Incoterms® is an abbreviation for “International Commercial Terms.” This term represents a very useful way of communication and it’s actually aimed at reducing confusion between buyers and sellers.
So what is an incoterm? An incoterm represents a universal term that defines a transaction between importer and exporter so that both parties understand the tasks, costs, risks, and responsibilities, as well as the logistics and transportation management from the exit of the product to the reception by the importing country. Incoterms are all the possible ways of distributing responsibilities and obligations between two parties. It is important for the buyer and seller to pre-define the responsibilities and obligations for the transport of the goods.
Here are the main responsibilities and obligations:
Point of delivery: here, the incoterms defines the point of change of hands from seller to buyer.
Transportation costs: here, the incoterms define who pays for whichever transportation is required.
Export and import formalities: here, incoterms define which party arranges for import and export formalities.
Insurance cost: here, incoterms define who takes charge of the insurance cost.
Advantages of using incoterms:
As they stand today, there are 11 main terms and a number of secondary terms that help buyers and sellers communicate the provisions of a contract in a clearer way; therefore, reducing the risk of misinterpretation by one of the parties.
Incoterms govern everything from transportation costs, insurance to liabilities. They contribute to answering questions such as “When will the delivery be completed?” “What are the modalities and conditions for transportation?” and “How do you ensure one party that the other has met the established standards? Having said that, it is important to remember that there are also limits to Incoterms. For example, they do not apply to contractual rights and obligations that do not have to do with deliveries. Neither do they define solutions for breach of contract.
Here’s what you should know about incoterms:
Ex Works (EXW) – The seller makes the goods available at its location, so the buyer can take over all the transportation costs and also bears the risks of bringing the goods to their final destination.
Free Carrier (FCA) – The seller hands over the goods into the disposal of the first carrier. After the buyer takes over all the costs, the risk passes when the goods are handed over to the first carrier.
Free Alongside Ship (FAS) – The seller must place the goods alongside the ship at the named port, the risk of loss or damage to the goods passes when the goods are alongside the ship, and the buyer bears all the costs from that moment on.
Free on Board (FOB) –The seller must load the goods on board of the ship, nominated by the buyer. Cost and risk are divided when the goods are actually on board.
Cost and Freight (CFR) –Seller must pay the costs and freight to bring the goods to the port of destination. Although the risk is transferred to the buyer when the goods are loaded on the ship.
Cost, Insurance and Freight (CIF) –It’s exactly like CFR except that the seller must in addition procure and pay for the insurance.
Carrier and Insurance Paid to (CIP) –The seller pays for the carriage and insurance to the named destination point, but risk passes when the goods are handed over to the first carrier.
Delivered Duty Paid (DDP) –The seller is responsible for delivering the goods to the named place in the country of the buyer, and pays all costs in bringing the goods to the destination.
Learning how to effectively file a freight claim is important because it will save time and money for your company. A freight claim is a legal demand for the payment of money, stemming from the breach of a contract of carriage. Following specific guidelines and processes is the only way to correctly deal with these claims. There are four essential elements to filing a freight claim:
The shipment must be identified so the carrier can complete an investigation.
The type of loss or damage must be stated.
The amount for the claim must be stated.
A demand for payment by the carrier must be included.
On top of making sure all four elements are included, follow these tips and suggestions to make sure you effectively file your next freight claim:
Take immediate action
Taking immediate action is a crucial step of effectively filing a freight claim. Freight claims for loss or damage are generally governed by Title 49, CFR. Claimants must file the claim, in writing, within the time limits specified in the bill of lading or contract of carriage. The time period cannot be more than 9 months (49 USC 14706e) from date of delivery or, if never delivered, the expected delivery date. Unless otherwise agreed upon in a contract, a carrier must acknowledge receipt of a claim within 30 days. The carrier must then pay, offer to compromise or disallow the claim within 120 days or provide status reports every 60 days thereafter. If the carrier fails to abide by these periods, it should be notified that it is violating the FMCSA claim regulations. Furthermore, per the National Motor Freight Traffic Association, concealed damage must be reported to the carrier within 5 days. After 5 days, if the carrier has not been alerted of the damage, they retain the right to deny the claim. The customer then becomes responsible for providing proof that the damaged or missing items were the result of poor actions on behalf of the carrier. If the customer is unable to provide such proof, the claim will be considered invalid.
