<blockquote><em>The International Chamber of Commerce has divided Incoterms&reg; under 11 heads. In this blog post you will get to know about the Incoterm&reg; </em><strong><em>Ex Works.</em></strong></blockquote>
<p>International Commercial Terms &ndash; commonly known as Incoterms&reg; - are published by the International Chamber of Commerce (ICC). The latest version was adopted on 1<sup>st</sup> January 2020. The ICC first published the Incoterms&reg; in 1936 and has since updated it at regular intervals to reflect the changes in global trade ecosystem.</p>
<p>International trade involves transactions between territories that have different rules and regulations. Incoterms&reg; are accepted by governments and regulatory authorities around the world. Parties involved in trade use Incoterms&reg; to decide who bears the cost and when the risk gets transferred from seller to buyer.</p>
<p>&nbsp;</p>
<p><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=EXW" target="_blank" rel="noopener noreferrer"><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f221ea0a3531379525477_Blog-Creative-1.png" alt="638f221ea0a3531379525477_Blog-Creative-1.png"></a></p>
<h3><strong>Ex Works (Place): Overview</strong></h3>
<p>The buyer bears all the costs and risks in an Ex Works arrangement. The seller must only make the goods available for the buyer at their warehouse/factory. As soon as the goods are collected, buyer undertakes all other obligations. Ex Works can be used for any means of transportation.</p>
<p>Ex Works is an Incoterm&reg; used for all methods of shipping, irrespective of the mode, or legs of the transport. Under Ex Works, the buyer undertakes all obligations of the shipment once the cargo is packed in export packaging and collected. Here, the buyer must arrange all transport, export documentation, cover all freight charges, and fulfil the importation and delivery process.</p>
<p>&nbsp;</p>
<p><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638db74198d5bbc95b2ed509_Ex%20Works%20V2.jpg" alt="638db74198d5bbc95b2ed509_Ex%20Works%20V2.jpg"></p>
<p>Some exporters insist on Ex Works as they desire to recognize the revenue for the sale instantly. As a matter of fact, the ICC&rsquo;s Incoterms&reg; 2020 manual clearly states that recognition of revenue is independent of any Incoterm&reg; rule. The parties involved in global trade shall make and agree upon specific provisions in the sale contract.</p>
<p>&nbsp;</p>
<h3><strong>Ex Works: Safeguards for Seller</strong></h3>
<p>When using Ex Works, the seller may want to consider slight changes to the terms and conditions. For example: "The supplier has the right to impose duties or move the goods to a public warehouse at the buyer's expense if the buyer does not pick up the shipment within "x" days of being informed of their availability. Without this change to the agreement, the seller is at risk of being exploited as free storage or of the buyer postponing the payment cycle.</p>
<p>The seller is only required to make the items available, appropriately packaged, at the designated location, which is typically the seller's factory or depot. Although the seller may be more qualified to do so, the buyer is responsible for putting the items onto a vehicle, for all export procedures, for onward transportation, and for any expenditures incurred after the products have been collected.</p>
<p>To be more specific, it may still be necessary for the exporter to participate in the export reporting and clearance processes and cannot practically delegate them to the buyer.</p>
<p>&nbsp;</p>
<p><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=EXW" target="_blank" rel="noopener noreferrer"><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f224556fe413902d3d886_Blog-Creative-2.png" alt="638f224556fe413902d3d886_Blog-Creative-2.png"></a></p>
<h3><strong>Ex Works: Advantage to the Buyer</strong></h3>
<p>Certain manufacturers are too focussed on the domestic market or may not have requisite licenses that may be required to export goods to the outside world. Some countries have good quality and inexpensive goods, which make it attractive for buyers to arrange all other things on their own.</p>
<p>If a buyer routinely sources goods from a particular country, it makes sense to consolidate different products and import it on their expense.</p>
<p>&nbsp;</p>
<h3><strong>Ex Works: Disadvantage to the Buyer</strong></h3>
<p>In Ex Works shipment, the buyer gets lower per unit cost than other Incoterms&reg;, while there are some significant disadvantages as well. If, for some reason, the goods cannot be exported from the origin country, the buyer bears the risk, because the transfer of ownership has already taken place.</p>
<p>&nbsp;</p>
<h3><strong>Ex Works: Seller&rsquo;s Responsibilities</strong></h3>
<p>The obligations of the seller are quite minimal under the Ex Works Incoterms&reg;. In essence, their only need is to make sure the cargo is prepared for export and that it can be picked up at their location. This indicates that the goods are already contained in export boxes for most shipments. When the cargo is prepared, it must be in a location where the buyer and seller may pick it up.</p>
<p>&nbsp;</p>
<p><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=EXW" target="_blank" rel="noopener noreferrer"><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f226681a8e6b413a2e2fa_Blog-Creative-3.png" alt="638f226681a8e6b413a2e2fa_Blog-Creative-3.png"></a></p>
<h3><strong>Ex Works: Buyer&rsquo;s Responsibilities</strong></h3>
<p>Once the buyer picks up the products from the seller, they take on all responsibility and risk. These obligations consist of the following:</p>
<p>1) Charges for loading the cargo at the pickup point so that it can be transported to the port for export.</p>
<p>2) Transporting the products to the port of origin to start the export procedure is known as delivery to port or place.</p>
<p>3) Export papers must be completed, and all taxes and duties associated with exporting the goods must be paid. The buyer is forced to rely on independent export strategies.</p>
<p>4) Charges at the origin terminal: All charges at the terminal are the buyer's responsibility.</p>
<p>5) Putting goods on carriage: The duty involved in putting the cargo on the carriage.</p>
<p>6) Carriage fees: All freight expenses related to transporting the cargo from one port to another.</p>
<p>7) Charges related with fees levied by the destination port and terminal are referred to as destination terminal charges. When the cargo reaches the port of destination, the terminal charges a fee to convey the consignment throughout the harbour and unload the shipment from the ship.</p>
<p>8) Delivery to destination: The price of moving the cargo from the port of destination to the ultimate location.</p>
<p>9) When the items have reached their destination, the costs involved with unloading the cargo from the final carrier are incurred.</p>
<p>10) Import duty, taxes, and customs clearance: All fees and charges related to bringing the goods into the country of destination.</p>
<p>&nbsp;</p>
<h3><strong>When to Use Ex Works Incoterm&reg;</strong></h3>
<p>Established importers set up offices in their export country for ease of handling their shipments. The buyer may opt for Ex Works if they are shipping via air express couriers. In most cases, express couriers collect goods from seller&rsquo;s location.</p>

