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United StatesDepartment reHandbook 700Agricultural ExportTransportationHandbook

United StatesDepartment ral ExportTransportationHandbookbyEllen M. Welbyand Brian McGregorTransportation Services BranchTransportation and Marketing ProgramsAgricultural Marketing ServiceWeb site: d February 2004

AcknowledgmentsThe authors are grateful to Robert Neenan and KateHealey, formerly of AMS, Transportation and MarketingPrograms; Mary E. Lassanyi, U.S. Department ofAgriculture (USDA), Agricultural Research Service,National Agricultural Library; David Enberg, J.E.Lowden & Co.; Karen Lowe, Firstar Bank; and OscarA. Lopez, Overseas Shipping Company. The authorsacknowledge the Agriculture Ocean TransportationCoalition, Air Transport Association of America,Bureau of the Census, Marine Office of AmericaCorp., Maersk Sealand, Inc., U.S. Department ofTransportation, and USDA’s Foreign AgriculturalService and Animal and Plant Health InspectionService for their assistance.Preferred CitationWelby, Ellen M., and Brian McGregor. Agricultural Export Transportation Handbook.U.S. Department of Agriculture, Agricultural Marketing Service, February 2004.Web http://dx.doi.org/10.9752/TS022.02-2004 This handbook provides a compilation of best industrypractices, and its recommendations have been shownto be effective under normal conditions.Mention of companies or commercial products doesnot imply recommendation or endorsement by the U.S.Department of Agriculture over others not mentioned.The U.S. Department of Agriculture (USDA) prohibits discriminationin all its programs and activities on the basis of race, color, nationalorigin, sex, religion, age, disability, political beliefs, sexualorientation, and marital or family status. (Not all prohibited basesapply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, largeprint, audiotape, etc.) should contact USDA’s TARGET Center at(202) 720-2600 (voice and TDD).To file a complaint of discrimination, write USDA, Director, Officeof Civil Rights, Room 326-W, Whitten Building, 14th andIndependence Avenue, SW, Washington, DC 20250-9410 or call(202) 720-5964 (voice and TDD). USDA is an equal opportunityprovider and employer.

ContentsSubjectPageIntroduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2Price Quotation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6Freight Forwarding . . . . . . . . . . . . . . . . . . . .International Freight Forwarder . . . . . . .Non-Vessel Operating Common CarrierShippers’ Association . . . . . . . . . . . . . .Customs Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7. . . . . . . . . . . . . . . . . .7. . . . . . . . . . . . . . . . . .8. . . . . . . . . . . . . . . . . .8. . . . . . . . . . . . . . . . . .8Ocean and Air Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9Ocean Cargo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9Air Cargo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12Transport Documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16Pro Forma Invoice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16Commercial Invoice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17Inspection Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17Weight Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18Packing List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19Shipper’s Letter of Instruction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20Dock Receipt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20Certificate of Origin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20Consular Invoice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20Insurance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20Automated Export System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20Bill of Lading. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22Air Waybill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22Sample Transport Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23Methods of Payment . . . . . . . . . . . .Cash in Advance . . . . . . . . . .Commercial Letters of Credit .Standby Letter of Credit . . . . .Documentary Collection . . . . .Open Account . . . . . . . . . . . .Mixed Methods . . . . . . . . . . . .Additional Methods of PaymentCurrency of Payment . . . . . . .Insurance . . . . . . . .Cargo InsuranceCoverage . . . . .Filing a Claim . . . . . . . . . . . . . . . . . . . .50. . . . . . . . . . . . . . . . . . .50. . . . . . . . . . . . . . . . . . .50. . . . . . . . . . . . . . . . . . .51. . . . . . . . . . . . . .40. . . . . . . . . . . . . .40. . . . . . . . . . . . . .40. . . . . . . . . . . . . .41. . . . . . . . . . . . . .42. . . . . . . . . . . . . .42. . . . . . . . . . . . . .42. . . . . . . . . . . . . .42. . . . . . . . . . . . . .43iii

