THE MOST POPULAR TERMS OF DELIVERY — EXW AND FOB
EXW — Ex Works (named place of delivery) means that a seller’s only responsibility is to make the goods available at his premises (works or factory). The buyer bears the full cost and risk involved in bringing the goods from there to the desired destination.
FOB — Free on Board (named port of shipment) means that the goods are placed on board the ship by the seller at a port of shipment named in the sales contract. The seller must clear the goods for export. The risk of loss of or damage to the goods is transferred from the seller to the buyer when the goods pass the ship’s rail.
HOW TO CLASSIFY YOUR GOODS FOR EXPORT?
At first glance it seems simple matter. However, it might be difficult. The Commodity Code (HS CODE) is organized into 21 sections and 97 chapters, accompanied with general rules of interpretation and explanatory notes. In order to classify goods it’s necessary to know full description of the goods (size, specification, material composition and so on). Classifying your goods correctly will help to ensure that you pay the right duty for import-export and VAT and know whether import or export certification is required. Incorrect classification can lead to your goods being delayed or/and possible financial penalties.
How to Calculate CBM for a Sea Shipment and Air Shipment
CBM (or cubic meter) is the standard size that international sea shippers use to calculate how much to charge for cargo that is less than a container load (LCL). A CBM is defined as 1 meter high, wide and deep. You calculate it by multiplying the three dimensions of a box, crate or pallet in metric units. For example, a box that is 0.6 m high by 0.4 m wide by 1 m deep is 0.24 CBM. A CBM is approximately 35 cubic feet.
As for air cargo, air carrier usually charge the rate for kilo. And in order to avoid the situation, where light cargo can be charged less, volume weight can be applied. The formula for calculation is like this: Width (CM) X Height (CM) X Depth (CM) / 6000 = volume weight. So if the cargo is light, and 1 CBM for example is less than 166 kilo, it will be charged the rate for 166 kilos by air carrier anyway.