carrier. The CPT term requires the seller to clear the goods for export.

CIP - CARRIAGE AND INSURANCE PAID TO (... named place of destination)

Means that the seller delivers the goods to the carrier nominated by him but the seller must also pay the cost of carriage necessary to bring the goods to the named place of destination. This means that the buyer bears all risks and any additional costs occurring after the goods have been so delivered. However, in CIP the seller also has to procure insurance against the buyer’s risk of loss of or damage to the goods during the carriage. Consequently, the seller contracts for insurance and pays the insurance premium. If multiple carriers are used for the carriage to the agreed destination, the risk passes when the goods have been delivered to the first carrier. The CIP term requires the seller to clear the goods for export.

DAT - DELIVERED AT TERMINAL (... named terminal at port or place of destination)

Means that the seller delivers the goods to the named terminal at the named port or place of destination, unloaded from the delivering carrier. “Terminal” may have multiple meanings and thus should be specified as clearly as possible. The DAT term requires the seller to clear the goods for export and the buyer to clear the goods for import. If the seller is also responsible to arrange transport beyond the terminal, then the DAP or DDP term should be used.

DAP - DELIVERED AT PLACE (... named place of destination)

Means that the seller’s obligation ends when the goods are delivered to the disposal of the buyer at the named destination place. The DAP term specifies the buyer bears the risk and is responsible for unloading. The DAP term requires the seller to clear the goods for export and the buyer to clear the goods for import. If the seller is to be responsible for import clearance, then the DDP term should be used.

DDP - DELIVERED DUTY PAID (... named place)

Means that the seller delivers the goods to the buyer, cleared for import, and not unloaded from any arriving means of transport at the named place of destination. The seller has to bear all the costs and risks involved in bringing the goods thereto including, where applicable, any “duty” (which term includes the responsibility for the risk of the carrying out of customs formalities and the payment of formali- ties, Customs duties, taxes and other charges) for import in the country of destination. If the parties wish the buyer to bear all risks and costs of the import, the DAP term should be used.

Group 2.

FAS - FREE ALONGSIDE SHIP (... named port of shipment)

Means that the seller delivers when the goods are placed alongside the vessel at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment. The FAS term requires the seller to clear the goods for export. This term is valid for vessel shipments only.

FOB - FREE ON BOARD (... named port of shipment)

Means that the seller delivers when the goods are loaded on board a vessel at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that point. The FOB term requires the seller to clear the goods for ex- port. This term is valid for vessel shipments only. If the cargo is delivered to the carrier by the seller before the goods are loaded on board the vessel, then the FCA term should be used.

CFR - COST AND FREIGHT (... named port of destination)

Means that the seller delivers when the goods are loaded on board a vessel at the named port of shipment. The seller must pay the costs and freight necessary to bring the goods to the named port of destination BUT the risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time of delivery, are transferred from the seller to the buyer when the goods are loaded onto the vessel. The CFR term requires the seller to clear the goods for export. This term is valid for vessel shipments only. If the cargo is delivered to the carrier by the seller before the goods are loaded on board the vessel, then the CPT term should be used.

CIF - COST INSURANCE AND FREIGHT (... named port of destination)

Means that the seller delivers when the goods are loaded on board a vessel at the named port of shipment. The seller must pay the costs and freight necessary to bring the goods to the named port of destination BUT the risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time of delivery, are transferred from the seller to the buyer when the goods are loaded onto the vessel. The CIF term requires the seller to clear the goods for export and to provide minimum insurance cover. This term is valid for vessel shipments only. If the cargo is delivered to the carrier by the seller before the goods are loaded on board the vessel, then the CIP term should be used.

N o t e s :

• Incoterms must always be accompanied by a “named place” including city, province/state and country. The International Chamber of Commerce updates Incoterms every ten years, most recently in 2010. Because the implications and interpretations differ between publications, the year of the revised publication should also be stated. Example of correct Inco statement: “FOB Surabaya, Jawa Timur, INDONESIA, Incoterms 2010.”
• Incoterms identify risk and cost to the seller and buyer, but do not identify title transference.
• All reference to the cost of “Customs clearance” includes not only duty and /or other government levy but also the administrative cost associated with fulfilling that process.
• The exporter and/or importer may or may not be the seller or buyer. Exporter and importer status are specifically governed by the particular laws of the country of export and country of import.

