Logistics & freights
Before embarking on any export venture, please ensure you understand the basic terms of delivery (including pricing and documentation). You must also understand the responsibilities of the major players for safe delivery of your products to buyers. Such details include: transport modes, duration of shipment, conditions required for different products and the agreed terms of trade.
- Know the available range of freight options
- Understand the importance of freight forwarding for a seamless export process
- Conduct due diligence in engaging a freight forwarder
- Understand INCOTERMS 2020, this will enable you understand your responsibilities and that of the buyer.
- Familiarize yourself with the necessary freighting requirements.
Freight forwarders & Custom Brokers
It is extremely important that you identify experienced freight forwarders and custom brokers. This would ensure that your products meet the agreed terms of delivery..
In order to be well prepared please:
- Familiarize yourself with different transport modes required to deliver the goods to the buyer
- conduct research on at least three freight forwarders / custom brokers
- visit the online databaseof freight forwarders, custom brokers and cargo agents in Nigeria
INCOTERMS is an acronym for International Commercial Terms. These are recognised terms in international business 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 define 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).
For detailed explanations on INCOTERMS and the different possibilities, find out everything you need to know on the INCOTERMS rules.
To ensure payment after delivery, take into account the following tips;
- Familiarize yourself with the different modes of payments
- Letter of Credit (LC) is a more secured mode of payment
- To receive payment ensure all delivery conditions must be satisfied
- Discuss suitability of different options with your bankers / financial advisers
Always undertake due diligence on your buyers before exporting!
International Chamber of Commerce (ICC) provides information about the incoterms rules. These rules have become an essential part of the daily language of trade. They have been incorporated in contracts for the sale of goods worldwide and provide rules and guidance to importers, exporters, lawyers, transporters and insurers.