(Business
Without Borders – Paul Gallant)
The latest iteration of
‘Incoterms’ will help you avoid costly misunderstandings when sending your
products
“When was the last time you saw a truck floating?” asks Joy Nott, the president
of the Canadian Association of Importers and Exporters. “I don’t think you
have.”
But when Canadian companies import or export goods internationally, Nott
estimates that 90% of them use the shipping code FOB –
short for “Free On Board” or “Freight On Board.” The vast majority of Canadian
international trade is by truck; international guidelines state that cargo sent
FOB must
be carried by a sea vessel. For international land and air transportation,
shipping cargo FOB
invites only confusion and possible legal headaches. Yet Canadian companies
can’t seem to part with the term. Understanding shipping, and the terms that
define it, is crucial for any business sending goods abroad.
Nott hopes an update of the International Commercial Sales Terms, known as
Incoterms, could persuade Canadian businesses to look more carefully at what
they’re agreeing to when they draw up shipping contracts with international
suppliers and customers. The 11 revised Incoterms, which come into effect January 1, 2011, are
aimed at making the responsibility of buyer and seller even more clear in an
era where multimodal transportation has become the rule, not the exception.
Read more here
(membership required).
