Trade Terms And Services For Door-To-Door Shipping From China
There are several Incoterms involved in the process of shipping from China that you should be aware of. Incoterms are adjusted every 10 years to keep up with the current state of the global shipping industry.
Ex Works
Under this term, the exporter makes the goods available to the buyer by shipping them to the buyer’s location. From the moment the exporter receives the goods from China, the exporter is responsible for all duties, transportation costs, insurance premiums, and any other responsibilities involved in the process.
Free Alongside Ship (FAS)
FAS stipulates that the seller is responsible for transporting the goods from the factory or warehouse to the loading port. Once the goods arrive at the port, the buyer will bear the subsequent risks and cover the costs of transportation to the final destination.
Free Carrier (FCA)
Under FCA, the exporter or seller processes the export goods and hands them over to the carrier for transportation to the destination specified by the importer or buyer. If the specified place is the exporter’s business premises, the exporter is responsible for loading the goods onto the transport vehicle. Keep in mind that once the goods arrive at the specified destination agreed upon by the parties in the Incoterms, the exporter is no longer responsible for the goods.
Free on Board (FOB)
This trade term is highly desirable for importers who require door-to-door delivery. Under an FOB agreement, the seller delivers the goods to the port and is responsible for loading the goods on a carrier after customs processing. Once the goods are loaded on the carrier, the risk of loss shifts to the buyer, who will be responsible for the transportation and insurance costs from that point to the country of delivery.
Cost and Freight (CFR)
CFR involves joint responsibility between the buyer and the seller. The seller exports the goods at the port of origin and pays the freight. Once the goods reach the ship’s rail, the buyer is responsible for the transportation and insurance costs as well as customs duties.
Cost, Insurance and Freight (CIF)
Under this trade term, the seller assumes full responsibility for delivering the goods to the carrier and paying the associated customs duties. The seller also pays the insurance premium. Once the goods reach the port of destination, the responsibility shifts to the buyer, who is responsible for customs clearance and other related costs.