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Pricing - Yerukhimovich IL

4.7. Kinds of the prices depending on the account in them of transport charges

The relationship between sellers and buyers is not limited only to determining the price of goods (work, services). It is necessary to agree on the basic terms of delivery that define the basic rights and obligations of the parties to the transaction when transporting, packing and labeling goods for cargo insurance and registration of commercial documentation, as well as determine the place and time of transfer of ownership from the seller to the buyer and how these conditions are reflected In the price of the goods.

It should be understood that all additional costs may or may not be included in the price, or be included partially or completely. All of this is within the concept of "franking," that is, economic and legal conditions that determine the order of inclusion in prices of certain costs associated with transportation, handling, storage and insurance of goods. The franking regulates the legal obligations of the parties in connection with the supply of goods in domestic and foreign trade.

In domestic trade, depending on the terms of delivery of goods, prices vary by Franco. "Franco" (in Italian, "free") is a commercial term meaning that a certain part of the cost of transporting or loading goods is included in the price of the producer. Each kind of Franco shows to which point in the way of the movement of the goods from the seller to the buyer additional costs are included in the price under the contract of sale. There are six kinds of Franco. It should be remembered that in all cases, these costs are ultimately borne by the buyer.

The franco-warehouse price of the supplier does not include any costs of moving the goods from the seller to the buyer (for loading in the supplier's warehouse, transportation to the departure station, unloading, etc.). All these costs the buyer pays above the price of the goods.

The price of the franco-departure station takes into account the price of the goods and the seller's costs for moving the goods from their warehouse to the departure station. All further costs associated with the delivery of goods to the warehouse of the buyer are paid separately.

The price of the French-car carriage of the departure station differs from the previous one in that it includes additional costs for supplying the car to the access roads and loading the goods into the wagons at the departure station.

The price of the franco wagon destination station except the price of the goods includes the costs of its movement from the seller's warehouse to the destination station without unloading from the wagons. The buyer pays for the further transportation of goods to his warehouse in excess of the price, separately.

The price of the franco-destination station includes transportation costs from the supplier's warehouse to the destination station, taking into account the costs of unloading products from the wagons.

It should be noted that most cargo is not reloaded at railway stations of departure and destination (ore, coal, oil products, rolled metal, pipes, etc.). For such goods, the prices of the ex-car carriage station of departure (destination) are applied, and not the French destination station (departure).

The franco-warehouse price of the buyer takes into account the price of the goods and all the costs of moving it from the seller's warehouse to the buyer's warehouse.

In international trade practice, when drawing up and concluding foreign trade contracts for sale and purchase, the parties use the basic terms of delivery, the interpretation of which and the obligations of the parties deriving from them are contained in a special collection of the International Chamber of Commerce "Incoterms" [18]. According to international rules, the basic principle of regulating the terms of delivery of goods consists in the sequential increase in the seller's obligations from the minimum to the maximum volume and the corresponding increase in the costs of moving the goods, which the seller pays and, therefore, takes them into account in the price of the goods fixed in the contract.

The Incoterms collection contains the basic concepts used in international trade practice and is the official normative basis for arbitration of disputes that arise on relevant issues.

Consider the most common basic conditions of delivery.

EX - ex-factory ... (from the enterprise, mine, warehouse, etc.). Under this condition, the seller must provide the goods at his disposal to the buyer. He also must at his own expense prepare the goods, attaching the documents confirming his compliance with the terms of the contract, notify the buyer of the readiness of the goods for shipment and complete the set of documents necessary for exporting goods from the country. At the request of the buyer and at his expense the seller can assist in obtaining additional documents necessary for the import of goods into the imported country.

The importer (buyer) must enter into an agreement with the carriers of the goods and pay for transportation from the seller's enterprise to the destination, including loading, to obtain export licenses, to execute and pay customs procedures, as well as taxes and fees, to pay the goods to the seller at the manufacturer's price.

All risks of accidental damage and loss of goods, from the moment of its provision by the seller (exporter), are borne by the buyer.

FRC - Free Carrier ... (name of the item). The exporter must supply goods at his own expense, attaching documents confirming his compliance with the terms of the contract, depending on the requirements of the contract, to package the goods in containers, to load onto trailers in seaborne, to ensure the movement of the goods on their own wheels, to notify the importer about the shipment of the goods to the port, Export license, deliver the goods to the contracted place in the port and deliver it in due time to the carrier along with a set of documents required for its exportation, as well as execute customs procedures.

