Glossary

Incoterms 2020

Incoterm, or "International Commercial Terms" is a set of rules, which is international recognition to help in the global transport of goods. Each term has well-defined rules and regulations which both parties need to comply. The International Chamber of commerce publishes these rules. With Incoterm, language is never a barrier.

Free on board (FOB)

This term defines even split of price and responsibilities between buyer and seller.

EX Works (EXW)

This term puts the whole responsibility on the shoulder of the buyer, and the only responsibility that rests with the seller is that of making the goods available for pickup.

Costs and freights (CFR)

Under these terms, the seller must bear all costs up to the port of destination, for which the buyer is responsible.

Costs, insurances and freights (CIFR)

The terms are like those mentioned in CIF with the only difference that the buyer must include the costs incurred for insurance.

Free carrier (FCA)

Under this shipping term, the seller must deliver the goods to a location where the carrier operates along with clearing the goods for export from the country of origin. The costs and the sole risk of liability are borne by the buyer in accordance with this Incoterm.

Free alongside ship (FAS)

This term states it is the responsibility of the buyer to get the goods ready for loading alongside the ship besides customs, clearing it for export.

Delivered at terminal (DAT)

Under this term, the seller must bear all the responsibility including unloading the goods at the named terminal at the destination port. The buyer bears all the other costs incurred such as Customs clearance, import duties, taxes, and delivery costs.

Delivered duty paid (DDP)

This term states the seller must bear all the risks and costs such as duties, taxes and other charges of delivering the goods along with clearance for import. The maximum obligation rests with the seller under this term.

Dangerous Goods

What are dangerous goods?

The Business Dictionary defines dangerous goods as “articles or materials capable of posing a significant risk to persons, health, property or the environment when transported in large quantities”. It also notes that dangerous goods is the “international standard term for goods covered by the United Nations Recommendations on the Transport of Dangerous Goods”. Dangerous goods are also referred to as hazardous material or dangerous cargo. Dangerous goods can exist in solid, liquid, and gaseous form. They can be colorless or colored, hot, or cold, odorless or pungent. They can be corrosive chemicals, explosives, batteries, or even daily-use items such as hair spray, perfume, aftershave, liquor, and cigarette lighters.

Classes of Dangerous Goods

How to ship dangerous goods?

Before offering a dangerous good to an air carrier for shipment, the Hazardous Materials Regulations require the shipper to properly classify, package, mark and label the package to identify the hazard. When shipping dangerous goods (e.g. lithium batteries or battery-powered devices, aerosols, oxygen cylinders) or flammable liquids (e.g. perfumery products or alcoholic beverages), follow these steps to ensure that your package is properly packed and marked. Some air carriers may have additional carrier-specific requirements so always check with your carrier before tendering your dangerous goods shipment.

Step 1: Safety Data Sheet (SDS)

The Safety Data Sheet (SDS) is a good starting point to determine if an item you are shipping may be hazardous. Generally you can obtain an SDS from the manufacturer of the products you plan to ship by air and refer to the shipping information section. Pay particular attention to the specific information that pertains to shipments by air. A hazardous material or commodity is defined as a substance or material that is capable of posing a reasonable risk to health, safety, and property when transported in commerce. It is designated as hazardous under section 5103 of the Federal Hazardous Materials Act. Materials Transportation Act (49 USC 5103). The term includes hazardous substances, hazardous wastes, marine pollutants, elevated temperature materials, or those materials designated as hazardous in the Hazardous Materials Table that meet the criteria defining hazard classes and divisions in Part 173 of the Hazardous Materials Regulations.

Step 2: Needs Assessment

If you determine that an item is hazardous, the FAA recommends that you conduct a needs assessment analysis to determine which employees in your company will perform a hazardous materials function and identify the level of training that is required by the regulations.

Step 3: Training

For most employees, training will include general and safety knowledge for their duties. Under 49 CFR, a hazardous materials employee is required to receive periodic training every three years. The lCAO Technical Instructions provide that the recurrent hazardous materials training requirements prescribed in Part L, Chapter 4, Section 4.2.3, “must take place within 24 months of previous training to ensure knowledge is current.” The hazardous materials employee, self-employed or self-employed, is required to screen hazardous materials as it affects the safety of the hazardous materials transport: Loads, unloads, or handles hazardous materials or dangerous goods; Designs, manufactures, inspects, tests, reconditions, repairs, modifies or marks qualified packaging for use in the transport of hazardous materials or dangerous goods. Prepares hazardous materials or dangerous goods for transportation; Is responsible for safety of transporting hazardous materials or dangerous goods; or Operates a vehicle used to transport hazardous materials or dangerous goods.

