Air freight Security
As a result of the 26/10/1998 decree (Ministry of Transportation), air transport companies have an obligation to the effect of the decree to apply procedures and technical means to verify and detect objects that may damage the safety of the aircraft. This decree is also valid for airfreight. The overall objective is to maximum the reduction for the risk of danger that a shipment presents for airfreight safety, through the implementation of adapted means and procedures, throughout the overall chain of events which includes preparation, warehousing, and transport of shipments delivered to the air companies. Invoicing of airfreight safety corresponds to the repercussion of the costs generated by implementing the regulation. This invoicing is applied to all the exported products.
Air Fuel surcharge
Since the year 2002, the airfreight, maritime or land freight areas have suffered significant increases in their costs related to the increase in the price of petroleum: kerosene, among others, increased more than 50 % since January. This significant cost increase forces us to implement a variable surcharge, which shall be re-evaluated every month based on the price of kerosene. This surcharge is applied to all types of national and international freight. We invite you to contact your agency regarding current fee details. Fuel surcharge calculation method This surcharge is calculated based on the average kerosene spot price per gallon (ARA index from Rotterdam), which is published daily by the American Energy Department. The reference price is available on the Internet (in English) at the following address : http://www.eia.doe.gov
Road Fuel surcharge
Since the end of 2003, the transport area has suffered a significant cost increase related to the increase in the price of petroleum (an increase of 13.80 % in the price of diesel fuel since December 2003). This significant cost increase forces us to implement a variable surcharge, which shall be re-evaluated every month based on the price of diesel fuel. This surcharge will be applied to all national and international shipments. We invite you to contact your agency regarding current fee details. Fuel surcharge calculation method This surcharge is calculated based on the average diesel fuel price published by the European Commission. The reference price is available on the Internet (in English) at the following address http://ec.europa.eu/energy/observatory/oil/bulletin_en.htm
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Article 1 – SUBJECT MATTER AND DEFINITIONS
This text sets out to define the terms on which the services of the Transport and/or Logistics Operator (referred to as T.L.O.) may be provided, in any way whatsoever (agent, freight forwarder, customs broker, forwarding agent, carrier, logistic provider, warehouse keeper, etc.) concerning goods of any kind, from all sources, for all destinations, under either an internal or an international system.
The T.L.O. has been certified as an Authorized Economic Operator (A.E.O) since 2009.
Regardless of the transport technique used, these Terms of Sale shall govern relationships between the instructing party and the T.L.O., without prejudice to the application of international conventions in case of international road transport, air transport or maritime transport.
According to these General Terms and Conditions, the following terms shall have the meaning specified:
“THE INSTRUCTING PARTY”: the instructing party refers to the party who contracts with the T.L.O. and in some instances the customs broker.
“SHIPMENT”: set of goods, either packed (pallets, containers, etc.) or not, actually placed, at the same time, in the hands of the T.L.O., and picked up on a single transportation document for the same shipping, to a single unloading place.
“PARCEL”: a parcel refers to an item or a range of equipment made of several items, whatever the weight, dimensions and volume, constituting a unit load which is handed over to the T.L.O. (cardboard box, box, container, bundle, roll, a pallet that would have either been roped up or packaged by the instructing party, etc.) conditioned by the sender before the coverage, even if the content is detailed in the transport document.
Article 2 – ENFORCEABILITY
Neither special conditions nor other general conditions from the instructing party, shall, unless explicitly accepted by the T.L.O., prevail over these conditions. Giving the shipping order is worth approval, wholeheartedly, by the instructing party of these general Terms and Conditions
Article 3 – COST OF SERVICES
Prices are calculated on the basis of the information supplied by the customer, taking into account, in particular, the services to be performed, the nature, the gross weight and the volume of the goods to be transported and the routes to be taken.
Prices are quoted based on exchange rates in effect at the time they are given.
They shall also depend on the terms and rates set by the subcontractors and established by the existing laws, regulations and international conventions.
