This introduction touches on transport, freight forwarders and commercial invoices.

Types of international transportation

There are a number of shipping options open to you. Obviously, they are determined by the quantity and size of your shipment and where it is going to or where it has come from.

Exporters may find it useful to consult a freight forwarder in determining the method of international shipping. Since carriers are often used for large and bulky shipments, the exporter should reserve space on the carrier well before the actual shipment date. This reservation is called the booking contract.

International shipments are increasingly made through bills of lading under a multimodal contract. The multimodal transit operator (frequently one of the transporters) takes charge of and responsibility for the entire movement from factory to final destination.

First steps

Order confirmation

Once an order has been confirmed, a document called a commercial invoice, or sales confirmation, will be completed by the seller.

Click here to see a sample of a commercial invoice.

Upon confirmation of the order, you should be aware of:

1. The quantity of the products being shipped
2. The entire cost of the shipment
3. How and when they will be shipped
4. Who is responsible for the shipment

Responsibility

Who is responsible for shipment is dependent on the Incoterms parties agree to during negotiations. These terms are fundamental to international trade as they clarify when responsibility for the shipment passes from seller to buyer. Caution must be exercised when selecting Incoterms because they usually relate to particular modes of transportation. For example, some Incoterms deal solely with transport by sea. Terms such as FOB and CIF can be used only for ocean bound freight:

• FOB - FREE ON BOARD: This means the shipper (seller) has upheld his/her part of the agreement when the goods pass the ship's rails at the port of exit. The receiving party (buyer) assumes risk and costs associated with the goods once they pass the ship's rail in the seller's home port. Due to the specific mention of the ship's rails, an aircraft or other mode of transport cannot be used in conjunction with FOB.
  
  
  
• CIF - COST, INSURANCE AND FREIGHT This means the seller's responsibility ends when the goods pass the ship's rail in the port of shipment. The seller must pay the costs and freight necessary to bring the goods to the named port of destination, but any additional costs due to events occurring after the time of delivery are transferred from the seller to the buyer. However, in CIF the seller must also procure marine insurance against the buyer's risk of loss of or damage to the goods during carriage.
  
  For a list of most commonly-used Incoterms - click here