Nikole Edweena

The CFR price is calculated by taking in consideration, the price of goods, labour, packing-labelling, freight insurance, customs, verifications, documentation, duties & taxes, port charges, etc. The seller cannot charge the buyer for shipping costs however he can take it into consideration while arriving at the price for the quote.

As you keep borrowing money, the due amount to be paid increases. A daily interest or overdraft fee is charged on the borrowed amount until you repay the full amount. However, you don’t need to repay it all at once. You can pay the lender back in parts, as and when convenient to you, as long as the lender allows you to do so.

As you pay the amount back, the due amount decreases, and hence the interest also decreases. Once you’ve made the full repayment to your bank by depositing the amount in your account, you are eligible to borrow again within the credit limit set by your lender.

Air Freight charges are comparatively 4 to 5 times more than the cost of moving the same shipment via road, and 12 to 16 times than the cost of moving it via sea routes. Air Freight rates are generally between 1.5 USD to 4.5 USD per kg, and they depend on a range of factors:

Fuel prices: Fuel costs are one of the most prominent reasons why air freight is the most expensive mode of transporting your goods. Fluctuations in global fuel prices dictate the latest freight rate trends.

Shipment type: The regular shipment costs relatively less. But if your goods require specific climatic conditions, the companies charge more for providing those services.

Space and Chargeable weight: In case you're shipping your goods via the Less than Container Load (LCL) method, the amount you pay for getting your package delivered via air freight is directly proportional to the space it takes up inside a container and its chargeable weight.

Distance and route: Greater the distance between the airport of origin and the destination, the more the shipping costs. However, some of the busiest routes for air cargo are cheaper than those where trading is scarce, simply because it's much more profitable for a company to move goods between the routes that can guarantee business both to and from.

Trade credit insurance typically covers two types of risks:

1. Commercial risk:

This refers to the failure of a buyer to clear the outstanding amount/ invoice due to financial reasons such as bankruptcy, insolvency, protracted default, and more.

2. Political risk:

This refers to non-payment by the buyer due to external events beyond the control of both parties. It could include geopolitical disturbances like war, terrorist attacks, riots, or natural disasters. This risk also covers any action undertaken by the local government, such as import-export restrictions, license cancellation, currency shortage, or any other economic limitations. Political risks are valid only in the case of international buyers.

Post-shipment export finance can include a lot of different forms:

• Bill negotiation under LC can be availed of by an exporter after submitting the required documents to the bank. The bank, on its part, sanctions an amount up to the maximum of the L/C amount, after liquidating pre-shipment finance, if availed of by the exporter.
• Bill discounting can be used by the exporter even when the bill is not covered under L/C. 
• Advance can also be availed of against bills sent for collection; this is a regular practice in certain lines of trade.
• Advance against goods sent on a consignment basis can be availed after the sale of goods. The overseas branch of the exporter’s bank can adjust this advance against the proceeds once they are realized.
• Advance against duty drawback can be used by exporters in case of drawbacks received via government incentives. These benefits are provided by the government after the sale of goods and receipt of the sale proceeds. These advances can be offered by banks as pre-shipment finance as well.
• Advance against undrawn balance is applicable in case of businesses where the exporter doesn’t bill the buyer for the entire sale value. A portion of the invoice value is not drawn in anticipation of differences and adjustments in the final value.
• Advance against retention money is applicable in the case of capital goods or construction projects. A portion of the project value is retained by the buyer until the contract is fulfilled, and banks provide an advance against this retained portion. Similar to this is advance against deferred payment.