SubjectPageMaintaining Product Quality During Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53Effective Packaging and Labeling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53Stacking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55Packing Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55Standardization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56Unit Loads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57Pallets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57Slipsheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57Labeling and Branding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58Temperature, Humidity, and Other Environmental Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60Loading Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64Intransit Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66Receiving Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66Air Circulation and Sanitation in Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67Export Advice and Assistance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .105State Departments of Agriculture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .105General Market Research and Market Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .110Foreign Market Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .111Export Assistance Programs and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .112Foreign Country Import Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .113U.S. Export Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123U.S. Export Inspection, Grading, and Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .124Export Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .126Export Financing and Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .127Trade Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .127Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .128Trade Information Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .129Publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .130Journals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .131Publishers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .132Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .133Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .137iv

IntroductionThe 51.6 billion of U.S. agricultural exports in calendar year 2000 was 3.1 billion more than in 1999, a6.4-percent jump. This increase broke the 3-year stringof annual declines that started in 1997. U.S. exports ofhigh-value agricultural products accounted for 2.2 billion or two-thirds of the export gain in 2000. Takingadvantage of these growing export opportunities is notlimited by company size. Many small to medium-sizecompanies are successfully selling their products overseas.Is your company ready to take advantage of theseexport opportunities? Have you developed an international marketing plan? Do you know which foreign market(s) hold the greatest potential and risk for yourproduct(s) and have you located foreign customers?These are a few of the questions your company needsto answer before shipping product(s) overseas.This publication provides you with a list of resources tohelp answer these questions. But mainly, the handbooklooks at the transportation portion of the exportprocess, that is, how to physically move agriculturalproducts overseas with a focus on shipping high-valueor value-added agricultural products. (Limited information on shipping bulk commodities is included.)Many shippers rely simply on a freight forwarder, atravel agent for cargo, to handle all their transportationneeds. The right freight forwarder is a valuable ally, butthe shipper must also take an active role. It is the shipper’s reputation and repeat sales that are on the line.By understanding who are the key players and theirresponsibilities, incoterms (international commercialterms), ocean and air cargo services, transport documentation, cargo insurance, methods of payment, andproduct handling, shippers can work with their freightforwarder to better ensure the success of their exportventure.documents used in export transportation and providessamples. It also explains the different types of cargoinsurance, where to obtain it, and the procedures tofollow when filing a claim. It offers guidelines for thesafe transport of agricultural products to the overseasbuyer, including tips on cooling, grading, packing, loading, storage, and the selection of transport equipmentand mode of transportation. The sections on tradeassistance and publications are included to provideshippers with other sources of information when theanswer cannot be found within this text.Our goal is to provide agricultural shippers with theinformation they need, in a concise, user-friendly format. We have also gone considerable lengths toensure that the information in the publication is accurate. Should you discover information that is incorrect,we would appreciate hearing about it. Also, if you haveany comments, suggestions for improvements, or additional information we should include, we would like tohear from you.Send comments to:Ron HagenUSDA, AMS, TMPTransportation Services Branch1400 Independence Avenue, SWRoom 1203 South BuildingWashington, DC 20250Phone: (202) 690-1320Fax: (202) 690-1498E-mail: Ron.Hagen@usda.govThis handbook provides an overview of an export shipment, highlighting what parties are involved and theirresponsibilities. It looks at the role of the freight forwarder, non-vessel operating common carrier, andcustoms broker. Incoterms, how to quote a price, andmethods of payment are also covered as are oceanand air transportation. It explains the more common1Economic Research Service, Foreign Agricultural Trade of theUnited States (FATUS), p. 2, February 2000.1

