Tuesday, June 6, 2017

Delivering the Difficult

The On Demand Economy is starting to bring about big changes in the logistics landscape. The "Uberization of Freight" and the rush to digitizing and automating all facets of the distribution process has seen a multitude of new companies enter our field.

A large amount of investment capital has been put into even the smallest of technology companies, with no logistics experience, in hopes of creating the next big application for Logistics managers to use. We can credit Amazon for this.

All eyes are on Amazon as they have transitioned from an online bookseller, to an online marketplace of everything, to a global logistics company. "The Amazon Affect" has changed the perception of the distribution and logistics world.

In my 30 years in logistics, no matter the organization, warehousing and transportation has always been a back end function. These services have always been regarded as "support" services for sales. Amazon came along and moved logistics front and center. 

Not only can you buy the item you want, but we are going to deliver that item to your door faster than anyone else. The Logistics process for Amazon has become its selling value proposition.

It used to be sales went like this...We have this product, not many other people can offer it to you at this good of price, so buy it from us...Today Amazon says...We know you can buy this product from a number of places online without much difference in price, but our logistics network will get it to you faster than anyone else.

Amazon has now become the number 1 online retailer because they made logistics the cornerstone of their value proposition. They believe so much in this business model that they have literally changed from a Retail company to a Logistics company. They have quickly bought warehouses, trucks, planes and boats in an effort to take more control over their supply chain.

The interesting thing about the influx of capital into Logistics is that it is targeted at the computerization or automation of the process, not at the process itself. Asset based warehousing, trucking and last mile delivery companies have not seen the kind of investments in assets to actually perform the job, that their tech counterparts have received.

In today's business environment most investment goes toward ways to make money without having to actually physically do anything other than code software. 

It is my opinion that if the capital influx into logistics were reversed and the majority of this capital were spent on trucks, material handling equipment and equipment that makes the flow of products from manufacturers to consumers smoother, rather than on software, the world of logistics would be even more paramount in today's e commerce marketplace.

If companies that actually did the work of moving products had the capital it needed to always have the right equipment in the right location at the right time, delivery logistics would be more efficient and cost less to get items into the hands of the consumer.

Gateway O.T Specializes in the blue collar, white glove, first mile, last mile and everything in between space. Using assets and people to actually pickup, move and deliver large and difficult to deliver items such as appliances, spa tubs and the assembly of office cubicles all the way to where the customer wants them, is our value proposition.



We help provide the freight logistics management for all of the pieces of the puzzle, beyond the online TMS, WMS reporting type features, Gateway concentrates more on the custom delivery of your merchandise than on the delivery of the data for your merchandise. 

I am not saying that the technology to streamline logistics is not important, in fact if you have read my blog you would know I was very involved in the large scale development and implementation of an early ERP ported TMS system in the early 90s and I understand its importance in the supply chain.

In truth, I just think the race for big bucks through new apps with not a lot of work or effort in actual physical distribution is a waste of assets that could be progressing our industry into a new era of customer service for everyone purchasing online.

Lately our choices for transportation management tools online have grown exponentially because of this, but what has it really done to benefit pickup, delivery or customer service? More computer networks, more rate shoppers, more communications tools, more document producers, the choices have become endless. 

The problem is many of these programs and networks will fall off and disappear, meaning the financial investment people are making today in these programs really aren't advancing the state of logistics for the benefit of the consumer.  

Hey everyone who is making the next best logistics app, becoming the Uber of Freight, or trying to become the Amazon of All Cargo, how about paying more attention at what is really happening! Amazon didn't just create an app and call it a day, they are creating a huge Asset Based Distribution Network to dominate Logistics! Why aren't you? 

Steven Tittle is Owner of Gateway Optimum Transportation and Gateway Crate and Freight - an asset based 3 PL located in Tempe, Arizona. A Blue Collar-White Glove kind of company who provides its clients with first mile, last mile and everything in between. Contact him at steven@gatewayot.com or visit www.gatewayot.com or www.gatewaycrateandfreight.com  














  

Friday, April 7, 2017

Is your SMB shipping process at risk from 3PL systems mergers?


