In the realm of international trade, Incoterms play a pivotal role in delineating responsibilities and costs between buyers and sellers. Two commonly used terms, DDP (Delivered Duty Paid) and DAP (Delivered at Place), exhibit significant distinctions, directly impacting exporters in their commercial dealings.

 The Basics of DDP and DAP

  1. DDP (Delivered Duty Paid):

    This term places the responsibility for delivering the goods, along with associated costs, on the seller. This includes custom duties and local taxes in the destination country. However, unless the exporter is registered for taxes in the importing country, recovering these input taxes can be challenging, for both the importer and the exporter.

  2. DAP (Delivered at Place): 

    In Contrast to DDP, the seller is responsible for delivering the goods to the agreed-upon place in the destination country but is not liable for customs duties and local taxes. Under this term, the importer can be registered to reclaim input taxes in their country, offering the opportunity to mitigate the costs associated with these taxes, provided they comply with local registration and tax procedures.

Why Favour DAP for Exporters?

Opting for DAP presents several significant advantages for exporters:

In conclusion, although the choice between DDP and DAP hinges on the specific circumstances of each trade transaction, favouring DAP offers substantial benefits for exporters. It allows them to streamline operations, mitigate risks, and provide greater financial flexibility, while also considering the potential benefits of input tax recovery for importers, bolstering the economic viability of international trade exchanges.

The container shipping industry forms the backbone of international trade, transporting goods from one corner of the globe to another. However, with the rapid growth of this industry, environmental concerns related to greenhouse gas emissions and ocean pollution have become increasingly pressing. That’s why the maritime industry is actively exploring new solutions to reduce its environmental impact, including the adoption of low-emission fuels.

The Urgency of Emission Reduction

Maritime transport is responsible for a significant share of global greenhouse gas emissions, and these emissions are continually on the rise. Ships typically use heavy fuel oil, a sulfur-rich fuel, to power their engines, resulting in the release of sulfur dioxide (SO2), nitrogen oxides (NOx), and fine particulate matter into the atmosphere. Moreover, maritime transport is also associated with oil spills and ocean pollution.

In light of these challenges, the maritime industry acknowledges the need to reduce emissions to meet increasingly stringent environmental standards. New low-emission fuels are emerging as a promising solution.

Liquefied Natural Gas (LNG)

  1. Liquefied Natural Gas (LNG):

    LNG is one of the most prominent low-emission fuels in the maritime sector. It consists of methane, a natural gas, which produces significantly fewer CO2 emissions and other pollutants compared to heavy fuel oil. Additionally, LNG is currently the cleanest fuel available, offering a substantial reduction in SO2 and NOx emissions.

    Many shipping companies are investing in LNG-powered vessels, and some have already launched commercial services using this technology. LNG is also relatively abundant, making it economically attractive.

  2. Biofuels: 

    Biofuels, such as marine biodiesel, are fuels made from renewable raw materials like vegetable oils and animal fats. These fuels are less polluting than heavy fuel oil and have the additional benefit of using renewable resources.

    The use of biofuels requires minor modifications to existing engines, making the transition straightforward for many shipping companies. However, it is essential to ensure that biofuel production is sustainable to avoid compromising food security and biodiversity.

  3. Hydrogen Fuel Cells:

    Hydrogen fuel cells are an emerging technology gaining popularity in the maritime sector. They generate electricity by combining hydrogen with oxygen from the air, producing only water as a byproduct. Fuel cells offer a clean alternative to traditional internal combustion engines.

    Many major maritime companies are experimenting with hydrogen fuel cell-powered ships, although this technology is still in its early stages and requires significant investments in clean hydrogen production.

Advantages of New Low-Emission Fuels

The adoption of these new low-emission fuels comes with numerous advantages, including:

Challenges of Adoption

While new low-emission fuels offer significant benefits, their large-scale adoption still presents challenges. Initial transition costs, refuelling infrastructure, fuel availability, and the need for new propulsion technologies are all obstacles to overcome.

However, the maritime industry recognizes the crucial importance of these changes for its future, both from an environmental and business perspective. Government incentives, ongoing research, and innovation in the sector will help accelerate the transition to low-emission fuels.

The shift to low-emission fuels is a critical element of the global effort to reduce greenhouse gas emissions and protect our environment. The container shipping industry is on track to play a major role in this transition to a cleaner and more sustainable future.

The container shipping industry is facing significant environmental challenges, but it is actively exploring new solutions to reduce its environmental impact. New low-emission fuels offer a promising way to cut greenhouse gas emissions and promote sustainability in this vital industry.

