Dominican businessmen do not control shipping contracts

Dominican Republic businessmen each year lose millions of dollars because in none of the transactional patterns of international trade do they have control of maritime transport for their cargo, which in turn reduces the capacity to reduce logistics costs.

This was stated by Anibal Piña a shipping expert and company president of AP Marine Cargo (Intelligent Maritime Transport).

The cargo is under the control of the seller

The cargo is under the control of the seller.

He argued that when making their purchases from international suppliers, Dominicans opt for CIF shipments (Cost, Insurance and Freight), which implies that the seller holds the power of decision when choosing the transport of cargo to the destination port.

“Obviously the insurance does not always cover the path to the Dominican port or to the warehouse of the importer, or to handling at the border, besides which the fact is that it is almost always an insurance company unknown to the importer,” Piña said.

He added: “it is for this reason that the cost of transporting cargo entering the country is so high when the importer goes to pay, and this can be avoided if our merchants and manufacturers are more familiar with these issues and give a vote of confidence to local operators, putting into their hands the procurement logistics for cargo on the international market.”

He said that this will generate great economic profitability and result the final consumer will be the beneficiary.

According to the shipping expert, the same happens with exporters regularly sell under FOB conditions, in which the buyer chooses international transport used and the conditions that suit him, leaving the Dominican seller without defense mechanisms, such as logistical transactions, especially with large bulk shipments and containers and other significant volumes.

“This practice is deeply rooted in Dominican business and, with few exceptions, the process is reversed; it therefore encourages businesses to make a financial outlay so that they can feel the loss of savings opportunities generated by these groups (of buyers),” said Piña.

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