CIF, short for “Cost Insurance Freight”, means that the exporter is obligated to deliver the goods to the buyer by placing them aboard the vessel which it paid for and cover the insurance as well.
The exporter assumes all the costs of loading to the collecting vehicle, inland transport, export clearance, THC, freight and insurance. When the goods are loaded on the vessel, all risks transfer to the importer.
CFR, short for “Cost and Freight”, means that the exporter is obligated to deliver the goods on board the vessel arranged by the exporter itself.
Until the goods are placed aboard the ship, the exporter bears all risks and costs of loading to the collecting vehicle, inland transport, export clearance, THC and freight. From that point forward, all risks transfer to the importer.
FOB, short for “Free on Board”, means that the exporter is obligated to deliver the goods aboard the vessel designated by the importer at the agreed delivery port in the country of export.
FAS, short for “Free Alongside the Ship”, means that the exporter is obligated to deliver the goods by placing them alongside the vessel nominated by the buyer at the named port of shipment.
DDP, short for “Delivery Duty Paid”, means that the exporter is obligated to deliver the goods to the importer at the agreed delivery/destination point in the importer’s country and pay for all duties and taxes in both countries and, if any, transit countries.
The whole transportation process is carried out by the exporter’s forwarder. All the costs and risks from loading at the exporter’s premises to the delivery/destination point in the country of import are borne by the exporter. In addition, the exporter also assumes the costs of export, transit and import clearance which is risky for the exporter as it may not have anticipated everything about customs formalities, duties and taxes.
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DPU, short for “Delivered at Place Unloaded”, means that the exporter is obligated to deliver the goods to the importer at the agreed delivery/destination point as unloaded.
DPU is used in any mode of transportation. Export clearance is the liability of the exporter, while import clearance and all related customs formalities are carried out by the importer.
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