Import / Export guide for beginners

On this page we provide you the most basic knowledge you will need to get started. We explain step-by-step how to import, how to export and introduce necessary trading terms for successfully communicating with your business partners.

A:Import step by step

  1. 1.Target market analysis and product choice
  2. 2.Reading the import regulations
  3. 3.Seller search
  4. 4.Price negotiation and determination of payment conditions / Incoterms
  5. 5.Receive Quotation and samples
  6. 6.Conclusion of the sales contract
  7. 7.Choice of the Freight Forwarder and Custom Brokers; Fixing the shipping and delivery schedule
  8. 8.Product order
  9. 9.Customs clearance at the port of destination (for food, an analysis may be required)
  10. 10.Onward transport to your warehouse
  11. 11.Relabeling in the language of the country of sale (if necessary)
  12. 12.Sales start!

B:Export guide for beginners

  1. 1.Acceptance of an import request and shipment of product directories and catalogs
  2. 2.negotiation talks about price, payment method and contract details
  3. 3.Make an estimate and send samples
  4. 4.Conclusion of the product sales agreement
  5. 5.Notification from the importer about the forwarder details
  6. 6.Contact the forwarder and discuss the delivery date
  7. 7.Acceptance of the final order
  8. 8.If required product relabeling in the language of the importing country
  9. 9.Preparation of the necessary documents for customs clearance
  10. 10.Shipping

Incoterms

Incoterms are a series of predefined commercial terms published by the International Chamber of Commerce that are widely used in International commercial transactions. A series of three-letter trade terms related to common contractual sales practices, the Incoterms rules are intended primarily to clearly communicate the tasks, costs, and risks associated with the transportation and delivery of goods.

The most commonly encountered Incoterms are called EXW, FOB and CIF.

Allocations of costs to buyer/seller

Incoterm 2010 1.Packaging 2.Export customs declaration 3.Carriage to port of export 4.Unloading of truck in port of export 5.Loading on vessel/airplane in port of export 6.Carriage (sea/air) to port of import 7.Insurance 8.Unloading in port of import 9.Import customs clearance 12.Import duties and taxes 10.Loading on truck in port of import 11.Carriage to place of destination
EXW Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer
FCA Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer
FAS Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer
FOB Seller Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer
CPT Seller Seller Seller Seller Seller Seller Buyer Buyer/Seller Buyer Buyer Buyer/Seller Seller
CFR Seller Seller Seller Seller Seller Seller Buyer Buyer/Seller Buyer Buyer Buyer Buyer
CIF Seller Seller Seller Seller Seller Seller Seller Buyer/Seller Buyer Buyer Buyer Buyer
CIP Seller Seller Seller Seller Seller Seller Seller Buyer/Seller Buyer Buyer Buyer/Seller Seller
DAT Seller Seller Seller Seller Seller Seller Buyer/Seller Seller Buyer Buyer Buyer Buyer
DAP Seller Seller Seller Seller Seller Seller Buyer/Seller Seller Buyer Buyer Seller Seller
DDP Seller Seller Seller Seller Seller Seller Buyer/Seller Seller Seller Seller Seller Seller

Rules for sea and inland waterway transport

Incoterm 2010 1.Seller 2.Carrier 3.Port/terminal 4.Onboard 5.Port/terminal 6.Buyer
FOB Seller Seller Seller Seller Buyer Buyer
FAS Seller Seller Seller Buyer Buyer Buyer
CFR Seller Seller Seller Seller Buyer Buyer
CIF Seller Seller Seller Seller Buyer Buyer

Rules for any modes of transport

Incoterm 2010 1.Seller 2.Carrier 3.Port 4.Ship 5.Port / Terminal 6.Named place 7.Buyer
EXW Seller Buyer Buyer Buyer Buyer Buyer Buyer
FCA Seller Seller Buyer Buyer Buyer Buyer Buyer
CPT Seller Seller Buyer Buyer Buyer Buyer Buyer
CIP Seller Seller Insurance Insurance Insurance Insurance Buyer
DAT Seller Seller Seller Seller Seller Buyer Buyer
DAP Seller Seller Seller Seller Seller Seller Buyer
DDP Seller Seller Seller Seller Seller Seller Seller

Rules for any mode of transport

EXW(Ex Works)

The handover of the goods is done prepackaged on the company premises of the seller. After the transfer incurred, forwarding and insurance costs has to take over completely the buyer.

FCA(Free Carrier)

The seller assumes all costs and risks until the goods have been handed over to the forwarder at a contractually agreed transshipment point. (for example, a specific port or container storage) Freight and insurance costs incurred after handover must be borne by the buyer.

CPT(Carriage Paid To)

As with FCA, the seller assumes the risk of loss of goods until handover to the forwarder, but also incurs the transport costs of the container ship. Who takes over for the insurance costs by sea is not fixed, but mostly these are taken over by the buyer, who already carries the risk.

