‘CIF gives exporters maximum control over their cargo’

SELLING GOODS on a CIF or CIP basis is the way to go, according to Safcor Panalpina’s internal auditor Geoff Epstein.
“It not only gives exporters maximum control over their cargo,” he said, “but also provides foreign buyers with some certainty regarding their dutiable values.”
And the latter is a factor that can often be overlooked, with SA using a notional customs duty value.
“This makes us one of the world’s exceptions,” said Epstein.
“Most countries base their customs duties on the actual landed cost of goods at the port of discharge. For example, imports to the member
countries of the European Union are taxed on the CIF value.”
Given this norm, freight costs become doubly important, not only affecting the overall costs to foreign buyers, but also attracting customs duties and other taxes.
“The implication for exporters is that they need to be aware of the available freighting opportunities and costs
applicable to their products,” he said. “Excessive forwarding and transportation costs can stymie even the best-planned export drive.”This means ensuring that shipping costs are kept as low as possible.
“While this will include shopping around for the most attractive freight rates,” said Epstein, “exporters must consider selling goods in quantities that optimise freight space and avoid incurring minimum charges.”
This means that exporters must also take into account the nature and design of their export packaging.