Introduction to transporting goods

Introduction to transporting goods

Contents

Transporting goods

International sales contracts involve transporting goods from one country to another. This can get complicated, as usually more than one type of transport is involved.

For example, goods are carried by road (or by a combination of road and rail) to the port of shipment. They're then carried by sea to the destination port. From here, the goods are carried further by road (and/or rail) before arriving at the buyer's warehouse.

Goods are often delivered by the seller to the shipping company at that company's inland depot, rather than at the port of shipment. The shipping company will then transport the goods from their depot in the seller's country to their depot in the buyer's country and charge a freight charge. It's necessary to agree on who pays this freight charge, as well as who pays the costs of transport to the shipping company's depot in the seller's country and from its depot in the buyer's country to the buyer.

If you're the seller, the ideal arrangement from your point of view would be for the buyer to collect the goods from your warehouse or factory. The buyer would then have to pay for all the transport costs. However, few buyers would be prepared to do this.

From the buyer's point of view, the ideal arrangement would be for you to deliver the goods directly to their warehouse. In this case, you'd have to pay for all the transport costs. This, on the other hand, wouldn't be ideal for you.

There are International Commercial Terms that cover various arrangements by which the seller and buyer can share the transport costs and risks. These are called Incoterms.