Page 32 - Export and Trade

Import Management

An introduction to importing management courtesy of Daniel Silva, secretary of the Importers Institute.

To give your import business the best chance of success, FRVWV WKDW PXVW EH IDFWRUHG LQ 7ZR VLJQL¿FDQW FRVWV DUH
it’s vital you begin by accurately and objectively insurance and freight.
assessing the opportunity. In any new venture it’s very
easy to overstate the opportunities and understate the Insurance
challenges. There is often a feeling that you should kick- It is in the best interests of both buyer and seller
start the process immediately to ensure the opportunity to ensure that the value of the goods are insured
is not missed. At this point it is important to slow from the time that they leave the overseas supplier’s
down, take a deep breath and complete the necessary factory until the time they arrive at your storage
groundwork that will prove whether or not (on paper, at facility in New Zealand. There are many different
OHDVW \RXU LGHD KDV OHJV $OWKRXJK WLPH FRQVXPLQJ LW¶V types of freight insurance available, from general
recommended you go through the steps below before IUHLJKW LQVXUDQFH WKURXJK WR VSHFL¿F IUHLJKW LQVXUDQFH
committing to your import initiative. services.
It is important before transacting business with your
Assess your costs supplier that you decide on which Incoterm you are
Often import businesses start when an individual or a JRLQJ WR WUDGH XQGHU ,QFRWHUPV DUH D VHW RI GH¿QLWLRQV
FRPSDQ\ VHHV DQ RSSRUWXQLW\ WR EX\ D VSHFL¿F SURGXFW from the International Chambers of Commerce which
offshore at a competitive price and bring it to New GH¿QH WKH UHVSRQVLELOLWLHV RI LPSRUWHUV DQG H[SRUWHUV
=HDODQG WR VHOO DW D SUR¿W ,W LV LPSRUWDQW WR XQGHUVWDQG 7KH IROORZLQJ LV VLPSOL¿HG WDEOH XVLQJ VRPH RI WKH
that as well as the cost of the good/s, there are other more commonly used terms.

Origin Cartage Int’l Freight Destination Cartage
EXW–Exworks
FOB – Free on board
CFR–CostandFreight
DDP and DDU – Delivered ZLWK GXW\ SDLG RU XQSDLG
= Exporter Pays

If you’re purchasing the goods Free On Board, as the There are many different Incoterms in addition to
buyer you are taking responsibility for the risk as soon FOB and CIF, and the Incoterm you and your supplier
as the goods have passed over the ship’s rail onto the trade under will need to be negotiated between both
ship at the port of departure. From this point onwards parties. There is no hard and fast rule about which
until the goods arrive at your storage facility, as the Incoterm is preferable. If you have a relationship with a
buyer you carry the risk relating to whether the goods good freight forwarder or shipping company and you’re
were damaged, lost or misplaced in transit. FRQ¿GHQW WKH\ FDQ RIIHU \RX EHWWHU WHUPV WKDQ \RXU
If you trade under CIF, the supplier carries that risk supplier, then it would be preferable to trade under
until the goods are delivered to the destination port FOB, as arranging freight and insurance independently
in New Zealand. When trading under FOB, the buyer could allow you to save money and receive better cover.
organises and pays for insurance and freight costs, Get familiar with the most recent edition of the
while trading under CIF means the supplier organises Incoterms guide. Contact your local Chamber of
and pays for insurance and freight costs. Commerce for more information.

30 NZ Export & Trade Handbook 2018