If you are in the field of foreign trade, you may do foreign forwarder, especially if you are new to it. Between FOB, FAS and DAP, as well as CIFFA, CETA and FCL, you may feel that you are either suffering from information overload or drowning in an alphabet soup. But the good news is that you don’t need to swallow a dictionary to analyze terms. Here’s a quick guide to some of the more common export terms you need to know.

Trade terms applicable to modes of transport by water:

 

1.FAS (Free Alongside Ship)

 

The seller shall, within the date or time limit agreed in the contract, deliver the goods to the port of shipment stipulated in the contract and deliver the goods to the side of the vessel designated by the buyer. In addition, the seller shall provide commercial invoices and other documents required by the contract.

 

Should the buyer’s vessel fail to land, the barge charges shall be borne by the Seller.

 

  1. FOB (Free onBoard)

 

The seller shall deliver the goods to the port of shipment stipulated in the contract and deliver the goods to the vessel designated by the buyer on the date or within the time limit agreed in the contract. In addition, the seller shall provide commercial invoices and other documents required by the contract.

 

The risk division of goods takes the ship’s side at the time of loading as the boundary.

 

 

3.CFR (Cost and Freight)

 

The seller shall deliver the goods to the port of shipment stipulated in the contract and deliver the goods to the vessel designated by the buyer on the date or within the time limit agreed in the contract. In addition, the seller shall provide commercial invoices and other documents required by the contract.

 

After loading the goods, the seller must give the shipping advice to the buyer in time so that the buyer can take delivery of the goods and take out insurance, otherwise the seller shall be responsible for the loss of the goods.

 

 

4.CIF (Cost Insurance Freight)

 

The seller shall deliver the goods to the port of shipment stipulated in the contract and deliver the goods to the vessel designated by the buyer on the date or within the time limit agreed in the contract. In addition, the seller shall provide commercial invoices and other documents required by the contract.

 

Note that this regulation is symbolic delivery: the seller completes the shipment on time and submits to the buyer the relevant documents stipulated in the contract, including title document, to complete the delivery obligation, regardless of whether the shipment is damaged in transit, the buyer must pay.

 

Trade terms applicable to all modes of transport

 

1.EXW (Ex Works)

 

The seller shall deliver the goods at the place of origin or location within the delivery time agreed in the contract. In addition, the seller shall provide commercial invoices and other documents required by the contract.

 

The seller shall assist the buyer to go through the export customs formalities, but the buyer shall bear the risk of the goods being prohibited from export. The transaction price is the lowest in 11 trade terms, which is very attractive to buyers.

 

  1. FCA(Free Carrie)

 

The seller shall deliver the goods to the carrier appointed by the buyer within the delivery time agreed in the contract. In addition, the seller shall provide commercial invoices and other documents required by the contract.

 

If the agreed place is the seller’s place, the seller shall bear the loading and unloading charges. The seller may choose a suitable place of delivery.

 

 

3.CPT (Carriage Paid To)

 

The seller shall deliver the goods to the carrier appointed by the seller within the delivery time agreed in the contract. In addition, the seller shall provide commercial invoices and other documents required by the contract.

 

Note that the seller pays for the delivery of the goods to the destination, but the risk has passed by the time the goods are delivered to the carrier.

 

4.CIP (Carriage and Insurance Paid To)

 

The seller shall deliver the goods to the carrier appointed by the seller within the delivery time agreed in the contract. In addition, the seller shall provide commercial invoices and other documents required by the contract. The seller bears freight and insurance.

 

Note that the seller’s risk has been transferred when the goods are delivered to the carrier, and the insurance is agent nature.

 

5.DAT (Delivered At Terminal)

 

The seller shall deliver the goods to the port of destination or other terminal specified in the contract and unload the goods within the delivery time agreed in the contract. In addition, the seller shall provide commercial invoices and other documents required by the contract.

 

The seller pays transit costs including the third country, but not the importing country’s customs clearance costs. The seller shall bear the risks on the way of transportation and decide whether to apply for insurance.

 

6.DAP (Delivered At Place)

 

The seller shall deliver the goods to the destination specified in the contract within the delivery time agreed in the contract and complete the delivery before unloading. In addition, the seller shall provide commercial invoices and other documents required by the contract.

 

Buyer shall pay import and discharge charges. The seller shall bear the risks on the way of transportation and decide whether to apply for insurance.

 

  1. DDP(Delivered Duty Paid)

 

The seller shall deliver the goods to the destination specified in the contract within the delivery time agreed in the contract and complete the import customs clearance procedures. Among the 11 trade terms, the seller bears the greatest risks, liabilities and expenses.

 

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