Drop shipment (FCA FTZ /CIF Shanghai seaport)

Dropshipment 

Delivery term with the supplier

  • FCA Shanghai FTZ (Free Trade Zone)
Delivery term with the customer 
  • Goods from outside China, CIF Shanghai Seaport

Company A is responsible for arranging and paying for the transportation of goods from the Shanghai Free Trade Zone (FTZ) to the Shanghai Seaport.

To do this, Company A would hire a local freight forwarder or a third-party logistics (3PL) provider in Shanghai.

The Transportation Process 🚚

Based on the Incoterms provided, here is the breakdown of responsibilities and the likely process for Company A:

 * Contract a Freight Forwarder: Company A's primary step is to engage a freight forwarder based in or with strong operations in Shanghai. This forwarder will act as Company A's agent to manage the local logistics.

 * Coordinate Pickup: Under the FCA Shanghai FTZ term, the supplier completes its obligation once the goods are delivered to the carrier nominated by Company A at the agreed-upon point within the FTZ. Company A will instruct its freight forwarder to be that nominated carrier, or to arrange for one (e.g., a trucking company).

 * Manage Local Transit & Customs: The freight forwarder will then:

   * Arrange for a truck to pick up the cargo from the supplier's designated point in the FTZ.

   * Handle any necessary domestic customs transit procedures for moving goods from the bonded FTZ to the seaport terminal.

   * Physically transport the container/goods to the correct terminal at the Shanghai Seaport.

 * Fulfill CIF Obligations: Under the CIF Shanghai Seaport term, Company A is the seller and must arrange and pay for the main sea freight and insurance to the destination port. The hired freight forwarder will also handle booking the ocean freight with a shipping line and loading the goods onto the vessel.

In summary, Company A bridges the gap between the two contracts by hiring a local freight forwarder to take possession of the goods in the FTZ (fulfilling the FCA term) and manage all subsequent steps to get the goods onto the ship (beginning the CIF term).

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