1. Shipping Internationally…
Key things you should be thinking about
A presentation for UKTI
By
Andy King
Monmouth Ventures Ltd

2. Major areas for consideration
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Communication
Shipping Terms
Choosing the right logistics partner
Modes of Transport
Packaging
Insurance
Getting paid
Transit times and lead times
Local knowledge
Documentation
Regulation
Managing Suppliers

3. Communication
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English is THE international business language but
understanding can vary
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Keep it simple and clear, don’t use difficult or
obscure words
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Check for understanding
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Confirm everything in writing

4. Shipping Terms
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International trade is covered by 11 shipping or
INCOterms.
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Differences boil down to who is responsible at
different stages of the journey
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Obligation to pay follows responsibility

5. Shipping Terms
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Terms that begin with “C” mean that the seller of
the goods has responsibility for the shipping
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Terms that begin with “D” mean that the seller’s
responsibility ends at a defined point
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Terms that begin with “E” seller’s responsibility
ends when the goods leave
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Terms that begin with “F” means that the seller has
limited responsibility for the shipping

6. Choosing the right partner
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Horses for courses
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Big is not necessarily best, but are usually the
cheapest and easiest to use
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Small specialists will give a better service but will
cost more
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Tend to find out how good your partners are when
something goes wrong

7. Mode of transport
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Which mode should you use? Depends on a number of
factors
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Size, weight, nature of items being shipped, collection
time, destination, desired delivery date
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Lead time + material (nature, value) + location + size =
cost
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Quick = expensive, Big = expensive, Q + B = very
expensive
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The shorter the transit, the more secure the shipment

8. Packaging
• International more demanding than
domestic…pack accordingly
• Quality and suitability of packaging is a key factor
in claims
• Nature of destination and local capabilities
determines need
• Nature of goods impacts choice of packaging
o Hazards – rules
o Liquids
o Temperature control
o Value
o Delicate or breakable

9. Insurance
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Have some…you never know when you will need it
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Don’t try to cut your cost of trade by underdeclaring the value of your goods
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Insurance claims will only be paid to the value
declared on your invoices
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Customs authorities have a pretty good idea of
what most items are worth

10. Getting paid…
• Logistics can play a big part in making sure you get
paid
• Agreements often have clauses and penalties for
late delivery
• Finance in the form of Letters of Credit (LC’s) often
have specific terms relating to the transport and
delivery of goods
o Make sure you understand them
o Follow them precisely…or else!
o Make sure your partner has experience of
dealing with LC’s

11. Transit times…True or false?
•
There are lies, damned lies and then there are transit
times!
• Leave as much time as possible
• What can go wrong, will go wrong
o Tsunami
o Ash Cloud
o SARS / Flu
o Bad weather
o Strikes
o Fuel crisis
o Traffic – accidents, busy routes/days
• Cost

12. Local knowledge
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The more you know, the more you will save
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Everywhere is different, even within a country
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Public holidays…
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Understand the clearance process, especially in
developing nations, and the USA

13. Shipping Documents
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There is a minimum requirement depending on
mode of transport
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Invoice and packing list
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Does your product need a licence or a permit?
Import and/or export
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Lots of good information on Government website
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Logistics partner can add value here

14. Regulation
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Increasing
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Voted the biggest pain issue
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Huge variation in rules and application
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China – poor process, corrupt?
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Russia – constant rule changes, corrupt?
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USA – protectionist, lots of rules, very officious
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India – bureaucratic, slow but can be speeded up
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Latin America – chaotic, corrupt?
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Africa – Corrupt?
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Middle East – Restrictions, embargo
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Lean on your partner, experience counts for a lot

15. Managing Suppliers
It is a process
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Specify what you expect and need
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Consider a few alternatives
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Check that reality matches claims
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Monitor performance
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Review with supplier
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Demand corrective action
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Repeat cycle
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Working in partnership will consistently deliver the best results

16. Useful Links
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HMRC Import/Export helpline
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Link to useful Government information about
International trade
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http://www.fta.co.uk/
Link to the AICES (Air express Association) website
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http://www.rha.uk.net/
Link to the FTA website
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https://www.gov.uk/incoterms-international-commercial-terms
Link to the RHA website
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https://www.gov.uk/browse/business/imports-exports
Link to guide for Incoterms
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http://search2.hmrc.gov.uk/kb5/hmrc/contactus/view.page?record=iQ
9MFQAxnZk
http://www.aices.org/
Link to the BIFA website
o
http://www.bifa.org/content/home.aspx