Incoterms®: Ex Works - Cogoport

Incoterm EXW (Ex Works): Complete Guide to Buyer & Seller Responsibilities

<blockquote id=""><em id="">The International Chamber of Commerce has divided Incoterms® under 11 heads. In this blog post you will get to know about the Incoterm® </em><strong id=""><em id="">Free Carrier.</em></strong><br></blockquote><p id="">International Commercial Terms – commonly known as Incoterms® - are published by the International Chamber of Commerce (ICC). The latest version was adopted on 1<sup id="">st</sup> January 2020. The ICC first published the Incoterms® in 1936 and has since updated it at regular intervals to reflect the changes in global trade ecosystem.</p><p id="">International trade involves transactions between territories that have different rules and regulations. Incoterms® are accepted by governments and regulatory authorities around the world. Parties involved in trade use Incoterms® to decide who bears the cost and when the risk gets transferred from seller to buyer.</p><figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=FCA" target="_blank"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f221ea0a3531379525477_Blog-Creative-1.png" loading="lazy" alt="638f221ea0a3531379525477_Blog-Creative-1.png" style="width: 886px; height: 129px;"></div></a></figure><h3 id=""><strong id="">Free Carrier (Place): Overview</strong></h3><p id="">The seller is responsible for export clearance and delivering the goods to the carrier at the designated point of delivery in accordance with the Free Carrier (FCA) shipping terms. Any individual or business that conducts the carrying is referred to as a carrier, including a shipping line, airline, trucking company, railroad, or freight forwarder.</p><figure id="" class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><div id=""><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638dbda5ac558a3fa980505c_FCA_IMAGE.jpg" loading="lazy" alt="Incoterm - Free Free Carrier (FCA)" id="" width="auto" height="auto"></div></figure><h3 id=""><strong id="">FCA in Shipping Terms</strong></h3><p id="">Once the cargo is prepared to be put onto the carrier, the buyer takes responsibility for it. FCA is applicable to all modes of transportation, including road, rail, sea, and air freight. The buyer may arrange carriage at a lower cost than what their seller may offer. FCA enables the buyer to step in and take over after the cargo has been exported, which can be a risky and time-consuming operation for certain products. Once the commodities reach the point of export, however, the buyer takes all risks and liabilities. </p><h3 id=""><strong id="">Free Carrier: Seller’s Responsibilities</strong></h3><p id="">According to FCA Incoterms®, the seller is responsible for managing the entire export procedure for the goods they are selling. The buyer is responsible for the cargo after it is prepared to be loaded into the vessel. The full list of the seller's obligations can be found below.</p><p id="">1) Export Packaging: For export, the cargo needs to be packaged. Some nations have certain rules governing how goods must be exported. This may involve product markings or packaging design. The person in charge of this aspect must make sure the packaging complies with export laws.</p><p id="">2) Loading Fees: These are any expenses related to loading the cargo onto the first carrier to move the products to the export point as it leaves the seller's location. </p><p id="">3) Delivery to Port/Place: These are the costs related to moving the products from the seller's location to the specified port or location where the cargo will be shipped once they are loaded onto the truck. The port or location would typically be a seaport, an airport, or a rail port.</p><p id="">4) Customs Clearance: The expenses and obligations related to formally exporting the goods from the country of origin. This may involve pre-shipment inspections, customs checks, or any other special clearances needed to export the cargo.</p><p id="">The cargo can be given to the buyer once these obligations are fulfilled. The buyer is solely responsible for any risks connected to the subsequent phases of the logistical process.</p><figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=FCA" target="_blank"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f224556fe413902d3d886_Blog-Creative-2.png" loading="lazy" alt="638f224556fe413902d3d886_Blog-Creative-2.png" style="width: 886px; height: 129px;"></div></a></figure><h3 id=""><strong id="">Free Carrier: Buyer’s Responsibilities</strong></h3><p id="">The risk passes to the buyer when the goods clear customs and arrives at the Named Place. The buyer then has the obligations listed below to complete the logistical process.</p><p id="">1) Terminal charges at origin: Any fees or requirements related to the shipping facility where the cargo is loaded for the primary transportation phase onto the chosen vessel. </p><p id="">2) Loading on carriage: The shipping company charges a loading fee for the cargo to be loaded onto the carriage.</p><p id="">3) Carriage fees: These are the freight costs associated with transporting cargo from one port to another.</p><p id="">4) Terminal fees at destination port: Once the cargo has reached the port of destination, any terminal fees related to unloading, moving, and keeping the load while it waits for the official import procedure.</p><p id="">5) Delivery to destination: Moving the goods to the address specified by the buyer after it has left the port of origin.</p><p id="">6) Unloading at destination: Costs related to unloading the cargo at the designated delivery location specified by the buyer.</p><p id="">7) Customs clearance: The purchaser is responsible for all expenses and liabilities related to importing the items. Duty, taxes, and any other requirements from customs authorities must be complied with or paid for by the buyer in the event of any inspections.</p><h3 id=""><strong id="">Free Carrier: Advantages to the Buyer</strong></h3><p id="">After the item has been lawfully exported from the nation of origin, FCA enables the buyer to have complete control over the transportation of their goods. Due to their ability to manage all moving parts of the logistics chain, some buyers believe they may profit from this Incoterm.</p><p id="">FCA can be a useful Incoterm® for purchasers who frequently acquire containerized goods and who have a reputable third-party logistics provider or freight forwarder they can trust.</p><figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=FCA" target="_blank"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f226681a8e6b413a2e2fa_Blog-Creative-3.png" loading="lazy" alt="638f226681a8e6b413a2e2fa_Blog-Creative-3.png" style="width: 886px; height: 129px;"></div></a></figure><h3 id=""><strong id="">Free Carrier: Disadvantages to the Buyer</strong></h3><p id="">There is a reason why FOB not as popular for maritime shipments than FCA. The buyer must take additional procedures at the port of origin under FCA, and as a result, the buyer is responsible for terminal and loading expenses. The best party to handle a problem that arises during shipping depends on whether the cargo is in the country of the seller or the buyer.</p><p id="">Therefore, even though FCA is not significantly different, employing it may have a disadvantage because sellers may not be as comfortable with the procedure. The ideal Incoterm® for exporting goods from any nation is typically one where both the buyer and seller have the most expertise.</p><h3 id=""><strong id="">When to Use Free Carrier Incoterm® </strong></h3><p id="">A buyer would only wish to take FCA into account if most of the following criteria can be satisfied:</p><p id="">• They are shipping containerized cargo.</p><p id="">• Their seller prefers FCA over FAS or FOB.</p><p id="">• The cargo is being transported straight to the terminal for export and not to the shipping service provider's warehouse</p><p id="">• They are familiar with the logistics procedure and requirements in the seller's nation, or they are employing a shipping service. </p><p id="">If the four criteria mentioned above can be satisfied, FCA is a sensible alternative to take into account as an Incoterm®.</p>

