General

International trade terms are an indispensable way of expressing prices in foreign trade, each of which specifies the obligations that both parties are responsible for in certain trade terms. Let's introduce commonly used international trade terms and take a look together.

EXW (ex factory delivery)

EXW "Ex Works Delivery (... designated location)" refers to the completion of delivery when the seller delivers the goods to the buyer at their location or other designated location (such as a factory, factory, or warehouse). The seller does not handle export customs clearance procedures or load the goods onto any means of transportation. This term is the international trade term in which the seller has the least obligation. If the buyer is unable to directly or indirectly handle the export procedures of the goods, this method should not be used.

However, if both parties wish that the seller is responsible for loading the goods and bear all the costs and risks of loading the goods at the time of shipment, it must be clearly stated in the sales contract. When the buyer is unable to directly or indirectly handle export procedures, this term should not be used, but FCA should be used, if the seller agrees to load the goods and bear the costs and risks.

FCA (Free Carrier)

FCA is a free carrier, also known as "free carrier", which means that the seller only needs to deliver the goods to the carrier designated by the buyer at the designated location and complete export customs clearance procedures to complete the delivery. It should be noted that the choice of delivery location will have an impact on the obligation to load and unload goods at that location. If the seller delivers at its location, the seller shall be responsible for loading the goods, and if the seller delivers at any other location, the seller shall not be responsible for unloading the goods.

FAS (Free Alongside Ship at Loading Port)

The FAS trade term refers to delivery alongside the ship (... designated loading port), while the international trade term FAS refers to the seller delivering the goods alongside the ship at the designated loading port, i.e. completing the delivery. The buyer must bear all risks of loss or damage to the goods from then on. FAS requires the seller to handle export customs clearance procedures.

This is contrary to the previous version, which required the buyer to arrange for export procedures. However, if the parties wish the buyer to handle the export procedures, it needs to be clearly stated in the sales contract. This term only applies to sea or inland waterway transportation.

FOB (Free on Board)

FOB (abbreviation for Free On Board), also known as "FOB", is one of the commonly used trade terms in international trade. The full text of FOB is Free On Board (... named port of shipment), which means delivery on board (... named port of shipment), commonly known as delivery on board at the port of shipment. According to this term, the transaction is made and the buyer is responsible for dispatching a ship to pick up the goods. The seller shall load the goods onto the vessel designated by the buyer at the loading port and within the specified time limit specified in the contract, and notify the buyer in a timely manner. When the goods cross the ship's rail during loading, the risk passes from the seller to the buyer.

CFR (Cost and Freight)

The English term for this term is "Cost and Freight (... named port of destination)", which means "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 destination port. However, after the goods are delivered to the deck of the ship, the risks, loss or damage to the goods, as well as additional expenses caused by accidents, are borne by the seller to the buyer upon delivery of the goods to the deck of the ship. In addition, the seller is required to handle the export customs clearance procedures for the goods. This term applies to sea or inland waterway transportation.

CIF (Cost, Insurance, and Freight)

Definition: CIF is composed of the first letter of the three words COST, INSURANCE, AND FREIGHT (NAMED PORT OF DESTINATION) in capital letters. In Chinese, it means cost plus insurance and freight (designated destination port). It refers to the time when the goods cross the ship's rail at the loading port (actually inside the loading cabin), and the seller completes the delivery. The freight and insurance premiums for the goods from the loading port to the destination port shall be paid by the seller, but the risk of damage and loss occurring after the goods are loaded on board shall be borne by the buyer.

CPT (freight paid to)

Carriage Paid to (CPT), also known as Carriage Paid to (... named place of destination), means that the freight is paid to (... designated destination). This term refers to selling, which means that the seller must not only bear the same obligations under the terms, but also obtain insurance for the buyer's risk of loss or damage to the goods during transportation, enter into an insurance contract, and pay insurance premiums.

CIP (Freight, Insurance Paid To)

The term "Carriage and Insurance Paid to (... named place of destination)" in English means that the freight and insurance are paid to (... named place of destination). It refers to the seller's obligation, in addition to the same term as paying the freight to the designated destination, to purchase marine insurance and pay insurance premiums for the risk of loss of or damage to the goods that should be borne by the buyer during transportation. This term applies to any mode of transportation.

DAF (border delivery)

DAF is the abbreviation for Delivered At Frontier, which is translated as "border delivery" in Chinese. The term is followed by the specified place (... named place). DAF refers to the transaction of goods when the seller, at a designated location and specific delivery point at the border, hands over the goods that have not yet been unloaded from the transportation vehicle that are still in delivery to the buyer for disposal, completes the export customs clearance procedures for the goods, but has not yet completed the import customs clearance procedures.

The above is the relevant introduction of international trade terms, hoping to be helpful to everyone.