If one or more of these fundamental factors were to be modified once the quotation is received, and this also by the T.L.O’s substitute carriers, in a way that may be enforceable against the latter, and on the basis of evidence provided by it, the original quoted price should be modified under the same terms. The same would apply in case of unforeseen events, of any kind, that would lead to a modification of a key element in the service, together with the planned route of transport.
The agreed price might be revised in the event of a change in the cost of the fuel price, as provided for in articles L. 3222-1 and L. 3222-2 of the Transport Code.
Prices do not include:
– immobilization and storage charges as well as all other extra costs, unless expressly specified in the proposal,
– all duties, taxes, fees or charges that would be payable in application of any regulation, particularly fiscal or customs regulations (such as import duties, stamp duty, etc.).
Article 4 – INSURANCES
No insurance shall be taken out by the T.L.O. without a written order in duplicate from the instructing party for each shipping, specifying the risks to be covered (ordinary and specific) and the values to be guaranteed. Unless specifically specified otherwise, only ordinary risks shall be insured. If such a direction is given, the T.L.O., acting on behalf of the customer, shall take out an insurance contract with an insurance company which is known to be solvent for the period of cover. As the T.L.O. is acting as an agent in this specific case, it can, by no means, be considered to be an insurer.
The terms and conditions of the insurance policy shall be considered as known and approved by the shippers and the consignees, who shall bear the costs thereof. An insurance certificate shall be issued, if required, by the instructing party.
Any customer who personally covers all risks associated with transport shall specify to his insurance company that it is required pursuing his remedy against the T.L.O., according to the provisions of article 8 below.
Article 5 – SERVICES PERFORMANCES
The customer is deemed to have accepted the intermediaries and subcontractors the T.L.O. has chosen.
Departure and arrival dates that may have been communicated by the T.L.O. are given for information purposes only.
The instructing party must provide the T.L.O. with the necessary and specific instructions that are required for the execution of the transport services, added services and/or logistic services. There is no need for the T.L.O. to check the documents (commercial invoice, packing note, etc.) the instructing party has provided.
All specific delivery instructions (cash on delivery, etc.) shall be written and duplicated for each consignment and need the express acceptance of the T.L.O. In any event, such an order is only incidental to the primary transport and/or logistics service being provided.
Article 6 – INSTRUCTING PARTY’S OBLIGATIONS
Goods must be handed over already packaged, packed, marked and labeled so that they can be carried out and delivered to the consignee in accordance with the instructions given to the T.L.O. and in normal conditions.
The instructing party shall be solely responsible for the choice of packaging and for its fitness to bear the transport and handling.
Full trucks, semi-trailers, mobile crates, containers, once the loading operations are completed, shall be sealed by the loader himself or it representative. The driver must make sure of this before collecting the vehicle.
The instructing party shall be liable for all consequences of any lack, inadequacy or defect of the packaging, packing, marking or labeling. He shall also be responsible for all consequences of any failure to perform the duty of information and declaration regarding the specific nature, and in some cases, the value as well as the specificity of the handed over goods. The foregoing deals, more particularly, with dangerous goods.
The instructing party shall bear alone any consequences of erroneous, incomplete, unenforceable or belated declarations or documents, including those submitted after the expiry of time limits.
In the event of any loss or damage to the goods, or of any delay, the consignee or receiver shall carry out all checks by means of regular and sufficient inspections; they shall express motivated reserves regarding the carrier. More generally, they shall take all the necessary steps to retain the claims and to confirm the mentioned reserves in the forms and within the time limits set down by law, or else no warranty claim shall be made against the T.L.O. or its representatives.
If customs transactions need to be completed by the T.L.O. on behalf of the customer, the instructing party shall hold the customs agent harmless against any financial consequences arising from erroneous instructions, unusable documents, or those submitted after the expiry of time limits leading generally to the payment of additional duties and/or extra taxes and fines issued by the public Authority concerned.
If the goods are refused by the consignee, and in the event of the latter’s failure for any reason, all initial and additional costs owed and incurred by the T.L.O. shall be borne by the instructing party.
