When it comes to rail freight, the location of your collection and delivery points is crucial. Even if your warehouse is in an ideal spot, how accessible is it to for a truck to collect your cargo and deliver to the rail depot or intermodal hub? Rail terminals are generally located outside of major urban areas, so it’s important to evaluate how feasible it is to transfer cargo between the terminal and your final destination. If there are challenges such as narrow roads or restricted access for large trucks, it’s vital to communicate these to your Freight Forwarder. If you have had problems previously, communicate these, it makes the whole process quicker and reduces the risk of delays.

For example, if you are shipping several pallets of goods from Italy to the UK via rail, and your final delivery location is in a rural area, this could pose a challenge. While rail is an efficient means of long-distance transport, the final leg (last-mile delivery) may require coordination with a smaller vehicle. If your Freight Forwarder is unaware of access restrictions, you could face delays, additional storage costs at the rail terminal, or even re-delivery fees. Ensuring that your freight forwarder is informed about your location and any access restrictions will save both time and money.

Rail freight offers the flexibility of transporting large volumes of cargo efficiently, but it’s essential to consider whether the loading and unloading facilities at your site are suitable for rail-based transport. Are forklifts, cranes, or other specialised equipment available at both ends of the shipment? Depending on the size and weight of the cargo, different types of handling equipment may be necessary. Generally, rail freight cargo is containerised cargo and will be transhipped to a road vehicle for final delivery, but, the same considerations should be made and you should be prepared to arrange for any equipment needed to load/offload. If special equipment is required, inform your Freight Forwarder so arrangements can be made in advance.

For example, if you are shipping large industrial machinery from Italy, a standard forklift may not be sufficient, and you may need a crane for loading. Alternatively, for smaller shipments like palletised goods, a forklift may suffice, but a tail-lift vehicle could be necessary for final delivery if there’s no unloading equipment at the destination. Not providing this information in advance can lead to delays, extra costs, or even the inability to deliver your goods. Make sure your freight forwarder knows what equipment is needed so the proper arrangements can be made.

Timing is everything in logistics, and rail freight is no exception. Are there preferred or fixed collection and delivery times at your site, or do you have a flexible schedule? Rail terminals typically operate during specific hours, so synchronizing your availability with the terminal’s schedule is crucial to avoid delays.

For example, if your warehouse can only accept deliveries during specific time windows, and the train arrives outside of those hours, your goods may be held at the terminal until they can be transferred. This can incur additional costs and impact your overall supply chain. Similarly, rail schedules are more rigid than road transport, so if you miss a train departure, it can cause significant delays. Planning ahead and communicating your timing preferences with your Freight Forwarder from the start can help ensure smooth operations.

Understanding the capacity of your warehouse to handle incoming deliveries is critical when coordinating large shipments via rail. If your warehouse has limited space or personnel, receiving multiple containers or large volumes of goods on the same day could overwhelm your operation. By informing your Freight Forwarder about your warehouse’s capacity, they can stagger deliveries or store goods temporarily at an offsite facility.

For instance, if you are importing goods from Italy using rail freight, and several containers are scheduled to arrive at once, but your warehouse can only handle one container per day, it’s essential to plan ahead. Freight-365 can organise staggered deliveries, off-site storage, or even reworking of cargo to make it easier to manage.

When shipping via rail freight, understanding and declaring the proper classification of your goods is essential. Every shipment must be accompanied by accurate commodity codes (HS codes), which are used for customs declarations and determining duties or taxes. In addition, specific commodities like dangerous goods (DG) require special handling, labelling, and documentation.

For example, if you are transporting hazardous chemicals, rail freight offers an ideal solution due to its ability to safely move large quantities of dangerous goods across long distances. However, failing to provide the necessary safety data sheets or not adhering to the proper packaging requirements could result in significant delays at customs or even fines. Always inform your Freight Forwarder of the nature of your cargo so they can handle the necessary documentation and advise on compliance with local and international regulations.

The seller makes the goods available at their premises, or at another named place. This term places the maximum obligation on the buyer and minimum obligations on the seller. The Ex Works term is often used while making an initial quotation for the sale of goods without any costs included.

EXW means that a buyer incurs the risks for bringing the goods to their final destination. Either the seller does not load the goods on collecting vehicles and does not clear them for export, or if the seller does load the goods, they do so at buyer’s risk and cost. If the parties agree that the seller should be responsible for the loading of the goods on departure and to bear the risk and all costs of such loading, this must be made clear by adding explicit wording to this effect in the contract of sale.

There is no obligation for the seller to make a contract of carriage, but there is also no obligation for the buyer to arrange one either – the buyer may sell the goods on to their own customer for collection from the original seller’s warehouse. However, in common practice the buyer arranges the collection of the freight from the designated location, and is responsible for clearing the goods through Customs. The buyer is also responsible for completing all the export documentation, although the seller does have an obligation to obtain information and documents at the buyer’s request and cost.

These documentary requirements may result in two principal issues.