Incoterms®: Free Carrier (Place) - Cogoport

Incoterm FCA (Free Carrier): Best Use Cases, Cost & Transfer of Risk

<blockquote id=""><em id="">The International Chamber of Commerce has divided Incoterms® under 11 heads. In this blog post you will get to know about the Incoterm® </em><strong id=""><em id="">Free Alongside Ship.</em></strong><br></blockquote><p id="">International Commercial Terms – commonly known as Incoterms® - are published by the International Chamber of Commerce (ICC). The latest version was adopted on 1<sup id="">st</sup> January 2020. The ICC first published the Incoterms® in 1936 and has since updated it at regular intervals to reflect the changes in global trade ecosystem.</p><p id="">International trade involves transactions between territories that have different rules and regulations. Incoterms® are accepted by governments and regulatory authorities around the world. Parties involved in trade use Incoterms® to decide who bears the cost and when the risk gets transferred from seller to buyer.</p><figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=FAS" target="_blank"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f221ea0a3531379525477_Blog-Creative-1.png" loading="lazy" alt="638f221ea0a3531379525477_Blog-Creative-1.png"></div></a></figure><h3 id=""><strong id="">Free Alongside Ship (Port): Overview</strong></h3><p id="">According to the Free Alongside Ship (FAS) Incoterm® guidelines, the seller clears the cargo for export and puts them next to the ship at the designated port of departure. The specified port of departure shall be either a loading dock or a barge, but not a container terminal.</p><p id="">The buyer oversees local transport, discharge, import formalities and duties, and onward carriage to the final destination in addition to handling the loading of the freight aboard the vessel. Nowadays, FAS is mainly reserved for interior canal cargo and sea freight.</p><p id="">Bulk freight, like grain or oil, is a common use for it. The seller is in charge of getting the items to the chosen port, or the spot where the ship is. The buyer is responsible for loading the cargo onto the vessel at the scheduled port.</p><figure id="" class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><div id=""><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638dc138ac558a328c809c1d_FAS_IMAGE.jpg" loading="lazy" alt="Incoterm - Free Alongside Ship (FAS)" width="auto" height="auto" style="width: auto; height: auto;"></div></figure><h3 id=""><strong id="">Free Alongside Ship: Seller’s Responsibilities</strong></h3><p id="">When transacting using FAS Incoterms®, the seller is accountable for the following:</p><p id="">1) Export packaging: The goods must be packaged by the vendor for shipping.</p><p id="">2) Charges for loading: The seller is liable for any charges involved in loading the cargo onto the initial carrier. </p><p id="">3) Delivery to place/port: The cost of transportation to the port or place of origin is the buyer's responsibility.</p><p id="">4) Export Duty, Taxes &amp; Customs Clearance: In the event, the cargo is being exported, any costs associated are the responsibility of the seller. </p><p id="">5) Origin Terminal Handling Charges (OTHC) are another expense that falls under the seller's responsibility.</p><p id="">The seller often only oversees operations up until the designated vessel, although he is still responsible for the export customs procedures. The seller will create all necessary customs clearance paperwork, which he will then deliver to the buyer at the designated port.</p><figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=FAS" target="_blank"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f224556fe413902d3d886_Blog-Creative-2.png" loading="lazy" alt="638f224556fe413902d3d886_Blog-Creative-2.png"></div></a></figure><h3 id=""><strong id="">Free Alongside Ship: Buyer’s Responsibilities</strong></h3><p id="">In FAS, the buyer is responsible for paying all business expenses as soon as the supplier delivers the items to the designated vessel location. The buyer is accountable for the following:</p><p id="">1) After the shipment reaches the destination port, the buyer is responsible for paying all DTHC.</p><p id="">2) Delivery to destination: After the cargo reaches the port, the buyer's obligations continue; they are now responsible for any expenses related the final delivery.</p><p id="">3) Unloading at destination: The buyer is also responsible for the unloading costs.</p><p id="">4) If the cargo transported under the FAS Incoterm® is imported into the nation, the buyer is responsible for paying all import duty, taxes, and customs clearance fees. It is always advised that buyers choose a customs broker to help them import their freight.</p><h3 id=""><strong id="">Transfer of Risk in Free Alongside Ship</strong></h3><p id="">The buyer will be responsible for the risk factors up until the place of destination since the risk is transferred at the designated vessel. Additionally, he will be held responsible for the entire loss if he doesn't give the seller clear instructions regarding the location and place of the vessel. Since the buyer completes the entire freight and transportation process after the designated port, the risk and damage element of the products persists until they reach their final location.</p><figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=FAS" target="_blank"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f226681a8e6b413a2e2fa_Blog-Creative-3.png" loading="lazy" alt="638f226681a8e6b413a2e2fa_Blog-Creative-3.png"></div></a></figure><h3 id=""><strong id="">Insurance in Free Alongside Ship</strong></h3><p id="">Since the buyer is in charge of the entire freight process, he is also in charge of the insurance. Since he bears the responsibility for the danger and harm to the goods, everything that goes wrong during the procedure will be his fault. Given that the items will be transported by sea and inland waterways, he will need to have maritime insurance and ocean freight insurance. </p><h3 id=""><strong id="">When to Use Free Alongside Ship Incoterm® </strong> </h3><p id="">FAS has its roots in the era of sail-powered shipping. Nowadays, FAS is solely utilised for inland canal shipments and sea freight. &nbsp;</p><p id="">FAS is still frequently used when buying large pieces of machinery that are loaded onto a barge and transported further along a canal before being positioned alongside another vessel, when the buyers take over the shipping procedure.</p>