We are excited to introduce our new brand identity: W.J. Jones is now Jones International Freight Forwarder, and expert provider of international logistics solutions!

We are dedicated to supporting you through the import and export chain, with solutions tailor-made for your needs. Our expert team fully understands every aspect of freight coordination and has the right solutions for your business. Our extensive network of agents will see that your shipments get to the right destination, exactly as you want them. 

 

International freight forwarder: Send your products to the right port, get professional import-export service

Do you need one-on-one contact with your freight forwarder, speedy answers to questions, tracking information on your goods and smooth and efficient management? With a team of specialists in international transport logistics, our freight forwarding service is the best available. Our team will deliver to the right destination.

 

Documentary credits: Professional support for documentary credits and letters of credit

Do you need clarification or assistance with documentary credit forms? Do you know what to do when you get an export letter of credit? Do you want to receive your goods as ordered, or paid by your customer on the initial transaction? For exporters, we review letters of credit, coordinate, and help you with documents that meet banking requirements. For importers, we help you apply for documentary credit.

 

Consolidated shipping services for frozen products: Bringing your products to the right destination- a sensible shipping option

Do you want to ship frozen products to Europe, but only have a small quantity? Is air transport too costly for you? We have the only frozen cargo groupage in Canada. Wherever you ship to in Europe, we make sure it gets there in the shortest possible time and in the best possible conditions for your product’s sensitivity.

 

Innovating for a better future

Stay tuned! We are excited about the new services we’ll be offering in 2022. We are working to develop new solutions for the reality of Covid and the economy, so we can serve you better.

 

Jones, your partner in international logistics, for a peace of mind guaranteed

Businesses need peace of mind when it comes to international freight forwarding. We can relate to the confusion and stress involved with importing and exporting goods internationally. With extensive expertise in shipping and forwarding, we deliver the best possible solutions in transportation logistics. 

 

That is precisely why we guarantee superior service at every single phase of your shipment.

 

We can help you maximize efficiency and limit your stress, risks and financial losses. 

 

We help you to succeed,

 

Your Jones Team

Whether you’re an importer or an exporter, making the right decisions will undoubtedly have an impact on costs and delivery times. And during spring thaw, when shipping logistics become a little more complicated, these decisions take on even more importance. The following tips should help you make informed decisions when the time comes

Why are there specific rules for transportation during spring thaw?

In spring, the mercury rises and the ground thaws; winter takes a toll on our roads, which are 30% to 70% more fragile due to temperature variations and water accumulation. To avoid further damage to the roads, certain precautions should be taken. Vehicles that are too heavy risk causing significant damage to roads, while vehicles with a lighter load, even if not by much, contribute to better road conditions.

How are the spring thaw transportation regulations determined?

During spring thaw, Transport Québec performs real-time assessments of road conditions and determines the appropriate rules. This period can stretch from early March to mid-June, and varies according to three predetermined thawing zones, based on both weather and geography. Restrictions varying from 8% to 20% can be imposed on vehicle loads. And even if spring thaw is over in the south of the province (zone 1), some restrictions may still apply to other zones located further north.

How do these restrictions impact cargo shipping logistics?

This restrictions may entail additional costs for carriers, creating the need for alternate routes, longer shipping times, delayed cargo departures or arrivals, lighter loads, or the purchase of additional equipment for better weight distribution. Proper shipment planning can contribute to alleviating these hurdles and help make better informed decisions.

While it is important to plan ahead for possible spring thaw adjustments, you should also consider the various restrictions that may apply. A carrier who gets caught with an overweight load will not be allowed to go through with a delivery, will need to pay a fine, be forced to offload or redistribute all or part of the load on the spot, arrange for pickup and rerouting of cargo, etc. Non-compliance can have costly consequences.

Expert tips to save time and money

Your transportation logistics expert is a specialist in this matter, providing valuable assistance during spring thaw to ensure that your cargo reaches its destination as planned, and answering any questions you may have about these restrictions. Every year, spring thaw causes unexpected, often annoying surprises. For greater peace of mind, make sure you double-check every aspect of your shipping plans with your Jones transportation logistics expert.

This past February 1st, the Montreal Port Authority (MPA) unveiled its project to develop a new container terminal in Contrecoeur. This major project will support the growth of the container market, a sector that significantly impacts the economic development of Montreal, the province of Quebec, as well as Eastern Canada. In a presentation to the Board of Trade of Metropolitan Montreal (CCMM) on May 14, Mrs. Sylvie Vachon, CEO of the Port of Montreal, unveiled the 3 axes surrounding the development of the Port in the coming years, aimed at supporting the growth of maritime transport:

On the occasion of Ms. Vachon’s visit to the CCMM, the Honourable Marc Garneau, Canada’s Minister of Transport, announced a $ 45.8 million investment for the extension of Boulevard de l’Assomption in Montreal. The CEO of the MPA welcomed this announcement, highlighting the importance of this access road to facilitate traffic to and from the Port of Montreal.