Firstly, the stipulation for the buyer to complete the export declaration can be an issue in certain jurisdictions (not least the European Union) where the customs regulations require the declarant to be either an individual or corporation resident within the jurisdiction. If the buyer is based outside of the customs jurisdiction they will be unable to clear the goods for export, meaning that the goods may be declared in the name of the seller by the buyer, even though the export formalities are the buyer’s responsibility under the EXW term.

Secondly, most jurisdictions require companies to provide proof of export for tax purposes. In an EXW shipment, the buyer is under no obligation to provide such proof to the seller, or indeed to even export the goods. In a customs jurisdiction such as the European Union, this would leave the seller liable to a sales tax bill as if the goods were sold to a domestic customer. It is therefore of utmost importance that these matters are discussed with the buyer before the contract is agreed. It may well be that another Incoterm, such as FCA seller’s premises, may be more suitable, since this puts the onus for declaring the goods for export onto the seller, which provides for more control over the export process.

FCA can have two different meanings, each with varying levels of risk and cost for the buyer and seller. FCA (a) is used when the seller delivers the goods, cleared for export, at a named place which is their own premises.FCA (b) is used when the seller delivers the goods, cleared for export, at a named place which is not their premises. In both instances, the goods can be delivered to a carrier nominated by the buyer, or to another party nominated by the buyer.

In many respects this Incoterm has replaced FOB in modern usage, although the critical point at which the risk passes moves from loading aboard the vessel to the named place. The chosen place of delivery affects the obligations of loading and unloading the goods at that place.

If delivery occurs at the seller’s premises, or at any other location that is under the seller’s control, the seller is responsible for loading the goods on to the buyer’s carrier. However, if delivery occurs at any other place, the seller is deemed to have delivered the goods once their transport has arrived at the named place; the buyer is responsible for both unloading the goods and loading them onto their own carrier.

Specific rules for sea and inland waterway transport

The seller delivers when the goods are placed alongside the vessel (e.g., on a quay or a barge) nominated by the buyer at the named port of shipment. The risk of loss of or damage to the goods passes when the goods are alongside the ship, and the buyer takes on responsibility for all costs from that moment onwards.

Specific rules for sea and inland waterway transport

The seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the goods are on board the vessel, and the buyer takes on responsibility for all costs from that moment onwards.

Specific rules for sea and inland waterway transport

The seller delivers the goods on board the vessel. The risk of loss of or damage to the goods passes when the goods are on board the vessel. The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.

Specific rules for sea and inland waterway transport

The same as CFR with the addition that the seller must also obtain minimum insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage.

CPT replaces the C&F (cost and freight) and CFR terms for all shipping modes outside of non-containerized seafreight.

Under CPT the seller pays for the carriage of goods up to the named place of destination.

However, the goods are considered to be delivered when the goods have been handed over to the first or main carrier, so that the risk transfers to buyer upon handing goods over to that carrier at the place of shipment in the country of Export.

The seller is responsible for origin costs including export clearance and freight costs for carriage to the named place of destination (either the final destination such as the buyer’s facilities or a port of destination. This has to be agreed to by seller and buyer, however).

If the buyer requires the seller to obtain insurance, the Incoterm CIP should be considered instead.

Similar to CPT with the exception that the seller is required to obtain minimum insurance for the goods while in transit.

The seller is deemed to have delivered when the goods are placed at the disposal of the buyer on the arriving means of transport and ready for unloading at the named place of destination.

Under DAP terms, the risk passes from seller to buyer from the point of destination mentioned in the contract of delivery.

Once goods are ready for shipment, the necessary packing is carried out by the seller at their own cost, so that the goods reach their final destination safely. All necessary legal formalities in the exporting country are completed by the seller at their own cost and risk to clear the goods for export.

After arrival of the goods in the country of destination, the customs clearance in the importing country needs to be completed by the buyer, e.g. import permit, documents required by customs, etc., including all customs duties and taxes.

Under DAP terms, all carriage expenses with any terminal expenses are paid by seller up to the agreed destination point. The necessary unloading cost at final destination has to be borne by buyer under DAP terms.

This Incoterm requires that the seller delivers the goods, unloaded, at the named place. The seller covers all the costs of transport (export fees, carriage, unloading from main carrier at destination port and destination port charges) and assumes all risk until arrival at the destination place.

The seller is responsible for delivering the goods to the named place in the country of the buyer, and pays all costs in bringing the goods to the destination including import duties and taxes. The seller is not responsible for unloading. This term is often used in place of the non-Incoterm “Free In Store (FIS)”. This term places the maximum obligations on the seller and minimum obligations on the buyer. No risk or responsibility is transferred to the buyer until delivery of the goods at the named place of destination.

The most important consideration for DDP terms is that the seller is responsible for clearing the goods through customs in the buyer’s country, including both paying the duties and taxes, and obtaining the necessary authorizations and registrations from the authorities in that country. Unless the rules and regulations in the buyer’s country are very well understood, DDP terms can be a very big risk both in terms of delays and in unforeseen extra costs, and should be used with caution.

Please find a downloadable chart below for Incoterms, explaining costs and responsibility