Week 2 – Discussion 1
I need 250 words Initial Post and two replies of 75 words each. No plagiarism.
The Incoterms2010 rules include 11 trading terms created by the International Chamber of Commerce (ICC). In 200 to 300 words, describe two Incoterms2010 rules of your choice and explain which of them is more exporter-friendly and why. Then, respond to at least two of your classmates posts..
COLLAPSE SUB DISCUSSION
Wen hao Li
Wen hao Li
Sunday30 Aug at 17:31
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Week 2/Discussion 1,
Hello class,
The International Chamber of Commerce created eleven terms in 1936, known as the International Commerce Terms rules (David, 2013, Pg. 180). These eleven terms focus on guiding exporters and importers on what responsibilities are required for each party as far as tasks and incidents occurred. The five aspects that are addressed in each Incoterm are the tasks that will be performed by the exporter, the tasks performed by the importer, the activities paid for by the exporter, the activities paid for by the importer, and when the transfer of responsibility will take place between the parties (David, 2013, Pg. 181). The choice of the strategy to employ often lies with the exporter. The two Incoterms that I chose are EXW and FOB.
The Ex-Works (EXW) rule can be utilized in any means of transportation and merchandise (David, 2013, Pg. 185). This rule is more advantageous for the exporter because the importer is required to pick up the merchandise from the exporter’s location. The exporter has the basic tasks to package the goods for export and provide the documents to the importer (David, 2013, Pg. 186). It could be burdensome for importers to have to go to a foreign country and facilitate loading and transporting the goods back home.
Free on Board (FOB) rule can be utilized for any merchandise but only through the ocean (David, 2013, Pg. 201). There may be variants for this rule because this rule is one of the oldest maritime trade terms. Because of this rule’s variants, it depends on the port to determine who’s responsible for specific costs. Previously, the change of responsibility occurred when the exporter crossed the ship’s rail, but in the 2010 version, responsibilities change when the goods are “on board” (David, 2013, Pg. 202).
References
David, P. (2013).International logistics: The management of international trade operations(4th ed.). Retrieved from https://www.vitalsource.com/
Maxwell Takyi
Sunday30 Aug at 20:50
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Hello All,
Incoterms rules were created in 1936 by the International Chamber of Commerce to define the duties and responsibilities of an exporter and importer involved in an international sales transaction. Incoterms define which tasks will be performed by either the exporter or importer, which of the two will pay for activities, and when the transfer of responsibility for the goods will occur (David, 2013). Of the 11 Incoterms rules, the two that I think are more exporter-friendly are the Delivery at Place (DAP) and Ex-Works (EXW).
With regards to the delivery at place (DAP) Incoterms rule, the exporter is responsible for export packing, transportation cost, clearing of goods for export, and providing all necessary documentation to the importer to clear Customs in the importing country. Under the DAP transaction, the proof of delivery is the arrival of the goods ready for download at the importer’s choice location. The importer under the DAP transaction is responsible for the cost of unloading goods and clearing Customs with the exporter’s documents.
EXW Incoterms rule can be used for any merchandise and any means of transportation. It is the easiest of the Incoterms rules for exporters (sellers) and the most difficult for importers. The exporter’s only obligation is to make the goods (shipment) available for the importer and render assistance in obtaining an export license or other necessary official documentation for shipment (export) of goods. Besides the packaging of goods, the exporter has a minor or limited role compared to other Incoterms. EXW is, therefore, an exporter friendly Incoterm because the exporter plays a minor role, therefore, having enough to deal with other business requirements.
Reference:
David, P. (2013).
International logistics: The management of international trade operations
(4th ed.)
. Retrieved from https://www.vitalsource.com/