OverviewA typical export shipment from the United Statesinvolves approximately 40 steps that are carried out by11 separate entities. The following is an outline of anexport shipment going by sea using a confirmed irrevocable letter of credit as the method of payment. Thisis followed by a list of the entities involved and theirindividual responsibilities.Forty Steps of an Export ShipmentThe buyer requests a quotation from thesupplier/seller.2.The seller responds by sending a pro formainvoice. The buyer uses the pro formainvoice to apply to its bank for a letter ofcredit.3.The buyer/consignee’s bank issues the letterof credit.4.A purchase order and the letter of credit aresent to the shipper.5.Shipper issues instructions to the freight forwarder for shipping the goods.6.The freight forwarder books space with anocean carrier (and inland carrier if requestedby the shipper). When the booking is made,the carrier assigns a booking number to identifythe shipment.7.The freight forwarder prepares and submitsa bill of lading master and a shipper’s exportdeclaration, which are sent to the ocean carrier.8.The shipper’s freight forwarder transmits theinland bill of lading and delivery instructions tothe selected inland carrier, a truck, rail, or bargeline.9.The inland carrier picks up the cargo at thespecified location and issues a cargo receipt tothe shipper.10.The cargo is delivered, along with a set ofprepared dock receipts, to the out-bound pierterminal.Source: Maersk SeaLand2After taking delivery of the cargo, the outboundterminal gives a signed copy of the dock receiptto the inland carrier.12.A copy of the dock receipt is also sent to theocean carrier’s office.13.The ocean carrier’s office matches the dockreceipt with the booking number; it prepares aloading stowage plan.14.The cargo is lifted aboard and stowed on the vessel, according to the stowage plan.15.After the cargo has been loaded, the terminalsends the bills for stevedoring and wharfage tothe outbound carrier’s office.16.The outbound carrier’s office issues an ocean billof lading with on-board certification, whenrequired, to the shipper’s freight forwarder. Thisbill of lading is a negotiable instrument and actsas title to the goods.17.Upon receipt of the due bills from the outboundcarrier’s office, the shipper’s freight forwarderpays the amounts due (if prepaid).18.If the terms of sale indicate that the shipper isresponsible for all transportation costs, and theshipper has not prepaid, then the freight forwarder collects payment from the shipper inexchange for the transportation documents.19.The shipper submits a commercial set—the documents required for collection of payment as stated in the letter of credit—typically a negotiablebill of lading, an invoice and insurance certificate,and a customs invoice, if necessary—to thebank.20.The bank carefully reviews the documents in thecommercial set to guarantee that there are nodiscrepancies. After acceptance of the commercial set, the bank pays the shipper in accordancewith the letter of credit issued by the buyer’sbank.21.The shipper’s bank transmits the commercial setand a debit invoice to the consignee’s bank.21.211.

