TECHNICAL TERMINOLOGY

Many businesses are still making serious mistakes when using CIF and CIP, leading to unnecessary losses. Below are three of the most common misunderstandings about Incoterms that customers using transportation services often encounter.

In import-export and logistics operations, a thorough understanding of the legal framework is crucial for businesses to mitigate risks, optimize costs, and ensure the smooth operation of the supply chain.

Incoterms 2020 is a crucial set of rules in international trade, defining the responsibilities, costs, and risks between sellers and buyers during the delivery of goods. However, many businesses and newcomers to logistics still learn Incoterms by simply memorizing the names instead of understanding their underlying principles.

TEU, short for Twenty-foot Equivalent Unit, is the international standard unit of measurement equivalent to a 20-foot container. Meanwhile, FEU (Forty-foot Equivalent Unit) is also used to denote a 40-foot container. These are fundamental measurements commonly used in the shipping industry to calculate the capacity of ships, warehouses, handling equipment, and even the volume of goods handled through ports.

Incoterms group E are the simplest terms for the seller. Accordingly, the seller only needs to deliver the goods to the buyer at his location (usually a warehouse or factory). The buyer is fully responsible for transporting the goods from the point of delivery to the final destination. This means that the seller will not bear any shipping or insurance costs.

ICD and Depot – two terms used daily in the logistics industry, have certain similarities and differences. Let’s distinguish these two concepts with Vietsun Logistics.