Q
13 common modes of delivery in international trade
A
1. EX Works  (EXW)

EX Works (... named place), that is, "factory delivery (...specified place)". It means that the seller is responsible for delivering the prepared goods to the buyer at the place where the workshop, factory, warehouse, etc., but is usually not responsible for loading the goods on the vehicle prepared by the buyer or for customs clearance. The buyer bears all costs and risks of transporting the goods to the intended destination from the seller's location. This term is the term of trade that the seller has the least responsibility for. If the buyer cannot handle the exit of the goods, this method should not be used.

2. Free Carrier (FCA)

Free Carrier (... named place), that is, "cargo carrier (...designated place)". It refers to the goods that the seller is responsible for handing over to the goods, and after delivery, the goods are delivered to the buyer at the designated place. According to commercial practice, when the seller is required to cooperate with the carrier by signing a contract, the seller can do so in the event that the buyer bears the risks and expenses. This term applies to any mode of transport. It should be noted that the choice of delivery location will have an impact on the obligation to load and unload at that location. If the seller delivers at its place, the seller shall be responsible for loading the goods, and if the seller delivers at any other location, the seller is not responsible for unloading the goods.

3. Free Alongside ship (FAS)

Free Alongside ship (... named port of shipment)" means "the ship's delivery (...designated port of shipment)". It means that the seller delivers the goods to the ship at the designated port of shipment or barge, from then on. The buyer shall be responsible for the full cost and risk of loss or damage of the goods, and the buyer shall handle the export clearance procedures. This term applies to maritime transport or inland water transport. Note: If the ship dispatched by the buyer cannot be docked, the seller is responsible for transporting the cargo by barge. To the side of the ship, it is still delivered by the ship. The responsibility and cost of loading the ship shall be borne by the buyer.

4. Free on Board (FOB)

Free on Board (... named port of shipment), that is, "shipping on board (...designated port of shipment)". It means that the seller delivers the goods after passing the cargo at the designated port of shipment. After the goods pass the ship's rail, the buyer shall bear the full cost, risk, loss or damage of the goods, and the seller shall be required to handle the export customs clearance of the goods. That is to say, the buyer is responsible for dispatching the ship to pick up the goods, and the seller shall install the goods on the ship designated by the buyer within the specified port of shipment and the prescribed time limit, and notify the buyer in time. When the goods are loaded onto the designated ship at the port of shipment, the risk is transferred from the seller to the buyer. This term applies to maritime transport or inland water transport.

5, Cost and Freight  (CFR or C&F)

Cost and Freight (named port of shipment), which means "cost plus freight (...specified destination port)". It means that the seller must pay the expenses and freight charges required to transport the goods to the designated port of destination, but after the goods are delivered to the deck of the ship, the risk, loss or damage of the goods and the additional expenses incurred after the accident occur, the goods cross the designated port. After the ship's side, the seller will turn to the buyer. In addition, the seller is required to handle the export customs clearance of the goods. That is, the delivery on board the ship at the port of shipment, the seller is required to pay the cost of transporting the goods to the designated destination port. However, the risk of the goods is transferred at the time of delivery on board the port of shipment. This term applies to maritime transport or inland water transport.

6, Cost, Insurance and Freight (CIF)

Cost, Insurance and Freight (...named port of shipment), that is, "cost, insurance and freight (...designated destination port)". It means that in addition to the obligation of the seller to have the same term as "cost plus freight", the seller must also handle the maritime insurance in which the goods are lost or damaged by the buyer during the transportation and pay the insurance premium. Therefore, in addition to the same obligations as the CFR terminology, the seller must also handle the cargo insurance for the buyer and pay the insurance premium. According to the general international trade practice, the insurance amount insured by the seller should be increased by 10% according to the CIF price. If the buyer and the seller have not agreed on the specific risks, the seller only needs to obtain the insurance coverage at the lowest limit. If the buyer requests insurance for war insurance, the seller shall be insured under the premise that the insurance premium is borne by the buyer. When the seller is insured, If it can be done, it must be insured in the contract currency. This term applies to maritime transport or inland water transport.