If you are a small to medium sized business that sells or distributes products, you have most likely heard of Unishippers and Worldwide Express, the 3PL parcel and freight rate re sellers. They both offer discounted shipping rates through their online shipping systems (TMS) and both offer multiple shipping service coverage ranging from parcel all the way up to truckload.

For the years I spent managing distribution and supply chains I probably had the privilege of meeting dozens of representatives from both of these companies. Each one offering me better rates or better services than the other. At times, I utilized their shipping systems to my companies advantage. 

When I learned that Worldwide Express and UniShippers were merging I couldn't help but recall the countless times the reps would question the others system, process or service offering. Most of this was to try to gain my shipping volume, I understand that, but sometimes it even turned personal, one agent despising the other because of the direct rivalry they were in . Now that I am in the 3PL business myself, reselling my rates, I understand how competitive this business is. 

The merger of Unishippers and World Wide Express will create a 3PL dominant rate reseller at over $1B, yes 1 Billion, in freight management, with the vast majority of that coming from SMBs and SMEs. and in the parcel and LTL shipping segment. Small business owners who use their online systems to ship their products should be fine for a while, but these mergers happen for a reason, and sometimes the reason isn't to make things better for the customer.

There is no reason for the new merged company to continue development and to support both TMS systems, one will have to go and all the client base will be merged into one system. There is also no reason to keep replicated offices, sales staff and customer service personnel. Mergers are made to trim the fat, or in business terms provide for better economies of scale.

If you are currently using the Unishippers or Worldwide Express Platform some changes may be coming your way, not just from the system you use but also from the customer service you have been accustomed to. Both of these companies are non-asset based 3PLs whose business model relies on Franchisees, the majority of whom work from their home to sell to you.

There are a number of 3PL rate resellers in the parcel, LTL and TL segment that will step in where the new merged company has left businesses feeling disenfranchised. Although these 2 companies are at the top of the complete online TMS offering competing against each other, soon they will be one, which means less competition at the top of this segment.

I was involved in the early development of a TMS system back in the early 90s that ported to a few of the well known ERPs (Oracle, SAP) That system was designed more for large corporate enterprises, because back then, they were the only companies who could afford this type of technology development. Today however, access to advanced rating, routing and tracking software is offered to even the smallest of companies through these online systems. 

There are many Transportation Management System offerings out there available today, although some are limited in service offering. Most will offer LTL services, rate shop, book, track but then don't offer the small business owner the parcel shipping service (Carrierrate) or vice versa the system offers you parcel shipping (Shipgooder) but not truckload and LTL management.

So when two large companies in one space, here its the 3PL Non-Asset based TMS providers, merge what can SMBs and SMEs do to prepare for this change?

Now may be a good time to run an RFP of your shipping data with another 3rd party provider. This is always a good exercise anyway for small businesses to analyze cost and service. If you are happy with your system and customer agent ask them what they know about the changes coming from the merger so you can be prepared.

A large merger like this, in this space, is not uncommon, in fact M&A among similar logistics companies has been on the upswing for the last decade, but make sure the moves that are being made benefit you as a small business. Make a plan to help you make a smooth transition whether that's staying with the system changes currently happening or changing to a new system and process altogether.

Steven Tittle is owner and partner in Gateway Optimum Transportation a Federally licensed Motor Carrier and Gateway Crate and Freight an Asset Light 3PL located in Tempe, Arizona offering Freight Management and Logistics services to its clients. For more information visit www.gatewayot.com or www.gatewaycrateandfreight.com

     




        











     

Wednesday, March 15, 2017

You won your Online Auction? Now What?

Gateway Crate and Freight gets a lot of work from people who win online auctions from out of town. Most of these people are out of state and some are even in other countries. We have picked up auction items such as antiques, restaurant equipment, computers, water meter readers, and even a walk through metal detector.

