We usually use the following trade terms in our international business
FCA
FCA (Free Carrier) means that the seller delivers the goods to the carrier or another person designated by the buyer at a specified place. The parties must specify the place of delivery as clearly as possible. Risk passes to the buyer at the named place.
The FCA rules now contain an additional element relating to the bill of lading. Under this option, the buyer and seller agree that the buyer's carrier will issue a shipboard bill of lading to the seller after loading, and the seller will then deliver the bill of lading to the buyer (possibly through a chain of banks). One of the problems with the old FCA rule was that it ended before the goods were loaded on the ship, which prevented the seller from obtaining a shipboard bill of lading. However, banks generally require a bill of lading under a letter of credit, so the FCA rules have been revised to take this market reality into account.
CFR
CFR (Cost and Freight) means that the seller delivers the goods when they pass the ship's rail at the port of shipment. The seller pays the cost and freight required to bring the goods to the named port of destination. In addition, the seller must clear the goods for export. However, the buyer must bear the risk of loss or damage, as well as any additional costs incurred as a result of events occurring after delivery. The term applies to sea freight only.
CIF
CIF (Cost, Insurance and Freight) means that the seller delivers the goods when they pass the ship's rail at the port of shipment. The seller pays the cost and freight required to bring the goods to the named port of destination. The seller must clear the goods for export. The risk of loss and damage is the same as for CFR.
The seller also contracts insurance against the buyer's risk of loss of or damage to the goods during transport. The seller is obliged to obtain minimum marine insurance protection. If the buyer wishes to obtain more insurance protection, he needs to reach an explicit agreement with the seller or arrange additional insurance on his own.