CIP(Carriage and Insurance Paid to)

The seller bears all costs and risks on the transport route until unloading the goods at the destination port. From this point on, the buyer bears all costs and assumes the risk.

DAT(Delivered At Terminal)

The seller unloads the goods at an agreed terminal and hands them over to the buyer. The seller bears all costs and risks until this time. The subsequent import costs and customs fees will be borne by the buyer.

DAP(Delivered At Place)

Similar to DAP, however, the buyer not only covers costs and risk to the terminal, but also to another location at the port. (Delivery van, warehouse etc.)

DDP(Delivered Duty Paid)

Like DAP but the seller also takes over the import costs and customs fees.

Rules for sea

FAS(Free Alongside Ship)

The seller bears all costs up to the loading point at the port. All subsequent costs including the loading into the container and onto the ship will be borne by the buyer.

FOB(Free on Board)

The seller assumes all costs and risks until the goods are on the ship. Then the buyer takes over the costs and the risk.

CFR(Cost and Freight)

Like FOB, but the seller also takes over the freight costs at sea. The insurance fees by sea are borne by the buyer.

CIF(Cost, Insurance & Freight)

Like CFR but in addition, the seller also carries the insurance fees during sea transport. Then the buyer takes over the risk.

D:Payment options in international trade

T/T Remittance (Telegraphic Transfer Remittance)

An international bank transfer from one account to the other.

T/T Remittance (Telegraphic Transfer Remittance)

1)100% Advance payment by T/T
A bank transfer in advance by the buyer. No risk for the seller, high risk for the buyer.
2)T/T at sight
The buyer transfers the trade sum to the seller's account as soon as he has received the shipping documents (Invoice, Packing List and B / L).

L/C (Letter of Credit)

A payment method that is particularly used in large-volume trading transactions. A letter of credit is a kind of international check, a guarantee of a trade between a company and a bank. If e.g. after the delivery the goods, the customer files for bankruptcy, the bank takes over the payment as long as the contract is fulfilled. Conversely, the bank is liable to the buyer for non-delivered deliveries. In international trade, there is always the danger for the seller that the payment is not made and for the buyer that the delivery does not arrive. In both cases, an L / C avoids uncertainties.

L/C at sight (Letter of Credit)

Similar to the normal L / C but the buyer does not have to pay in advance. The seller gets the money from his bank at the same moment he loads the goods into the ship. The buyer can wait until the goods have arrived at the port of destination and then immediately receives all shipping documents from his bank.

D/P (Documents against Payments)

Same as the L / C payment method BUT no guarantee bank security.

F:Trading Dictionary

THC(Terminal Handling Charge)

All fees that apply until the container which is containing the goods, arrives at the designated area in the container yard.

Exporter/Seller

The party that sells and exports goods

Importer/Buyer

The party that buys and imports goods

Freight forwarder

A company that offers all kind of services concerning goods handled at a freight port (Transport, customs clearance, etc.)

P/L Packing list

A company that offers all kind of services concerning goods handled at a freight port (Transport, customs clearance, etc.)information about weights, dimensions and content. This document is necessary for customs clearance during both export and import. It allows to check if all exported goods have arrived completely in the country of destination.

C/I Commercial Invoice

A document which, like the Packing List, is a necessary document for customs clearance for import and export. It contains the product names, quantities, the value of the goods and the contract conditions.

B/L Bill of Lading

The Bill of Lading is a sea consignment note. It is also a security documenting that the shipping company has received the goods and hands them over to the recipient at the agreed destination. To accept the goods, the recipient needs the original B / L document.

SWB Sea Waybill

The SWB is similar to the B / L but in contrast, the name of the recipient is entered on the SWB. To take over the goods, therefore, a document of identity of the recipient and a copy of the SWB is sufficient. Sending the original SWB to the buyer is not necessary, which saves time and effort. Since the SWB is not a security, it is almost never used in L / C transactions.

AWB Air Waybill

Das Pendant der SWB für die Luftfracht.

Delivery (Incoterms definition)

The point in the transaction where the risk of loss or damage to the goods is transferred from the seller to the buyer.

Arrival (Incoterms definition)

The point named in the Incoterm to which carriage has been paid.

Free (Incoterms definition)

Seller has an obligation to deliver the goods to a named place for transfer to a carrier.

Carrier (Incoterms definition)

Any person who, in a contract of carriage, undertakes to perform or to procure the performance of transport by rail, road, air, sea, inland waterway or by a combination of such modes.

Terminal (Incoterms definition)

Any place, whether covered or not, such as a dock, warehouse, container yard or road, rail or air cargo terminal.

To clear for export (Incoterms definition)

To file Shipper’s Export Declaration and get export permit.