Attempt to mitigate the damages
A responsibility that all parties of the shipping process share is attempting to mitigate damages. It is your responsibility to give a good faith effort to salvage damaged products unless you consider them to be totally or substantially useless and of no good.
Make supporting documentation available
Including supporting documentation is necessary for correctly filing a freight claim. If available, you should include the original bill of lading (BOL), the paid freight bill, inspection reports, notification of loss, copies of request for inspection, invoices, waivers, and other appropriate documents such as temperature reports and weight certificates. The more information you have regarding the freight, the more effective your claim will be.
Create a detailed description of the losses or damages
A detailed description of the loss or damage should be properly displayed. The claimant should include the number of items damaged, the type of damage, the value of each unit, and the net loss which results in the total amount of the claim. For example:
Many shippers use the services of intermediaries such as brokers or 3PLs (like Logistics Plus) to arrange with carriers for the transportation of their goods. Ordinarily a broker or 3PL does not have any liability for loss or damage since it is not a carrier and does have physical possession or control over the shipments. As a value-added service, Logistics Plus will generally offer to handle the filing and/or collection of claims on behalf of our customers. We also make available the various documents shippers need to file claims. This should not be confused with an assumption of liability, however; and claims must still be filed in your name (not that of Logistics Plus).
If you frequently ship LTL freight or truckload shipments, freight losses and damages are almost inevitable at some point during the process. That’s why it’s important to have an experienced and caring freight management partner on your side. When you work with Logistics Plus, we’ll gladly assist you with the filing or processing of your freight claims, and we’ll go to bat for you with the carriers to best represent your interests. Contact us today to learn more.
It was such an honor for Logistics Plus to have sponsored 2017 Best of Varsity Cup event which culminated with the awards banquet Friday evening at the Erie Bayfront Convention Center. Jim Berlin founded Logistics Plus 20 years ago with one guiding principle: Passion For Excellence. That passion has helped transform Logistics Plus from what it was in 1996: Three employees and one customer … to what it is today: A global company, based right here in Erie, with over 400 employees serving thousands of customers all around the world. Clearly, the district 10 student-athletes honored Friday evening also have a strong passion for excellence. We hope these student-athletes keep that same passion and competitiveness as they move on to the next phases of their lives. Whether that involves athletics, education, starting a career, or raising a family – having a passion for what you do will ensure your continued success in life.
You can read the final recap from Erie Times-News online at GoErie.com. Also included here are some photographs of Logistics Plus employees at the event (Flickr slide show below), and a couple videos from WICU 12 via ErieNewsNow.com.
This cool video shows an operation by the Logistics Plus Belgium team in Antwerp. We have been involved in a larger project involving the transport and delivery of two large (7 x 4 x 4 meter, 29 metric ton) proton therapy systems to a hospital in Manchester. Since there would be no space to reposition this equipment correctly at the final delivery site, we had to flip them at the port; but in a controlled way of course. So that’s how you flip it!
Logistics Plus Receives 2017 Supply & Demand Chain Executive SDCE 100 Top Supply Chain Projects Award
Cargo project involving the safe delivery of 200-ton stator from Poland to Turkey earns award for second consecutive year
ERIE, Pa. (June 22, 2017) – Logistics Plus Inc., a leading worldwide provider of transportation, logistics and supply chain solutions, is proud to announce – for the second consecutive year – it has been selected by Supply & Demand Chain Executive, the executive’s user manual for successful supply and demand chain transformation, as a recipient of an “SDCE 100” Top Supply Chain Projects Award.
The SDCE 100 is an annual list of 100 great supply chain projects. These projects can serve as a map for supply chain executives who are looking for new opportunities to drive improvement in their own operations. These projects show how logistics providers help their customers and clients achieve supply chain excellence and prepare their supply chains for success. The supply chain project submitted by Logistics Plus that earned this year’s recognition involved the safe delivery of a 200-ton stator (the stationary portion of an electric generator) from Gdynia, Poland to a Yatagan Thermal Power Plant in Mugla, Turkey on behalf of a Fortune 500 power and energy company.