17. Appendices

18. Incoterms – “E & F”
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EXW (EX-Works)
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FOB (Free On Board)
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One of the most commonly used-and misused-terms, FOB means that the shipper/seller uses his freight
forwarder to move the merchandise to the port or designated point of origin. Though frequently used to
describe inland movement of cargo, FOB specifically refers to ocean or inland waterway transportation of
goods. "Delivery" is accomplished when the shipper/seller releases the goods to the buyer's forwarder. The
buyer's responsibility for insurance and transportation begins at the same moment.
FCA (Free Carrier)
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One of the simplest and most basic shipment arrangements places the minimum responsibility on the seller
with greater responsibility on the buyer. In an EX-Works transaction, goods are basically made available for
pickup at the shipper/seller's factory or warehouse and "delivery" is accomplished when the merchandise is
released to the consignee's freight forwarder. The buyer is responsible for making arrangements with their
forwarder for insurance, export clearance and handling all other paperwork.
In this type of transaction, the seller is responsible for arranging transportation, but he is acting at the risk
and the expense of the buyer. Where in FOB the freight forwarder or carrier is the choice of the buyer, in
FCA the seller chooses and works with the freight forwarder or the carrier. "Delivery" is accomplished at a
predetermined port or destination point and the buyer is responsible for Insurance.
FAS (Free Alongside Ship)*
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In these transactions, the buyer bears all the transportation costs and the risk of loss of goods. FAS requires
the shipper/seller to clear goods for export, which is a reversal from past practices. Companies selling on
these terms will ordinarily use their freight forwarder to clear the goods for export. "Delivery" is
accomplished when the goods are turned over to the Buyers Forwarder for insurance and transportation.

19. Incoterms – “C”
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CFR (Cost and Freight)
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CIF (Cost, Insurance and Freight)
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This arrangement similar to CFR, but instead of the buyer insuring the goods for the maritime phase of the
voyage, the shipper/seller will insure the merchandise. In this arrangement, the seller usually chooses the
forwarder. "Delivery" as above, is accomplished at the port of destination.
CPT (Carriage Paid To)
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This term formerly known as CNF (C&F) defines two distinct and separate responsibilities-one is dealing
with the actual cost of merchandise "C" and the other "F" refers to the freight charges to a predetermined
destination point. It is the shipper/seller's responsibility to get goods from their door to the port of destination.
"Delivery" is accomplished at this time. It is the buyer's responsibility to cover insurance from the port of
origin or port of shipment to buyer's door. Given that the shipper is responsible for transportation, the
shipper also chooses the forwarder.
In CPT transactions the shipper/seller has the same obligations found with CIF, with the addition that the
seller has to buy cargo insurance, naming the buyer as the insured while the goods are in transit.
CIP (Carriage and Insurance Paid To)
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This term is primarily used for multimodal transport. Because it relies on the carrier's insurance, the
shipper/seller is only required to purchase minimum coverage. When this particular agreement is in force,
Freight Forwarders often act in effect, as carriers. The buyer's insurance is effective when the goods are
turned over to the Forwarder.

20. Incoterms – “D”
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DAT (Delivered At Terminal)
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DAP (Delivered At Place)
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This term is used for any type of shipments. The shipper/seller pays for carriage to the terminal, except for
costs related to import clearance, and assumes all risks up to the point that the goods are unloaded at the
terminal.
DAP term is used for any type of shipments. The shipper/seller pays for carriage to the named place, except
for costs related to import clearance, and assumes all risks prior to the point that the goods are ready for
unloading by the buyer.
DDP (Delivered Duty Paid)
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DDP term tend to be used in intermodal or courier-type shipments. Whereby, the shipper/seller is
responsible for dealing with all the tasks involved in moving goods from the manufacturing plant to the
buyer/consignee's door. It is the shipper/seller's responsibility to insure the goods and absorb all costs and
risks including the payment of duty and fees.

21. Andy King
Monmouth Ventures Ltd
www.monvts.com
E: andy@monvts.com
P: + 44 7946 596 546