22.A non-negotiable copy of the bill of lading is sentto the consignee as notification that the cargohas been shipped.23.After the vessel has sailed, the manifest, freightbills (if sent freight due), delivery receipts, container list, and arrival notice are sent to the carrier’s overseas office.24.Within 4 working days of the vessel’s clearance,U.S. Customs receives a non-negotiable bill oflading copy with the shipper’s export declaration.25.Copies of the manifest are provided to theinbound pier terminal.26.The consignee’s bank releases the commercialset to the consignee against payment of theinvoice amount.27.Before the ship’s arrival, the carrier’s overseasoffice issues an arrival notice and invoice covering the ocean freight and other charges due iffreight charges are for the buyer’s account.28.The buyer sends the commercial set, arrivalnotice and invoice, and forwarding instructions toits customs broker.29.The customs broker presents the endorsed negotiable bill of lading to the inbound carrier’s officeas proof of title to the goods, and pays the oceanfreight (if freight charges are for the buyer’saccount).30.Upon receipt of freight due (if a collect shipment)and the negotiable bill of lading, the carrierreleases the cargo to the customs broker.31.At the same time, the carrier’s office notifies theinbound pier terminal that the consignee’s cargomay be released.34.In the case when the release is not effected atthe berth, the customs office notifies its inspectorat the inbound pier terminal that the cargo maybe released.35.The customs broker issues a delivery order to theinbound pier terminal authorizing delivery of thecargo to the designated inland carrier.36.The consignee’s customs broker issues an inlandbill of lading to the selected inland carrier.37.The inland carrier picks up the cargo at theinbound pier terminal.38.The cargo is delivered to the buyer.39.The inland carrier issues a freight bill to the consignee’s customs broker.40.With the shipment completed, the consignee’scustoms broker issues a bill to the consigneecovering ocean freight, terminal charges (if thesebills are charged to the buyer’s account), inlandfreight, and fees for the customs broker’sservices.The U. S. Department of Agriculture (USDA), AMS,Transportation and Marketing Programs (TMP), hasproduced a video, A Business of Details—ExportingHigh Value U.S. Agricultural Products, which follows anagricultural shipment from the farm to an overseasmarket. The video demonstrates the information covered in this section. (You can order a free copy of thevideo at: U.S. Department of AgricultureAMS, Transportation and MarketingProgramsTransportation Services Branch Publications1400 Independence Avenue, SWRoom 1217, South Building, or Stop 0267Washington, DC 20250-0267Responsibilities32.33.The consignee’s customs broker submits to thelocal customs office the proper documents andduties due for clearance in accord with local regulations.The customs office reviews the documents andmay elect to inspect the shipment. Once it is satisfied that the shipment is in compliance with thelaws, the customs office authorizes the release ofthe cargo to the customs broker.3Shippers! Contact freight forwarder with specifics of shipmentincluding:Number of packagesMarks and numbersDescription of cargo3Source: Maersk SeaLand, and the Port Authority of New Yorkand New Jersey3

!!!!!!Foreign destinationGross weight of each package shippedForeign party to be notifiedArrange inland freight *Prepare inland bill of lading *Prepare dock receipt *Prepare packing listMark cargo for:Gross and net weightCubic measurementForeign destinationIdentification marksCountry of originCheck documents prepared by freight forwarder foraccuracy* Denotes tasks that can also be handled by the freightforwarder.Freight Forwarders! Arrange inland transportation **! Book space with steamship company or air carrier! Prepare documents, including:Inland bill of lading **Dock receipt **Ocean bill of lading/air waybill masterConsular invoiceDelivery orderShipper’s export declaration! Pay the ocean freight charges! Secure the original documents for the shipperTerminal Operators!!!!!!!!Control truck traffic by issuance of pass to driverCheck the delivery order or dock receiptAssign a checker for loading and unloadingStuff containers for breakbulk cargoControl parking of containersAssign stowage locationsCoordinate movement of containers to the vesselLoad and secure the vesselOcean CarriersBook cargoDispatch containersProcess the bill of ladingPrepare:Freight invoiceManifestArrival noticeDelivery receiptStow plan! File shippers export declaration (SED) with U.S.Customs! Notify consignee of arrival and availability of cargo! Arrange inland transportation when required!!!!Customs InspectorsCheck import documentsInspect cargoControl release of cargoAssess duties where requiredComplete the processing of import permits** Denotes tasks that the shipper can also perform.!!!!!Inland CarriersCustoms Brokers!!!!!Receive delivery instructions ***Pick up cargo from shipperDeliver cargo to export pointHave dock receipt signed ***Notify exporter of arrival of cargo ****** This information can be supplied by either the shipper or the freight forwarder, whoever made thearrangements for inland transportation.! Prepare required customs entry and files with customs! Effect customs release, freight release! Coordinate with inland carrier for pickup of importcargo! Verify information on bill of lading and prepare delivery orders! Guarantee loading charges with terminal operatorConference Cargo InspectorsCommercial Banks! Issue financial documents guaranteeing paymentunder specified terms and conditions4! Spot-check exported cargo against submitted documents! Check against commodity description, weight, andcube

Port Authorities! Quasi-governmental organizations responsible forthe control and movement of vessels and cargo inand out of the portInsurance Surveyors! Survey cargo damage as requested by shipper orcarrier5

