Trade Flock - How to Import Solar Panels From China? TradeFlock - Import Solar Panels Magazine | Page 25

Incoterms
When and where the consignment shall be
transferred between the supplier and the
importer are referred to as internation-
al standard codes in terms of shipping.
For example, FOB (Free on Board)
includes transportation from the factory, to
the port of destination/office/warehouse.
FOB includes all export procedures, which
are required to ensure that the cargo can
be legally exported. But from the port of
destination, the importer must arrange
to forward the goods to final destination.
On the other hand, the importer can book
DAP (Delivered at Place), which includes
shipping from the factory in China, to
a specified address overseas, such as an
importer’s warehouse.
FCL and LCL Shipping
If the importer buys by the container load, then FCL
(Full Container Load) shipping is a good choice.
FCL is also the cost-effective freight method if
counted by cost per volumetric unit and weight unit.
However, many small volume buyers don’t
buy full container loads. As already said,
Air freight is then a viable solution for them.
However, some shipments are stuck in the twilight
zone between air freight and FCL cost viability.
Then the solution spells LCL, or Less (than)
Container Load which is generally shared
container freight. Cargo from multiple buyers
gets stored in the same container.
Freight Insurance
Insurance is included, by default, when an importer selects the incoterm CIF, standing for Cost Freight (and)
Insurance.If importer orders according to DAT (Delivered at Terminal) or DAP (Delivered at Place) then, the im-
porter has to inform his shipping company that the cargo must be insured. Shipping insurance is cheap and rarely
costs more than US$50 to US$100. Shipping insurance covers the value of the cargo, in case of transportation
damage. It will not cover lost sales or product development costs.
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