Japan Customs Regulation of Advance Filing Rules (AFR)

Starting March 2014, Japan will applying the "Advance Filing Rules (AFR)", which require a vessel operator or a NVOCC to electronically submit to JAPAN Customs information on maritime container cargoes to be loaded on a vessel intended to entry into a port in Japan, in principle no later than 24 hours before departure of the vessel from a port of loading

This is  new rule in Japan that the Origin/Export side as POL must input all of data of shipment 24 hour advance upon shipping out and Export side (POL) must input the all data also HS CODE 6 digits (listed by Japanese Customs) prior the vessel sail through NACCS system but this systems is only allowed by SP (Service Provider) network for Japan Advance Filing Rules authorized by NACCS center to connect directly to NACCS.

If you fail to input the data before 24 hour upon departure, then, consignee can not get the container smoothly and might cause lots of penalty even not able to unload the container.

*The Rules will be implemented in March 2014.

Ship Passing Through The Panama Canal

Panama Canal and how it works Ship Passing Through The Panama Canal, you can see in the below video

Illustration of Ship Passing Through The Panama Canal

Canal locks time lapse


A Gigantic Container Ship Passing Through The Panama Canal


Cargo ship passing through panama cana

NVOCC (Non-Vessel Operating Common Carrier)

Currently, the carrier’s definition, the general is “a contract of carriage with the consignor or the person the actual transportation of people.” Agents into the field of international freight transport, to carry out a single mode or multimodal transport business, with clients as a contract of carriage, and issuing the transport document (FCT, FBL, etc.), responsible for transport, which has become a carrier . However, because they generally do not own or control means of transport can only transport through the carrier has entered into a contract of carriage, the actual transportation by others, such carrier known as NVOCC. NVOCC business only in the actual contract carrier, but the actual completion of the transport carrier is the actual carrier.

NVOCC business

As the economic, technological practice different, whether at home or abroad, non-vessel operating carrier very different scope, and do some non-vessel carrier cargo customs clearance, cargo transfer, short-haul, freight forwarding and distribution , and a variety of different modes of transport booking agency business, some of which apply only to one or more business.
The principal activities of NVOCC

1. As a carrier and shipper for the carriage of goods contract, the issue of shipping documents (bills of lading, consignment note), and to accept goods from place to place of destination, transportation for delivery of the goods.

2. As a general cargo carrier organizations, the entire transport, development of the whole transportation plan and organize the implementation of activities.

3. Requirements and the goods to the shipper, the specific conditions of contact with the actual carrier will transport (booking).

4. Received from the hands of the shipper of goods, organization or agency to export to Hong Kong Transport, a contract of carriage (in my name), and to deliver the goods to the ocean carriers have been booking. In the transition process, on behalf of the owner to complete the declaration, inspection, Tally and other procedures.

5. If necessary, the goods for storage and the database business.

6. In the hands of the port from the ocean carrier to accept goods, the delivery of the goods to the consignee. The owner is concerned, non-vessel carrier delivers the goods to transport, compared to the traditional carrier transport in the formalities to be much more convenient and can save freight forwarders commissioned this part.

According to the scope and nature of business is different from non-vessel carrier can be divided into the following three categories:

1. Carrier type
Such kind of shipping carrier is determined in their transport routes to carry out transport activities, to accept the shipper of the goods and issue bills of lading, the goods in transit loss, damage responsibility. In actual operations, he is a contract carrier, not by yourself transportation, only the goods to the actual carrier transport, and to accept the goods at destination, delivery of goods to the consignee.

2. Forwarders type
Such NVOCC specializing in transit, goods in transit and the major destination, with its own branch (office), or agents, from the hands of the shipper or the carrier to accept the land transport of goods, issuing bills of lading, Then apply for continuation transportation, transit, delivery, the carrier delivers the goods to the sea, from sea to complete maritime transport carrier in the port of destination to receive the goods, to raise the consignee. The type and carrier type of the main difference is that it is not limited to transportation routes, not only to choose the appropriate carrier, can also choose the most suitable transport routes. Currently, many shipping companies Zai canvassing area, pairs of non-vessel carrier Jiaoda transfer of dependence, therefore, Zhuanyun people canvassing in the Wei Zi Ji, Jingyingzhuanyun also actively De Zuowei agent, representative carrier people go through to accept delivery of goods, loading, unloading, care to do, collecting freight and other services, and derive the difference between receipts and shipping.

3. Agent-based
Class NVOCC in the cargo doors to take different after the owner, in principle, to provide transportation services directly to the owner, instead of using the “wholesale” approach, by mode of transport and direction, to transport people or type bulk carrier type The non-vessel carrier, bill of lading issued by them. Since this approach has obvious agent characteristics, so called agent-based. NVOCC act as a broker in recent years the emergence of a form of transport services, this type of non-vessel operating carrier generally do not engage in specific activities and the actual services business, the organization engaged only in transportation, goods distribution, transportation the choice of means and transport routes and services to improve their income mainly intermediary fees and because the “wholesale” freight differences arising.