Trade Terms Analysis

I. FOB
FREE ON BOARD (... Named port of shipment) - free on board port of shipment (... The named port of shipment means that the seller must designate the port of shipment within the time of shipment stipulated in the contract to deliver the goods to the ship nominated by the buyer and bear all the expenses until the goods pass the ship's side and the risk of loss or damage to the goods.
The term FOB is what we usually call "FOB".
Under the general terms of the 1990, under the terms of FOB, the main obligations of buyers and sellers are as follows:
(1) the seller's main obligations:
1. to be responsible for delivering the goods conforming to the contract to the ship designated by the buyer in accordance with the customary port of shipment within the specified date or period of the contract and giving the buyer sufficient notice.
2. responsible for handling export procedures and obtaining export licenses or other approvals;
3. to bear all costs and risks of the goods passing the ship's port at the port of shipment;
4. responsible for providing commercial invoices and certifying the general documents that have been delivered to the ship. If the buyer and the seller agree to use electronic communication, all documents can be replaced by EDI message with the same effect.
(two) the buyer's main obligations:
1. to pay the price according to the contract stipulations.
2. responsible for chartering or booking, paying freight, and giving sufficient notice to the seller about the name of the vessel, the place of shipment and the time of delivery.
3. all the customs formalities for obtaining import licenses or other approvals and handling the importation of goods and transit through another country if necessary.
4. to bear all costs and risks of the goods passing the ship's side at the port of shipment;
5. collect the goods delivered by the seller according to the contract, and accept the documents that are in conformity with the contract.
To adopt FOB terminology, we should pay attention to the following points:
1. the buyer shall charter the ship in time, and notify the seller in time of the name, place and time of shipment, so that the seller can make timely shipment and arrange shipment. Otherwise, it will constitute a breach of contract by the buyer. This may lead to the seller's request for rescission of the contract and / or claim for damages.
2. the shipping cost burden. A ship is represented by FOB terminology. Common are:
FOB FOB Liner terms means that the shipping cost is borne by the buyer (i.e. the buyer) who pays the shipping fee as a liner.
FOB FOB under tackle (hereinafter referred to as "delivery") shall be borne by the buyer at the place where the seller will place the goods at the point where the ship's hooks are available.
FOB includes FOB stowed (FOBS), which means that the seller is responsible for loading the cargo into the cabin and paying the shipping costs including the shipping charge.
FOB includes FOB trimmed (FOBT), which means that the seller is responsible for loading the cargo into the cabin and paying the shipping charges including trimming charges.
3. the United States interpretations of FOB terms are different from those of the 1990 Incoterms. The United States divides the FOB terminology into six categories. Among them, only the "designated port of shipment" (FOB port of shipment) is similar to the 1990 INCOFERMS interpretation. Therefore, when our foreign trade enterprises are negotiating import business with the US and other American exporters in accordance with the terminology, they should clearly indicate that the other party (seller) is responsible for obtaining the export license and paying all export taxes and fees in addition to the "words" after the terminology of the accelerator.

Two, CIF
COST, INSURANCE AND FREIGHT (... Named port of destination) - cost plus insurance and freight (... The named port of destination) means that the seller must deliver the goods to the ship at the port of destination at the port of shipment within the time of shipment stipulated in the contract, and bear all the expenses until the goods pass the ship's side and the risk of loss or damage to the goods, and shall be responsible for handling the cargo insurance, paying the premium, and chartering the shipping or booking the shipping space, and paying the freight from the port of loading to the port of destination.
In accordance with the general provisions of 1990, the main obligations of CIF buyers and sellers are as follows:
(1) seller's main obligations
1. to be responsible for the delivery of the goods conforming to the contract at the port of shipment to the port of destination specified at the port of shipment, and to give the buyer sufficient notice.
2. responsible for handling export procedures and obtaining export licenses or other approvals;
3. responsible for chartering or booking and paying the freight to the port of destination;
4. responsible for handling cargo transportation insurance and paying insurance premium;
5. to bear all costs and risks of the goods passing the ship's port at the port of shipment;
6. responsible for the provision of commercial invoices, insurance policies and goods to the agreed port of destination. If the buyer and the seller agree to use electronic communication, all documents can be replaced by electronic data interchange with equal effect.
(two) buyer's main obligations
1. to pay the price according to the contract stipulations.
2. responsible for handling import procedures and obtaining import licenses or other approvals.
3. to bear all costs and risks of the goods passing the ship's side at the port of shipment;
4. collect the goods delivered by the seller according to the contract, and accept the documents that are in conformity with the contract.
When adopting CIF terminology, we should pay attention to the following points:
1. the CIF contract is a "shipping contract". Although we usually call it "CIF", it means the composition of the price is the cost plus insurance. It does not mean that the seller is also responsible for the risk before the goods arrive. The Seller shall no longer be liable for any possible risks of the goods after the goods are delivered to the seller at the place of shipment as stipulated in the contract.
2. the Seller shall charter the ship in time for booking.
3. the Seller shall make insurance according to the contract requirements. The starting and ending date of the insurance liability shall be in conformity with the goods transportation and shall be effective from the buyer's protection no later than the time when the buyer is required to bear the risk of loss or damage of the goods (i.e., when the goods pass over the ship's side at the port of shipment). The time limit for this insurance liability must be extended until the port of destination agreed on arrival of the goods.
4. the burden of unloading charges is often expressed in terms of CIF terminology, such as:
2 CIF CIF (Liner terms), which means that the unloading cost is handled according to the conditions of the liner, and is borne by the party paying the freight (i.e. the seller).
2 CIF CIF ex ship "s hold" means the buyer's burden of unloading the cargo from the bottom of the bilge to the dock.
2 CIF ex tackle (CIF) refers to the expenses borne by the seller to lift the cargo from the bottom to the side of the ship and unload the hook.
2 CIF discharging to CIF (landed) means the cost of unloading the goods to the port of destination by the seller.
The 5.CIF contract is a symbolic delivery contract. The seller submits only the documents that meet the requirements of the contract, that is, the delivery of the goods. Even if the goods have been damaged or damaged even when the seller submits the documents, the buyer still has to pay the documents by documents, but he can claim compensation from the one-way ship or the one-way insurance company.

