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Understanding and negotiating Shipping Terms With Your Overseas Supplier

There are many shipping terms related to the importation of goods from Overseas suppliers into Australia or the rest if the world. It is important to understand what is covered by each term, as different abbreviations cover specific aspects of the shipping process.  When negotiating the purchase price with your overseas supplier it is essential to know and understand the most common shipping terms as this can affect the final price that you pay.

Two of the most common shipping terms are Ex-works and FOB

Ex works –  A trade term which you as the buyer are responsible for all  inland transportation, freight, shipping cost from the sellers place of manufacture or warehouse including any overseas customs requirements. This in effect means you can control all the costs of getting the goods from their door to your door & may be an opportunity to save cost of the product over an Fob arrangement.

Overall the costs of the product will lower as you are responsible for all fees from the sellers door to your door.

Some fees involved in the Ex-works shipping arrangement are as follows, but this can vary from country to country.
Please call us for clarification on 03 9333 6820.

  • Origin export terminal charges.
  • Export docs & handling.
  • Express / telex release fee.
  • Transportation of the items from the sellers store to the shipping port.
  • Export local customs fees.
  • Certificate of origin & other documentation fees.
  • Fumigation or heat  treatment.
  • All destination costs in Australia such as terminal charges , duty, customs clearance, quarantine & delivery to your door.

Fob –  Free on Board  – A trade term you as the buyer has negotiated  price based on the seller to deliver goods on board the ship or flight designated by you at the point of loading . The seller full fills their obligation to cover any origin costs including export customs ,inland transportation from their door to the shipping port of loading . The actual purchase cost of the goods may be higher as the seller has to pay to have the goods delivered and any other origin fees prior to export.

Overall the costs of the product maybe higher as you are responsible only for the freight of port of origin port /airport to your destination.

Your final shipping costs will be.

  • International freight ( air or sea – FCL or LCL) from the origin port to destination port of Australia.
  • Export docs and handling fee.
  • All destination costs in Australia such as terminal charges, duty, customs clearance, quarantine & delivery to your door.

Don’t risk being caught out with costs you were not aware off, contact us to find out how you can negotiate shipping terms with your overseas seller.   

Carmen Leigh.

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