The True Meaning of a Leadtime
It's been my experience in dealing with factories that when you're quoted a lead time, one needs to be careful about what that means. It needs to be made very clear that the lead time is relevant to the Incoterms you've negotiated. For instance, if your price is $1 FOB Shanghai, China with a 4 week lead time, that means, in 4 weeks, you can expect your goods to be available for your forwarder. You still need to ship it !!! If your terms are CIF Sydney, Australia with a 6 week lead time, then your goods should be delivered to Sydney, 6 weeks after your order has been confirmed.
This all sounds very simple and straightforward, but these things can lead to misinterpretation of when your goods will actually be delivered. So the lesson here is, be clear on what your quoted lead times mean to you.
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There are 13 types of Incoterms:
There are 13 types of Incotems, which are:
Origin Terms
EXW - Ex-Works, named place where shipment is available to the buyer, not loaded.
The seller will not contract for any transportation.
International Carriage NOT Paid by Seller
FCA - Free Carrier, unloaded at the seller's dock OR a named place where shipment is available to the international carrier or agent, not loaded.
This term can be used for any mode of transport.
FAS - Free Alongside Ship, named ocean port of shipment.
Ocean shipments that are NOT containerized.
FOB - Free On Board vessel, named ocean port of shipment.
This term is used for ocean shipments only where it is important that the goods pass the ship's rail.
International Carriage Paid by the Seller
CFR - Cost and Freight, Named ocean port of destination.
This term is used for ocean shipments that are not containerized.
CIF - Cost, Insurance and Freight, named ocean port of destination.
This term is used for ocean shipments that are not containerized.
CPT - Carriage Paid To, named place or port of destination.
This term is used for air or ocean containerized and roll-on roll-off shipments.
CIP - Carriage and Insurance Paid To, named place or port of destination.
This term is used for air or ocean containerized and roll-on roll-off shipments.
Arrival At Stated Destination
DAF - Delivered At Frontier, named place of destination, by land, not unloaded.
This term is used for any mode of transportation but must be delivered by land.
DES - Delivered Ex-Ship, named port of destination, not unloaded.
This term is used for ocean shipments only.
DEQ - Delivered Ex-Quay, named port of destination, unloaded, not cleared.
This term is used for ocean shipments only.
DDU - Delivered Duty Unpaid, named place of destination, not unloaded, not cleared.
This term is used for any mode of transportation.
DDP - Delivered Duty Paid, named place of destination, not unloaded, cleared.
This term is used for any mode of transportation.
This all sounds very simple and straightforward, but these things can lead to misinterpretation of when your goods will actually be delivered. So the lesson here is, be clear on what your quoted lead times mean to you.
click me
There are 13 types of Incoterms:
There are 13 types of Incotems, which are:
Origin Terms
EXW - Ex-Works, named place where shipment is available to the buyer, not loaded.
The seller will not contract for any transportation.
International Carriage NOT Paid by Seller
FCA - Free Carrier, unloaded at the seller's dock OR a named place where shipment is available to the international carrier or agent, not loaded.
This term can be used for any mode of transport.
FAS - Free Alongside Ship, named ocean port of shipment.
Ocean shipments that are NOT containerized.
FOB - Free On Board vessel, named ocean port of shipment.
This term is used for ocean shipments only where it is important that the goods pass the ship's rail.
International Carriage Paid by the Seller
CFR - Cost and Freight, Named ocean port of destination.
This term is used for ocean shipments that are not containerized.
CIF - Cost, Insurance and Freight, named ocean port of destination.
This term is used for ocean shipments that are not containerized.
CPT - Carriage Paid To, named place or port of destination.
This term is used for air or ocean containerized and roll-on roll-off shipments.
CIP - Carriage and Insurance Paid To, named place or port of destination.
This term is used for air or ocean containerized and roll-on roll-off shipments.
Arrival At Stated Destination
DAF - Delivered At Frontier, named place of destination, by land, not unloaded.
This term is used for any mode of transportation but must be delivered by land.
DES - Delivered Ex-Ship, named port of destination, not unloaded.
This term is used for ocean shipments only.
DEQ - Delivered Ex-Quay, named port of destination, unloaded, not cleared.
This term is used for ocean shipments only.
DDU - Delivered Duty Unpaid, named place of destination, not unloaded, not cleared.
This term is used for any mode of transportation.
DDP - Delivered Duty Paid, named place of destination, not unloaded, cleared.
This term is used for any mode of transportation.
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