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, the seller’s obligations are getting bigger, while the buyer’s on the contrary. In other words, among the above-mentioned trade terms, the seller bears the least responsibility under the EXW term, and the seller bears the most responsibility under the DDP term.
EXW ex works
It means that when the seller delivers the goods to the buyer at its location or other designated locations (such as a workshop, factory or warehouse), the delivery is completed, and the seller does not go through export customs clearance procedures or load the goods on any means of transportation.
This term is the term with the least liability of the seller.
FCA Cargo Delivery Carrier
It means that the seller only needs to deliver the goods to the carrier designated by the buyer at the designated place and complete the export customs clearance procedures to complete the delivery.
It should be noted that the choice of delivery location will have an impact on the obligations of loading and unloading at that location. The term can be used for various modes of transportation, including multimodal transportation.
FAS Alongside Delivery
It means that the seller delivers the goods to the side of the ship at the designated port of shipment, that is, the delivery is completed. The buyer must bear all risks of loss or damage to the goods since then.
FOB term
It refers to the name of the goods + the quantity of the goods + the unit price + FOB + the port of shipment. The transfer of risk is when it crosses the ship's rail. As the goods did not cross the ship’s rail, the liability should be borne by the seller company.
If the boom breaks during the re-lifting process and the cement does not fall into the sea but onto the ship board, the risk is transferred to the buyer, and the buyer’s company should bear the responsibility.
CFR cost and freight
It means that the seller completes delivery when the goods pass the ship’s rail at the port of shipment, and the seller must pay the freight and expenses required to transport the goods to the designated port of destination.
However, the risk of loss or damage to the goods after delivery, as well as any additional costs caused by various events, is transferred from the seller to the buyer.
This term only applies to sea or inland water transportation. If the parties do not intend to deliver the goods across 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 pass the ship’s rail at the port of shipment. This term only applies to maritime and inland water transportation.
If the parties do not intend to deliver the goods across the ship’s rail, the CIP term should be used.
CPT freight paid to (designated destination)
It means that the seller delivers the goods to its designated carrier (the goods are delivered to the carrier), but the seller must also pay the freight to transport the goods to the destination. That is, the buyer bears all risks and other expenses after delivery.
CIP freight and insurance
It means that the seller delivers the goods to the designated international forwarder, but the seller must also pay the freight for the goods to the destination, that is, the buyer bears all risks and additional costs after the seller has delivered the goods.
The term can be applied to various modes of transportation, including multimodal transportation.
DAF Frontier Delivery
It means that when the seller is at the designated location and specific delivery point at the border, before the border of the country’s customs border, the goods that are still on the delivery vehicle and have not been unloaded are handed over to the buyer for disposal, and the export customs clearance procedures have been completed but not yet The delivery is completed when the import customs clearance procedures are handled.
DES Delivered on board the destination port
It means that at the designated port of destination, the goods are handed over to the buyer on the ship for disposal, but the seller will complete the delivery without going through the customs clearance procedures for the import of the goods.
This term can only be used when the goods are transported by sea or inland waterway or multimodal transport on the ship at the port of destination.
DEQ destination port terminal delivery
It means that the seller only needs to deliver the goods to the carrier designated by the buyer at the designated place and complete the export customs clearance procedures to complete the delivery.
It should be noted that the choice of delivery location will have an impact on the obligations of loading and unloading at that location. The term can be used for various modes of transportation, including multimodal transportation.
DDU Unpaid Delivery
It means that the seller delivers the goods to the buyer at the designated destination for disposal without going through import procedures or unloading the goods from the delivery means of transport, that is, the delivery is completed.
This term applies to various modes of transportation, but when the goods are delivered on a ship or wharf at the port of destination, the term DES or DEQ should be used.
DDP delivery after duty
It means that the seller completes import customs clearance procedures at the designated destination, and delivers the goods that have not been unloaded on the delivery means of transport to the buyer to complete the delivery.
Because the seller bears the greatest responsibility under the DDP term, if the seller cannot obtain the import license directly or indirectly, this term should not be used; if the parties want the buyer to bear the import risks and costs, the DDU term should be used.
This term applies to various modes of transportation, but when the goods are delivered on a ship or wharf at the port of destination, the term DES or DEQ should be used.
