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Text 4: Exporting
When a company exports goods abroad there are many problems it must
consider, e, f, packaging, transportation, insurance and payment. First the goods
must be packed carefully in containers to protect them from damage. The
containers must be labelled clearly to show where they are going. The label may
also show what the containers contain.
Goods can be transported by sea or by air, by a shipping company or by an
airline. If the goods are shipped, then transportation must be arranged from the
factory to the docks (or quay). This can either be by road in trucks (or lorries) or
by rail. The shipment must be insured against loss or damage in transit (while it
is being transported). Sometimes the exporter takes on insurance and sometimes
the importer insures the depending on the terms of their agreement.
For instance, goods are either sent C.I.F (Cost, Insurance and Freight) when
the loco price includes all the transport cost and insurance to the port of port of
destination, or F.O.B (Free On Board); when the loco price includes only the cost
of getting the goods on board the ship; the freight and the insurance costs are
paid by the importer. Freight and insurance are also paid by the importer when
goods are sent F.A.S (Free Along Side Ship), but the loading charges are not
included.
If an importer wants his goods sent free of charge the price includes the
customs duty plus the cost of conveying the goods to his warehouse. If the goods
are damaged in transit the company is covered by the insurance.