Are you using the correct transport document for shipping goods?
The use of the wrong transport document could lead to unexpected costs and liability for the seller by extending the responsibilities beyond the definition of the incoterm rule. The Incoterm @ 2010 requires the buyer to provide the seller with appropriate proof of taking delivery of the goods, not the seller to provide proof of transport of the goods.
- Why is this important?
- What should you know about the FCA or EXW Incoterm © 2010 rules? Under the EXW rule, the only correct transport document is a courier receipt provided by an international door-to-door courier / freight service. EXW obliges the carrier to load the domestic means of transport and at that time provide the seller with the appropriate evidence in the form of a courier receipt.
La règle incoterm de la FCA exige que le vendeur charge les marchandises sur le transporteur intérieur. Si l’acheteur a pris possession ou livraison des marchandises lors du chargement, la preuve appropriée doit être un récépissé de cargaison du transitaire (FCR), un connaissement intérieur ou tout autre document de chargement/livraison pertinent signé par le transporteur et fourni au vendeur lors du chargement .
- What if the LC requires an air waybill or sea bill of lading instead?
The LC must be changed to change the transport document to a Courier Receipt or Freight Forwarder Receipt (FCR). Why? Because the shipper's responsibility now extends beyond the release and loading of the goods on the domestic carrier until the actual loading of the international carrier. It is unregulated territory.
- What could go wrong?
1. The goods are lost or damaged during transport to the international carrier Here are the consequences that could occur:
- The buyer has not purchased the insurance before loading the inland conveyance and damages will revert to the seller.
- inability to obtain a clean AWB or OBL due to visible damage or loss of goods resulting in LC deviation and sending of documents on approval to the buyer.
- Failure to obtain an accurate AWB or OBL due to the non-compliance of the freight forwarder or carrier with LC requirements.
- The seller may not be able to obtain the AWB or OBL at all. If the goods are lost or stolen en route to the international carrier, a valid transport document will not be issued. Without the transport document, there will be a total loss of goods and funds.
2. There is a delay in loading the goods on the international carrier. If the time constraints are close, the delay can create a shipment defect on the last shipment date on the LC.
Avoid unnecessary risk by taking the time to verify that the correct transport document has been applied to your EXW or FCA shipment. You will save yourself unforeseen headaches and there will be no surprises that negatively impact your results!
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Written by Sherri Lane