Incoterms®: Free Alongside Ship (Port)

Incoterm FAS (Free Alongside Ship): Meaning, Use Cases & Responsibilities 

<blockquote id=""><em id="">The International Chamber of Commerce has divided Incoterms&reg; under 11 heads. In this blog post you will get to know about the Incoterm&reg; </em><strong id=""><em id="">Free on Board.</em></strong></blockquote>
<p id="">International Commercial Terms &ndash; commonly known as Incoterms&reg; - are published by the International Chamber of Commerce (ICC). The latest version was adopted on 1<sup id="">st</sup> January 2020. The ICC first published the Incoterms&reg; in 1936 and has since updated it at regular intervals to reflect the changes in global trade ecosystem.</p>
<p id="">International trade involves transactions between territories that have different rules and regulations. Incoterms&reg; are accepted by governments and regulatory authorities around the world. Parties involved in trade use Incoterms&reg; to decide who bears the cost and when the risk gets transferred from seller to buyer.</p>
<figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><img style="width: 886px; height: 129px;" src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f221ea0a3531379525477_Blog-Creative-1.png" alt="book shipment" loading="lazy"></figure>
<h3 id=""><strong id="">Free on Board (Port): Overview</strong></h3>
<p id="">Free on Board (FOB) is an Incoterm&reg; that specifies that the seller is responsible for all costs involved with loading the cargo onto the ship. When the goods are secured on board the ship, the risk is transferred to the buyer, who is then in charge of the remaining portions of the shipment.</p>
<p id="">The buyer is responsible for processing after the delivery point. Based on what the two parties have decided, responsibility for risk and insurance is defined. Only transport by sea or interior waterways is covered by FOB. As a result, the location is always a port. If the principal conveyance is by air, ground, or rail, it does not apply.</p>
<p id="">Since the seller is in charge of the items up until they are loaded onto the vessel, he must make sure goods get there. FOB is typically only used in a few situations with containers at minor ports because most products are now delivered to container yards rather than directly to a single vessel. Both sides agree on the location of the products' delivery before shipment.</p>
<figure id="" class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center">
<div id=""><img id="" src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638dc3d775c3ef72f39fd69f_Free%20on%20Board%20V2%5B45%5D.jpg" alt="Incoterm - Free On Board (FOB)" width="auto" height="auto" loading="lazy"></div>
</figure>
<h3 id=""><strong id="">Free on Board: Seller&rsquo;s Responsibilities</strong></h3>
<p id="">The full list of the seller's obligations can be found below:</p>
<p id="">1) Warehouse: The seller's warehouse, as used in the FOB Incoterm&reg; , refers to the location where the seller keeps his or her products to complete the export process. In this case, the seller is responsible for paying for product maintenance. In the process, the warehouse is also referred to as the location of origin, where both parties decided to enter a contract.</p>
<p id="">2) Transportation: Inland transportation from the warehouse to the arrival port is part of the trade transit for the seller.</p>
<p id="">3) Documents: The following documentation must be provided by the seller to the buyer:</p>
<ul id="">
<li id="">Commercial invoice</li>
<li id="">Bill of Lading</li>
<li id="">Packing list</li>
<li id="">Insurance certificate</li>
<li id="">Export licence</li>
<li id="">Custom clearance</li>
</ul>
<p id="">4) &nbsp; In a FOB agreement, the seller is responsible for exporting goods from the point of origin to the port of delivery. Additionally, since the seller's obligation extends solely to the port, their focus is on the export customs. Seller will be responsible for handling all export customs processes and associated fees.</p>
<p id="">5) &nbsp; Freight:</p>
<ul id="">
<li id="">Seller is responsible for expenses of storing the goods in the warehouse.</li>
<li id="">Payment to the freight forwarding agent.</li>
<li id="">Charges to be paid at the terminal</li>
<li id="">Fees associated with loading goods at the port</li>
<li id="">Freight payment from FOB origin, or the location agreed upon by the parties, till the port</li>
</ul>
<p id="">Basically, all fees paid FOB from the point of origin until the goods are loaded at the port.</p>
<p id="">6) Insurance: Normally, the seller is not obligated to provide insurance to the buyer. However, it can be decided as a matter of concern for the seller up until the terminal as a matter of discipline. Moreover, at the buyer's request, the seller may offer to help the buyer with insurance and customs arrangements.</p>
<figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=FOB" target="_blank" rel="noopener">
<div><img style="width: 886px; height: 129px;" src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f224556fe413902d3d886_Blog-Creative-2.png" alt="international freight" loading="lazy"></div>
</a></figure>
<h3 id=""><strong id="">Free on Board: Buyer&rsquo;s Responsibilities</strong></h3>
<p id="">The buyer has the obligations listed below to complete the logistical process:</p>
<p id="">1) Warehouse: For a buyer, a warehouse is the location where the items will be kept following the entire import-export transaction. Since the buyer will transport the products from the port in his country to the warehouse, it is his job to unload the cargo there.</p>
<p id="">2) Transportation: The buyer is responsible for all transportation costs after the seller loads the goods at the port. The seller therefore handles the ocean freight transit, the unloading of products, and the inland transfer from the buyer's port to his location.</p>
<p id="">3) Documents: The buyer will need those documents in order to import goods into the port of his country because the seller will show verification of all export clearance procedures to the buyer.</p>
<p id="">4) Custom Clearance: Since the seller will have already handled the export processes, the buyer will be responsible for FOB import customs. Even then, the buyer will still need the seller to provide proof of export customs to complete the shipment process.</p>
<p id="">5) Freight: The buyer will be responsible for paying marine freight, transportation from the port of arrival to the final destination, the cost of goods insurance, as well as any charges associated with loading and unloading the products from the port of arrival to the final destination.</p>
<h3 id=""><strong id="">Free on Board: Advantages for the Buyer</strong></h3>
<p id="">Since each party's responsibilities provide them the most control while the shipment is in their jurisdiction, FOB shipping is quite popular among buyers and sellers. When using FOB Incoterms&reg;, the buyer benefits from having the most control over logistics and shipping costs, which gives them the freedom to select the shipping options.</p>
<p id="">With FOB, the purchaser can choose the freight forwarder for the complete cargo, instead of depending on the supplier to handle some or all of the freighting. To reduce back and forth and the possibility of confusion between two shipping companies, the buyer only needs to rely on one company for the duration of the transportation process.</p>
<p id="">FOB Incoterm&reg; is also the most economical choice because it provides the buyer the freedom to compare shipping costs. The risk is transferred when the items are safely put onto the shipping vessel, however the buyer's forwarder is in charge of all aspects of the transportation process. Once the package has left the seller's warehouse, the buyer is in charge of the goods and has better control over the delivery's success.</p>
<p id="">Sellers value FOB Incoterms&reg; because they can consider the sale closed as soon as the consignment leaves their factory.</p>
<figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=FOB" target="_blank" rel="noopener">
<div><img style="width: 886px; height: 129px;" src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f226681a8e6b413a2e2fa_Blog-Creative-3.png" alt="signup" loading="lazy"></div>
</a></figure>
<h3 id=""><strong id="">Free on Board: Disadvantages for the Buyer </strong></h3>
<p id="">For most buyers, FOB has minimal to no drawbacks. The process may appear more difficult for newer importers or importers who have always made purchases under Incoterms&reg;, where the seller arranges the freight expenses. However, the management and considerable cost reductions quickly surpass this drawback.</p>
<h3 id=""><strong id="">When to Use FOB Incoterm&reg; </strong></h3>
<p id="">Most bulk goods that will be transported by sea qualify as valid FOB agreements. Assuming that the shipment can be sent by any method of transportation, as is frequently the case with buyers and sellers, FOB is misunderstood. Only exports by sea and inland waterways are feasible by FOB, according to the ICC. FCA is an Incoterm&reg; that can be used for all modes of transportation when shipping by land rather than sea, therefore buyers and sellers may want to use it.</p>
<p id="">Even if the buyer acquires ownership of the cargo once it is put onto a truck at the seller's warehouse, the seller is still in charge of making sure the consignment sails safely beyond the ship's rails.</p>

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Incoterms® FOB: Free on Board Simplified