Many of our clients do their due diligence BEFORE bidding or purchasing items they may win. Contacting us for a quote on picking up, packing, palletizing, crating and shipping these items gives the prospective buyer a good idea about how much of a "deal" they are actually getting after factoring in packing and transportation.

Those that buy first and figure out logistics later find out that the road to great deals online starts with understanding the costs of the entire project, not just the purchase price of the item. Lets look at a recent Gateway Crate and Freight auction purchase project.

A Security company in Baltimore, Maryland won an online auction for a walk through metal detector. You have probably walked through one of these before:

    

Although the Auction company for this was located in Phoenix, Arizona the actual item was at a US Customs and Border Protection facility in Yuma, Arizona. The security company got a great price on the unit but did not pre-plan the logistics.

Here is where an understanding of how most online auctions work, can reduce your logistics cost. This auction had a time limit of 72 hours for pickup once the auction was won and like most auctions the item must be picked up by the purchaser "as-is". In other words the auction company will not prepare your items for shipping in any manner.

The problem with not planning this out was that Gateway Crate and Freight was contacted by the purchaser and only had 48 hours to schedule a truck to pickup this item to meet their deadline. The client ended up having to pay for us to send a dedicated driver and truck to pickup the item in Yuma, which is a round trip of over 400 miles. In this case the pickup charge was more then the shipping of the packaged unit from Arizona to Maryland.

Had this customer pre-planned or quoted this item prior to the purchase, this company could have cut the pickup cost in half. The day prior to being contacted and in the first 24 hours it had been available for pickup, we had a 26' padded van returning from San Diego that could have picked this item up for less than half the dedicated van charge.

Understanding the time limits for an "as-is" pickup given by an online auction is paramount to getting a good "deal".  

Another important step in getting your product, if you can't pick it up your self, is providing the auction site with a release. You must provide "authorization" to the auction house to release the product to a 3rd party who is picking it up.

Providing the purchase ticket and lot number to the third party to be picked up is essential as well, to ensure you get the items you purchased. After picking up your items, the rest is a piece of cake for us. After palletizing, packing and shipping this metal detector the customer was extremely happy with their new purchase and has let us know they are looking for more of these in Arizona because they know we can handle their needs, and with better planning, save them money.

If you need more information about the logistics involved in making your first online auction purchase, contact our experienced staff, we would be happy to give you a free estimate on what it would take to get your items picked up, packed and shipped safely to you. Toll Free 855-474-4685

   

Steven Tittle is owner of Gateway Optimum Transportation and Gateway Crate and Freight a 3PL located in Tempe, Arizona that provides warehousing, custom crating, packing and transportation management services. www.gatewaycrateandfreight.com or www.gatewayot.com
MC917143 DOT2638954 Gateway Optimum Transportation is federally licensed as both a Motor Carrier and a Broker(Property).



Wednesday, February 15, 2017

Logistics and a lot of T.L.A

TLA? On Valentines Day? Isn't it TLC (Tender Loving Care)? TLC is a TLA...or is that TMI (Too Much Information)? LOL. The world is full of T.L.As (Three Letter Acronyms) and logistics loves using them.

I analyzed my last 6 blogs to find out that I used 19 Three Letter Acronyms! Ready for them? Lets go...COI, CES, COO, EXW, FCA, CPT, CIP, DAT, DAP, DDP, FAS, CIF, UPS, LTL, TMS, WMS, VCI and CFR twice in 2 different ways CFR meaning Cost and Freight (Incoterm) and CFR meaning Code of Federal Regulations.

Some of the above acronyms don't relate exactly to Logistics, CES for example is the acronym for the Consumer Electronics Show. I wrote about CES in my Trade Show blog. Other acronyms are high profile brands in the industry like UPS, which we all know stands for United Parcel Service.