In this article, we will address the expansion of the Contrecoeur terminal, which is expected to positively impact our maritime transport business.

 

Maritime transport via Montreal: a sustained growth pattern

In a few years, The Port of Montreal expects to have reached maximum container handling capacity at its facilities on the island of Montreal. In fact, according to containerized traffic forecasts, Montreal will see the number of containers to be handled increase by more than 70% by 2030, from about 1.5 million containers today to nearly 2.5 million containers annually. Since the Port’s current capacity is around 2.1 million containers (once the 2nd phase of the Viau terminal is completed) , a solution was needed to accommodate this growth.

According to Sophie Roux, Vice President of Public Affairs at the Port of Montreal, it is only “prudent to plan for sufficient capacity in order to cope with this growth. ”

Phase 1 of the Contrecoeur project, estimated at $ 750 million, will provide the Port with an additional annual capacity of 1.15 million containers by 2024

Its location is strategic, as it fulfills many of the needs and criteria for container handling, such as:

 

Good news for importers and exporters

In the prevailing economic context, and with the upcoming Comprehensive Economic and Trade Agreement between Canada and the European Union (among other things), this announcement harkens new opportunities for Québec among the world’s major world trade players. The Contrecoeur terminal will undoubtedly boost the operations of Quebec’s exporters and importers.

This will have a significant impact for all economic stakeholders in Montreal’s shipping industry, who will benefit from the presence of new companies, attracted by the new terminal project, thus allowing them to set up operations locally, thanks to changes in zoning bylaws.

 

Few relevant numbers to this effect

 

Addressing environmental issues

Environmental and ecological aspects were considered: the relevant environmental studies can be found on the Canadian Environmental Assessment Agency (CEAA) Website. Adequate measures will be taken to respect the environment. According to the Board of Trade of Metropolitan Montreal, such a project “undertaken according to best practices, both from an engineering and socially-responsible perspective, taking into account both safety and ecology, should be viewed in a positive light.”

 

Sources:

Whether you’re importing or exporting goods, you shouldn’t underestimate the risk of losses and other damages during shipping. Although carriers have their own coverage, did you know that you also have certain responsibilities when it comes to insurance?

Your carrier’s insurance is limited!

Even after you’ve handed your goods over to the carrier, they remain your responsibility. In Canada, overland carriers are insured for up to $2 per pound, or $4.41 per kilogram. In the United States, this can be as low as $0.60 per pound! For maritime shipping, the amount can vary, ranging from $500 to $900 per shipping container. Depending on what type of goods you are shipping, this may be ridiculously low!

If the value of the shipped goods is low and the aforementioned amounts are satisfactory, then the carrier can take full responsibility through its insurance. However, you should be aware that should losses or damage occur, you may have to wait a long time for the insurance settlement, as the carrier will need to clear everything with its insurance company before paying up. Having your own insurance is much safer, offers more complete protection and will allow your case to be settled faster.

Best practices

Beyond the importance of having adequate insurance, here are a few things you can do that will help avoid repair and clean-up costs, and make a big difference if you lose all or part of your shipment.

Photos: a powerful tool

These days, taking quality pictures is easier than ever thanks to our smartphones. Photographing your containers both at departure and arrival will help you make a stronger case in the event of damages. This will make it easier for your insurer to assess your claim and to determine where an incident may have occurred along the logistical chain.

Proper packaging is essential

Proper packaging of shipped goods is too often overlooked. A specialist will recommend the appropriate packaging for your goods, and will draw attention to issues that may arise during shipping. This step could cost a few extra dollars, but it’s definitely worth it.

An exporter of wood products recently encountered such an issue. The goods, shipped through maritime freight during a particularly warm winter, were overcome with mould and rot when they arrived at destination. The insurer compensated the client even though the damages were not directly attributable to seawater. When the problem arose again, further analysis showed that the variations in temperature between day and night had caused condensation, and that humidity was the culprit. The insurer required that further shipments include desiccants within the packaging in order to absorb humidity, failing which they could no longer insure such shipments. Had there been a more extensive analysis from the onset, this problem could have been avoided.