Article 7 – TRANSIT TIMES
No compensation for damage resulting from delay shall be owed if no time limit has been expressly requested by the instructing party and agreed on by the T.L.O. In such a case, the allowance could be granted only if the customer has sent a summons to deliver to the T.L.O. via a registered letter with acknowledgment of receipt.
Article 8 – LIABILITY
Liability for substituted parties’ actions:
The T.L.O.’s liability is strictly limited to the liability incurred by the substituted parties in the framework of the operation he was conferred upon with.
When the compensation thresholds of intermediaries or substituted parties are unknown or do not result from absolute or legal provisions, they shall be the same as the T.L.O’s ones.
The T.L.O.’s personal liability:
If the T.L.O’s personal liability is involved, for any reason and in any capacity, it shall be strictly limited:
• Concerning damages to the goods involved in the transport as a result of losses and damages and for any consequences resulting therefrom, to € 23 per kilogram with a maximum of € 750 per parcel, whatever the weight, volume, sizes, nature or value of the respective goods, and € 8.000 per consignment. Concerning the packages that are shipped in bulk, the indemnity shall not exceed € 2.5 per kilogram of missing or damaged goods with a maximum of € 8.000 per consignment.
• Concerning all other damages, whether direct or indirect (including those resulting from a delay in the delivery), the T.L.O’s personal liability shall be strictly limited to the cost of the goods under contract, and in any case, the amount of the indemnity may not exceed a maximum of € 8.000 per consignment.
Any quotation, any occasional price offer and all general price lists are established and/or published based on the above-mentioned liability limitations.
When the value of the goods under contract exceeds the above-mentioned liability limitations, the instructing party may:
– either bear, in the event of losses or damage, the difference between the T.L.O’s liability schemes and the value of the goods,
– either issue a declaration of value which, once set by itself and agreed on by the T.L.O, shall increase the liability limitations in the event of losses or damage, up to the amount of the declaration of value and leading to a supplement to be paid,
– or give clear information to the T.L.O., as provided for in article 4 of these Terms and Conditions about the fact that it can take out a personal insurance policy, specifying all risks and values to be insured. Such information shall be repeated for each consignment.
Article 9 – SPECIAL TRANSPORTS
Concerning special transports (controlled temperature transport, goods transport subject to a specific regulation including dangerous goods transport, etc.), the T.L.O shall provide the sender with suitable equipment, under predefined conditions by the instructing party, who shall be responsible for the choice of the mentioned equipment.
Article 10 – PAYMENT TERMS
All our invoices shall be payable CASH ON RECEIPT OF INVOICE, WITH NO DISCOUNT, in the invoice issuing place. If payment terms are exceptionally granted, any partial payment shall be attributed firstly to the non-preferential part of the debt.
In accordance with the conditions provided for in article L. 441-6, section 7 of the French Commercial Code, the agreed payment terms shall not exceed thirty days as from the invoice date.
Non-payment of one repayment shall lead, with no formalities, to an accelerated payment; the balance shall become immediately and fully payable, even in the case of acceptance of bill of exchange.
For any invoice that would be unpaid at the deadline date mentioned in the invoice, a penalty shall be automatically applied, corresponding to three times the basic interest rate as provided for in article L. 441-6, section 8 of the French commercial Code, without prejudice to the application of a fixed compensation of at least € 40 for recovery costs.
Article 11 – CONTRACTUAL POSSESSORY LIEN
Whatever the capacity in which the T.L.O. acts, the instructing party shall formally acknowledge that the T.L.O has a contractual possessory lien providing a general, permanent and preferential right on all the goods, values and documents the T.L.O owns, to guarantee all claims debts (invoice, interests, incurred costs, etc.) that the T.L.O. has against it, even those which are prior or extraneous to the transactions completed with the goods, values and documents it actually holds.
The customs broker has the same right as the T.L.O.
Article 12 – CONTRACT TERM-TERMINATION
If the instructing party and the T.L.O. entered into a permanent contract, this contract may be terminated at any time by either party by a registered letter with acknowledgment of receipt, subject to one month notice, except in cases of serious and deliberate breach of legal and regulatory obligation by either Party.