7, Carriage Paid to (CPT)

Carriage Paid to (... named place of destination), that is, "shipping to (...specified destination)". This term refers to the freight that the seller pays for the shipment of the goods to the specified destination. The risk of loss of or damage to the goods and any additional costs incurred in the event of the goods being delivered to the carrier shall be transferred from the seller to the buyer from the time the goods have been delivered to the carrier. In addition, the seller must go through customs clearance procedures for the export of goods. “Carrier” means any person who, in a contract of carriage, undertakes to perform the transportation by or in accordance with the joint means of railway, road, air, sea, inland waterway or the above-mentioned transportation. If the carrier is also used to transport the goods to the agreed destination, the risk is transferred from the time the goods are delivered to the first carrier. This term applies to all modes of transportation, including multimodal transport.

8, Carriage and Insurance Paid to (CIP)

Carriage and Insurance Paid to (... named place of destination), that is, "freight and insurance premium paid to (...specified destination)." It refers to the seller in addition to the "paid freight to (... specified purpose) In addition to the obligations of the CPT term, the seller must also handle the sea insurance and the insurance premium for the risk of loss of or damage to the goods that the buyer should bear in transit. During this period, the seller must pay the freight to ship the goods to the destination, and the buyer bears all risks and additional costs after the seller delivers. This term applies to any mode of transport.

9, Delivered at Frontier (DAF)

Delivered at Frontier (...named place), that is, "Border delivery (...designated place)". It means that the seller undertakes to transport the prepared goods to the designated place on the border. Before the customs border of the neighboring country, the goods that are still on delivery will be delivered to the buyer for disposal. Delivery is completed when the customs clearance procedures are completed but the import clearance procedures have not been completed. The term “border” can be used on any border, including the borders of exporting countries. Therefore, it is extremely important to accurately define the borders referred to by the designated location and the specific delivery point. This term applies primarily to goods transported by rail or road, as well as to other modes of transport.

10. Delivered Ex Ship (DES)

Delivered Ex Ship (... named port of destination), that is, "delivery on board the destination port (... designated destination port)". It means that the seller fulfils the following obligations and delivers the prepared goods to the buyer without going through the customs clearance of the goods on the deck of the designated port of destination. The seller shall bear all costs including the transportation of the goods to the designated port of destination. And risk. If the parties want the seller to bear the risks and expenses of unloading, the DEQ term should be used. The DES trade term can only be used when the goods are unloaded on board the port of destination by sea or by river or multimodal transport. This term applies only to sea or inland water transport.

11. Delivered Ex Quay (DEQ)

Delivered Ex Quay (Duty Paid) (...named port of destination), that is, "Delivery at the port of destination (customs paid) (...specified destination port)". This term refers to the seller's obligation to deliver the prepared goods to the buyer at the port of the designated port of destination, and the seller bears all risks and expenses, including the costs incurred in Guan Rui, taxation and other deliveries. In view of the fact that countries around the world are using DEQ terms, the question of who is responsible for the import formalities is not completely uniform. Therefore, attention must be paid when using DEQ terminology. This term applies to maritime transport or inland water transport.

12. Delivered Duty Unpaid (DDU)

Delivered Duty Unpaid (... named place of destination), that is, "unpaid duty delivery (...specified destination)". It means that the goods to be prepared by the seller are delivered at the place designated by the importing country and bear all costs and risks of transporting the goods to the designated place (excluding customs duties, taxes and other official fees payable upon import), and The cost and risk of handling customs formalities. The buyer shall bear the additional costs and risks arising from the failure to promptly handle the customs clearance of the goods. It is generally recommended that in the case of transactions with countries that have difficulty in importing customs clearance and time-consuming, in order to avoid affecting the transaction due to the buyer failing to handle import customs clearance in time, the seller should not use DDU as well. This term applies to all modes of transportation.

13. Delivered Duty Paid (DDP)

Delivered Duty Paid (... named place of destination), that is, "delivery after tax (...specified destination)". It means that the seller delivers the prepared goods at the designated place in the importing country, and bears all costs and risks of transporting the goods to the designated place, and handles the import customs clearance. That is to say, the seller completes the import customs clearance at the designated destination, and delivers the goods that have not been unloaded on the delivery vehicle to the buyer to complete the delivery. The seller must bear all risks and expenses for transporting the goods to the designated destination, including any “taxes and fees” (including liability and risk for customs formalities, as well as payment of fees, at the destination when customs formalities are required). Tariffs, taxes and other fees). The seller assumes the minimum liability under the EXW term, and the seller assumes the maximum responsibility under the DDP terminology.

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