Contact Us
TEL: +86-760-86285650
Fax: +86-760-87804185
Address: No.18-9B, GuangYuan Road, TanZhou Town, ZhongShan City, GuangDong Province, China
Home > Knowledge > Content
Top Tip Class Unit 10 Terms of Trading
Dec 04, 2017

We have been talk about the produce technique, you may get some skills to purchase our water bottle, so this day, I want to show some term of trading for your reference, then when you ne gotiation with the supplier, you may know if the term are unfair for you.

1.    FOB (shenzhen port is near our factory,usually we do FOBshenzhen)

"Free On Board", is a term in international commercial law specifying at what point respective obligations, costs, and risk involved in the delivery of goods shift from the seller to the buyer under the Incoterms 2010 standard published by the International Chamber of Commerce. FOB is only used in non-containerized sea freight or inland waterway transport. FOB terms do not define transfer of ownership of the goods.

The term FOB is also used in modern domestic shipping within the USA to describe the point at which a seller is no longer responsible for shipping cost.

Ownership of a cargo is independent from Incoterms. In international trade, ownership of the cargo is defined by the bill of lading or waybill.


That means, the cost of movement of goods on board of Airlines or on board of ship is borne by the seller. Rest of all expenses to arrive the goods at buyer's premise has to be met by the buyer.


2.     CIF

Cost, insurance and freight (CIF) is a trade term requiring the seller to arrange for the carriage of goods by sea to a port of destination, and provide the buyer with the documents necessary to obtain the goods from the carrier. The buyer only needs to bear the Customs clearance fees when the goods arrived.


3.     CFR

Cost and Freight, the seller is required to arrange for the carriage of goods by sea to a port of destination and provide the buyer with the documents necessary to obtain the goods from the carrier. Under CFR, the seller does not have to procure marine insurance against the risk of loss or damage to the goods during transit. So the buyer best to buy the insurance before shipping.


4.     FCA

A free carrier (FCA) is a trade term designating the location the seller is to deliver goods. Most often, the destination is a named airport, terminal or other place where the carrier operates. The cost for transportation is included in the price set by the seller, and the risk of loss is initially on the seller, transferring to the buyer upon delivery to the carrier.


3. ExW

Ex Works (ExW) is an international trade term that describes an agreement in which the seller is required to make goods ready for pickup at his or her own place of business. All other transportation costs and risks are assumed by the buyer.


Usually our quotation is including ExW cost and shipping cost, we will help the buyer to arrange the transportation. Also if the buyer have agent in China, we also can quote the FOB price for you. 

Previous: Unit 11 How to choose the trading terms

Next: Top Tip Class Unit 9 Common kettle’s accessories