CPT-Carriage Paid To

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CPT or Carriage Paid To, is one of the trade terms, which condition seller arrange the carriage. On other word, seller pay the transportation. The transportation should seller pay is from seller's warehouse until port destination. Regarding the insurance, buyer will arrange and pay the cost.

Buyers who place order in Indonesia, basically they always take FOB trade term. If the cargo readiness couldn't meets buyer requested, shipper will ask for extend shipment date, if it's really deadline, buyer will ask shipper to air the goods by prepaid. Means, shipper should pays the freight cost.

Buyers form Europe, such as France, determine the forwarder for collect or prepaid, called nominated forwarder. So that shipper and seller couldn't find out the forwarder the best, for their shipment. This condition is not good for seller because seller couldn't be freely to choose a forwarder who has a low freight rate, of course then, the freight charge or transportation will be high than expectation.

CPT is most commonly used in shipment by air. On the HAWB marked freight Prepaid.

Changing FOB to CPT like a monster for seller. Many companies couldn't survived forward or kept stand exists because of many shipment were changed from collect to prepaid, especially for a company who had a product heavy enough, such as shoes.

So that keep your production rush to meet buyer requirement in product and productivity. Avoid CPT or prepaid.

CFR Trade Term in Business Practice

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CFR stands for Cost and Freight. This is one of trade terms can seller or buyer use on their international trade. This trade term means seller arranges the carriage, and the risk transfer when the goods were loaded onto the ship. The cost from seller to port destination under seller's responsibility.

So that buyer has to arrange the Insurance. But, it depends on buyer definitely, if they do not worry about the risk of the goods during the shipment, maybe they will not think the insurance.

Both CIF and CFR are well know in business nature, means when a seller or buyer talk about CIF or CFR they usually know the term and condition.

So that don't worry to take CFR term.

If you ask me about "which one is popular between CFR and C&F ?" My answer is C&F is the word most common in business practice. My boss also knows about C&F well, and doesn't for CFR instead.

On billing from a courier company stated C&F instead of CFR. So that I think the C&F is more famous than CFR here. But, in fact both C&F and CFR have the same term and condition.

Which one you will use on your business, CFR or C&F?

Ex Work Trade Term in Business Nature

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When an international trade is using Ex Work trade term, buyer arranges carriage from seller's premises. Both seller and buyer should understand about this condition.

But, in business practice, sometimes there is a little bit different from. One shipment is called Ex Work, but, why forwarder ask a shipper to send the goods to their warehouse? It's really happened.

Ex Work as like as door to door service usually a courier use. All the cost and risk is to be buyer's responsibility. Seller provides the goods in seller's warehouse only, make sure the cargo ready at a certain time promised or agreed.

So that in this term shipper or seller provides only Bill of Lading, Invoice, and Packing List, the Insurance for the goods is not seller's responsibility. If the goods is loss, or is damage in an accident, for instance, all those risk is not seller's responsibility. All the risks are to be buyer's responsibility, instead.

When buyer and shipper are preparing a sales contract, both parties have to understand well the term and condition.

The Ex Work term in Italy is commonly use. When seller are willing to pay the freight cost, it means Ex Work trade term, instead of FOB. I have ever handled a shipment from Italy at the first time. Usually I decide FOB term for by sea shipment mode with a little volume. I didn't know at that time the business nature there. I choose a forwarder, and asked them to check all conditions and all the costs would be. The forwarder reported to me that the trade term was Ex Work. So that you should be careful and understand the business nature, too.    

Choosing FOB Trade Term.

When we have a shipment from around the globe, we have to check first all the costs of shipment comprehensive. Not all shipment with any trade term is cheaper than other. It all depends on the port of loading and the quantity of our shipment, and the shipment mode, too.

Sometimes, FOB term is more expensive than CIF when the shipment is by air.

I want to put here my experience regarding shipment from China by sea with the CIF trade term. When we don't mention the trade term in our order sheet, they will automatically decide the term is CIF. The sound is so great, means shipper will pay the shipment cost until port of discharge, and the Insurance fee is included.

It's several years ago. The time was coming to us to clear the goods here, in Indonesia port. It's not a big volume, was arranged by LCL. We were so shocked watching the invoice unusual and maybe unreasonable. The local charges in Jakarta port were very expensive.

I tried to check to the forwarder and warehouse why did the cost so high. I got the information from them that, they got an offer to handle our shipment with the high price, too. They advised us to check directly to the origin. After I checked to the shipper, they didn't know too, why the cost was  so high.

I asked the forwarder to give us a discount. They then were willing to give us a discount with a requirement, that we had to make a contract with them, would use their service.

This case gave us a warning to use CIF trade term for sea shipment from China especially for LCL shipment.

I don't now until know, to whom should I blame on. Is it forwarder or shipper? 

FOB Term is Common Uses

There are several trade terms could buyer taken for their shipment besides FOB. But, why do they choose only FOB?

FOB is one of the trade terms, which buyer or shipper will covers the cost of shipment from on board at the port of loading until they receive the goods at their warehouse. Shipper or beneficiary only has the obligation to send the goods to the port and pays all the cost until, the clearance cost included.

There are two reasons why does they always choose FOB:

1. Getting the fixed cost.
When the shipment term is FOB, buyers will freely finding the forwarder out and compare one to each other. They make an agreement for a certain period. They also will get the fixed warehouse during clearance process, then, of course, by this condition, they will get lower cost because they promise to place all their goods in a certain warehouse. Usually they are getting a special rate because all the party can get the fixed job.

