Auto & Transportation

International trade freight refers to the transportation from one country to another country through one or more modes of transportation, which is generally accompanied by international trade. However, international logistics also includes express delivery, and international freight does not include international express delivery. Let's share with you the main shipping terms of international trade freight contracts. Let's take a look together.

Delivery time

The shipping terms in the contract should specify the delivery time, place of shipment, destination, and the possibility of partial shipment and transshipment. According to the Incoterms, for contracts involving FOB, CFR, CIF, FCA, CPT, or CIP, the seller has fulfilled the delivery obligation by loading the goods onto the ship or delivering them to the carrier for supervision at the specified place of shipment (port) in the contract. Contracts concluded under these trade terms are a type of shipping contract, and the delivery time in the contract is actually the time of shipment. The seller is not responsible for when the goods arrive. The trade terms in Group D, as well as EXW and FAS terms, require the seller to place the goods under the actual control of the buyer. Therefore, the delivery time specified in the contract is the actual delivery time of the goods between the buyer and seller.

Delivery time is an important clause in the contract, and both delayed and early delivery constitute a breach of contract. For the provisions on the shipping period in the shipping contract, there are usually the following practices:

Clearly defined shipping times, such as shipment in December 1997 and shipment before December 31, 1977. The former sets upper and lower limits on the shipping time, while the latter only specifies the latest shipping date. It is stipulated to ship within a few days after receiving the letter of credit. In contracts using letter of credit payment methods, the seller may sometimes adopt this prescribed method to avoid the risk of losses to the seller due to the buyer's failure to open or timely opening of the letter of credit. At this point, the seller often needs to wait until they receive the buyer's letter of credit before starting to prepare or put into production, so the delivery time is related to the time of receiving the letter of credit.

Partial Shipment and Transshipment 

1. Partial shipment

In bulk goods transactions, the buyer and seller can specify partial shipment terms in the contract based on transportation conditions and supply and demand conditions. The partial shipment clause can generally stipulate that the seller is allowed to ship in batches, or specify the quantity and date of each batch, that is, installment shipment. The latter method has strict restrictions on the seller. According to the Uniform Customs and Practice for Documentary Credits, if one of the installments is not shipped according to the provisions of the letter of credit, the letter of credit will become invalid for that installment and future installments.

The Convention also stipulates that unless the credit certificate indicates that partial shipment is not allowed, it can be considered as allowing partial shipment. Multiple shipments with the same means of transportation, same voyage, and same destination indicated on the surface of the transportation document, even if different shipping dates or loading locations are indicated, are not considered as partial shipments.

2. Transit

Transshipment includes the act of transshipment, transshipment, and unloading from one means of transportation before loading onto another. The revised Uniform Customs and Practice for Documentary Credits, which came into effect in 1993, greatly relaxed the restrictions on transshipment. According to its regulations, the letter of credit explicitly prohibits transshipment, which means that transshipment is allowed. Even if the letter of credit prohibits transshipment, as long as the transportation document includes the entire transportation, this prohibition is only valid for non containerized general cargo and bulk cargo in the port to port method.

Okay, that's all for the main shipping terms of international trade freight contracts. I hope they can be helpful to everyone.