When exporting to Senegal, you shouldn’t be surprised if you face some additional charges that you didn’t expect. In this post, we’ll be explaining the choices exporters can make to minimize these charges.
1. The Correct Incoterm:
The choice of Incoterm is very important for both exporters and importers. While with some incoterms, exporters are responsible for the whole shipment process, with some, the exporter has to do nothing but prepare their cargo at their facilities. Thus, you should be aware of the various incoterms and which one to choose when exporting to avoid additional charges that you don’t expect. For example, while CIF (Cost Insurance Freight) or CFR (Cost and Freight) might be the safest and the least risky ones, EXW (Ex Works) or FOB (Free on Board) would be the cheaper and riskier options.
We would suggest that you don’t take any chances and use CFR or CIF. But if you really want to save money EXW and FOB are not that bad of options.
2. Choose the Payment Method Wisely:
If you are making a large transaction, you might want to acquire a letter of credit.
”A letter of credit, also known as a documentary credit or bankers commercial credit, or letter of undertaking, is a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an exporter of goods.”
The Letter of Credit will guarantee that you will be paid. But, if you don’t acquire one, you might either save some money or jump out of the frying pan and into the fire. So, if you trust your importer, you can use advance payment or open account methods to save some money. But if you don’t or simply don’t want to use the ‘’advance payment’’ or ‘’open account’’ we are advising you to use the ‘’Irrevocable Letter of Credit’’. This option doesn’t allow the letter of credit to be cancelled without the consent of both parties.
As I said in the paragraph; If you trust your buyer, go for the advance payment or open account. But if it is the first time you are doing business with the buyer, we don’t advise using those methods. You should go for ‘’Irrevocable Letter of Credit’’ instead.
3. Logistics:
Booking the logistics can be thought of as booking a hotel room or a flight etc. The earlier you book it, the more money you save. Also in some instances LCL (less than a container load) shipments will be charged more than FCL (full container load shipments). So, you can share a container with another shipment to pay less for logistics. This will be good for both parties.
You should always try to book the logistics as early as possible and try to reduce your number of shipments since each will come with a handling fee.
4. Choose Transshipment if Possible:
Since Direct shipments have higher demands, sometimes it will cost more than transshipments. So, transshipments are the most affordable choice but it comes with its disadvantages. Direct Shipments will save you time because with transshipments you are more likely to face a delay.
You should once again choose between cost and time. This will differ from shipment to shipment so you should decide which one is more beneficial for your cargo.
5. Having Necessary Documents:
a. SGS Certificate:
SGS is a certificate that enables you to demonstrate that your cargoes are compliant with international regulations. This certificate has to be provided along with other shipping documents to the importer.
b. BSC Certificate:
BSC stands for Bordereau de Suivi des Cargaisons. It means Cargo Tracking Note or CTN for short. It is an obligatory certificate that all shipments to Senegal have to acquire. Although we advise you to apply for Senegal BSC as soon as the documents are ready, you need to obtain it five days before the vessel arrives at the latest or the consequences aren’t pretty. Shipments who arrive without a BSC get charged with a penalty fee of twice the certificate cost plus the regulation costs. While having these harsh consequences, obtaining a BSC is not hard at all.
You just need these 2-3 documents listed below:
- Bill of Lading
- Commercial Invoice
- Freight Invoice – Only if the freight cost isn’t on the commercial invoice
