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Incoterms

International Commercial Terms (‘Incoterms’) are internationally recognized standard trade terms used in sales contracts. They’re used to make sure buyer and seller know

∙ Who is responsible for the cost of transporting the goods, including insurance, taxes and duties

∙ Where the goods should be picked up from and transported to

∙ Who is responsible for the goods at each step during transportation

Incoterms are used in contracts in a 3-letter format followed by the place specified in the contract (e.g. the port or where the goods are to be picked up)

*. EXW Ex-Works

*. FCA Free Carrier

*. FAS Free AlongSide Ship

*. FOB Free On Board or Frieght On Board

*. CPT Carriage and Paid to (Duty Paid)

*. CFR Cost and Frieght

*. CIF Cost Insurance and Frieght

*. CIP Carriage and Insurance Paid To

*. DAT Delivered at Terminal

*. DDU Delivery Duty Unpaid or DAP –Delivery at Place

*. DDP Delivery Duty Paid

Logistics is a part of Supply Chain Management… Movement of goods or any substance from one place to another is called Logistics..

There are 3 modes of transportation.. Surface transport, Air transport, Ocean transport

The transportation of goods or material is called as Cargo or Freight…

In the logistics, who bring the material or goods by air is called as “Carrier” (flight). Like that who bring the material or goods by ocean is called as “Vessel” (Ship).

Major document used for transportation:

*. For Surface Transportation - LR (Lorry Receipt) and GR (Goods Receipt)

*. For Rail Transportation - RR (Railway Receipt)

*. For Air Transportation - AWB (Airway Bill)

*. For Ocean Transportation - BL (Bill Of Lading)

*. Net Weight : Actual Weight of the Cargo.

*. Gross Weight : Actual weight of the cargo + box/pallet weight

*. Volume Weight : Outer dimensions of the pallet/crate/carton boxes.

Volumetric Weight Formula : (L*B*H) in cm /Divisor

Divisor = 6000 for Airlines

Divisor = 5000 for Fedex or DHL or Any Types of Express Courier for air

Divisor = 2500 or 4500 or 5000 or 6000 for any types of surface courier depends on agreement

By sea Volume is calculated Based on CBM - Cubic Meter

CBM Calculation Formula = (L*B*H in mm)/1000000000

= (L*B*H in cm)/1000000

= L*B*H in Meters