Import Logistic Process

 What is logistics

·        Logistic is generally the detail organization & implementation of complex operation. Logistic is the management of flow of thing between the point of origin to point of destination, reprocess or consumption of goods.

·        In logistics, it can be included tangible goods such as material equipment & supplies as well as food & other items. During the logistic involve physical items, Packaging Inventory, Transportation, Security, Fuel, Warehouse etc. 

What is Incoterm?

·        Incoterm is an International Commercial Terms are a set of trade which is develop by international chamber of commerce & Incoterm included risk & responsibility between buyer & seller will be same all over the world.

Incoterm 2020 (International commercial terms 2020)

·        International commercial terms are official terms published by the International Chamber of Commerce (ICC). Incoterms are voluntary authorities that are globally accepted and follow the rules and regulations for determining the responsibilities of buyers and sellers for the delivery of goods from one country to another under the contract for international trade.

·        Incoterms is determining Roles & Responsibility between buyer & seller.

Type of Incoterm

There are 11 types of Incoterms

·        EXW

·        FCA

·        FAS

·        FOB

·        CFR

·        CIF

·        CPT

·        CIP

·        DAP

·        DDP

EXW: EX-Work

·        EX-Work is a process where the buyer is doing every work, like first their container comes to our factory and our labour will load goods. Then every task will be done by the buyer, like customs clearance in India and customs clearance in his destination country, paying import duty, etc.

·        In EX Work buyer is pay every charge from our factory to their warehouse.

·        Ex-deed occurs when the seller delivers the items to the buyer at the seller’s location or another specified location.

·         If the products need to clear customs clearance, they need not be loaded on any storage vehicle for sale.

FCA: Free Carrier

·        The seller delivers the goods to the carrier or another personal nominated by the buyer at the seller’s name place.

·        The seller will deliver the products to the buyer’s designated carrier or person at the seller’s location.

·        The parties are well advised to transport the goods from this place exactly & Then risk is passes on buyer at that point.

FAS: Free Alongside Ship

·        The seller delivers when the goods are place any alongside the vessel (quay/barged/ship) nominated by the buyer at named port of shipment.

FOB: Free on Board

·        The seller has to deliver the goods on the vessel nominated by the buyer. After delivered on vessel, risk & damages of goods which is bear by buyer. Most of exporter is working only in FOB Incoterm.

·        EX: – In FOB Incoterm Seller is load goods, Then transport to port & then container stuff on vessel. After stuffing the consignment on the vessel, buyer risk and responsibility start, and the buyer is free from his risk and responsibility.

CFR: Cost & Freight

·        The seller delivers the goods to the port of destination or port of buyer.

·        We have a taking risk & responsibility at the buyer port. After buyer port every risk & responsibility is transfer to the buyer.

·        Seller must contract on the cost & freight. All the cost is pay for sending cargo at the port of destination or Seller is pay cost & freight.

CIF: Cost Insurance Freight

·        CIF is like CFR

·        All the process in CIF, it is a same like CFR.

·        But here, Is the seller purchase an insurance cover for protect the cargo any risk & damages.

CPT: Carriage Paid To

·        The seller delivers the good to carrier or another person nominated by the seller at an agreed place.

·        The seller must contract for pay the cost of carriage necessary to bring the goods to the name place of destination.

CIP: Carriage & Insurance Paid

·        Seller has a same responsibility as CPT, but they also contract for insurance cover against the buyer risk of loss or damages to the goods during the carriage.

·        Under CIP, Buyer has to obtain insurance or minimum cover.

DAP: Delivered Duty Paid

·        The seller delivered, When the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination.

·        The seller bears all risk involved in bargaining the goods to the named place.

DPU: Delivered Place Unloaded

·        DPU replace the former Incoterm DAT (Delivered at Terminal).

·        The seller delivers, When the goods once unloaded are placed at disposal of buyer at a named place of destination.

·        The seller bears all risk involved in bringing the goods to unloading them at the named place of destination.

