The basic terms of freight forwarding are EXW, FCA, FAS, FOB, CFR, CIF, CPT, CIP, DAF, DES, DEQ, DDU, DDP.
These 13 Incoterms, from left to right, are increasingly obligated by the seller and the opposite by the buyer. That is, in the above Incoterms, the seller bears the minimum liability under the EXW term and the seller bears the maximum liability under the DDP term.
EXW ex works
means delivery is completed when the Seller places the Goods at the disposal of the Buyer at its location or other designated place (e.g. workshop, factory or warehouse) without Seller going through export customs clearance or loading the Goods onto any means of transport.
This term is the one for which the seller bears the least liability.
FCA Carrier Liquidation
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 completes the export customs clearance procedures.
It should be noted that the choice of place of delivery has an impact on the obligation to load and discharge goods at that place. The term can be used for a variety of modes of transport, including multimodal transport.
FAS shipside delivery
means that the seller delivers the goods to the side of the ship at the designated port of shipment, i.e. completes delivery. The buyer must bear all risks of loss of or damage to the goods from that point onwards.
FOB terminology
It refers to the name of the goods + the quantity of the goods + the unit price + FOB + the port of shipment. Risk transfer is when crossing the side of a ship. Since the goods did not cross the ship's side, liability should be borne by the seller's company.
If, during the lifting process, the boom breaks and the cement does not fall into the sea but falls into the ship's board, the risk passes to the buyer, and this responsibility should be borne by the buyer's company.
CFR cost plus freight
means that the seller completes delivery when the goods cross the ship's side at the port of shipment, and the seller must pay the freight and costs required to transport the goods to the named port of destination.
However, the risk of loss of or damage to the goods after delivery, as well as any additional costs due to various events, i.e. transferred by the seller to the buyer.
The term only applies to sea or inland waterway transport. If the parties do not intend to deliver over the ship's side, the term CPT should be used.
CIF costs, insurance and shipping
means that at the port of shipment, the seller completes delivery when the goods cross the side of the ship. The term applies only to sea and inland waterway transport.
If the parties do not intend to deliver goods over the ship's side, the term CIP should be used.
CPT Shipping Fee to (Designated Destination)
means delivery by the seller to the carrier named by the seller (delivery carrier), provided that the seller must also pay the freight for the carriage of the goods to the place of destination. That is, the buyer bears all risks and other costs after delivery.
CIP shipping and insurance
means delivery by the Seller to its designated international freight forwarder, provided that the Seller must also pay the freight for the delivery of the goods to the place of destination, i.e. the Buyer bears all risks and additional costs after the Seller's delivery.
The term can be applied to a variety of modes of transport, including multimodal transport.
DAF border delivery
It means that the seller completes the delivery when the seller at the designated place and specific delivery point at the border, before the customs border of the adjacent country, hands over the goods that have not been unloaded on the means of transport that are still delivered to the buyer for disposal, and completes the export clearance procedures for the goods but has not yet completed the import customs clearance procedures.
DES is delivered on board at the port of destination
It means that at the designated port of destination, the goods are handed over to the buyer on board the ship for disposal, but the seller completes the delivery without going through the customs clearance procedures for the import of the goods.
The term may only be used when the goods are transported by sea or inland waterway or multimodal transport on board a ship at the port of destination.
DEQ delivery at the destination port terminal
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 completes the export customs clearance procedures.
It should be noted that the choice of place of delivery has an impact on the obligation to load and discharge goods at that place. The term can be used for a variety of modes of transport, including multimodal transport.
DDU delivered without paying taxes
means that the seller delivers the goods to the buyer at the disposal of the buyer at the named place of destination, without going through the import formalities and without unloading the goods from the means of transport that was delivered.
The term applies to all modes of transport, but the DES or DEQ term should be used when the goods are delivered on board or at the terminal at the port of destination.
DDP delivered after duty paid
It means that the seller completes the import customs clearance procedures at the designated place of destination, and delivers the goods that have not been unloaded on the delivery means of transport to the buyer and completes the delivery.
Because the seller bears the greatest responsibility under the DDP term, the term should not be used if the seller cannot obtain an import license directly or indirectly; If the parties wish the buyer to bear the risk and expense of importation, the DDU term should be used.
The term applies to all modes of transport, but the DES or DEQ term should be used when the goods are delivered on board or at the terminal at the port of destination.
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