Various price terms in international trade
1.FOB(Free on Board)
FOB, also known as the shipping port price, means that the seller delivers the goods to the port warehouse at the shipping port or the cargo yard at the dock, and delivers them to the shipping company within the shipping period stipulated in the contract, and pays all costs for the goods (including customs fees). , warehousing fees, insurance premiums) and risk is transferred to the buyer. This price term applies to shipping or inland waterway transportation.
2.CIF (Cost, Insurance and Freight)
CIF, also known as landed price, means that the seller's responsibilities include loading the goods on the ship and declaring for export in accordance with the contract, paying export taxes, purchasing insurance, bearing all costs and risks for exporting goods in international trade, and transporting the goods. to the port of destination and notify the buyer to pick up the goods. This price term applies to ocean shipping.
3.CFR (Cost and Freight)
CFR, also known as cost-plus-freight, means that the seller is responsible for loading the goods on the ship, and bears the export customs declaration fees and insurance costs, as well as the shipping costs to the destination port. This price term applies to ocean shipping.
4.DDP (Delivered Duty Pd)
DDP, also known as door-to-door price, means that the seller bears all costs and risks incurred from the port of import of the goods to the destination designated by the buyer. The seller is responsible for handling export customs declaration procedures, transporting the goods to the destination designated by the buyer, and delivering the goods after completing all relevant customs clearance procedures at the destination. This price term applies to all modes of transportation.
5. EXW (Ex Works)
EXW, also known as ex-factory price, means that the seller prepares the goods and provides the buyer with the means to arrange transportation by himself. The seller does not bear any logistics costs and risks, and the buyer needs to bear all costs and risks from the seller's factory to the destination.
