Hii,,
Today we discussed about the terms and incoterms in using export import business.and what charges applicable and custom packaging etc .know let's. Go to world trade business .. groww
.. my self ashish meena and I am hear to give bright knowledge about export import business.
All details cover in fob and CIF terms.
1.FOB( FREE on board) this means the seller (exporter in India )is responsible for the goods until they are load on to vessel al the port origin (eg. Mumbai , chennai,mudra port) the buyer's (importer in newyork )take over all costs and risk from that point onward....
2.CIF( cost insurance freight)this means the seller is responsible for the goods insurance and freight until they reach the port of destination (new york).the buyer take over risk once the goods are loaded on to the vessel but the seller covers the costs up to the destination port ...
CIF VALUE=fob +ocean freight /or air freight+marine insurance.
Factors in influencing fob and CIF VALUE:
1. product specification commercial invoice value ( Ex factory price )
This is based costs of your goods .
• weight and volume crucial for calculating shipping costs .heavy and bulk items will have higher freight charges.
• packaging if and cost of packaging to ensure safe Transite...
2. Origin and destination port .
• indian port mudra , chennai mumbai etc.
• USA port new york is specified but specified terminal might matters .
3. Transportation mode.
. Sea freight ocean freight most common for bulk goods .can be full container loaded (FCL)or less than container loaded (LCL)....
FCL .you book entire container 20 ft./40
Costs are fixed for container.
LCL.you share container space with other shipper and cost are based on your volume/weight .
4. INLAND TRANSPORTATION IN INDIA.
•costs of transportation goods from you factory/warehouse to the Indian port.
5. Port charge india .
• Terminal handling charges
•loading charges
•Documents fees.
6.custom and documents (india).
Export custom clearance fees generally law and fix most. India export but professional service may cost.
. Documents fee bill loading critical of origin etc.
7. Marine insurance..
Typically small proportion of the CIF value of to 0.5% to 1.5% of the cargo value or more freight risk goods .routes. it for against loss or damage living Transit . Institute cargo clauses offer the broad protection.
8. Exchange rate the prevailing USD to INR exchange rate will impact the final values .
General cost compound and estimate illustration not actual quotes.
To provide even rough estimate you need assume volume.for the product cost volume and act nature of the goods.
Let's assume you exporting 10 CBM cubic meter of wooden handicrafts from mudra port (INDIA)to new york port (USA ).
1. EX factory price of goods (commercial invoice value ) $ 10,000 (for 10 CBM of wooden handicrafts )
2. Inland transportation from factory to mudra port $200
3. Local charges at mudra port loading
Thc documents $150
4.export custom clearance (agent fee). $ 100 (estimate fob value).
FOB VALUE -EX FACTORY PRICE INLAND.
FOB VALUE - $10,000 +$200+$150+$10
5. Ocean freight (LCL mudra to new york of 10 CBM )
according to some sources LCL from mudra to new york for 5-10 CBM could be from $2595 (per CBM indicating total would be higher ). let's estimate $2500- $ 3000 for 10 CBM let's $2800 FCL 20 feet container for $ 2248, 40 ft for $2514
But value is less than 20 ft container usually holds which is 28 CBM.
6.marine insurance let's assume 1% of the CIF value or 1% of the fob value is an approximate in CIF
Insurance approximate=1% fob value
Insurance approximate=1%($ 10,450 let to $ 135
CIF VALUE FOB VALUE TO OCEAN FREIGHT
CIF VALUE=$10,450 +$ 2800+$135
• Garments .often shipped by air for faster delivery due to fashion cycle or by sea for bulk order is import duties on garments from India to very small significant eg 7% to 16.5%
For specified category higher under reciprocal regimes.
In export import business all charges and duties pay buy the buyer not seller.
For watching my contant and business knowledge.
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