The Selection of Trade Terms
20160120127 刘婷 16英语1班
The trade terms are the short terms or abbreviations or brief English concept(three characters in Incoterms2000) to indicate or explain the composition /formation of a unit price, standing for specific obligations of the buyer and the seller. Therefore, it is different to the ezporter and the importer. Let us look at a case:
In February 2000, an inland export company in China exported 30 tons of licorice paste to Japan, a total of 1200 cases per ton of 40 boxes, 1800 dollars per ton, FOB Xingang, a total of 54000 U. S. dollars, L/C at sight, the shipment period is before February 25, the goods must be loaded into containers. The export company has an office in Tianjin, so in early February will be shipped goods to Tianjin, by the Tianjin office in charge of ordering the shipment, unexpectedly the goods in Tianjin storage warehouse The next day, the warehouse fire at midnight, due to the wind fire, Rescue is not, 1200 cases of licorice paste were burned. The Office immediately informed the mainland company headquarters and requested that 30 tons be reissued as soon as possible, otherwise it could not be shipped on schedule.
As a result, the export company had to ask Japanese merchants to extend the validity of the letter of credit and the period of shipment by 15 days because of the poor supply of goods. To evaluate different trade terms, buyers and sellers bear different obligations. The use of trade terms is not only related to the interests of both sides, but related to the smooth performance.
The trade terms used to determine the terms of delivery in foreign trade business are mainly FOB, CIF and CFR delivered at the port of shipment. In the case of rolling and container transport, the side of the ship should be no practical significance when the FCA, CPT and CIP trade terms should be used as far as possible. In this case, the export company is located on the main line of railway traffic, the shipping company and Cosco Company have container transit points in the city, can accept both LCL consignment and the whole box consignment. If the FCA is used to deal with the outside world, the export company will be 1200 cases to the transit station or self-set after the whole box to the transit point, not only the risk transferred to the buyer, but also the local carrier (that is, the transit station) issued by the shipping documents can be negotiated in the local bank The company's own risk of transporting goods to Tianjin, and then container exports, not only increased its own risk, but delayed settlement.
Choosing the right trade terms for both buyers and sellers should consider the following factors: conducive to the development of China's ocean transport industry and insurance industry, increase revenue and reduce support. Most of China's import trade uses FOB or FCA terminology. In export trade, a deal is sought by CIF or CIP.
It is better to use CIF or CFR terms in export business than to adopt FOB. It is conducive to the development of cooperative relations between the two sides. In export operations, some countries require import trade to be insured in their home countries, and some buyers have a pre-insurance contract with an insurance company in order to seek insurance premiums, the exporter may agree to export in the form of CFR and CPT.
Compatible with the mode of transport. Exporters should try to use the FCA, CPT, CIP way to deal. Such trade terms also facilitate the early transfer of risk by the exporter, the early issuance of transport documents, early collection, and speed up the turnover of funds. FOB, CFR and CIF are only suitable for marine transportation and inland waterway transport. In the case of air transport and rail transport, FCA, CPT and CIP terms should be adopted.
Pay attention to risk aversion. When importing bulk goods imported by the importer is to be shipped by chartering, in principle, the importer shall use the FOB method, and the importing party will charter and insure itself, so as to avoid collusion between the exporter and the ship, and use the chartering bill of lading to defraud the purchase price.
The choice of trade terms should also be considered in conjunction with the payment method. Avoid the use of FOB or CFR terms in export operations, such as the use of commercial credits such as cash on delivery or collection, as far as possible.
 黄锡光. 国际贸易实务[M]. 复旦大学出版社，2018.