2. Getting the fixed lead time.
Deadline is the second major factors that shipper has to keep in time. Because buyer has prepared the market, the distribution, and the time of the goods on sale. Buyer wants to control all the things to make all are going smoothly. By taking FOB trade term, buyer will be able to control whether the goods has been on boarded or not.

3. Checking the cargo readiness.
Buyer could also checks the goods via forwarder for schedule agreed. Sometimes buyers in doubt when they received an information about cargo readiness. Buyer usually ask forwarder to check the goods with shipper. Forwarder will ask the shipment booking for a certain on board date. By doing so, buyer could get the the fixed schedule. 

Trick Buyer to Get Low Air Freight Cost

Today, the quality is not only a major factor company takes a look at, but the price is still number one after. Customer will sees the price, compares with another lower than. I read, in Japanese economic trend said so. Yes, we live today where the price will move forward to become number one for consideration.

Let's talk like the title. I have faced some cases in business, several buyer have been taken decision to ask shipper in Indonesia pay the shipping cost, Air Freight Cost, firstly then, they will refund full after. It's new case for me. They said that the freight rate in Japan is higher than Indonesia. I guess maybe because of their economic level is higher than Indonesia. All the price will be higher than here.

They also asked me to find out the lowest freight rate .

The problem will arises when the L/C has been mentioning the trade term is FOB Indonesia. The condition above mentioned, the trade term will be C&F or CIF instead, of course then, the discrepancy will happens. And the bank will refuses to sends a fund. It doesn't matter if buyer will covers the discrepancy cost and accepts the document that has a discrepancy.

Buyers, in this case, take an economic motion to make their company getting more profit through.
   

They Forgot CIF Term

CIF, or Cost, Insurance, Freight, is one of trade terms, both buyer and seller should understand correctly from the beginning when they issue a sales contract.

Sometimes sellers don't fulfill their obligation if consignee or buyer doesn't reminds them. For example, especially for trade that doesn't cover by L/C, let say the payment is T/T before shipment, they sometimes forget to provide an Insurance Certificate to cover the goods until port destination. Whereas the shipment term is CIF, means shipper or exporter should provide Insurance Certificate.

We have to remind shipper each time they make a booking for shipment to the forwarder. If we, buyers forget to remind them, they only give or send Invoice, Packing list, Bill of Lading. In Indonesia, then consignees have to issue the Insurance Certificate as one of required documents for customs process. Yes, it happened, or maybe a lot cases happened such.

CIF is one of trade terms where all the costs including Insurance and Freight cost from port of loading until port of discharge are for seller or shipper obligation. I don't understand well why they commonly forget the Insurance Certificate.

For you maybe as a seller, I hope you can keep in mind all the trade terms meaning and condition. For especially CIF, if you will not issue an Insurance Certificate, please take the C&F trade term to sales contract instead.    

  

16 Swift Code Bank of Tokyo

Swift code is one of important things in bank. The swift code sometimes called swift address. Someone or a company when will wire some money to overseas is asked to provide swift code or swift address by bank. It's to avoid the wrong transfer.

Swift code also will be needed when applying an L/C to issuing bank. It will be shown on the L/C when it's submitted or issued.

Swift code written also in a collection process when a shipper or beneficiary presents the document required to bank or beneficiary bank, especially for Document Against Payment (DAP) term.

Herewith I mention some swift codes of Bank of Tokyo:

1. BOTKAU2X    : BANK OF TOKYO MITSUBISHI UFJ, LTD., . SYNEY.
2. BOTKDEDX    : BANK OF TOKYO MITSUBISHI UFJ, LTD., . DUESSELDORF.
3. BOTKESMX    : BANK OF TOKYO MITSUBISHI UFJ, LTD., . MADRID.
4. BOTKFRPX     : BANK OF TOKYO MITSUBISHI UFJ, LTD., . PARIS.
5. BOTKGB2L     : BANK OF TOKYO MITSUBISHI UFJ, LTD., . LONDON.
6. BOTKHKHH   : BANK OF TOKYO MITSUBISHI UFJ, LTD., . HONGKONG.
7. BOTKIDJX      : BANK OF TOKYO MITSUBISHI UFJ, LTD., . JAKARTA.
8. BOTKJPJT       : BANK OF TOKYO MITSUBISHI UFJ, LTD., . TOKYO.
9. BOTKKRSX    : BANK OF TOKYO MITSUBISHI UFJ, LTD., . SEOUL.
10. BOTKMYKK : BANK OF TOKYO MITSUBISHI UFJ, LTD., . KUALA LUMPUR.
11. BOTKPHMM : BANK OF TOKYO MITSUBISHI UFJ, LTD., . MANILA.
12. BOTKSGSX   : BANK OF TOKYO MITSUBISHI UFJ, LTD., . SINGAPORE.
13. BOTKTWTX  : BANK OF TOKYO MITSUBISHI UFJ, LTD., . TAIPEI.
14. BOTKUS33    : BANK OF TOKYO MITSUBISHI UFJ, LTD., . NEW YORK.
15. BOTKVNVX  : BANK OF TOKYO MITSUBISHI UFJ, LTD., . HO CHI MINH.
16. BOTKUS6P    : BANK OF TOKYO MITSUBISHI UFJ, LTD., . SEATTLE