Incoterm FOB (Free On Board): Responsibilities, Risks & When to Use It

<blockquote><em>The International Chamber of Commerce has divided Incoterms® under 11 heads. In this blog post you will get to know about the Incoterm® </em><strong><em>Cost and Freight.</em></strong></blockquote><p>International Commercial Terms – commonly known as Incoterms® - are published by the International Chamber of Commerce (ICC). The latest version was adopted on 1<sup>st</sup> January 2020. The ICC first published the Incoterms® in 1936 and has since updated it at regular intervals to reflect the changes in global trade ecosystem.</p><p>International trade involves transactions between territories that have different rules and regulations. Incoterms® are accepted by governments and regulatory authorities around the world. Parties involved in trade use Incoterms® to decide who bears the cost and when the risk gets transferred from seller to buyer.</p><p><br></p><p><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=CFR" rel="noopener noreferrer" target="_blank"><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f221ea0a3531379525477_Blog-Creative-1.png" alt="638f221ea0a3531379525477_Blog-Creative-1.png"></a></p><h3><strong>Cost and Freight (Port): Overview</strong></h3><p>Cost and Freight (CFR) means the seller has fulfilled its obligation when the goods are delivered and loaded on the vessel they’ve nominated at the named port of shipment.</p><p>Only inland and sea transport should make use of CFR under Incoterms® 2020. As soon as the items are loaded onto the vessel before carriage begins, risk or liability for the goods passes from the seller to the buyer, and the buyer is then responsible for any further expenditures.</p><p><br></p><p><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638dc975c52f545ff652f28c_Cost%20And%20Freight%20V2%5B73%5D.jpg" alt="638dc975c52f545ff652f28c_Cost%20And%20Freight%20V2%5B73%5D.jpg"></p><h3><strong>Cost and Freight: Transportation Options</strong></h3><p>Although buyers and less experienced exporters might choose an F-group term, more experienced exporters prefer C-group terms since they allow direct communication with the carrier and provide all the information required for letters of credit in one location. Additionally, if you book a lot of freight, selecting C-group terms gives you more negotiation power.</p><p>Like the other four Incoterms® 2020 rules for shipping by sea and inland waterways, CFR is best used when the seller has direct access to the vessel for loading, such as when shipping bulk freight or non-containerized commodities. Carriage Paid to (CPT), however, might be a superior Incoterms® option for most exports. Any freight destination may be the named destination under CPT.</p><p>The risk of the products is transferred to the buyer after they are carried onboard, or before to the freight continuing, under CFR shipping terms, even though the seller is responsible up till the designated point of port. All payments after the scheduled port, including goods insurance, are the buyer's responsibility. Additionally, in CFR, the seller is not bound by any mandatory obligations, in contrast to the CIF Incoterm®, which calls for the provision of insurance coverage.</p><p><br></p><p><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=CFR" rel="noopener noreferrer" target="_blank"><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f224556fe413902d3d886_Blog-Creative-2.png" alt="638f224556fe413902d3d886_Blog-Creative-2.png"></a></p><h3><strong>Cost and Freight: Seller’s Responsibilities</strong></h3><p>When transacting using CFR Incoterm®, the seller is accountable for the following:</p><p>1) The seller shall make the following expenses:</p><p><br></p><ul><li>Warehouse charges</li><li>Inland charges for loading and carrying goods till the designated port</li><li>Depot and duty charges for terminal proceedings</li><li>Charges for documentation</li><li>Custom charges</li><li>Charges for shipping freight</li></ul><p>CFR freight charges are paid by the seller. He continues to be responsible for the carriage going from the warehouse to the first port, which is the port of the exporting country, and then for the carriage going from the first port to the second port, which is the port of the importing country.</p><p>2) Insurance: In general, the seller is not required to have insurance. Although he is in charge of delivery, he is not in charge of insurance. However, he may extend his services to insurance or even carry out the coverage process at the risk and expense of the client</p><p>3) Duty and customs clearance: The export customs procedures are the seller's responsibility. He is responsible for maintaining the packing list, commercial invoice, bill of lading, and other export-related paperwork. He will pay for things like terminal fees and freight forwarding costs. Additionally, he will give the buyer that paperwork to complete the freight procedures after the procedure.</p><p>4) Risk transfer: The risk of the goods after the first port is not the seller's responsibility, even though he is responsible for delivery of the goods up to the designated port. As soon as the seller loads the goods onto the vessel, the buyer assumes the risk of the commodities. Therefore, the importer is responsible for paying any additional fees or levies placed on the products because of carelessness or delays, such as shipping demurrage fees, unexpected taxes, etc.</p><p><br></p><p><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=CFR" rel="noopener noreferrer" target="_blank"><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f226681a8e6b413a2e2fa_Blog-Creative-3.png" alt="638f226681a8e6b413a2e2fa_Blog-Creative-3.png"></a></p><h3><strong>Cost and Freight: Buyer’s Responsibilities</strong></h3><p>Under the CFR Incoterm®, the buyer is accountable for the following:</p><p>1) Cost:</p><p><br></p><ul><li>Costs associated with insurance since he bears the entire burden of covering and the risk involved with the goods.</li><li>Processes for import customs, including payment of all fees and taxes at the designated port.</li><li>Transportation costs for inland travel between the designated port and the final destination.</li></ul><p>2) Freight: In this process, the buyer is just barely involved. As soon as the seller delivers the goods, the buyer must unload them at the dock and load them for interior transit to the final destination.</p><p>3) Risk Transfer: As soon as the seller loads the items onto the vessel at the first port, the risk of the commodities passes to the buyer. Additionally, the buyer bears the insurance risk from the beginning of the trade procedure. The loss will be the duty of the buyer if he neglects to direct the seller to the delivery port.</p><p>4) Insurance: As soon as the seller loads the items onto the vessel at the first port, the risk of the commodities passes to the buyer. Additionally, the buyer bears the insurance risk from the beginning of the trade procedure. The loss will be the duty of the buyer if he neglects to direct the seller to the delivery port.</p><p>5) Duty and customs clearance: The buyer is responsible for paying any import duties included in the CFR. The buyer is liable for unloading the items when the seller drops them off at the agreed port. All import taxes and charges are his responsibility at the dock port. Additionally, he will be responsible for paying any local and depot fees.</p><p>Even while the seller is responsible for delivery of the products up to the designated port, he is not responsible for the risk of the items after the first port. The risk of the commodities shifts to the purchaser as soon as the seller loads them onto the ship.</p><p>Therefore, any additional charges or levies imposed on the goods because of negligence or delays, such as shipping demurrage fees, additional taxes, etc., are the responsibility of the importer.</p><p><br></p><h3><strong>When to Use Cost and Freight Incoterm® </strong></h3><p>The best applications for CFR Incoterms® are in inland waterway and ocean freight. It is generally utilised for bulk cargo and non-containerized commodities when the seller has direct access to the vessel and the goods are put straight onboard rather than in a container terminal. If the items must be delivered to a container terminal, CFR will not be applicable.</p>

