Seal the Deal! Shipping terms of sale explained…

Whether you are importing or exporting you will need to agree shipping terms/terms of sale with the shipper/consignee. These terms establish who is responsible for which charges when it comes to delivering the goods to the final destination. Selections of the most common terms are listed here:

DDP: Delivery duty paid

The seller has to bear the risks and all costs, including taxes, duties and other charges delivering the goods, cleared for importation, to the port of destination. This is the maximum obligation for the seller with regards to terms of sale. Costs transfer to the buyer from port of destination

EXW: Ex Works

The seller makes goods available from their premises. Buyer bears all costs involved from seller’s premises to final destination. This is the minimum obligation for the seller with regards to terms of sale

FOB: Free on board

The seller fulfils his obligation to deliver when the goods have passed over the ship’s rail at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that point

DDU: Delivery duty unpaid

The seller has to bear the risks and all costs and other charges of delivering the goods, but not including duties and taxes to the port of destination. Costs transfer from seller to buyer at port of destination

 CFR: Cost and freight

The seller pays for cost and freight to the port of destination and also has to clear the goods for export; however, the risk of loss or damage to the goods once on board the vessel becomes the buyer’s responsibility. Costs transfer from the seller to the buyer at port of destination

 CIF: Cost, insurance, freight

Same terms as CFR above, however, the seller is also responsible for supplying marine insurance against the goods for loss or damage to the port of destination. Costs transfer to the buyer at port of destination

FCA: Free carrier

The seller is responsible for delivering the goods to the carrier at a named place stipulated by the buyer; the seller clears the goods for export. Costs transfer to the buyer once goods have been delivered to the carrier at named place

Should you come across  a term not listed here that you are not familiar with, please contact our dedicated sales team for a full explanation.

 

 

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