“Our goal with 2017’s Top 100 is to shine the spotlight on successful and innovative transformation projects that deliver bottom-line value to small, medium and large enterprises across the supply chain,” says Ronnie Garrett, editor of Supply & Demand Chain Executive. “The selected projects can serve as a roadmap for supply chain executives looking for new opportunities to drive improvement in their own operations. We congratulate all of our winners for a job well done!”
“This is another validation that our project cargo experts are among the best in the business,” said Jim Berlin, founder and CEO of Logistics Plus. “We handle many cool logistics projects for major companies all around the world, every day. As we like to say, when it comes to big, bad or ugly cargo projects, that’s where we’re at our best. As you can imagine, moving a 200-ton piece of equipment takes great planning and flawless execution. Our LP Turkey Division was the lead on this project, and they delivered for us, and our customer, yet again.”
About Supply & Demand Chain Executive Supply & Demand Chain Executive is the executive’s user manual for successful supply and demand chain transformation, utilizing hard-hitting analysis, viewpoints, and unbiased case studies to steer executives and supply management professionals through the complicated, yet critical, world of supply and demand chain enablement to gain competitive advantage. Visit them on the web at www.SDCExec.com.
About Logistics Plus Inc. Logistics Plus Inc. provides freight transportation, warehousing, global logistics, and supply chain management solutions through a worldwide network of talented and caring professionals. Founded in Erie, PA by local entrepreneur, Jim Berlin, 20 years ago, Logistics Plus is a fast-growing and award-winning transportation and logistics company. With a strong passion for excellence, its 400+ employees put the “Plus” in logistics by doing the big things properly, and the countless little things, that together ensure complete customer satisfaction and success.
The Logistics Plus® network includes offices located in Erie, PA; Alma, AR; Little Rock, AR; Los Angeles, CA; Riverside, CA; San Francisco, CA; Visalia, CA; Atlanta, GA; Chicago, IL; Detroit, MI; Kansas City, MO; Charlotte, NC; Lexington, NC; Buffalo, NY; Cleveland, OH; Charleston, SC; Greenville, SC; Nashville, TN; Dallas, TX; Fort Worth, TX; Houston, TX; Laredo, TX; Madison, WI; Australia; Bahrain; Belgium; Canada; Chile; China; Colombia; Egypt; France; Germany; Hong Kong; India; Indonesia; Kazakhstan; Kenya; Libya; Mexico; Poland; Saudi Arabia; Singapore; South Sudan; Taiwan; Turkey; UAE; and Uganda; with additional agents around the world. For more information, visit www.logisticsplus.com or follow @LogisticsPlus on Twitter.
Where is Erie going and who will take it there? In its annual “40 Under 40” feature, the Erie Reader seeks to answer these questions, giving a face to the present as we face an uncertain future. Whether it’s making a difference one-on-one in a classroom setting or lobbying for change on a national level, these electees prove that, yes, success can (and does) happen here. These are passionate individuals intensely dedicated to their crafts, trades, and causes, working hard to rewrite our narrative and reroute our course.
Congratulations to Matt Reichert, Manager of Operations and General Counsel for Logistics Plus Linguistic Solutions, on being named to Erie’s 40 Under 40 list! Read the full article online using the link below (Matt’s profile is on page 20).
Incoterms® is an abbreviation for “International Commercial Terms.” This term represents a very useful way of communication and it’s actually aimed at reducing confusion between buyers and sellers.
It was such an honor for Logistics Plus to have sponsored 2017 Best of Varsity Cup event which culminated with the awards banquet Friday evening at the Erie Bayfront Convention Center. Jim Berlin founded Logistics Plus 20 years ago with one guiding principle: Passion For Excellence. That passion has helped transform Logistics Plus from what it was in 1996: Three employees and one customer … to what it is today: A global company, based right here in Erie, with over 400 employees serving thousands of customers all around the world. Clearly, the district 10 student-athletes honored Friday evening also have a strong passion for excellence. We hope these student-athletes keep that same passion and competitiveness as they move on to the next phases of their lives. Whether that involves athletics, education, starting a career, or raising a family – having a passion for what you do will ensure your continued success in life.
