How to optimise your logistic for export sales

One of the most important fluctuations on cost prices is Transport costs.

Directly linked to oil rate and mainly based also on the USD change rate, transport costs fluctuate a lot and have a direct impact on your gross margin.

That's why it's very important to be aware day by day on these 2 important values: oil and USD (both in Euros) to check how it influence on your cost price or gross margin.

I always recommend to all producers selling on CIF terms to add a special clause in their sales agreement and specify clearly the cost of transport. If there is a variation of more than 10% on the agreed transport cost, this will be repercuted on invoice (before of course receving the acceptance from the final customer).

These last 4 years, many manufacturers have had to assume big losses due to very high fluctuations (on shipping companies-mainly form China as all the concepts are invoiced in USD).

Another option is to mention both rate in your offer (oil from one part and USD/EUR change rate applicated from the other side), if there is a difference of more than 10%, price and offer will be reviewed.

You can also negotiate with your shipping company on a fix change rate for a specific period and mentioned it on the proforma invoice.

These are small tips to protect yourself from this very volatile price term.

Reminder on Incoterm