In my new blog we will be adding 2 more 3 letter acronyms. API and EDI. Both of these acronyms are services that are not dependent on logistics but these days logistics is dependent upon them.

For years EDI, Electronic Data Interchange provided communication standards for exchanging electronic data between different companies or organizations. This computer to computer communication eliminated human errors and made order processing between two companies automatic.

Common business documents like purchase orders, invoices and shipping documents could be exchanged from one company to another without human input. EDI standards were established so everyone was on the "same page". Add a new partner? Standards were already in place to transmit and receive the EDI documents.

I helped develop a Transportation Management System (TMS) in the 90s that was used to transmit Shipping related EDI transaction sets to the Big Box stores that required them, back then we utilized a VAN (Value Added Network) to transmit the data, and that data would batch process at a pre determined time. 

Like most standards however, people came up with different standards...for the standards, and then for every standard now we have different versions of those standards. EDI standards ANSI, EDIFACT, TRADACOMS and more have been established, and for communication to work, both companies have to agree to the standard and version they want to work with.

If you are a larger organization you can push your standard back on a smaller supplier, but if your a smaller supplier trying to work with different larger corporations, that each use a different standard, boy are you in trouble. The Web based XML (Extensible Markup Language) standards were developed during this time as well, which began the process for less expensive web based data transfer.

With the advancement of the internet and the use of it as a communication tool, the Application Programming Interface (API) came along.



An API is like an EDI standard, in that it functions as a roadmap to data.  An API is a method of communicating between various software components that specifies routines, data structures, object classes, variables and remote calls. What this means is a new standard of "getting" and "posting" information between companies over the internet rather than over a private VAN.

There are Remote APIs and Web APIs but both allow for interactions between a companies data assets and those making the calls for that data. The differentiation here between EDI and API is that an API allows you to communicate in real time what you need, when you need it, using different standards but returning or posting only the information needed. 

With EDI you would send a transaction set, Set 858 is shipping information, all the shipping data fields would be populated and the file would be sent to the recipients computer, the recipients computer would then generate an EDI confirming receipt, "Acknowledge" The data transfer.

In many cases in the EDI world, a server may process these transactions in batches, so there may be a delay in the response. With API you have a live transaction in that you are connected into or with the recipients data rather than waiting for a batch process to occur to get the info.

We used to dispatch trucks for pickup using EDI and we would have to go and check the status of our EDI upload multiple times to see if the carrier had been dispatched. With an API driven dispatch system an email or notification is immediately sent from the server as soon as the request is made through the API.

Our Accufrate Transportation Management System is an API driven application. We have access to our carriers data from their server. When you get a rate quote through Accufrate its the rate that is coming from that carriers server, in real time. Dispatch of a truck for pickup occurs in real time, you know this because you are posting the data directly to the carriers interface and it is immediately replying.

The great thing about API driven technology is that an APIs design allows you to program into your application a way to access data from another companies application without the users needing to understand the programming inside the other companies modules.

An API provided to us by another company simply says - here is the information I am willing to share with you and this is how you get it, if there is information you want to give me, this is how you give it to me.

The advantage here is that you can give and get only the info wanted and needed at the time of the request, With an EDI the whole file (transaction set) is transferred each and every time.

In explaining this process, I started out by saying I was adding 2 more TLAs to your vocabulary. Did you see what happened? My 2 turned into 4 more TLAs, we added VAN (Value Added Network) and XML (eXtensible Markup Language) as well as EDI and API in just this short description of the use of these communication tools. 

Whether you are in logistics in the B2B or B2C segment I am HTH. TBH you can AMA and if IDK I will find the answer. I GTG but if you ever want to F2F just use my contact info from this page. BTW most of our customers are from WOM and appreciate our exceptional CRM.

If you think sorting through all of these TLAs (Three Letter Acronyms) was difficult...my next blog is going to be written in all emojis 👴 LOL

Steven Tittle is Owner of Gateway Optimum Transportation an Asset Light 3PL located in Tempe, Arizona. Steven has over 30 years experience in Transportation and Logistics Management including software development for logistics applications. Visit www.gatewayot.com or www.gatewaycrateandfreight.com for more information on the services they provide.