Price QuotationTerms of SaleExport terms of sale determine what costs are coveredin the price of the cargo. They also indicate at whatpoint ownership transfers to the buyer and at whatpoint responsibility for the cargo transfers. Internationalcommercial terms (incoterms) provide “the international rules for the interpretation of trade terms.” TheInternational Chamber of Commerce (ICC) publications Incoterms 2000 and GUIDE TO Incoterms 2000are the latest publications covering all trade terms. Themore commonly used trade terms are:! EXW (Ex Works.named point of origin)—The pricequoted applies only at the point of origin, and theseller agrees to place the goods at the buyer’s disposal at the specified place on the date or within theperiod fixed. All other charges are the responsibilityof the buyer. EXW is sometimes referred to as Freeon Board (FOB) .packing house, warehouse, etc.Example: EXW Factory, EXW Warehouse, etc.! FAS (Free Alongside Ship.named port of shipment)—Under this term, the seller quotes a price forgoods that includes charges for delivery of thegoods alongside a vessel at the port. The sellerhandles the cost of unloading and wharfage, loading, ocean transportation, and insurance costs areleft to the buyer.! FOB (Free on Board.named port of shipment)—Under this term, the seller quotes a price for goodsthat includes the cost of loading onto the transportvessel at the designated point. Ocean transportationand insurance are left to the buyer’s account.! CFR (Cost and Freight.named port of destination)—For shipments to designated overseas port ofimport, the seller quotes a price for the goods thatincludes the cost of transportation to the namedpoint of debarkation. The buyer is responsible forthe cost of insurance, which is referred to as C & Fin the old incoterms. The costs of unloading cargoat the port of destination are paid by the seller, tothe extent that they are included in the freightcharges. If the charges are separate, they fall to thethe buyer.! CIF (Cost, Insurance, Freight)—Under this term, forshipments to designated overseas port of import,the seller quotes a price for the goods, includinginsurance costs and all transportation and miscellaneous charges, to the point of debarkation from thevessel or aircraft. The costs of unloading cargo at6the port of destination are paid by the seller, to theextent that they are included in the freight charges.If the charges are separate, they fall to the accountof the buyer.The terms of sale dictate the point at which the title ofgoods transfer from the shipper to the consignee. Untilsuch time as the title of the goods transfers from theshipper to the consignee, the shipper has a financialand an insurable interest in the safe arrival of thegoods sold.Determining PriceTo calculate the cost of the export product, first determine the total product cost by multiplying the cost perunit by the number of units. Then add the following: Profit Commissions Banking fees Palletization/export packing Freight forwarding and documentation fees USDA inspection and phytosanitary certificate fees Other direct expenses related to special shippingrequirements such as temperature recorder charges EXW price Inland transportation FAS price Terminal handling charges FOB price Ocean freight charges Ancillary charges CFR price Insurance CIF price

Freight ForwardingInternational Freight ForwarderThe international freight forwarder plays an integralpart in the transportation process. Freight forwardersact on behalf of the exporter in arranging transportation services. They are familiar with the import rulesand regulations of foreign countries, methods of shipping, U.S. Government export regulations, and documents connected with foreign trade.Services—Freight forwarders provide a number of services. During the initial planning phases, the freight forwarder can help decide:!!!!Which carriers to useThe best days of the week to shipThe best routeThe most economical shipment sizeAt the beginning of a sale, they can provide theexporter with a quotation on:!!!!!!Freight costsPort chargesConsular feesCost of special documentationInsurance costsFreight forwarder’s feesThis information can be used in the preparation of anaccurate price quotation to foreign customers. At theshipper’s request, the freight forwarder can make theactual arrangements and provide the necessary services for expediting the shipment to its overseas destination. This can include:Booking space with the carrierCompleting export documentationArranging for ca

to answer before shipping product(s) overseas. This publication provides you with a list of resources to help answer these questions.But mainly, the handbook looks at the transportation portion of the export process, that is, how to physically move agricultural products overseas with a focus on shipping

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