Step 4:

Ask a trained employee to look up the material in the hazardous materials Table or ICAO TI, as necessary, to determine the quantities permitted to be shipped. The labels required, and the packaging permitted under 49 CFR Part 173 or the appropriate ICAO TI packing instruction.

Step 5:

Determine the quantities and corresponding packaging requirements for your shipments. Depending on the group assigned to the hazardous material, UN-specification packaging may be required. The packing group is a grouping according to the degree of danger presented by hazardous materials or goods. The performance level identifies the performance standard to successful testing of the packaging: X – For packaging meeting packing group I, II and III test. (Packing Group I – Great Danger) Y – For packaging meeting Packing Group II and III test. (Packing Group II – Medium Danger) Z – For packaging meeting packing group III test. (Packing Group III – Minor Danger)

Step 6:

If UN specification packaging is required, read the package sealing instructions carefully and obtain all materials listed in the instructions such as tape, ties, polythene bags ect. Be sure to follow the information instructions. Also review the additional requirements under 49 CFR Part 173.27(c)(3)(ii) if shipping liquids in individual packages by air. Packages meeting UN specifications are tested with the materials listed in the closure instructions. Any variation from the manufacturer’s instructions could compromise the integrity of the package and may be considered a violation of the Hazardous Material Regulations (HMR).

Step 7:

f UN specification packaging is required, read the package sealing instructions carefully and obtain all materials listed in the instructions such as tape, ties or polyethylene bags. Be sure to follow the information instructions. Also review the additional requirements under 49 CFR Part 173.27(c)(3)(ii) if shipping liquids in individual packages by air.

Step 8:

Mark and label the package.

Step 9:

If you are using a combined package, place the material in its inner packaging according to the sealing instructions. Then place the inner packaging in its approved outer packaging and seal the package according to the instructions.

Step 10:

Fill in the shipping paper and affix it to the outside of the package in an unobstructed area.

Step 11:

Your package is ready to be shipped.

Step 12:

Keep the shipper’s declaration on file for a period of two years

Customs Documentation Services

Alonso Logistics India has years of experience in handling customs clearance in India. We have documents related to import and export regulations as well as the formalities to be followed for approval by the customs authorities. Your cargo handling is always very safe with us.

Customs clearance procedure in India

The import and export of goods in and out of a country must undergo a customs clearance process. The importer and exporter of the goods must submit valid documents to clear this process. In this article we examine some of the main steps and processes for customs clearance in India.

1. Calling of vessels

Once the vessels carrying the goods reaches the country, the person who carried the vessels should make sure that the calling of vessels is done at the customs port. For instance, if goods are imported via aircraft, the pilot is responsible for call of the vessels at the customs airport. There is no requirement for the importer to get involved in this process and will be done by the airline or shipping line.

2. Presentation of the General Import Manifest (IGM)

The person in charge of the vehicle should file an Import General Manifest electronically before the goods arrive. This file would include the details of all the goods imported by the vessel.

3. Post verification operations

On review of the Import General Manifest and post verification of documents, the customs authorities will grant entry inwards to the vessel, assign an IGM number to the manifest and permit the master of the vessel to land and unload the cargo.

4. Custody of custodian

On arrival of the vessel, the goods would remain in the custody of the Custodian until it clears the customs process. A custodian may be a person approved by Principal Commissioner or Commissioner of Customs for this purpose. Imported goods can be unloaded subject to the following conditions:

5. Presentation of the incoming invoice

The importer of the goods must submit an entry invoice (customs copy) electronically for clearance of the goods, before or upon arrival of the goods. On the entry invoice, the importer himself determines the duties and taxes to be paid, which is called self-assessment. The importer will self-assess the duty after considering the applicable exchange rate and the import duty rate. After approval of the entry invoice, the importer has to pay the GST and duty to be entered in the Indian Customs Electronic Date Exchange System (ICEDIS). Once entered in ICEDIS, an entry invoice number will be generated. Subsequently, the importer must present the entry invoice (customs copy), cross-check with duties paid and other supporting documents to the port authorities to make an order allowing clearance. After making a clearance order, the port officer would generate a duplicate entry invoice (importer’s copy) and a triplicate entry invoice (exchange control copy). Both copies would subsequently be given to the authorised person. The note for unloading the goods must be mentioned in the report. It may only be unloaded at places approved by the competent customs office. Under the supervision of the competent authorities. Should be unloaded only during working hours.

6. Delivery of goods

On showing the customs clearances to the port authorities, the importer can take the delivery of his goods. In case of cargo deposited in a warehouse, the importer would another bill of entry called the ex-bond bill of entry to clear the whole or part of the warehoused cargo