Logistics & freights
If you want to export, make sure you understand the basic terms of shipping (including pricing and documentation). You must also understand the responsibilities of the major players for safe delivery of your products to buyers. Details such as duration of shipment, types of transport modes, conditions required for different products and the agreed terms for the export must be well understood.
- Understand the importance of freight forwarding for a seamless export process
- Know the available range of logistics options
- Conduct due diligence in engaging a freight forwarder
- Know how to apply INCOTERMS (2010) in order to quote your price for delivery correctly
- Familiarise yourself with export documents and documentation process for logistics
Freight forwarders & custom brokers
It is extremely important that you identify experienced custom brokers and freight forwarders. This would ensure that your products get to the buyer via the most appropriate conditions, costs and routes. Familiarise yourself with different transport modes required to deliver the goods to the buyer. In order to be well prepared please:
- conduct research on at least three freight forwarders / custom brokers
- visit the online database of freight forwarders, custom brokers and cargo agents in Nigeria
INCOTERMS is an acronym for International Commercial Terms. These are internationally recognised terms in international transactions. It provides details on the responsibilities of buyers and exporters. The terms are important for the processing of shipping and payment documents during exports. Basically, INCOTERMS defines all obligations of buyers and sellers within the logistics chain.
The picture below (source: internationalcommercialterms.guru) clearly outlines these obligations under different agreements. It specifies the responsibilities of the buyer and the seller per agreement including the point of transferring the obligations (transfer of risk).
Looking for more detailed explanations on INCOTERMS and the different possibilities? Find out everything you need to know on the INCOTERMS rules.
After delivering the specified product to your buyer, you should make sure you will receive the payment. Take into account the following tips with respect to getting paid:
- Familiarise yourself with the different modes of payments
- Letter of Credit (LC) is a more secured mode of payment
- To receive payment all delivery conditions mentioned on the LC must be satisfied
- Be sure that you can adhere to all the requirements and requested documents listed in the LC
- Discuss suitability of different options with your bankers / financial advisers
Always undertake due diligence on your buyers before exporting!