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Freight Forwarders 13 Basic Terms of Trade

13 Trade Terms for Basenton Freight Forwarders

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 obligation is increasing, the buyer’s vice versa. That is to say, among the above trade terms, the seller under the EXW term bears the least responsibility, while the seller under the DDP term bears the greatest responsibility.

China freight forwarder
China freight forwarder

EXW factory delivery
It means that when the seller hands over the goods to the buyer at its location or other designated locations (such as workshops, factories or warehouses), the delivery is completed, and the seller does not go through export customs clearance procedures or load the goods on any means of transport. This term is the term for which the seller is least liable.

FCA Freight Carrier
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 location and goes through the export customs clearance procedures. It should be noted that the choice of delivery location has an impact on the obligations to load and unload at that location. The term can be used for various modes of transport, including multimodal transport.

FAS ship side
It means that the seller delivers the goods to the side of the ship at the designated port of shipment, that is, to complete the delivery. The buyer must bear all risks of loss of or damage to the goods from then on.

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 passing over the ship’s rail. Since the goods did not cross the ship’s rail, the responsibility should be borne by the seller’s company. If during the hoisting process, the boom breaks and the cement does not fall into the sea but onto the deck, the risk is transferred to the buyer, and the buyer company should bear this responsibility.

CFR cost plus shipping
It means that the seller completes the delivery when the goods cross 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 due to various events, is transferred from the seller to the buyer.
The term applies only to sea or inland water transport. If the parties do not intend to deliver over the ship’s rail, the term CPT should be used.

CIF cost, insurance and shipping
It means that the seller completes the delivery when the goods pass the ship’s rail at the port of shipment. The term applies only to ocean and inland water transport. If the parties do not intend to deliver over the ship’s rail then the CIP term should be used.

CPT freight paid to (designated destination)
It means that the seller delivers the goods to their nominated carrier (carriage-free 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 costs after delivery.

CIP shipping and insurance
It means that the seller delivers to its designated international forwarder, but the seller must also pay the freight to transport the goods to the destination, that is, the buyer bears all the risks and additional costs after the seller’s delivery. The term can be applied to various modes of transport, including multimodal transport.

DAF Border Delivery
Refers to when the seller at the designated place and specific delivery point at the border, before the border of the country’s customs border, hand over the unloaded goods on the delivery vehicle to the buyer for disposal, complete the export customs clearance of the goods but not yet Delivery is completed when import customs clearance procedures are completed.

DES port of destination FOB
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 does not go through the customs clearance procedures for the import of the goods, and the seller completes the delivery. The term can only be used when the goods are carried by sea or inland waterway or multimodal on board the ship at the port of destination.


DEQ delivery at destination port
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 location and goes through the export customs clearance procedures. The term can be used for various modes of transport, including multimodal transport.

DDU delivery without tax
It means that the seller delivers the goods to the buyer at the designated destination without going through import formalities or unloading the goods from the conveying means of delivery, that is, the delivery is completed. The term applies to various modes of transport, but the DES or DEQ terms should be used when the goods are delivered on board a ship or terminal at the port of destination.

DDP Delivery After Duty Paid
It means that the seller completes the import customs clearance procedures at the designated destination and delivers the goods that have not been unloaded on the delivery vehicle to the buyer to complete the delivery. Because the seller bears the greatest responsibility under the DDP term, this term should not be used if the seller cannot obtain an import license directly or indirectly; the DDU term should be used if the parties expect the buyer to bear the risks and costs of importing.
The term applies to various modes of transport, but the DES or DEQ terms should be used when the goods are delivered on board a ship or terminal at the port of destination.

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