How much do you know about foreign trade terms?

1. FOB: Free On Board, FOB price. For transactions conducted at FOB prices, the buyer is responsible for sending a ship to pick up the goods. The seller should load the goods on the ship designated by the buyer at the port of shipment specified in the contract and within the specified time limit, and notify the buyer in time. The risk passes from the seller to the buyer when the goods are loaded onto the named vessel at the port of shipment.

2. CIF: Cost, Insurance and Freight (insert named port of destination), cost plus insurance plus freight. The components of the price include the usual freight from the port of shipment to the agreed destination port and the agreed insurance premium. Therefore, in addition to the same obligations as the CFR term, the seller should also apply for freight insurance for the buyer, pay the insurance premium, and pay the insurance premium according to the terms of the CFR. In general international trade practice, the insurance amount insured by the seller should be added 10% to the CIF price.

3. DDU: Delivered Duty Unpaid. The seller ships the goods directly to the designated place in the importing country, and must bear all the costs and risks of the goods to the designated place (excluding customs duties, taxes and other official fees to be paid at the time of import), so the "2000 General Rules" requires The buyer shall bear the additional costs and risks that may occur due to its failure to handle the import customs clearance in time.

4. FCA: Free Carrier, cargo delivery carrier. It means that the seller completes the delivery 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 choice of delivery location has an impact on the obligations to load and unload at that location. Seller shall be responsible for loading if Seller delivers at its location, and is not responsible for loading if Seller delivers at any other location.

5. EXW: Ex Works, ex works. It means that when the seller hands over the goods to the buyer at its location or other designated locations (such as workshops, factories or warehouses), the delivery is completed, and the seller does not go through export customs clearance procedures or load the goods on any means of transport. This term is the one for which the seller is least liable.

Extended information: In addition to the above items, there are the following trade terms:

1. DAP: Delivered At Place. It means that after the seller has delivered the goods by means of transport to the destination designated by the buyer, the goods loaded on the means of transport (without unloading) are handed over to the buyer for disposal, that is, the delivery is completed.

2. CPT: Carriage Paid To, freight paid to. Means the seller delivers the goods to their nominated carrier (cargo carrier), but the seller must also pay for shipping the goods to the destination. That is, the buyer bears all risks and other costs after delivery.

3. CFR: Cost and Freight, cost plus freight. Refers to delivery on board at the port of shipment, and the seller needs to pay the cost of transporting the goods to the designated port of destination. However, the risk of the goods is transferred on-board at the port of shipment.

4. FAS: Free Alongside Ship. It means that the seller delivers the goods to the side of the ship at the designated port of shipment, that is, to complete the delivery. The buyer must bear all risks of loss of or damage to the goods from then on.

5. DDP: Delivered Duty Paid, delivery after tax. It means that the seller has completed the import customs clearance procedures at the designated destination and handed over the goods that have not been unloaded on the delivery vehicle to the buyer to complete the delivery. The seller must bear all risks and costs of transporting the goods to the named destination, including any "taxes" payable at the destination when customs formalities are required (including the responsibility and risk of customs formalities, and payment of handling charges, duties, taxes and other charges). The seller bears the greatest responsibility under the DDP term.

"2010 Incoterms Interpretation General Rules" has 11 kinds of trade terms, which are divided into two categories according to the applicable modes of transportation:

Group 1: Seven terms applicable to any mode of transport: EXW, FCA, CPT, CIP, DAT, DAP, DDP.

EXW (ex works)

FCA (free carrier)

CPT (carriage paid to)

CIP (carriage and insurance paid to)

DAT (delivered at terminal)

DAP (delivered at place)

DDP (delivered duty paid)

Group 2: Four terms applicable to water transport modes: FAS, FOB, CFR, CIF.

FAS (free alongside ship)

FOB (free on board)

CFR (cost and freight)

CIF (cost insurance and freight)