 






Wednesday, January 11, 2017

Does your delivery need a C.O.I?

In the Transportation Logistics world insurance is required for pretty much everything. General Liability, Motor Truck, Contingent Cargo and Marine Cargo as well as coverage's like Errors and Omissions and Workman's Compensation. You would think by needing all this coverage that moving cargo around the world and into someones business or their home is a pretty risky endeavor. It is!

Gateway O.T performs Inside and White Glove delivery services where the building owner or management company requires us to prove we have sufficient insurance coverage while in or on their property. Our Crate and Freight division performs on site packing and crating services for large corporations that require we meet their minimum insurance requirements before we enter their property.

Large corporations carry many insurances but have to minimize their risk of claims against those policies by ensuring that the outside contractors they utilize have the coverage needed in case of an accident while on their property.

When we take our vehicles (trucks/vans) onto a companies property to load product or to unload crates for a project, Motor Truck Insurance coverage is required in case the truck accidentally hits another vehicle, structure or other items at the companies facility.

If while taking a pallet or a crate to a location in a building and that pallet smacks into a wall and creates a large dent, or knocks over some materials damaging them, there needs to be a general liability policy that can cover the cost of replacement or repair.

By the same token if an employee of Gateway is severely injured while on site at one of these locations and needs to collect workman's compensation insurance the company will require proof that such coverage exists.

A C.O.I or Certificate of Insurance is whats needed to prove that such coverage exists. 

Here is an example of a General Liability C.O.I for Gateway

This certificate is what we provide the requesting party with. Beside the Corporations we contract with, we mainly get requests for these certificates when we or one of our agents perform an Inside Delivery or White Glove Delivery into a residential complex or apartment building.

Normally the requesting party is a building property owner or property management company. They want to make sure that if an item is being moved down the hallway and falls and breaks, damaging the flooring or a wall or nice artwork in the lobby, that they will get reimbursed for such damage.

A Certificate of Insurance shows the requester that the company entering their property has proper insurance coverage in case an accident does occur.

For most requests by both corporations and apartment buildings, the Certificate of Insurance needs to be issued with specific information:

1. Coverage:  The requester must provide what minimum general liability they require, is it 1 million? 2 Million? 5? 10? It just needs to be verified that the coverage is above or at the  minimum requested.

2. Location:  This confuses people. The additional Certificate Holder is not always the location the item is delivering to. The big section almost toward the bottom of the C.O.I that asks Description of operation/locations/vehicles should list the actual delivery address location, including tenant name and apartment number.

3. Additional Certificate Holder: This is the actual covered party that may or may not be the delivery location but is the true holder of the COI  

A good way to explain 2 and 3 is: If one of our agents were doing a delivery to a resident in Trump Tower Chicago the C.O.I would read Delivery Location (2): 401 N Wabash Ave Chicago IL 60611 Mr: Smith Apartment #1, but the actual Certificate Holder (Bottom left hand box of C.O.I, 3) would be Trump Organization 725 5th Ave A New York, NY 10022

So with any pickup, delivery or job that needs to be performed, these pieces of information must be known before the insurer can provide a proper Certificate of Insurance.

Having proper insurances is important in this industry and knowing whats needed to get the job done and reduce the risks for all parties involved is good business. Hopefully my blog has helped you understand what a C.O.I is, why its needed, and what information it must contain. If you need properly insured logistics managed services please give us a try.

Gateway Optimum Transportation and Gateway Crate and Freight is a 3PL Located in Tempe, Arizona and provides crating, packing and transportation services that include beyond threshold moves like inside and white glove pickup and delivery services. visit www.gatewayot.com and www.gatewaycrateandfreight.com for more info.