DDP: Delivered Duty Paid

·        The seller delivers the goods are placed at disposal of the buyer, cleared for import on buyer port & transport ready for unloading at the named place of destination.

·        The seller bears all the cost & risk involved in bringing the goods to the place of destination.

·        Exporter have to clear custom in India & Also clear custom in buyer port & pay all cost, Insurance, freight, import duty.

·        From the 11 Incoterm, Exporter is only using only these three incoterms mostly. FOB, CIF, EXW

    There are three modes of transportation.

         By sea
         By air
         By roads

How to do by sea import

Transport by sea is a large volume of quantities with less cost than other three modes. Shipping container could also be use when transporting goods by land.

If the goods are transport in large quantities. But, there are no pressure to deliver quickly, so shipping by sea may be suitable.

How to do by Air Import

Air Freight import delivery is transfer and shipment goods via an air carrier, which may be charter or commercial. Such consignment travels from commercial and passenger aviation gateways to anywhere plans can fly and land.

               How to do by road import?

Road transport can be most flexible option for export business. It is usually quick and efficient.

Road transport is possible when the two boundaries of countries are connected to each other.

Road transport advantages:- Low cost, extensive road network possibility to schedule transport and tracking the location of goods, safety of product and private delivery.

Import Logistics Pricing

Millets 40000+profit 10000 = Rs.50000 Exw Per Ton, Total 20 Ton

 20 Tons Millets, Total 80,000 Fob

80000/20= 4000

EXW + Cost up to ship = FoB 54,000

CIF Price

Insurance + Fright

2000+78000 = 80000

80000/20 tons=4000

FoB 80000 + 4000 = 58,000 Per Tons

Convert in USD

58000/88.73=$692.70 Per Ton

CIF Mundra Port import price

Import Duty Calculation

58000 (Cost of Port of Destination) + 20% (11,600) + 12% GST (8352) + 4000 (Import Logistics)=81,952 (Per Ton Millet Price)

Import Pricing Calculation

Doing business in the international market is different from handling transactions in the domestic market at many levels. An importer needs to ensure that the product or service remains appealing even after factoring in the landing cost (verify and check all the costs associated with the product and logistics). The packaging and the expense of any upfront travel and due diligence.

How to Pay Import Duty.

Every good has a pre-defined rate of duty that is determined based on various factors. Where such goods are acquired, what they are made of, the purpose of the goods, etc.

If you import goods first time in India. You will be declared as per the custom rules.

For instance, you need to declare the items purchased from foreign country or any gift acquire outside from India. Custom duties are calculated on value of goods and other specific things.

Custom duties are charged almost universally on every good which are imported into a country.

Custom duty pays online with a few easy steps on lCEGATE website.

Types of containers.

Standard Container

A standard container is the most common types of containers in the market. It is made usually stell and sometime aluminium.

Standard container can use mostly dry cargo such as boxes, pallet, sacks and barrels etc. It can be customized on the inside to carry a specific type of goods

Open top container

Open top container has an bOpen on top. Open top container is used in when cargo is too large to be in a regular shipping container.

Some of the common items loaded in an Open top are construction material, machinery, pipe, dies etc.

               Flat rack container

Flat rack container is used for heavy loads and cargo that needs loading from the tops or side. It is open at top and both sides. This is using in heavy loading goods like Industrial Equipment, Industrial Raw Material, Machinery etc.The container only has sides on the short end of the container.

Refrigerator Container

Refrigerator container is a maintaining temperature for perishable goods like fruits, vegetable, medicine, chemical etc. Refer container mostly come 20 feet and 40 feet.

They carry the temperature sensitive items like fruits, vegetables, drugs, Ice Cream etc. Each items have a different temperature requirement and it needs to be maintained to protect it freshness.

Tank Container

Tank container is a tanker (Tanker container). It is made from strong steel and other anti-corrosive material. It is helpful for long life protection of liquid materials. If a tank container is above 95% full, there won’t be enough space for thermal expansion; yet, it must be filled to at least 80% to avoid hazardous liquids surging during travel.

Sizes of container

         20 feet
         40 feet
         40 feet high cube.