(... named place) "Ex works" means seller's only responsibility is
to make goods available at seller's premises, i.e., works or
factory. seller is not responsible for loading goods on vehicle
provided by buyer unless otherwise agreed. buyer bears full costs
and risk involved in bringing goods from there to desired destination.
Ex works represents minimum obligation of seller.
FREE CARRIER (... named place)
This term has been designed to meet requirements of multimodal
transport, such as container or roll-on, roll-off traffic by trailers and
ferries. It is based on same name principle as F.O.B. (free on board),
except seller fulfills its obligations when goods are delivered to the
custody of carrier at named place. If no precise place can be named at
the time of contract of sale, parties should refer to place where
the carrier should take goods into its charge. risk of loss or damage to
the goods is transferred from seller to buyer at that time and not at ship's
rail. term "carrier" means any person by whom or in whose name a
contract of carriage by road, rail, air, sea, or a combination of modes has been
made. When a seller has been furnished a bill of lading, way bill or carrier's
receipt, seller duly fulfills its obligation by presenting such a document
issued by a carrier.
FREE ALONGSIDE SHIP (... named port of
shipment) "F.A.S." or "free alongside ship" requires the
seller to deliver goods alongside ship on quay. From that point on,
the buyer bears all costs and risks of loss and damage to goods. Unlike
F.O.B., F.A.S. requires buyer to clear goods for export and pay cost
of loading goods.
FREE ON BOARD (... named port of
shipment) Under "F.O.B." or "free on board," goods are
placed on board ship by seller at a port of shipment named in sales
agreement. risk of loss of or damage to goods is transferred to the
buyer when goods pass ship's rail (i.e., off dock and placed on the
ship). seller pays cost of loading goods.
COST AND FREIGHT (... named port of
destination) "CFR"requires seller to pay costs and freight
necessary to bring goods to named destination, but risk of loss or
damage to goods, as well as any cost increases, are transferred from the
seller to buyer when goods pass ship's rail in port of shipment.
Insurance is buyer's responsibility.
INSURANCE AND FREIGHT (... named port of destination) "CIF" is CFR.
with additional requirement that seller procure transport insurance
against risk of loss or damage to goods. seller must contract with the
insurer and pay insurance premium. Insurance is generally more important in
international shipping than domestic shipping, because U.S. laws generally hold
a common carrier to be liable for lost or damaged goods.
CARRIAGE PAID TO (... named place of
destination) This term means seller pays freight for carriage of the
goods to named destination. risk of loss or damage to goods and any
cost increases transfers from seller to buyer when goods have been
delivered to custody of first carrier, and not at ship's rail.
Accordingly, "freight/carriage paid to" can be used for all modes of
transportation, including container or roll-on roll-off traffic by trailers and
ferries. When seller is required to furnish a bill of lading, way bill, or
carrier receipt, seller duly fulfills its obligation by presenting such a
document issued by person contracted with for carriage to main
CARRIAGE AND INSURANCE PAID TO (... named
place of destination) This term is same as "freight/carriage paid to
(CPT)" but with additional requirement that seller has to procure
transport insurance against risk of loss or damage to goods during the
carriage. seller contracts with insurer and pays insurance premium.
AT FRONTIER (... named place) "Delivered at frontier" means that the
seller's obligations are fulfilled when goods have arrived at frontier
but before customs border of country named in sales contract. The
term is primarily used when goods are carried by rail or truck. seller bears
the full cost and risk in delivering goods up to this point, but buyer
must arrange and pay for goods to clear customs.
DELIVERED EX SHIP (... named port of
destination) Means seller shall make goods available to buyer on
board ship at place named in sales contract. seller bears the
full cost and risk involved in bringing goods there. cost of unloading
the goods and any customs duties must be paid by buyer.
EX QUAY (... named port of destination) Means seller has agreed to make the
goods available to buyer on quay or wharf at place named in the
sales contract. seller bears full cost and risks in delivering goods
to that point including unloading.
DUTY UNPAID (... named place of destination) Under these terms, seller
fulfills his obligation to deliver when goods have been available to the
buyer uncleared for import at point or place of named destination. The
seller bears all costs and risks involved in bringing goods to point or
place of named destination. There is no obligation for import clearance.
DUTY PAID (... named place of destination) represents seller's maximum
obligation. term "DDP." is generally followed by words indicating
the buyer's premises. It notes that seller bears all risks and all costs
until goods are delivered. This term can be used irrespective of mode of
transport. If parties wish to make clear that seller is not responsible
for certain costs, additional word should be added (for example, "delivered
duty paid exclusive of VAT and/or taxes").