Get To Know The Trade Terms!
"EXW": This designation stands for "EX WORKS (... named place). This term means that the seller fulfils his obligation to deliver the goods to the buyer, when he has made them available at his factory, mill, warehouse, plantation, etc.; in other words, the seller is not responsible for loading the goods on the vehicle provided by the buyer or for clearing the goods for export, unless otherwise agreed.

"FCA": stands for "FREE CARRIER (... named place). It means that the seller fulfils his obligation to deliver the goods to the buyer, when he has handed them over, cleared for export, into the charge of the carrier named by the buyer at the named place or point. When, according to commercial practice, seller’s assistance is required in making the contract with the carrier, the seller may act at buyer’s risk and expense. FCA may be used for any mode of transport, including multimodal transport.

"FAS": "Free alongside Ship (... named port of shipment) means that the seller fulfils his obligation to deliver the goods when they have been placed alongside the vessel on the quay (or wharf) or in lighters (barges) used for loading and unloading ships, usually offshore) at the named port of shipment. This means that the buyer has to bear all costs and risk of loss of or damage to the goods from that moment. This term should not be used if the buyer is unable to carry out, directly or indirectly, the export formalities. FAS can only be used for sea or inland waterway transport.

"FOB": " Free On Board ( ... named port of shipment ) means that the seller fulfils his obligation to deliver the goods when they have passed over the ship’s rail at the named port of shipment- The buyer has to bear all costs and risks of loss of or damage to the goods from that point. FOB requires the seller to clear the goods for export. This term call only be used for sea or inland waterway transport when the ship’s rail serves no practical purpose, such as in the case of roll-on/roll-off or container traffic, the FCA term is more appropriate to use.

"CFR": "Cost and Freight (... named port or destination). The seller must in this case pay the costs and freight necessary to bring the goods to the named port of destination but the risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time the goods have been delivered on board the vessel, is transferred from the seller to the buyer when the goods pass the ship’s rail in the port of shipment. CFR requires the seller to clear the goods for export. It call only be used for sea and inland waterway transport. When the ship’s rail serves no practical purpose, such as in the case of roll-on/roll-off or container traffic, the CPT term is more appropriate to use

"CIF" : " Cost, Insurance and Freight ( ... named port or destination) means that the seller has the same obligations as under CFR but with the addition that he has to procure marine insurance against the buyer’s risk of loss of or damage to the goods during the carriage. The seller contracts for the insurance and pays the insurance premium. CIF requires the seller to clear the goods for export. It can only be used for sea and inland waterway transport. When the ship’s rail serves no practical purpose such as in the case of roll-on/roll-off or container traffic, the CIP term is more appropriate to use.

"CPT": "Carriage Paid To (... named place of destination). The seller pays the freight for the carriage of the goods to the named place of destination. The risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time the goods have been delivered to the carrier, is transferred from the seller to the buyer when the goods have been delivered into the custody of the carrier. The term "CARRIER" means any person who, in a contract of carriage, undertakes to perform or to procure the performance of carriage, by rail, road, sea, air, inland waterway or by a combination of such modes. If subsequent carriers are used for the carriage to the agreed destination, the risk passes when the goods have been delivered to the first carrier. CPT requires the seller to clear the goods for export. It may be used for any mode of transport including multimodal transport.

"CIP": "Carriage and Insurance Paid to (... named place of destination). The seller has the same obligations as under CPT, but with the addition that he has to procure cargo insurance against the buyer’s risk of loss of or damage to the goods during the carriage. The seller contracts for insurance and pays the insurance premium. CIP requires the seller to clear the goods for export. It may be used for any mode of transport including multimodal transport.

"DAF" : " Delivered At Frontier (… named place). The seller fulfills his obligations to deliver the goods to the buyer when the goods have been made available, cleared for export, at the named point and place at the frontier, but before the customs border of the adjoining country. The term " frontier " may be used for any frontier including that of the country of export. This term is primarily intended to be used when goods are to be carried by rail or road.

"DES": "Delivered Ex Ship" (... named port of destination) . The seller fulfills his obligation to deliver the goods to the buyer when the goods have been made available to the buyer on board the ship uncleared for import at the named port of destination. The seller has to bear all the costs and risks involved in bringing the goods to the named port of destination. This can only be used for sea or inland waterway transport.

"DEQ" : "Delivered Ex Quay (duty paid) ( ... named port of destination). The seller fulfills his obligation to deliver the goods to the buyer when he has made them available to the buyer on the quay (wharf) at the named port of destination, cleared for importation. The seller has to bear all risks and costs including duties, taxes and other charges of delivering the goods to this point. This term should not be used if the seller is unable, directly or indirectly, to obtain the import license. If the buyer is to clear the goods for importation and the duty, the words "duty paid "should be used instead of "duty unpaid". This term can only be used for sea or inland waterway transport.

"DDU" : " Delivered Duty Unpaid ( ... named place of destination). The seller fulfills his obligation to deliver the goods to the buyer when the goods have been made available at the named place in the country of importation. The seller has to bear the costs and risks involved in bringing the goods to this point (excluding duties taxes and other official charges payable upon importation as well as the cost and risks of carrying out customs formalities). The buyer must pay any additional costs and bear any risks caused by his failure to clear the goods for import in time. This term may be used irrespective or the mode of transport.

"DDP" : " Delivered Duty Paid ( ... named place of destination). The seller fulfills his obligation to deliver the goods to the buyer when the goods have been made available at the named place in the country of importation. The seller has to bear the risks and costs, including duties, taxes and other charges of delivering the goods to this point, cleared for importation. DDP represents the maximum obligation for the seller. This term may be used irrespective of the mode of transport.