The need to transmit and understand information made the human being use his rationality to create communication. Primitively it started from sounds, signs and gestures, it constitutes everything we understand today. It evolves constantly, with precious resources and fundamental tools.
Historical accounts report the first drawings, called rock paintings. Such spellings have been located since the 15,000th .C, on the African continent.
The Incoterms - International Terms of Trade - were created in 1936 to facilitate communication in the foreign trade scenario. Standing out as a contemporary tool, the vanguard of universal communication, based on the accuracy of understanding and transmitting information worldwide. Furthermore, these terms have the function of defining the role of the seller and buyer in international transactions, for governmental or private purposes.
What are the most used terms and their meanings?
ASWP = Any Safe World Port, or Any Safe Harbor in the World.
BCL = Bank Comfort Letter, or Bank Confirmation Letter. Statement offered by the buyer's bank that presents how much the individual has in his financial account, thus confirming whether the individual is able to pay for the transaction.
BG or FFG = Bank Guarantee confirmed by one of the Top 50 Prime World Bank, they are:
- Industrial & Commercial Bank of China Ltd
- China Construction Bank Corporation
- Agricultural Bank of China,
- Bank of China Limited
- BNP Paribas SA
- JPMorgan Chase Bank National Association
- China Development Bank Corporation
- Japan Post Bank Co. Ltd.
- The Bank of Tokyo Mitsubishi
- Wells Fargo Bank NA
- Bank of America National Association
- Deutsche Bank AG
- Sumitomo Mitsui Banking Corporation
- Credit Agricole SA
- Barclays Bank PLC
- Mizuho Financial Group
- Societe Generale
- Banco Santander SA
- Citibank NA
- Groupe BPCE
- Bank of Communication Co. Ltd.
- Postal Savings Bank of China Co Ltd
- Lloyds Banking Group
- HSBC Bank plc
- The Toronto-Dominion Bank
- The Royal Bank of Scotland Group PLC
- The Hongkong and Shanghai Banking Corporation Ltd (HSBC)
- The Norinchukin Bank
- Royal Bank of Canada
- UBS Group A.G.
- UniCredit S.p.A
- ING Bank N.V.
- Industrial Bank Co Ltd.
- China Merchants Bank Co Ltd.
- China Citic Bank Corporation (CNCB)
- China Minsheng Banking Corporation
- Shanghai Pudong Development Bank Co Ltd.
- Credit Suisse AG
- Banco Bilbao Vizcaya Argentaria S.A.
- Intesa Sanpaolo S.p.A.
- Commonwealth Bank of Australia
- The Bank of Nova Scotia
- Australian and New Zealand Banking Group Limited
- Cooperatieve Rabobank U.A. Nederland,
- Westpac Banking Corporation
- Nordea Bank AB (publ)
- Standard Chartered Bank
- Agricultural Development Bank of China
- National Australia Bank Ltd.
- China Everbright Bank Co. Ltd
BOL or B/L = Bill of Landing, or Bill of Lading. Advertisement that presents the characteristics of the cargo that is on a sea vessel.
CFR = Cost and Freight, or cost and freight to the port of destination.
CIF = Carriage And Insurance Paid To, or transportation and insurance paid to the place of destination.
C/O = Certificate of Origin, or Certificate of Origin. Document that presents the origin of the product.
DAP = Delivered At Place = delivered to the destination location.
DC = Draft Contract, or Draft Contract. Prior to a transaction in which the clauses, terms and conditions are present.
DPU = Delivered At Place Unloaded, or unloaded at the destination port.
L/C or LOC = Letter of Credit, or Letter of Credit. Credit transferred by the bank to the buyer for the same to carry out the import. It has some variations, such as:
CL/C = Confirmed Letter of Credit. Letter of Credit from a foreign bank and confirmed by a First Class bank. The payment of the import is guaranteed even in case of bank failure.
DL/C = Documentary Letter of Credit. A Letter of Credit usually issued by the exporter's bank to receive payment.
L/C = Irrevocable Letter of Credit, or Irrevocable Letter of Credit. It cannot be cancelled or changed without the prior permission of the bank that issued it. Conditions are committed to the buyer's bank.
RL/C = Revolving Letter of Credit, or Rotary Letter of Credit. Issued by the bank on behalf of the importer.
SBLC = Standby Letter of Credit. Issued by the exporter's bank.
SCO = Soft Corporate Offer. Document in which the exporter presents the stages of negotiation.
What is the purpose of communication via Inconterms?
- Accurately point the place where the goods should be delivered;
- Point the financial sender of foreign freight;
- Appoint the person responsible for paying the export and import formalities;
- What are the risks for the persona of the buyer and seller, enabling the mitigation of the same.
- What are the risks for the persona of the buyer and seller, enabling the mitigation of the same.
It is worth remembering that the principle of communication, part of how we were understood and not in the way we transmit the information. To commit these basic pillars to the principle of communication, help the propagation of information in an assertive manner.
How do Inconterms facilitate commercial communication?
Today's international processes, although they have technological devices to facilitate, have a high financial cost.
The use of Inconterms, in turn, can keep its respective users away from costly errors, arising from ambiguous and/or wrong interpretations. Thus enabling clarity in the execution of tasks, costs and risks involved in the delivery of goods from the seller to the buyer that can be mitigated.
Incoterms when committed to the commercial contract - purchase and sale, Pro-Forma - have legal recognition, even if not called normative or mandatory.
Is having knowledge about Incoterms enough?
Having knowledge about Incoterms is not enough to ensure the safety of the operation.
Information without the mastery of how and when to apply it can enhance the risks of the international business process. This process requires multiple efforts and collective actions for its due conclusion.
In order to mitigate the risks of the operation, it is necessary to have a multidisciplinary team, competent, which has market intelligence fully dedicated to such activities. Thus mitigating the legal, tactical, economic, strategic risks that when not executed properly can be costly for the business.
The safe solution is to have a strategic alliance with a corporation that offers all the necessary muscles, structure and support for the safety of the operation. Having knowledge and mainly applying it with due respect to all stages of the international business process.
Based on this main objective, A.R Inteligência de Mercado and the UPTIME Tradingthrough a solid strategic alliance, carry out import, export - with all necessary customs criteria - and distribution.
This strategic alliance established between the A.R Inteligência de Mercado, UPTIME Trading and Zport corporations – which performs port logistics storage – aims to meet the pent-up demand for secure operations in today's international scenario.
Our purpose is to ensure security and loyalty in order to deliver memorable results to our customers.
We are like this, it is part of the DNA of our company ''Security at all stages'.
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