There are many types of foreign trade transportation terms, and different terms stipulate the responsibilities, costs and risk division between buyers and sellers during the transportation of goods. Common types of foreign trade transportation terms are as follows:
Common overall transportation quotation terms
1.EXW (Ex Works): The seller delivers the goods to the buyer at its location (factory, warehouse, etc.), and the buyer is responsible for picking up the goods from the seller's location and bearing all costs and risks. The benefit to suppliers is that the price provided to customers does not include any freight at all, which has practical reference significance. Generally, foreign medium B and large B customers with many years of purchasing experience from China will choose this method, and they will complete the subsequent transportation process through their own domestic freight forwarders.
2.FOB (Free on Board): The seller must deliver the goods to the ship designated by the buyer at the loading port and the specified time specified in the contract to fulfill its delivery obligations. The costs and risks of the goods borne by the buyer and seller are bounded by the ship's rail. The risks and costs of the goods before they are loaded on the ship at the loading port and cross the ship's rail are borne by the seller, and are transferred to the buyer after crossing the ship's rail. The seller is responsible for export customs clearance procedures, including applying for export licenses, customs declarations and paying export tariffs. This method is to add the transportation fee, customs clearance fee and related miscellaneous fees from the domestic factory to the nearest port when quoting. Similarly, experienced foreign medium and large B customers may ask suppliers to provide this price and arrange subsequent transportation by themselves.
3.CNF (Cost and Freight): also known as CFR, that is, FOB price plus Freight Cost (sea freight + air freight) to the customer's port. The seller pays the cost of transporting the goods to the designated port of destination, but the risk is transferred to the buyer after the goods pass the ship's rail
4.CIF (Cost, Insurance and Freight): FOB price plus Freight Cost (sea freight + air freight) plus Insurance (insurance premium) to the customer's port. The components of the price of goods include the usual freight from the port of shipment to the agreed destination port and the agreed insurance premium. In addition to the same obligations as the CFR term, the seller must also arrange freight insurance for the buyer and pay the insurance premium. According to general international trade practices, the insurance amount insured by the seller should be 10% of the CIF price.
Destination-related terms
5.DDU (changed to DAP, delivery at destination): delivered to the customer's designated address abroad (excluding tariffs, value-added tax and related miscellaneous fees in the importing country). In most cases, express delivery is used. The value of sample orders is small and generally no customs declaration is required.
6.DDP (delivery after duty paid): delivered to the customer's designated address abroad (all-inclusive door price). The responsible party is responsible for transporting the goods to the designated location of the importing and exporting countries and bears all transportation, import taxes and other costs. The buyer does not need to bear any additional costs.
7. Other transportation terms
FCA (free carrier): the seller delivers the goods to the carrier designated by the buyer, and the risks and costs are transferred to the buyer when the goods are delivered to the carrier.
CPT (carriage paid to): the seller pays the freight to transport the goods to the designated destination, and the risk is transferred to the buyer when the goods are delivered to the first carrier.
CIP (freight and insurance paid to): in addition to paying the freight to transport the goods to the designated destination, the seller must also arrange for freight insurance and pay the insurance premium.
DAT (Delivered at named destination or terminal): The seller is responsible for transporting the goods to the designated terminal and unloading the goods.