  








Wednesday, December 14, 2016

Trade Show Season 2017 Crating and Shipping

The holiday season should be a time for living in the moment, enjoying family and friends, and taking a small deserved break from the hustle and bustle of work. For many, those who plan and organize their companies presence at trade shows, the real work, unfortunately starts when everybody else is getting into the holiday spirit.

For over a decade I worked at a company that attends the largest expo on earth. The Consumer Electronics Show (CES) which this year will run January 5-8th. The planning and logistics necessary to have a successful trade show in the first few months of the year always takes place in December.

The trade show season every year starts off with a bang, CES and just keeps going from there, with large shows such as MAGIC -Apparel, Furniture and Home Decor - Furniture, Automation Tech - Equipment, Medical Manufacturing - Medical Equipment, Kid Show - Baby and Kid, and The Day Spa Expo - Spa, all taking place in the first few months of the year.

The companies that attend these shows put in a lot of work during the holidays preparing for these shows. Designing new displays and signage that bring focus to new product lines, creating new advertising materials and needing custom crating and proper trade show packaging for their materials.

Gateway Crate and Freight helps a number of companies with the logistics of these events. Providing custom crating and packaging for these materials and providing transportation logistics to and from the shows.

Recently we helped a large Tile Flooring company prepare for their upcoming trade show season by designing and building reusable expo crates for their materials. Crates for their booth walls, signage and tile and slab materials were made with ease of use by show personnel on the trade show floor.

With so many different and unique compositions of items, many different crates had to be designed and built. One thing that needed the utmost protection were their larger tile slabs. We designed an A Frame crate to allow the slabs to travel on edge inside the crate (Picture of Build below) 


Additionally, the base was made to allow the walls to nest on the frame so that the walls would not need to be screwed in (the personal at the show would not need cordless drills etc to get to the display product) but the wall shell could be strapped on by ratchet straps and easily removed, while providing a strong crate interlock casing for the heavy product inside.


We routed hole handles into the crate casing to allow the crate shell to be taken on and off of the base easily. This kind of customization is designed into these crates after evaluating how items are treated during transportation, but also how the materials can be accessed easily while being loaded and unloaded while on the trade show floor.


The two shell casing are easily fitted onto and taken off the base to access the materials on the A Frame. This design also allows for easy wrapping and securing of the materials in the crate. For example slabs on the A Frame, when the walls are detached can be banded or shrink wrapped to the A Frame to ensure the slabs don't shift or come into contact with the crate walls during transportation.


Multiple custom crates designed specifically for trade show materials is a specialty of Gateway Crate and Freight. Providing the crate and packaging you need to ensure your items get to the trade show floor and back without incidence is a top priority.

Gateway Optimum Transportation has also provided our clients with trade show shipping and logistics services and our Trade show experts have years of experience successfully planning and executing trade show shipping for shows around the world.

Call for a free quote for trade show crating and packing or just for expo logistics information. One of our trade show professionals will be happy to assist you with your questions. Toll Free 855-474-4685 or visit our trade show page online at http://www.gatewaycrateandfreight.com/tradeshow.html

Now if you are not attending one of these important early year trade shows in 2017 get back to enjoying the holidays, don't drink too much egg nog and sit back and relax, dont mind us - trade show logistics people - we have a lot going on right now. Happy Holidays.

Gateway Crate and Freight and Gateway Optimum Transportation is a 3PL provider of crating, packing and shipping logistics services located in Tempe, Arizona. Steven Tittle is Owner and founding partner and has over 2 decades of experience in managing trade show logistics. Visit www.gatewaycrateandfreight.com or www.gatewayot.com.







Monday, November 7, 2016

Selling and Shipping International? What terms of sale should you use? Know your Incoterms

Gateway deals with a lot of first time international shippers. People looking to sell their goods overseas and looking for the costs involved to make the sale. It is always an educational lesson beyond logistics transportation to explain to people the basics of International sales contracts BEFORE calculating the costs in transportation. I always instruct these people to read up on the latest Incoterms. 

