If you are an importer, do not leave the choice of freight forwarder and mode of transport up to your supplier. Similarly if you want to export, control your shipment to at least the port/airport of destination at your customers country of residence.
When importing preferably chose an “e” or “f” Incoterm® (ex works, fca, etc.). Your supplier may chose the cheapest mode of transport and even earn some money on the freight charges.
Should you be an exporter selling under a “c” or “d” Incoterm® (cfr, cip, dap ddu) would be advisable because you control the consignment and may actually take advantage of freight charges.
When importing you may have to outlay or advance cost for your goods prior to shipment and if freight charges are included in your agreement this payment will be higher. It is also worth wile to consider the rate of exchange, which, in recent times has not been to the importers advantage. The more can be paid in our local currency the better for the importer.
In case of a damage, a claim will be paid out in South Africa, giving the importer the choice of when and how he is going to replace/repaid the damaged items.
Buying under the above mentioned terms gives you the choice of the forwarder/clearing agent, reducing the risk of miss or late communication and control of rates.
It is important to note that according to SARS you may only make out a zero rated tax invoice if it does show international freight charges. Upon request you may also have to prove actual payment to a South African forwarder, air- shipping line or transporter. For this reason only there is not really any other option but to sell under a “freight prepaid” term.
As an exporter you are also interested to get as much foreign currency into the country as possible, hence taking control of the forwarding as well. Depending on your agreement with your customer, you may even receive some of it up front. Insuring an export consignment in South Africa gives you the opportunity to replace any damaged, lost items with as little as possible delay and complications.
Call or e-mail us for a no obligation chat to find the best possible transport solution for you and your company. We will gladly visit you in your offices at a time convenient to you. If you enjoyed the tips in this article, click on the Facebook image below to share it with your friends.