subject: The Phrases Which Are to Be Avoided While Merchant Trading of Crude Oil [print this page] The Phrases Which Are to Be Avoided While Merchant Trading of Crude Oil
As crude oil production has geographical limitations, its worldwide trading becomes an important and essential activity. There are very few countries in the world which are self sufficient in their requirement for crude and hence have no choice but to import this commodity into their country. Over the years oil trading has become an organized sector within international business which now follows certain industry norms. Further in this article we will discuss few of the trading terms or phrases which should be avoided as they won't leave good impression of you. Anyone looking to get involved with this industry must have knowledge related to basic terms and phrases and their actual meaning. Just using certain terms because you have heard others use them doesn't mean that they do any good for you.
The first term which is commonly used by many brokers and agents involved in oil business is CIF ASWP. This term is related to logistics part of trade process and defines the geographical threshold of prices offered by a seller. CIF stands for Cost Insurance and Freight, which means all these three components are covered in the price. Usually what follows CIF should be the name of the place till where the Cost, Insurance and Freight are covered. For example if your buyer is in China and wants delivery of the cargo on Shanghai port, what you would mention is CIF Shanghai. Term CIF Shanghai would mean that all the cost, insurance and freight up to Shanghai Port are covered in the given price and any expenses beyond this threshold would be on buyers account.
Now, if you have been using the term CIF ASWP what would that actually mean and signify anything? What it means would be Cost, Insurance and Freight to Any Safe World Port and would it actually signify something? Having now known the actual logic behind the concept it won't be difficult to answer that term CIF ASWP doesn't actually mean anything and it would just signify your lack of knowledge on the subject matter.
The second such commonly used term is ICPO. ICPO here stands for Irrevocable Corporate Purchase Order. This term is used in few countries only to signify seriousness or intent on part of the buyer to do business but when it comes to International Business this doesn't mean anything at all. If you use the term ICPO in any formal communication with your supplier it will only give an impression that you do not know much about the business or you are trying to con him into something. So please avoid using this term from henceforth.
The third commonly used phrase is NCNDA which actually stands for Non Circumvention Non Disclosure Agreement. In legal terms NCNDA does not hold any good and should never be used while entering into to legally binding agreement. The usage of this terminology would only leave a negative impression of yours on the opposite party involved.
The last phrase which we will discuss in this article would be IMFPA. Now IMPA stands for is Irrevocable Master Fee Protection Agreement and what it trying to imply is that the brokers fee or commission remains protected. This again is an incorrect way of establish something which serves little purpose other than leaving a negative impression of yours. A real broker/agent with proper buyer/seller mandate need not fear of protecting his fee and should definitely use these improper tools to do so.
welcome to Insurances.net (https://www.insurances.net)
