13 foreign trade terms
The basic terms of foreign trade include EXW, FCA, FAS, FOB, CFR, CIF, CPT, CIP, DAF, DES, DEQ, DDU, DDP.
In these 13 trade terms, from left to right, the seller's obligations are increasing, while the buyer's obligations are on the contrary. That is to say, in the above trade terms, the seller bears the minimum responsibility under the EXW term, while the seller bears the maximum responsibility under the DDP term.
EXW
It means that when the Seller delivers the goods to the Buyer at its location or other designated place (such as workshop, factory or warehouse) for disposal, the delivery is completed. The Seller does not go through export customs clearance procedures or load the goods on any means of transportation.
This term is the one with the minimum liability of the seller.
FCA
It means that the seller shall deliver the goods to the carrier designated by the buyer at the designated place and complete the export customs clearance formalities.
It should be noted that the choice of the place of delivery will have an impact on the obligations of loading and unloading at that place. The term can be used for various modes of transport, including multimodal transport.
FAS
It means that the seller delivers the goods to the ship at the designated port of shipment. The buyer must bear all risks of loss or damage to the goods since then.
FOB
It refers to the name of goods+quantity of goods+unit price+FOB+port of shipment. Risk transfer refers to the transfer when crossing the ship's side. Since the goods did not cross the ship's rail, the responsibility should be borne by the seller's company.
If the suspender breaks and the cement does not fall into the sea but into the ship's plate during the lifting process, the risk is transferred to the buyer, and the responsibility should be borne by the buyer's company.
CFR
It means that the seller completes 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 of or damage to the goods after delivery, as well as any additional costs caused by various events, shall be transferred from the seller to the buyer.
This term only applies to sea or inland water transport. If the parties do not intend to deliver goods across the ship's rail, the CPT term shall be used.
CIF
It means that the seller completes delivery when the goods cross the ship's rail at the port of shipment. This term applies only to sea and inland water transport.
If the parties do not intend to deliver goods across the ship's rail, the CIP term shall be used.
CPT
It means that the seller delivers the goods to the carrier designated by it (FCA), but the seller must also pay the freight for transporting the goods to the destination. That is, the Buyer shall bear all risks and other costs after delivery.
CIP
It means that the seller delivers the goods to the international freight forwarder designated by the seller, but the seller must also pay the freight for transporting the goods to the destination, that is, the buyer bears all risks and additional costs after the seller delivers the goods.
The term can be applied to various modes of transport, including multimodal transport.
DAF
It means that when the seller, at the designated place and the specific delivery point at the border, delivers the goods that are still in delivery on the means of transport and have not been unloaded to the buyer for disposal before the customs border of the neighboring country, and completes the export customs clearance formalities of the goods, but has not yet completed the import customs clearance formalities, the goods are sold.
DES
It means that at the designated port of destination, the goods are delivered to the buyer for disposal on board, but the seller completes the delivery without going through the import customs clearance procedures.
This term can only be used when the goods are transported by sea or inland river or multimodal transport on board the ship at the port of destination.
DEQ
It means that the seller shall deliver the goods to the carrier designated by the buyer at the designated place and complete the export customs clearance formalities.
It should be noted that the choice of the place of delivery will have an impact on the obligations of loading and unloading at that place. The term can be used for various modes of transport, including multimodal transport.
DDU
It means that the seller delivers the goods to the buyer at the designated destination without going through the import formalities or unloading the goods from the means of transport.
This term is applicable to all modes of transportation, but when the goods are delivered on board or at the port of destination, the term DES or DEQ shall be used. DES or DEQ terms.
DDP
It refers to that the seller completes the import customs clearance formalities at the designated destination, and delivers the goods that have not been unloaded on the means of delivery to the buyer to complete the delivery.
Because the seller bears the greatest responsibility under the DDP term, if the seller cannot obtain the import license directly or indirectly, this term should not be used; If the parties want the buyer to bear the risks and costs of import, the DDU term shall be used.
This term is applicable to all modes of transportation, but when the goods are delivered on board or at the port of destination, the term DES or DEQ shall be used.
