Several Common Incoterms

Trade terms of international trade, also known as price terms. In international trade, the obligations undertaken by the buyer and the seller will affect the price of goods. In the long-term international trade practice, it has gradually formed the direct connection between some trade terms closely related to price and price, forming several quotation modes.

In the first mock exam, each mode stipulates the obligations of the buyer and seller in certain trade terms. The term used to describe this obligation is called trade term.

EXW (ex works): ex works (designated place). It means that the seller delivers the goods from the factory (or warehouse) to the buyer. Unless otherwise specified, the seller is not responsible for loading the goods on the vehicle or ship arranged by the buyer, nor handling the export customs declaration formalities. The Buyer shall bear all expenses and risks from the delivery of the goods from the seller's factory to the final destination.

FCA (Free Carrier): Freight to the carrier (designated location). This term means that the seller must deliver the goods to the carrier designated by the buyer at the designated place within the delivery period stipulated in the contract, and bear all costs and risks of loss or damage to the goods before the goods are put into the custody of the carrier. In addition, the seller shall go through all customs formalities required for export.

FOB (free on board): free on board (designated port of shipment). This term stipulates that the seller must deliver the goods to the ship designated by the buyer at the designated port of shipment within the shipment period specified in the contract, and bear all expenses before the goods cross the ship's rail and the risk of loss or damage to the goods.

CFR (cost and freight): cost and freight (named port of destination) means that the seller must deliver the goods to the ship bound for the named port of destination at the port of shipment within the shipment period specified in the contract, bear all expenses before the goods cross the ship's rail and the risk of loss or damage to the goods, and be responsible for chartering and booking space and paying the normal freight to the port of destination.

CIF (cost, insurance and freight): cost, insurance and freight (designated port of destination) means that the seller must deliver the goods to the ship bound for the designated port of destination at the port of shipment within the time of shipment specified in the contract.Bear all expenses before the goods cross the ship's rail and the risk of loss of or damage to the goods, handle cargo insurance, pay insurance premium, charter and book space, and pay the normal freight from the port of shipment to the port of destination.

DDU (delivered duty unpaid): Delivered Duty Unpaid (designated destination) means that the seller delivers the goods to the buyer at the destination designated by the importing country without going through import formalities or unloading the goods from the means of transportation.

The Seller shall bear all expenses and risks until the goods are transported to the designated destination, excluding any "taxes" payable for import at the destination when customs formalities need to be handled (including the responsibilities and risks of handling customs formalities, as well as the payment of handling fees, customs duties, taxes and other expenses).

DDP (Delivered Duty Paid): delivery after duty paid in the importing country (designated destination) means that the seller transports the goods to the designated place in the importing country and delivers the goods that have not been unloaded on the delivery means of transport to the buyer. The seller is responsible for handling the import customs declaration procedures and delivering any import "taxes" that should be paid at the destination when customs procedures need to be handled.

The Seller shall bear all expenses and risks before delivering the goods to the buyer. If the seller cannot obtain the import license directly or indirectly, this term should not be used. DDP is the most responsible trade term for the seller.