Incoterms or International Commercial Terms are internationally recognized standards used in sales contracts to define who is responsible for the goods at each stage of the sales delivery process. This includes who pays for what portion of the transportation and includes who pays for insurance, taxes and duty.

What I am providing below is a brief (very brief) interpretation of the latest Incoterms we use here at Gateway and in no way should be regarded as a definitive rule on the terms. For a full understanding of these terms and or changes to them visit www.iccwbo.org.

Let’s begin with the Incoterm that works best for anyone selling goods to a foreign entity

EXW

Exworks – In this sales contract term, the two parties are agreeing that full sale of the goods occurs when the buyer picks up the goods from the sellers shipping location. The buyer then is responsible for all costs associated with transportation, insurance risks, taxes and duties.

Here the seller has no obligations except for providing the buyer with the goods. The sales contract however should specify the location “EXW Tempe” if your facility is in Tempe, Arizona.

FCA

Free Carrier – In this sales agreement the seller provides the goods to the buyer’s carrier at a specific place but the seller has performed all obligations for export, “Cleared for export”

Here the seller may not have to cover by insurance the transport to the buyer’s carrier but does take all risk involved to that point.

CPT

Carrier Paid To – This sales agreement has where the seller pays for the transportation to the buyer’s destination overseas responsibility of the goods rests with the buyer once this is passed to the first carrier at its destination.

CIP

Carriage and Insurance Paid – For this sales agreement the seller is responsible for transportation and insurance to a specified location at the destination country. This term is mainly used when transporting goods by ocean container. When using this term the seller does pay for insurance to the named place.

Here the seller would be responsible for the goods until transfer to the customers named place “CIP Tokyo”

DAT

Delivered at Terminal – In this sales term the buyer takes ownership of the goods when they arrive at the named Terminal and is responsible for all costs involved in clearing the goods into the country. Under these terms the seller is not required to provide insurance to this point, but may.

DAP

Delivered at Place – This contractual sales term is very similar to DAT except for one important detail. Here the seller pays for transportation to the named place and like DAT the buyer pays the cost of importing the goods, duty taxes and fees. But the seller has responsibility for the goods until they are unloaded by the buyer

This is important because if the buyer does not clear the goods and unload them in a timely manner the seller may end up responsible for storage charges and fees.

DDP

Deliver Duty Paid – This sales term makes the seller responsible for the delivery of the goods to the buyer’s country and makes the seller responsible for all costs involved including duty tax and fees at the destination country.

FAS

Free Alongside Ship – This contractual sale term requires the seller to provide goods to the specified port the goods are to be shipped from. The seller must also make the goods ready for export but the Buyer is responsible for the cost and risk in loading the goods.

This sales term is primarily used for large, heavy or bulk shipments.

CFR

Cost and Freight – With this sale term the seller is responsible for the costs to the port and the buyer takes the risk and responsibility once it is loaded onto the ship.

CIF

Cost Insurance and Freight – use this sale term in the same manner as CFR except that the seller provides insurance coverage for the goods up until they are loaded on the ship.

These are the Incoterms mainly used today, there are a lot more terms you may find that had their place in commerce over the years DDU, DES, DAF and the likes have all but vanished from today’s commerce landscape.

I like to tell those starting their venture into International sales that they should become very familiar with these Incoterms before planning a shipment. These terms should be negotiated and agreed upon in the contract. Gateway provides our clients with the costs involved for each of the Incoterms provided so that they understand the true total cost of an international sale.


Find out which terms works best for your commodities and your business goals, whether you are the seller or the buyer, understanding your Incoterms when negotiating sales price will put you at a great cost advantage the next time you go to sell or buy goods with a customers overseas.

Gateway Crate and Freight is a 3PL located in Tempe, Arizona and is an IPPC certified WPM Export crating facility (US-20468) specializing in professional packing and shipping of large, fragile and valuable commodities. Visit www.gatewaycrateandfreight.com or www.gatewayot.com