Do you understand these trade terms of freight forwarders? (1)
The basic terms of freight forwarders are EXW, FCA, FAS, FOB, CFR, CIF, CPT, CIP, DAF, DES, DEQ, DDU, DDP.
These 13 trade terms, from left to right, have increasing obligations for the seller and vice versa for the buyer. In other words, in the above trade terms, the seller bears the least liability under the EXW term, while the seller bears the most liability under the DDP term.
EXW factory delivery
Delivery is completed when the goods are delivered to the Buyer at the Seller's place of residence or other designated place (such as workshop, factory or warehouse) without the Seller completing export customs clearance or loading the goods on any means of transport.
This term is the one for which the seller is least liable.
FCA delivery to carrier
It means that as long as the seller delivers the goods to the carrier designated by the buyer at the designated place and goes through the export customs clearance procedures, the delivery is completed.
It should be noted that the choice of place of delivery has an impact on the obligation to load and discharge goods at that place. The term can be used for various modes of transport, including multimodal transport.
FAS side delivery
It means that the seller delivers the goods alongside the ship at the named loading port, that is, the delivery is completed. The buyer must bear all risks of loss of or damage to the goods from that time.
FOB term
Refers to the name of the goods + quantity + unit price +FOB+ port of shipment. The risk transfer is when it goes over the side of the ship. As the goods did not cross the ship's rail, the liability should be borne by the seller's company.
If in the process of lifting, the boom breaks, the cement does not fall into the sea but into the ship board, then the risk is transferred to the buyer, and this responsibility should be borne by the buyer company.
CFR cost and freight
It means that the seller completes the delivery of the goods over the ship's rail at the port of loading, and the seller must pay the freight and expenses required to transport the goods to the named port of destination.
However, the risk of loss of or damage to the goods after delivery, as well as any additional costs due to various events, is passed from the seller to the buyer.
The term applies only to sea or inland waterway transport. If the parties do not intend to deliver over the ship's rail, the CPT term should be used.
CIF cost, insurance and freight
It means that the seller completes the delivery when the goods cross the ship's rail at the port of loading. The term applies only to sea and inland waterway transport.
If the parties do not intend to deliver over the ship's rail, the term CIP shall be used.
CPT freight payable to (named destination)
It means that the seller delivers the goods to its designated carrier (the carrier), but the seller must also pay the freight to get the goods to the destination. That is, the buyer bears all risks and other costs after delivery.
