Topic/subject: Export Marketing
1. Compare and contrast three incoterms. Explain why your choices are superior to your teammates when writing your comments..
2. PLEASE PROVIDE COMMENTS TO THE TWO DISCUSSIONS AND SHOW LINKS WHERE THEY CAN GO TO GET MORE INFO. EXPLAIN WHY YOUR CHOICES ARE SUPERIOR TO THESE DISCUSSION POST.
DISCUSSION#1: EXW Incoterm is probably the most favorable one from a sellers point of view, there is very little risk involved. The seller will not have to carry the burden of shipping it or any issues with the cargo. This makes the buyer totally responsible for making sure the shipment arrives safely at their location. There might be some complications, the seller will still have to be involved in exporting documents and clearances if the issues were not sorted.
This is quite similar to FCA terms but with FCA terms it is more likely that the seller runs certain risks depending if they need to drop the shipment at a specified location. “Most Incoterms experts argue that FCA is the best Incoterm to use when the buyer is arranging the main carriage of the goods, which means the international transportation”
Another interesting Incoterm is CPT Incoterm, the risk is divided more equally between the seller and buyer, CPT is often used in air freight, containerized ocean freight, small parcel shipments and “ro-ro” shipments of motor vehicles. With CPT the seller is responsible for the goods, commercial invoice, export packaging. The buyers are responsible for payment of goods, cost of import clearance.
https://www.shippingsolutions.com/blog/incoterms-2020-fca-spotlight-on-free-carrier (Links to an external site.)
https://www.twill.net/faq/logistic-terms-updates/what-does-fca-in-shipping (Links to an external site.)
https://www.incotermsexplained.com/the-incoterms-rules/the-eleven-rules-in-brief/ex-works/ (Links to an external site.)
DISCUSSION#2: Incoterms are usually related with the end product in terms of shipping and distribution for companies. There are 11 established incoterms (categories are typically determined via the delivery location and the individuals responsible for each leg of the journey. There are 4 established groups for incoterms (E,F,C,D) which further splits off to other subdivisions within the established group. For ex: Incoterms in group C (CFR, CIF, CPT, and CIP) are relate to the fact that the seller is responsible for all responsibility to the buyer’s destination port, once it’s loaded onto the buyers transport, the buyer assumes 100% responsibility for the goods.
Incoterms in Group D (DAT, DAP, DDP) relate to the destination of the goods. Delivered at Terminal (DAT) refers to when a seller delivers the good to the destination, waits for the products to be unloaded, then assumes all responsibility until the goods reach the buyers designated destination. Delivered at Place (DAP) slightly differs from delivered at terminal good are delivered ready to be unloaded at the designated destination in DAP, instead of waiting for them to be unloaded, then to deliver it to the designated destination in DAT. Delivered Duty Paid (DDP) assumes essentially 100% of the responsibility on the seller. Everything from clearing customs, paying duties, unloading, packaging, and shipping. ALL cost and risks related to export are covered and handled by the seller in DDP.
https://www.delta-net.com/compliance/customs-controls/faqs/what-are-the-different-types-of-incoterms (Links to an external site.)