Shipment terms and conditions
 
       
               
                   
 
- Allocations of shipment terms -

EXW – Ex Works (named place of delivery)

The seller makes the goods available at their premises, or at another named place. This term places the maximum obligation on the buyer and minimum obligations on the seller. The Ex Works term is often used while making an initial quotation for the sale of goods without any costs included.

FCA – Free Carrier (named place of delivery)

The seller delivers the goods, cleared for export, at a named place (possibly including the seller's own premises). The goods can be delivered to a carrier nominated by the buyer, or to another party nominated by the buyer. If delivery occurs at the seller's premises, or at any other location that is under the seller's control, the seller is responsible for loading the goods on to the buyer's carrier. However, if delivery occurs at any other place, the seller is deemed to have delivered the goods once their transport has arrived at the named place; the buyer is responsible for both unloading the goods and loading them onto their own carrier.

CPT – Carriage Paid To (named place of destination)

CPT replaces the C&F (cost and freight) and CFR terms for all shipping modes outside of non-containerized sea freight. The seller pays for the carriage of the goods up to the named place of destination. However, the goods are considered to be delivered when the goods have been handed over to the first or main carrier, so that the risk transfers to buyer upon handing goods over to that carrier at the place of shipment in the country of Export. The seller is responsible for origin costs including export clearance and freight costs for carriage to the named place of destination (either the final destination such as the buyer's facilities or a port of destination. This has to be agreed to by seller and buyer, however).

CIP – Carriage and Insurance Paid to (named place of destination)

This term is broadly similar to the above CPT term, with the exception that the seller is required to obtain insurance for the goods while in transit. CIP requires the seller to insure the goods for 110% of the contract value under at least the minimum cover of the Institute Cargo Clauses of the Institute of London Underwriters (which would be Institute Cargo Clauses (C)), or any similar set of clauses. The policy should be in the same currency as the contract, and should allow the buyer, the seller, and anyone else with an insurable interest in the goods to be able to make a claim. CIP can be used for all modes of transport.

FOB – Free on Board (named port of shipment)

Under FOB terms the seller bears all costs and risks up to the point the goods are loaded on board the vessel. The seller's responsibility does not end at that point unless the goods are "appropriated to the contract" that is, they are "clearly set aside or otherwise identified as the contract goods". Therefore, FOB contract requires a seller to deliver goods on board a vessel that is to be designated by the buyer in a manner customary at the particular port. In this case, the seller must also arrange for export clearance. On the other hand, the buyer pays cost of marine freight transportation, bill of lading fees, insurance, unloading and transportation cost from the arrival port to destination.

CFR – Cost and Freight (named port of destination)

The seller pays for the carriage of the goods up to the named port of destination. Risk transfers to buyer when the goods have been loaded on board the ship in the country of Export. The Shipper is responsible for origin costs including export clearance and freight costs for carriage to named port. The shipper is not responsible for delivery to the final destination from the port (generally the buyer's facilities), or for buying insurance. CFR should only be used for non-containerized seafreight and inland waterway transport; for all other modes of transport it should be replaced with CPT

CIF – Cost, Insurance & Freight (named port of destination)

This term is broadly similar to the above CFR term, with the exception that the seller is required to obtain insurance for the goods while in transit to the named port of destination. CIF requires the seller to insure the goods for 110% of their value under at least the minimum cover of the Institute Cargo Clauses of the Institute of London Underwriters (which would be Institute Cargo Clauses (C)), or any similar set of clauses. The policy should be in the same currency as the contract. The seller must also turn over documents necessary, to obtain the goods from the carrier or to assert claim against an insurer to the buyer. The documents include (as a minimum) the invoice, the insurance policy, and the bill of lading. These three documents represent the cost, insurance, and freight of CIF. The seller's obligation ends when the documents are handed over to the buyer. Then, the buyer has to pay at the agreed price. Another point to consider is that CIF should only be used for non-containerized sea freight; for all other modes of transport it should be replaced with CIP
Allocations of costs to Buyer / Seller
 
 
Loading at Origin
Export customs declaration
Shipment to Port of Export
Unloading of truck in Port of Export
Loading on vessel at Port of Export
Shipment (Sea/Air) to Port of Import
Insurance
Unloading at Port of Import
Loading on truck at Port of Import
Shipment to place of destination
Import customs clearance
Import duties and taxes
Unloading at destination
EXW
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
FCA
Seller
Seller
Seller
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
FAS
Seller
Seller
Seller
Seller
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
FOB
Seller
Seller
Seller
Seller
Seller
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
CPT
Seller
Seller
Seller
Seller
Seller
Seller
Buyer
Buyer / Seller
Buyer / Seller
Seller
Buyer
Buyer
Buyer
CFR
Seller
Seller
Seller
Seller
Seller
Seller
Buyer
Buyer / Seller
Buyer
Buyer
Buyer
Buyer
Buyer
CIF
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Buyer / Seller
Buyer
Buyer
Buyer
Buyer
Buyer
CIP
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Buyer / Seller
Buyer / Seller
Seller
Buyer
Buyer
Buyer
DAT
Seller
Seller
Seller
Seller
Seller
Seller
Buyer / Seller
Seller
Buyer
Buyer
Buyer
Buyer
Buyer
DAP
Seller
Seller
Seller
Seller
Seller
Seller
Buyer / Seller
Seller
Seller
Seller
Buyer
Buyer
Buyer
DDP
Seller
Seller
Seller
Seller
Seller
Seller
Buyer / Seller
Seller
Seller
Seller
Seller
Seller
Buyer
 
Rules for sea and land waterway transport
Rules for any modes of transport
 
Seller
Carrier
Port
Ship
Port
Terminal
Place
Buyer
 
Seller
Carrier
Port
OnBoard
Port
Buyer
EXW
Seller
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
FOB
Seller
Seller
Seller
Seller
Buyer
Buyer
FCA
Seller
Seller
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
FAS
Seller
Seller
Seller
Buyer
Buyer
Buyer
CPT
Seller
Seller
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
CFR
Seller
Seller
Seller
Seller
Buyer
Buyer
CIP
Seller
Seller
Insurance
Insurance
Insurance
Insurance
Insurance
Buyer
CIF
Seller
Seller
Seller
Seller
Buyer
Buyer
DAT
Seller
Seller
Seller
Seller
Seller
Seller
Buyer
Buyer
             
DAP
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Buyer
             
DDP
Seller
Seller
Seller
Seller
Seller
Seller
Seller
Seller
             

Shipment Terms

 

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