Three, CFR
COST AND FREIGHT (... Named port of destination) -- cost plus freight (... The named port of destination) means that the seller must deliver the goods to the port of destination at the port of shipment within the time of shipment stipulated in the contract, and bear all the expenses until the goods pass the ship's side and the risk of loss or damage to the goods, and shall be responsible for chartering or booking the cargo and paying the normal freight charges at the port of destination. In accordance with the general provisions of 1990, the main obligations of CFR buyers and sellers are as follows:
(three) seller's main obligations
1. to be responsible for the delivery of the goods conforming to the contract at the port of shipment to the port of destination specified at the port of shipment, and to give the buyer sufficient notice.
2. responsible for handling export procedures and obtaining export licenses or other approvals;
3. responsible for chartering or booking and paying the freight to the port of destination;
4. to bear all costs and risks of the goods passing the ship's port at the port of shipment;
5. responsible for providing commercial invoices and common shipping documents for goods destined for the agreed port of destination. If the buyer and the seller agree to use electronic communication, all documents can be replaced by electronic data interchange with equal effect.
(four) buyer's main obligations
1. to pay the price according to the contract stipulations.
2. responsible for handling import procedures and obtaining import licenses or other approvals.
3. to bear all costs and risks of the goods passing the ship's side at the port of shipment;
4. responsible for handling insurance procedures and paying insurance premiums;
5. collect the goods delivered by the seller according to the contract, and accept the documents that are in conformity with the contract.
In order to conclude a contract according to CFR terms, special attention should be paid to the following points:
1. in the CFR terminology, we must pay attention to the issue of shipping notices. Because in the CFR terminology, the seller is responsible for arranging the transportation, and the buyer is responsible for the insurance. Therefore, before the goods are loaded onto the ship, that is, before the risk is transferred to the buyer, the buyer will timely complete the insurance to the insurance company, which is a crucial issue in the CFR contract. Therefore, IVCOTERMS emphasizes that the seller must inform the buyer without delay that the goods have been loaded on board. Otherwise, the seller is liable for breach of contract.
2. in terms of unloading cost, the term of CFR CFR is usually used in terms of unloading cost, for example:
2 CFR CFR (Liner terms), which means that the unloading cost is handled according to the conditions of the liner, and is borne by the party paying the freight (i.e. the seller).
2 CFR CFR ex ship "s hold" means the seller's burden of lifting the cargo from the bottom to the side of the ship and unloading the hook.
2 CFR ex tackle (CFR) refers to the buyer's burden of unloading the cargo from the bottom of the bilge to the dock.
2 CFR discharging to CFR (landed) means the cost of unloading the goods to the port of destination by the seller.

Four, FCA
FREE CARRIER (...) Named place) -- cargo carrier (... The designated place shall mean that the Seller shall, within the specified time of delivery within the contract, place the goods which are exported to the Customs at the designated place or place to the carrier designated by the buyer for supervision, and shall bear the risk of loss or damage to the goods until the goods are subject to the supervision of the carrier. The buyer must at his own expense make a contract of carriage for the goods to be dispatched from the designated place or place, and give full notice to the seller about the name of the carrier, the time and place for delivery, and bear all the expenses and risks after the delivery of the goods to the carrier; he shall be responsible for receiving the goods and paying the price according to the contract.
The term FCA is applicable to various modes of transportation, especially container transport and multimodal transport.
Under the general terms of the 1990, under the terms of FCA, the main obligations of buyers and sellers are as follows:
(1) the seller's main obligations:
1. responsible for the delivery of goods conforming to the contract in the specified place or place within the time of delivery stipulated in the contract to the carrier designated by the buyer.
The 2. is to handle export procedures and obtain export licenses or other approvals.
3. all costs and risks before delivery of the goods to the carrier.
4. is responsible for providing commercial invoices and certifying that goods have been delivered to the carrier's usual documents. If the buyer and the seller agree to use electronic communication, all documents can be replaced by EDI message with the same effect.
(two) the buyer's main obligations:
1. to pay the price according to the contract stipulations.
2. responsible for concluding the transport contract, paying the freight, and giving the seller sufficient notice of the carrier's name, time and place for delivery.
3. all the customs formalities for obtaining import licenses or other approvals and handling the importation of goods and transit through another country if necessary.
4. to bear all costs and risks of delivery of goods to the carrier;
5. collect the goods delivered by the seller according to the contract, and accept the documents that are in conformity with the contract.
When using this term, we should pay attention to the following points:
1. the delivery point and the risk transfer point are the designated place or place where the buyer specifies the carrier's supervision of the goods. The above designated locations or locations may be railway terminus, departure airport, freight station, container terminal or stacking plant, multi-purpose freight terminal or similar receiving point. If the carrier delivers the loaded container to the place where the seller holds the goods, the delivery point and risk transfer point will be at the door of the seller's premises - the gate of the factory or warehouse.
Under the terms of 2.FCA, the buyer must enter into a contract of carriage at his own expense, but if the seller can assist in achieving better results, the seller may assist in the conclusion of the contract of carriage, but the costs and risks involved shall be borne by the buyer.
3. when FCA terms are used, most of the goods are collectively or grouped, such as loading containers or pallets. Therefore, the seller should consider the cost of assembling the goods and calculating them.

Five, CPT
CARRIAGE PAID TO (