When the duration of the partner relationship exceeds one year, the period of notice shall be extended to three months, plus one month per year of continuous relations after the two year period, not exceeding a period of six months.
Article 13 – PRESCRIPTION PERIOD
Other than Customs operation, all claims arising from the contract entered into by the parties shall be time barred within one year after the performance of the disputed service of the said contract and in terms of duties and taxes collected afterwards, starting from the recovery notification.
Article 14 – GOVERNING LAW AND LEGAL JURISDICTION
These Terms and Conditions are governed by French law.
In the event of a dispute or contestation, exclusive authority shall be granted to the Tribunal de commerce of Paris, even in the event of plurality of defendants or of the introduction of third parties.
Insurance against overall risk
This guarantee covers goods (also called faculties) against risks related to transport. As opposed to liability insurance, which only covers the service provider’s, transport provider’s, and the transport broker’s responsibility, the Ad Valorem insurance covers the transported goods against all risks of damages related to transport. Goods destroyed within the framework of a force majore case shall not be eligible for indemnification with an RC policy, although they will be eligible within the framework of Ad Valorem insurance.
AD VALOREM insurance permits insuring the goods in and of themselves based on their real value. Even when there is an exonerating case of force majore (for example: a storm) for the transport provider and the transport broker, the goods shall be indemnified by the Ad Valorem insurer. There are some classic coverage exceptions in the insurance contract: : - goods with their own vice - packaging failure - particular nature of the goods (live animals… art objects…) This transported goods insurance may be signed for sea, air, and land transports. A specific type of insurance corresponds to each type of transport. The insurance value to be considered is the real value of the goods. This value must be real and must be able to be justified in case of an incident. This value serves as the basis to calculate the insurance premium and for the indemnification in case of an incident. The type of goods must also be verified, since the conditions exclude certain goods or limit indemnification amounts when a certain value is exceeded (live animals, used goods, alcohol, cigarettes, art works…). )
Transport Insurance Contract Framework :
Contracts signed in France refer to the “PRINTED” types/general conditions (refined by the insurers). These printings are reviewed regularly.
1- Maritime Insurance
– FAP Except: (Specific fault range)
Damages and material losses caused by one or many circumstances listed in a nominative and limitative manner are exclusively covered. It is regarding larger risks such as shipwreck, overturning, boarding, fallen shipment….. contribution to common fault.
Against all risks:
This insurance is much more wide-ranging than the previous one, and it covers specific faults. However, not all of the faults are covered and there are some exceptions. Financial, commercial or indirect damages (the consequences of a delay in particular are not covered) are specifically excluded.
– Maritime insurance against war risks and those assimilated :
These risks are excluded from the ordinary risk insurance, but they may be covered only during the maritime portion of the trip (Waterborne guarantee) or during the whole trip (printing on 01/05/85). Not all of the circumstances are covered, mainly: destruction, deterioration, theft, looting, and disappearances as a result of a civil or foreign war… political terrorism or sabotage. This insurance is agreed upon with an extended premium and it can be rejected or suspended for certain destinations.
2- Air insurance
– Ordinary risks :
The guarantee called “major accident” corresponds to the FAP coverage Except Maritime. (plane crash, collision, shipwreck, falling…..). – Insurance against all risks : It is essentially the same to that applied in the maritime transport framework. – War risks : They are the same as in maritime matters, except for the Waterborne guarantee, which is not valid for air.
3- Land insurance :
– The guarantee called by specified accident corresponds to the FAP Except Maritime.
– The guarantee against all risk is of the same type as the previous ones.
– The guarantee for war risks and those assimilated must be signed separately.
