Several common delivery methods in foreign trade transactions (Part One)

Release time 2020-05-19 15:57:52 42 times viewed
In foreign trade export transactions, different delivery methods are involved. In the 2000 General Terms of Interpretation of International Trade Terms, the 13 trade terms in international trade are uniformly explained, including the place of delivery, division of responsibility, risk transfer, and applicable transportation methods. Let's take a look at several common delivery methods in foreign trade transactions together!



Factory delivery (EXW)
The full English name is "EX Works (... named place)", which means "factory delivery (... designated place)"
Division of responsibilities:
1. The seller is responsible for delivering the prepared goods to the buyer in the workshop, factory, warehouse, etc., but is generally not responsible for loading the goods on the vehicle prepared by the buyer or handling the customs clearance of the goods.
2. The buyer bears all costs and risks of shipping the goods to the intended destination from the seller's location.

Note:
This term is the term for sale and purchase with the least responsibility of the seller, and if both parties wish to be responsible for loading the goods at the time of shipment and bear the full cost and risk of loading the goods, they must be clearly stated in the contract of sale. If the buyer is unable to handle the exit procedures for goods, it is not appropriate to use this method.

Cargo Carrier (FCA)
The full English name is "Free Carrier. (… named place)" , i.e. "the goods are delivered to the carrier (... designated location)”.

Division of responsibility: 
The seller shall be responsible for the goods handed over by the seller, and after the clearance is carried out, and delivered to the buyer at the designated place of carriage and care. In accordance with commercial practice, when the seller is required to collaborate with the carrier by contract, the seller may do so at the buyer's risk and expense.

Note: 
This term applies to any mode of transport. It should be noted that the choice of the place of delivery has an impact on the obligation to load and unload at that location. If the seller delivers the goods at its place, the seller shall be responsible for loading the goods and, if the seller delivers the goods at any other place, the seller is not responsible for unloading the goods.

Free alongside ship (FAS)
The full English name is "Free Alongside ship (... named port of shipment", i.e. “side delivery (... Specified port of shipment).

Division of responsibility: 
The seller delivers the goods to the side of the ship at the designated port of shipment or barge, from then the buyer shall bear the full cost and risk of loss or damage to the goods, and the buyer shall go through the export clearance procedures.

Note: 
This term applies to sea or inland transport. If the vessel assigned by the buyer is unable to dock, the seller is responsible for bringing the goods to the side of the ship by barge and still delivering it by the ship's edge. The responsibility and cost of loading the ship shall be borne by the buyer.

Free on board (FOB)
The full English name is "Free on Board (...named port of shipment", i.e. "delivery on board the ship (... Specified port of shipment)”.

Division of responsibility: 
1. The port of shipment on board the ship, the seller in the designated port of shipment to deliver the goods through the ship's rail, the seller will complete the delivery. For delivery on board the port of destination, the seller must bear all risks and costs before the goods are shipped to the port of destination for discharge.
2. After the goods cross the ship's rail, the buyer is responsible for sending the ship to pick up the goods, and shall bear the full cost, risk, loss or damage of the goods. The seller is also required to go through the customs clearance procedures for the export of the goods.

Note: 
This term applies to sea or inland transport. The seller shall load the goods onto the vessel designated by the buyer at the port of shipment and within the specified period of time stipulated in the contract and notify the buyer in a timely manner. When the goods are loaded onto a designated vessel at the port of shipment, the risk is transferred from the seller to the buyer.

Cost and freight (CFR or C-F)
The full English name is "cost and freight(named port of shipment)”, i.e. "cost plus freight(……designated port of destination)”.

Division of responsibility: 
1. The seller must pay the expenses and freight required to ship the goods to the designated port of destination, but the risk of the goods is to be transferred on board the ship at the port of shipment.
2. After the goods cross the ship's rails at the designated port and hand them over to the ship's deck, the risk of the goods is transferred from the seller to the buyer. The seller is also required to go through the customs clearance procedures for the export of the goods.

Note: 
This term applies to sea or inland transport. When the goods are loaded on board at the port of shipment, it is important to pay attention to the issue of the notice of loading, and the seller must notify the buyer without delay that the goods have been loaded onboard. Otherwise, the seller is liable for breach of contract.

Cost, insurance and freight (CIF)
The full English name is "Cost, Insurance and Freight(…named port of shipment)”, i.e. "Cost, insurance and freight ( ......designated port of destination).

Division of responsibility: 
1. In addition to having the same obligation as the term "cost plus freight", the seller shall also be subject to maritime insurance and insurance premiums for the loss or damage of the goods by the buyer in transit. 
2. The seller shall bear all risks of loss or damage after the goods have been loaded at the port of shipment after delivery of the goods to the ship at the designated port of shipment within the agreed date or period.

Note:
This term applies to sea or inland transport. Although the seller arranges the carriage of goods and for the processing of cargo insurance, the seller is not obliged to guarantee the delivery of the goods to the agreed port of destination, since the CIF is a term for delivery of the goods, not a term for delivery at the port of destination, i.e. the CIF is not a "CIF".