Incoterms®: Cost and Freight (Port) - Cogoport

Incoterm CFR (Cost and Freight): Meaning, Use Cases & Legal Implications

<blockquote id=""><em id="">The ICC has divided Incoterms® under 11 heads. In this blog post you will get to know about the Incoterm® </em><strong id=""><em id="">Cost, Insurance and Freight.</em></strong><br></blockquote><p id="">International Commercial Terms – commonly known as Incoterms® - are published by the International Chamber of Commerce (ICC). The latest version was adopted on 1<sup id="">st</sup> January 2020. The ICC first published the Incoterms® in 1936 and has since updated it at regular intervals to reflect the changes in global trade ecosystem.</p><p id="">International trade involves transactions between territories that have different rules and regulations. Incoterms® are accepted by governments and regulatory authorities around the world. Parties involved in trade use Incoterms® to decide who bears the cost and when the risk gets transferred from seller to buyer.</p><figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=CIF" target="_blank"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f221ea0a3531379525477_Blog-Creative-1.png" loading="lazy" alt="638f221ea0a3531379525477_Blog-Creative-1.png"></div></a></figure><h3 id=""><strong id="">Cost, Insurance and Freight (Port): Overview</strong></h3><p id="">Cost, Insurance and Freight (CIF), a commercial clause in Incoterms 2020, states that the seller is responsible for all costs up to and including delivery of the products and payment of settlement for carriage and insurance to the designated port.</p><p id="">The use of CIF is limited to ocean and inland waterways, and it is typically reserved for bulk cargo, non-containerized commodities, and situations in which the seller has direct access to the vessel for the purpose of loading the goods.</p><p id="">When a seller uses CIF in their shipping clause, they agree to bear the entire cost of exporting and transporting the products up until they are loaded onto the ship. The buyer obtains control of the shipment and is in charge of importing and transporting the items to their destination once they are securely loaded aboard the boat.</p><figure id="" class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><div id=""><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638dcdd4f5ce0255d4fdc8c8_Cost%20Insurance%20and%20FreightV2%5B92%5D.jpg" loading="lazy" alt="Incoterm - Cost, Insurance and Freight (CIF)" width="auto" height="auto" style="width: auto; height: auto;"></div></figure><h3 id=""><strong id="">Cost, Insurance and Freight: Seller’s Responsibilities</strong></h3><p id="">The seller manages much more than just making sure the cargo is loaded onto a container ship. Their complete obligations consist of:</p><p id="">1) Export packaging: Ensuring that the cargo is appropriately packaged and ready for shipment. Some exporting nations need particular markings be placed on a product's package or product itself.</p><p id="">2) Loading charges: Expenses incurred in transporting the cargo from the seller's warehouse to the port.</p><p id="">3) Delivery to port/place: All costs of transportation incurred in transferring the cargo from the seller's warehouse to the port. </p><p id="">4) Taxes, duty, and customs: Any duties related to the cargo's export that are related to customs. The seller shall bear all costs associated with any customs inspections and related fees. </p><p id="">5) Origin terminal charges: These are the loading port handling fees.</p><p id="">6) Loading on carriage: The costs involved in putting the goods aboard the ship.</p><p id="">7) Carriage charges: The price of transporting a shipment from its loading port to its final destination.</p><p id="">8) Insurance: According to CIF Incoterm® , the seller must have insurance coverage for the cargo up until the port of destination.</p><figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=CIF" target="_blank"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f221ea0a3531379525477_Blog-Creative-1.png" loading="lazy" alt="638f221ea0a3531379525477_Blog-Creative-1.png" style="width: 886px; height: 129px;"></div></a></figure><h3 id=""><strong id="">Cost, Insurance and Freight: Buyer’s Responsibilities</strong></h3><p id="">The seller transfers the shipment and all risks to the buyer as soon as the cargo is loaded aboard the ship. The following obligations apply to the buyer when they are in charge of the shipment:</p><ul id=""><li id="">Destination terminal charges: These fees, also referred to as destination handling charges (DTHC), include everything from cargo transfer inside the terminal to offloading. </li><li id="">Delivery to destination: Organizing the procedures for the cargo's transfer from the port to the place where it will be delivered.</li><li id="">Unloading at destination: Any expenses related to loading the cargo onto the truck once it has reached the delivery location.</li><li id="">Taxes, duties, and customs: Complete import requirements, including duty, taxes, and customs clearance. The buyer is in charge of fixing any issues that arise from a customs inspection or an issue with the importation.</li></ul><h3 id=""><strong id="">CIF: Advantages for the Buyer</strong></h3><p id="">All fees for exporting the items from the country of origin are covered by the seller. CIF becomes a viable alternative when the buyer has insufficient knowledge with the origin country and lacks the relationships to help with local transportation and exportation since it enables the seller to handle most of the shipment that takes place outside of the destination country.</p><p id="">This may seem attractive to many people because it carries low risk for the buyer. &nbsp;CIF requires the seller to ensure that their goods can be properly exported if the buyer is unaware of the export regulations for the product. When transporting hazardous or dangerous commodities or making purchases in nations where the norms and regulations are not adequately documented, this can be useful.</p><p id="">Insurance paid for by the seller might help to minimize some of the losses in the event of a maritime problem, such as piracy, damage brought on by bad weather.</p><p id="">When a buyer already works with a third-party logistics provider who can manage domestic and import shipments, CIF enables the buyer to make use of their existing resources without having to hunt for new ones in the nation of origin.</p><figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=CIF" target="_blank"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f226681a8e6b413a2e2fa_Blog-Creative-3.png" loading="lazy" alt="638f226681a8e6b413a2e2fa_Blog-Creative-3.png"></div></a></figure><h3 id=""><strong id="">CIF: Disadvantages for the Buyer</strong> </h3><p id="">Once the items are on board the conveyance vessel, all risk is assumed. The buyer is in charge of fixing or covering losses when something goes wrong during the shipping process.</p><p id="">The buyers are responsible for paying all import taxes and fees. The price of insurance and shipping is included in the sale price because the seller is required to obtain insurance. When importing under CIF Incoterm® , the buyer is responsible for paying freight costs as well as insurance and customs duties and taxes on top of the product price.</p><p id="">The destination handling fees must be paid by the buyer, which is not a bad thing; nevertheless, if not agreed beforehand, it may result in additional hidden costs for the buyer. The destination handling fees for the buyer may occasionally be increased by shipping companies shipping on behalf of customers under CIF conditions because this is an unavoidable expense.</p><p id="">You can have a hard time receiving money from your insurance claim if your cargo is damaged. If your shipment is damaged, you might not learn about it until the container has been unloaded and you have given your seller the full sum due. CIF Incoterm® often describe the beneficiary as the seller. In that case, the seller completed the deal, and the seller—and not the buyer—would be responsible for paying the insurance claim.</p><h3 id=""><strong id="">When to Use Cost, Insurance and Freight Incoterm® </strong></h3><p id="">Only sea and waterway shipments should use CIF Incoterm®. CIF can be helpful for people who are just starting out with importing because it enables them to understand the importing procedure before they are required to know the export process.</p>