PROCEDURE IN CASE OF AN ACCIDENT WITH TRANSPORTED GOOD INSURANCE
Resource Preservation : making OBSERVATIONS is fundamental. They imply a presumed responsibility and they maintain the resource, conditioning the right to action against those responsible. They must be clear, precise and made as fast as possible. The terms vary according to the types of transport, but : – in case of apparent damage, it is imperative to make observations at the moment of delivery regarding the transport or delivery service, and to confirm them immediately by certified letter with acknowledged receipt – if the damages are not apparent, the observations must be made in writing (certified letter with acknowledged receipt), generally within 3 days after the delivery. (this term is often imperative). If the observations are not made, any actions against those responsible may be disqualified.
Language is one of the most complex and important tools of International Trade. As in any complex and sophisticated business, small changes in wording can have a major impact on all aspects of a business agreement.
Word definitions often differ from industry to industry. This is especially true of global trade, where such fundamental phrases as “delivery” can have a far different meaning in the business than in the rest of the world. For business terminology to be effective, phrases must mean the same thing throughout the industry. That is why the International Chamber of Commerce created “INCOTERMS” in 1936. INCOTERMS are designed to create a bridge between different members of the industry by acting as a uniform language they can use. Each INCOTERM refers to a type of agreement for the purchase and transportation of goods internationally. There are 13 different terms, each of which helps users deal with different situations involving the movement of goods. For example, the term DDU is often used with transportation involving intermodal or courier based shipments; FCA assists with situations found in Ro/Ro or sea container transport. INCOTERMS also deal with the documentation required for global trade, specifying which parties are responsible for which documents. Determining the paperwork required to move a consignment is an important job, since requirements vary so much between countries. Two items, however, are standard: the commercial invoice and the packing list.
INCOTERMS were created primarily for people inside the world of global trade. Outsiders frequently find them difficult to understand. Seemingly common words such as “responsibility” and “delivery” have different meanings in global trade than they do in other situations.
In global trade, “delivery” refers to the seller fulfilling the obligation of the terms of sale or to completing a contractual obligation. “Delivery” can occur while the merchandise is on a vessel on the high seas and the parties involved are thousands of miles from the goods. In the end, however, the terms wind up boiling down to a few basic specifics:
Costs: who is responsible for the expenses involved in a shipment at a given point in the shipment’s journey?
Control: who owns the goods at a given point in the journey?
Liability: who is responsible for paying damage to goods at a given point in a shipment’s transit?
It is essential for shippers to know the exact status of their shipments in terms of ownership and responsibility. It is also vital for sellers & buyers to arrange insurance on their goods while the goods are in their “legal” possession. Lack of insurance can result in wasted time, lawsuits, and broken relationships.
INCOTERMS can thus have a direct financial impact on a company’s business. What is important is not the acronyms, but the business results. Often companies like to be in control of their freight. That being the case, sellers of goods might choose to sell CIF, which gives them a good grasp of shipments moving out of their country, and buyers may prefer to purchase FOB, which gives them a tighter hold on goods moving into their country.
This glossary will explain what all of the terms mean and their impact on the trade process. Since most international buyers and sellers do not handle goods themselves, but work through freight forwarders and brokers, this guide will highlight how both fit into the terms under discussion.
INCOTERMS are most frequently listed by category. Terms beginning with F refer to shipments where the primary cost of shipping is not paid for by the seller. Terms beginning with C deal with shipments where the seller pays for shipping. E-terms occur when a seller’s responsibilities are fulfilled when goods are ready to depart from their facilities. D terms cover shipments where the exporter/seller’s responsibility ends when the goods arrive at a specific point. Because shipments are moving into a country, D terms usually involve the services of a customs broker and a freight forwarder. In addition, D terms also deal with the pier or docking charges found at virtually all ports and determining who is responsible for each charge.
One of the simplest and most basic transport arrangements places the minimum responsibility on the seller with greater responsibility on the buyer. In an EX-Works transaction, goods are basically made available for pickup at the exporter/seller’s factory or warehouse and “delivery” is accomplished when the merchandise is released to the consignee’s freight forwarder. The buyer is responsible for making arrangements with their forwarder for insurance, export clearance and handling all other paperwork. Used for any mode of transport.