The price of the goods under this basic condition includes all costs of the seller up to the point of his transfer to the carrier.

The importer is obliged to pay the price of the goods to the exporter and inform him of the requisites of the carrier, at his own expense to conclude an agreement with the carrier and pay all costs associated with the delivery of the goods from the point agreed by the contract to the destination, including the cost of handling and handling.

FCP - freight freight fee paid to ... (name of destination). Under this condition, unlike the previous one, the seller pays the freight (freight) of the goods to the specified destination and includes these costs in the price of the goods.

The buyer must insure the goods at his own expense and pay all other costs incurred during transportation.

The risk of death and accidental damage to the goods passes from the seller to the buyer at the time the seller transfers the goods to the carrier.

CIP - freight-freight fee and insurance paid to ... (name of destination). This condition is similar to the previous one with the addition that the seller must provide transport insurance against the risks of death or accidental damage to the goods during transportation. Then the price of the goods increases by the amount of the insurance premium.

DAF - delivery to the border ... (name of the place of delivery at the border). Under this condition, the seller's obligations end before the customs border of the importing country. The price of the goods includes all the costs of the seller, including his expenses for the production of goods and profits, delivery in a timely manner to the border point of the importing country, the transfer of a set of documents, including transportation, payment of customs procedures and all costs before the transfer of the goods to the buyer.

DDP - delivery ... (name of the destination in the country of importation) with payment of the fee. Unlike the EXW term, which means the minimum obligations of the seller, DDP means the maximum obligations: the seller bears all costs of delivering the goods to the place specified by the buyer, obtaining export and import licenses, performing customs procedures on both sides of the border and paying customs duties and risk of accidental Damage and loss of goods before delivery to their destination.

All costs of the seller are included in the price of the goods, which the buyer reimburses.

DDV - delivery ... (name of destination in the country of importation) without payment of fee. All costs of the seller, specified in the previous condition, except for the duty, are included in the price of the goods under the contract.

FOB - free on board . Purchase and sale of goods on this condition implies the duty of the seller to deliver and load the goods on board the ship at the expense of his forces and means. The FOB condition provides for the liability of the seller for the condition of the goods, damage and loss until they are delivered on board. In this case, the price of the sale includes directly the price of the goods, as well as transportation and other expenses for the delivery of it on board the vessel.

In international trade practice, FOB conditions and prices are applied for the export of many types of industrial products, finished products. Statistical publications of the UN and other international and national organizations usually publish FOB export prices.

FAO - ex-ship alongside the vessel . This condition requires the seller to place the goods along the side of the ship on the embankment in the named port. The price of the goods is determined based on the costs of the seller for the performance of the assigned duties.

OIF - cost, insurance, freight . When the goods are delivered on the CIF condition, the price of the goods specified in the contract is included directly in the price of the goods themselves, insurance costs, freight and transportation costs to the port of destination, with payment of fees, taxes and duties related to the export of the goods.

Statistical publications of the UN and other international and national organizations usually publish CIF import prices.

OFR - cost and freight . This condition, unlike the previous one, does not include the seller's costs for insurance. All costs from the moment of transfer of goods through the ship's rail are paid by the buyer in excess of the price specified in the contract.

EXS - from the ship ... (name of the port of destination). This basic condition means that the seller places the goods at the disposal of the buyer on board the ship at the destination specified in the contract. The seller must obtain an export license at his own expense, perform customs formalities, pay for loading, freight, insurance. He bears all risks of accidental damage and loss of goods until he arrives at the port of destination. All these costs of the seller are accounted for in the price fixed in the contract.

EXQ - from the quay ... (name of the port). Under this condition, the seller places the goods at the disposal of the buyer at the wharf at the destination specified in the contract. All costs and risks of delivering the goods to this place are borne by the seller.

There are two types of contracts on EXX terms: "from the pier ... with payment of the fee" and "from the pier ... duty at the expense of the buyer." At the conclusion of the contract, the parties are obliged to fully specify these conditions, since otherwise it may be unclear who (the seller or the buyer) is responsible for customs clearance of the imported goods.

We examined the most common basic terms of delivery, which determine the procedure for the delivery and payment of goods in domestic and international trade and the accounting in the prices of additional costs of the seller. At the same time, it is necessary to clearly understand that the price specified in the contract includes absolutely all costs of the seller. Overpaid, the buyer pays for expenses that are not covered by the specific terms of delivery.