The US exporter wants to sell on FCA seller's warehouse terms while the foreign buyer wants CIF delivery. Learn how the Logistics Pro Forma Invoice (LPFI) bridges the gap.
A common challenge in international trade is a mismatch between the terms the seller wants to offer and the terms the buyer wants to receive. The US exporter may prefer to sell on FCA (seller's warehouse) terms, while the foreign buyer prefers CIF delivery to its port. The Logistics Pro Forma Invoice bridges that gap.
The Foreign Principal Agent (FPA) issues the LPFI for the services the seller would otherwise have been responsible for from EXW through CIF. All of these services are quoted and handled by the logistics professional, so the seller is not responsible for them. The FPA invoices the buyer and works at the buyer's direction. Risk of ownership transfers from the seller to the buyer when the cargo is loaded at the seller's warehouse.
Under FCA seller's warehouse terms, the seller retains control of the export compliance declaration but does not move the cargo to a consolidation warehouse. The seller is responsible for loading onto the collection conveyance.
Two pro forma invoices are issued to the buyer. Invoice #1 from the seller covers all charges up to FCA seller's warehouse. Invoice #2 from the FPA covers all charges from loading at the seller's warehouse to the buyer's port of unlading.
Under CIF port of unlading terms, the buyer retains responsibility from that point to the ultimate destination. The buyer appoints the service providers for that leg of the move and pays those providers directly.
Talk with H.C. Bennett about how this applies to your import or export operation.