FOB (Free On Board)
One of the most commonly used-and misused-terms, FOB means that the exporter/seller uses his freight forwarder to move the merchandise to the port or designated point of origin. Though frequently used to describe inland movement of cargo, FOB specifically refers to ocean or inland waterway transportation of goods. “Delivery” is accomplished when the exporter/seller releases the goods to the buyer’s forwarder. The buyer’s responsibility for insurance and transportation begins at the same moment.
FCA (Free Carrier)
In this type of transaction, the seller is responsible for arranging transportation, but he is acting at the risk and the expense of the buyer. Where in FOB the freight forwarder or carrier is the choice of the buyer, in FCA the seller chooses and works with the freight forwarder or the carrier. “Delivery” is accomplished at a predetermined destination point and the buyer is responsible for Insurance.
FAS (Free Alongside Ship)
In these transactions, the buyer bears all the transportation costs and the risk of loss of goods. FAS requires the exporter/seller to clear goods for export, which is a reversal from past practices. Companies selling on these terms will ordinarily use their freight forwarder to clear the goods for export. “Delivery” is accomplished when the goods are turned over to the Buyers Forwarder for insurance and transportation.
CFR (Cost and Freight)
This term formerly known as CNF (C&F) defines two distinct and separate responsibilities-one is dealing with the actual cost of merchandise “C” and the other “F” refers to the freight charges to a predetermined destination point. It is the shipper/seller’s responsibility to get goods from their door to the port of destination. “Delivery” is accomplished at this time. It is the buyer’s responsibility to cover insurance from the port of origin or port of shipment to buyer’s door. Given that the shipper is responsible for transportation, the shipper also chooses the forwarder. Used for sea or inland waterway transportation.
CIF (Cost, Insurance and Freight)
This arrangement similar to CFR, but instead of the buyer insuring the goods for the maritime phase of the voyage, the shipper/seller will insure the merchandise. In this arrangement, the seller usually chooses the forwarder. “Delivery” as above, is accomplished at the port of destination. Used for sea or inland waterway transportation.
CPT (Carriage Paid To)
In CPT transactions the shipper/seller has the same obligations found with CIF, with the addition that the seller has to buy cargo insurance, naming the buyer as the insured while the goods are in transit. Used for any mode of transportation.
CIP (Carriage and Insurance Paid To)
This term is primarily used for multimodal transport. Because it relies on the carrier’s insurance, the exporter/seller is only required to purchase minimum coverage. When this particular agreement is in force, freight forwarders often act in effect, as carriers. The buyer’s insurance is effective when the goods are turned over to the forwarder.
DAF (Delivered At Frontier)
Here the seller’s responsibility is to hire a forwarder to take goods to a named frontier, which is usually a border crossing point, and clear them for export. “Delivery” occurs at this time. The buyer’s responsibility is to arrange with their forwarder for the pick up of the goods after they are cleared for export, carry them across the border, clear them for importation and effect delivery. In most cases, the buyer’s forwarder handles the task of accepting the goods at the border across the foreign soil. Used for any mode of transportation.
DES (Delivered Ex Ship)
In this type of transaction, it is the seller’s responsibility to get the goods to the port of destination or to engage the forwarder to the move cargo to the port of destination uncleared. “Delivery” occurs at this time. Any destination charges that occur after the ship is docked are the buyer’s responsibility. Used for sea or inland waterway transportation.
DEQ (Delivered Ex Quay)
In this arrangement, the buyer/consignee is responsible for duties and charges and the seller is responsible for delivering the goods to the quay, wharf or port of destination. In a reversal of previous practice, the buyer must also arrange for customs clearance.
DDP (Delivered Duty Paid)
DDP terms tend to be used in intermodal or courier-type shipments. Whereby, the shipper/seller is responsible for dealing with all the tasks involved in moving goods from the manufacturing plant to the buyer/consignee’s door. It is the exporter/seller’s responsibility to insure the goods and absorb all costs and risks including the payment of duty and fees.
DDU (Delivered Duty Unpaid)
This arrangement is basically the same as with DDP, except for the fact that the buyer is responsible for the duty, fees and taxes.