| EXW |
Ex Works (… named place) |
The seller/shipper is responsible to make the goods available to the buyer at the seller’s own premises. The buyer is responsible for making arrangements with their forwarder for insurance, export clearance and handling all other paperwork i.e. the buyer bears all costs and risk in delivering the goods from the seller’s premise to the named place of destination. |
| FCA |
Free Carrier (… named place) |
The seller/shipper has to fulfill the obligations to deliver the goods and clear them for export to the carrier named place where the risk of loss and damage is also transferred from seller/shipper to buyer. The seller/shipper is responsible for arranging transportation, but he is acting at the risk and the expense of the buyer. Where in FOB the freight forwarder or carrier is the choice of the buyer, in FCA the seller chooses and works with the freight forwarder or the carrier. “Delivery is accomplished at a predetermined port or destination point and the buyer is responsible for insurance. |
| FAS |
Free Alongside Ship (…named port of shipment) |
The seller/shipper has to fulfill the obligations to deliver the goods alongside the vessel on the quay at the named port of shipment, where the buyer bears all costs and risk from that time. FAX requires the seller/shipper to clear goods for export, which is a reversal from past practices. Companies selling on these terms will ordinarily use their freight forwarder to clear the goods for export. “Delivery” is accomplished when the goods are turned over to the buyer’s forwarder for insurance and transportation. |
| FOB |
Free On Board (…named port of shipment |
One of the most commonly used- and misused-terms, FOB means that the seller/shipper uses his freight forwarder to move the merchandise to the port or designated point of origin. Though frequently used to describe inland movement of cargo, FOB specifically refers to ocean or inland waterway transportation of goods. “Delivery” is accomplished when seller/shipper releases the goods to the buyer’s forwarder. The buyer’s responsibility for insurance and transportation begins at the same moment.
The seller/shipper has to fulfill the obligations to deliver the goods on board the vessel at the named port of shipment and clear the goods for export. The buyer bears all costs and risks when the goods are passed over the ship’s rail. |
| CFR |
Cost and Freight (…named port of destination) |
This term formerly known as CNF (C&F) defines two distinct and separate responsibilities-one is dealing with the actual cost of merchandise “C” and the other “F” refers to the freight charges to a predetermined destination point. It is the seller/shipper’s responsibility to get goods from their door to the port of destination. “Delivery” is accomplished at this time. It is the buyer’s responsibility to cover insurance from the port of origin or port of shipment to buyer’s door. Given that the seller/ shipper is responsible for transportation and also chooses the forwarder. i.e. ,
The seller/shipper has to pay for the costs and freight necessary to deliver the goods to the named port of destination. But the buyer bears the risk of loss and damage when the goods are passed over the ship’s rail in the port of shipment. Insurance and import clearance is the buyer's responsibility. |
| CIF |
Cost, Insurance and Freight
(…named port of destination) |
This arrangement similar to CFR, but instead of the buyer insuring the goods for the maritime phase of the voyage, the seller/shipper will insure the merchandise. In this arrangement, the seller usually chooses the forwarder. “Delivery”as above, is accomplished at the port of destination. i.e.
The seller/shipper has to pay for the costs and freight necessary to deliver the goods to the named port of destination. The seller/shipper has to procure transport insurance against the risk of loss or damage to the goods. The seller/shipper must contract with the insurer and pay the insurance premium. The buyer bears the risk of loss and damage when the goods are passed over the ship’s rail in the port of shipmen, and pay for the import clearance. |
| CPT |
Carriage Paid To (…named place of destination) |
The seller/shipper has to fulfill the obligations to pay for freight to deliver the goods to the named place of destination and clear them for import. The risk of loss or damage to the goods and any cost increases is transferred from the seller/shipper to the buyer when the goods are delivered to the custody of the final carrier, but not at the ship's rail. The buyer pays for import clearance. The seller/shipper has the same obligations found with CIF, with the addition that the seller/shipper has to buy cargo insurance, naming the buyer as the insured while the goods are in transit. |
| CIP |
Carriage and Insurance Paid To (…named place of destination) |
his term is primarily used for multimodal transport. Because it relies on the carrier’s insurance, the shipper/sell is only required to purchase minimum coverage. When this particular agreement is in force, Freight forwarders often act in effect , as carriers. The buyer’s insurance is effective when the goods are turned over to the forwarder.
The seller/shipper has to fulfill the obligations to pay for freight to deliver the goods to the named place of destination and clear them for import. The risk of loss or damage to the goods and any cost increases is transferred from the seller to the buyer when the goods are delivered to the custody of the final carrier, but not at the ship's rail.
The seller/shipper has to procure transport insurance against the risk of loss or damage to the goods during the carriage. The seller/shipper contracts with the insurer and pays the insurance premium. |
| DAT |
Delivered At Terminal (…named place) |
This term is used for any type of shipments. The seller/shipper pays for carriage to the terminal, except for costs related import clearance, and assumes all risks up to the point that the goods are unloaded at the terminal.
The seller/shipper pays for carriage to the terminal, except for costs related to import clearance, and assumes all risks up to the point that the goods are unloaded at the terminal.. |
| DAP |
Delivered At Place (…named place) |
This term is used for any type of shipments.
The seller/shipper pays for carriage to the named place, except for costs related to import clearance, and assumes all risks prior to the point that the goods are ready for unloading by the buyer. |
| DDP |
Delivered Duty Paid (…named place of destination) |
This term tend to be used in intermodal or courier-type shipments. Whereby, the seller/shipper is responsible for dealing with all the tasks involved in moving goods from the manufacturing plant to the buyer/consignee’s door. It is the seller/shipper’s responsibility to insure the goods and absorb all costs and risks including the payment of duty and fees. |
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