Think ahead

Prevention is key to minimizing risks, and helps avoid potential losses due to product degradation during shipping. Obviously, it is impossible to eliminate risk completely: make sure your insurance coverage is adequate and most importantly, call on professionals who will share their expertise with you and provide you with peace of mind.

All import and export activities include the important notion of Incoterms. To make the right decisions, you should understand this complex aspect, as it will define, among other things, how your goods are transported. Contacting the experts at Jones will provide you with peace of mind, because they will help you make the right choices. Consult our section on Incoterms today and sleep tight … we’ll take care of everything!

INCOTERMS

As an international freight forwarder, we work with Incoterms on a daily basis. Following is a general overview: their usage, their importance, what to pay particular attention to, etc. The rules of international transport are complex and the best advice we can give you is to surround yourself with competent partners who are experienced with your activity sector.

1. What are Incoterms?

All official terms used to define the rights and obligations of buyers and sellers involved in international and domestic exchanges are called Incoterms (contraction of the terms “international”, “commercial” and “terms”). They are used to avoid any misunderstandings between the parties involved in a transaction. They are designated by an abbreviation, which consists of three letters followed by the exact place where the negotiated agreement will apply. This is an extremely important notion.

FCA, FOB, CIP, CPT and DAT, for example, are all Incoterms that have completely different meanings, which should not be taken lightly. The most important thing to remember is that Incoterms make it possible to clearly mark your transaction with regard to the following elements:

This is how accountability is determined throughout the transport chain: who is responsible for what, to what extent, from where and when. Regardless of the means of transportation, they are part of the sales contract, and are irrevocable once signed. One cannot be too careful about this part of the transaction. Inadequate understanding of Incoterms, or a laissez-faire approach to these can have disastrous consequences.

2. Practical examples of Incoterm usage

Example 1

Your transaction has been concluded: let’s say that your merchandise will be shipped from Montreal, by sea, to Shanghai, and the roles will be distributed according to Incoterm: CIP-Shanghai-2010 Incoterms®. CIP stands for Carriage and Insurance Paid to, Port Shanghai represents the place where the rule will apply, and Incoterms® 2010 refers to the regulations that came into force on 1 January 2011.

According to this Incoterm, the seller included, in his commercial invoice, the price of the goods, the cost of transport to the port of Shanghai, and cargo insurance. That’s all. The transfer of ownership risk from the seller to the buyer takes place from the moment the goods are handed over to the first carrier (in this case, this will happen at the Port of Montreal).

However, the seller, who is also responsible for producing all the documentation, pays the insurance, valid until the port of Shanghai. Generally, payment of a CIP is made at the port of arrival.

It is important to differentiate risk transfer, which is one of the factors determined by Incoterms, and the transfer of ownership, which takes place when the payment is made or according to whatever has been negotiated. Transfer of ownership is not defined by Incoterms.

Example 2

Here’s another example of how important it is to know what the Incoterms you will be working with involves: FCA-Port Montreal-Incoterms® 2010: Free Carrier.

Here, the seller takes on all formalities, export costs, duties and taxes related to the transaction, and turns over the goods to the carrier designated and paid by the buyer. It is at this stage that the transfer of risk takes place, meaning that the seller’s responsibility in terms of costs and risks ends. Hence, the buyer assumes responsibility for the transport to the final destination.

In this example, the buyer is in control of the logostics chain. The seller has every incentive to ensure that an agreement has been reached with respect to payment, or to receive payment before releasing the goods if he wants to be paid reasonably quickly… or even simply obtaining payment.

3. When should I be particularly vigilant with Incoterms?

Over time, when working with a regular customer, an international freight forwarder eventually becomes familiar with his client, and on both sides, some things become routine. We know that with a particular customer, cargo always goes through the same port, we know the type of insurance required, the deadlines to be met, and so on. In other cases, however, particular attention must be paid to Incoterms. Here are some examples, which apply to sea, air or land freight:

Should you remain responsible for the cargo until final delivery? Would it be preferable to end the seller’s responsibility as soon as the cargo is loaded onto the boat? How do we know if we are adequately insured, in either case? Did you know that in many cases, ownership is not transferred at the same time as risk? What does all this mean, in real terms?

When so many questions need to be considered, it is normal to feel lost. That’s why the services of an experienced international freight forwarder will often make all the difference, avoid unpleasant surprises and allow you to carry out your import or export business activities with peace of mind.

4. List of 2010 Incoterms and summary table

Download our Incoterms summary table to see different scenarios.

Below is a list of Incoterms and a brief summary of their meaning.

INCOTERMS – ALL MODES OF TRANSPORTATIONS

INCOTERMS – SEA FREIGHT ONLY

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