No matter you are buyer or supplier, importer or exporter, shipping incoterms are a very important thing you should know.

Incoterms are a standard set of terminology, first created by the International Chamber of Commerce (ICC) in 1936, used universally, defining the key parts of freight forwarding for traders, buyers, sellers, and banks. The latest set of Incoterms was published in 2010, and this is currently under consortium to be revised for 2020.

Incoterms 2010 are used today by practitioners and traders, anyone involved in the supply chain of delivering goods overseas will probably come across incoterms, including Traders, Producers, Buyers, Sellers, Governments, and Banks.

To understand the difference between each  .... Will list all the movements for any product from the factory end until the buyer warehouse to understand the responsibilities on sellers and buyers based on each incoterm as below.

Loading the goods at the factory
Transporting to the port
Clearing customs on the loading port
Shipment/ main transport
Clearing customs on the detestation port
Unloading of the goods at the destination port
The final leg of the transport from the port to the buyer’s warehouse/ shop.

EXW - Ex Works

Ex Works is a trading scenario in which the Seller of the goods responsible for the production and packaging of the goods at their place of manufacture only. And this is the issue Ex-works have in the international marketplace. The Buyer remember, is responsible for all the above process and movements


FOB - Free On Board

Based on this incoterm the seller will be responsible for Loading the goods at the factory, Transporting to the port and Clearing customs on the loading port, The rest of this will be under buyer responsibility


CIF - Cost, Insurance and Freight

Based on this incoterm the seller could cover the goods by marine insurance certificate and will be responsible for Loading the goods at the factory, Transporting to the port, Clearing customs on the loading port and Shipment/ main transport.

The incoterm will be called C&F if there is no insurance covering the goods, The rest of these steps will be under buyer responsibility


CFR – Cost and Freight

the Exporter will arrange and pay for transportation to the destination port which is specified by the buyer. Furthermore, the exporting company will arrange and fund the transportation that is set out by the purchasing party.

In relation to liability and the ultimate responsibility, the purchaser will take this on when the ship arrives in the destination port. Any costs beyond this fall under the liability of the buyer


For more information about incoterm, please contact us and we will send you the full guide for all incoterms


Print   Email