Trade terms are produced in the long-term international trade practice. It is a special term used to express the price structure of commodities, explain the place of delivery, and determine the risks, costs, and division of responsibilities.
Introduction to commonly-used international trade terms:
EXW (Ex Works)
EXW - Ex Works (named place)" means that delivery is made when the seller places the goods at the buyer's disposal at his premises or at another named place such as a workshop, factory or warehouse, without the seller's export clearance or load the goods on any means of transport. This term is the trade term that the seller bears the least obligation. If the buyer cannot directly or indirectly handle the export procedures of the goods, this method should not be used.
However, if both parties want the seller to be responsible for loading the goods at the time of departure and bear all the costs and risks of loading the goods, it must be clearly stated in the sales contract. The term should not be used when the buyer is unable to export directly or indirectly, but FCA should be used if the seller agrees to load the goods at his expense and risk.
FCA (Free Carrier)
FCA is a free carrier, that is, "delivery to the carrier (designated place)" means that the seller only needs to hand over the goods to the carrier designated by the buyer at the designated place, and complete the export customs clearance procedures to complete the delivery. It should be noted that the choice of place of delivery will have an impact on the obligation to load and unload the goods at that place. Seller shall be responsible for loading the goods if delivered at its location and shall not be responsible for unloading if delivered at any other place.
FAS (Free Alongside Ship at Port of Shipment)
The trade term of FAS is delivery alongside the ship (designated port of shipment). The trade term FAS means that the seller delivers the goods to the side of the ship at the designated port of shipment, that is, completes the delivery. The buyer must bear all risks of loss of or damage to the goods from then on. FAS requires the seller to go through export customs clearance procedures.
This is contrary to the content of the previous version, which required the buyer to arrange for export formalities. However, if the parties want the buyer to go through export procedures, it needs to be clearly stated in the sales contract. This term applies only to sea or inland waterway transport.
FOB (Free on board at port of shipment)
FOB (the acronym for free on board), also known as "Free On Board", is one of the commonly - used trade terms in international trade. The full text of FOB is Free On Board (named port of shipment), that is, delivery on board (designated port of shipment), which is customarily called FOB at the port of shipment. According to this term, the buyer is responsible for sending the ship to pick up the goods, and the seller should load the goods on the ship designated by the buyer at the port of shipment and within the specified time limit specified in the contract, and notify the buyer in time. When the goods pass the ship's rail during loading, the risk is transferred from the seller to the buyer.
CFR (Cost and Freight)
This term is "Cost and Freight (named port of destination)" in English, that is, "Cost and Freight (named port of destination)". It means that the seller must pay the expenses and freight required to transport the goods to the designated port of destination, but after the goods are handed over to the ship's deck, the risk of loss or damage to the goods and the additional expenses caused by the accident, after the goods are handed over to the ship's deck , the burden will be shifted from the seller to the buyer. In addition, the seller is required to go through customs clearance procedures for the export of the goods. This term applies to sea or inland waterway transport.
CIF (Cost, Insurance and Freight)
Definition: CIF is the capitalization of the first letter of the three words COST, INSURANCE, AND FREIGHT (NAMED PORT OF DESTINATION), which means cost plus insurance plus freight (designated port of destination) in Chinese. , (actually in the hold of the shipping vessel), the seller completes the delivery. The seller shall pay for the freight, insurance and etc. of the goods from the port of shipment to the port of destination, but the risk of damage and loss of the goods after loading shall be borne by the buyer.
CPT (Carriage Paid To)
Carriage paid to (CPT) English is Carriage Paid to) tid to (named place of destination), that is, freight paid to (named place of destination). This term refers to selling means that in addition to the same obligations under the term, the seller must also obtain cargo insurance against the buyer's risk of loss or damage to the goods in transit, conclude an insurance contract, and pay the insurance premium.
CIP (Carriage, Insurance Paid To)
Carriage and insurance paid to, that is, freight and insurance paid to (named place of destination). It means that in addition to the seller having the same obligation as the freight paid to (specified destination), the seller must also apply for marine insurance and pay the insurance premium for the risk of loss or damage to the goods that should be borne by the buyer during transportation. This term applies to any mode of transport.
DAF (Delivered Frontier)
DAF is the abbreviation of delivered at Frontier. The term is followed by a named place. DAF means that when the seller is at the designated place and specific delivery point at the border, before the border of the country's customs border, the goods that are still in delivery and have not been unloaded are handed over to the buyer, and the customs clearance procedures for the goods have been completed but have not yet been delivered. Delivery is complete when import customs clearance is completed.