Incoterms®: Cost, Insurance and Freight (Port)

Incoterm CIF (Cost, Insurance & Freight): Full Breakdown for Exporters

<blockquote id=""><em id="">The International Chamber of Commerce has divided Incoterms® under 11 heads. In this blog post you will get to know about the Incoterm® </em><strong id=""><em id="">Cost Paid To (Place).</em></strong><br></blockquote><p id="">International Commercial Terms – commonly known as Incoterms® - are published by the International Chamber of Commerce (ICC). The latest version was adopted on 1<sup id="">st</sup> January 2020. The ICC first published the Incoterms® in 1936 and has since updated it at regular intervals to reflect the changes in global trade ecosystem. </p><p id="">International trade involves transactions between territories that have different rules and regulations. Incoterms® are accepted by governments and regulatory authorities around the world. Parties involved in trade use Incoterms® to decide who bears the cost and when the risk gets transferred from seller to buyer.</p><figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=CPT" target="_blank"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f221ea0a3531379525477_Blog-Creative-1.png" loading="lazy" alt="638f221ea0a3531379525477_Blog-Creative-1.png"></div></a></figure><h3 id=""><strong id="">Carriage Paid To (Place): Overview</strong></h3><p id="">Carriage Paid To (CPT) Incoterm® states that the cost of the items includes everything needed to transport the goods to the specified location. Only local shipping and unloading fees as well as import procedures are the buyer's responsibility.</p><p id="">Once the items are delivered to the first carrier, typically at the origin port, the responsibility for the shipment is transferred. CPT is similar to an FCA agreement in that it can be applied to all modes of transportation, but unlike an FCA agreement, the delivery destination is not predetermined. Even though CPT is a less frequent Incoterm®, there are specific instances in which it can be applied.</p><p id="">Since the buyer and seller must provide two central locations—which are not always the most obvious—CPT can be a complicated Incoterm®. The delivery location and the destination are the two points that must be determined in a CPT agreement. </p><p id="">Delivery is the act of handing over items to the carrier that the seller has hired to carry the cargo to the customer. The buyer's risk starts at this moment. The cost of shipping the freight to the destination must also be covered by the seller. Although the buyer now bears the risk and obligation for the shipment, the seller is still in charge of delivering the shipment until it reaches the specified destination. Once the risk shifts from the buyer, he is obliged to pay the seller.</p><figure id="" class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><div id=""><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638de18dee1edfd00c533d0b_Carriage%20Paid%20to%20V2%5B98%5D.jpg" loading="lazy" alt="Incoterm - Carriage Paid To (CPT)" width="auto" height="auto" style="width: auto; height: auto;"></div></figure><h3 id=""><strong id="">Carriage Paid To: Seller’s Responsibilities</strong></h3><p id="">When transacting using CPT Incoterm®, the seller is accountable for the following:</p><p id="">1) Export packaging: The vendor must put the sold goods in export packing that is suitable for transit.</p><p id="">2) Loading cost: The seller is liable for any fees paid while the cargo is being loaded onto a truck at the seller's warehouse. </p><p id="">3) Delivery to port/place: All expenses related to moving the loaded items to the port or export location are the seller's responsibility.</p><p id="">4) Origin Terminal Handling Charges (OTHC): These fees at the origin terminal are the responsibility of the seller. </p><p id="">5) Loading on carriage: The seller is responsible for covering the expense of loading the cargo into the carriage.</p><p id="">6) Freight cost: These are the delivery costs, which the vendor is responsible for covering.</p><p id="">7) Destination Terminal Handling Charges (DTHC): These expenses at the final terminal are also the responsibility of the vendor.</p><figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=CPT" target="_blank"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f224556fe413902d3d886_Blog-Creative-2.png" loading="lazy" alt="638f224556fe413902d3d886_Blog-Creative-2.png"></div></a></figure><h3 id=""><strong id="">Carriage Paid To: Buyer’s Responsibilities</strong></h3><p id="">When making a purchase using CPT Incoterms®, the buyer is in charge of the following steps:</p><p id="">1) Delivery to destination: The cost of transporting the goods to the final destination is the buyer's responsibility once it has been unloaded from the carrier.</p><p id="">2) Unloading at destination: When cargo arrives at warehouses, there occasionally exist unloading costs. It is the buyer's obligation to pay any costs that might be incurred.</p><p id="">3) Taxes, duties and customs: All import fees must be paid by the buyer. This covers dunnage, penalties, inspections by customs, and holding fees.</p><h3 id=""><strong id="">CPT: Advantages for the Buyer</strong></h3><p id="">The buyer is at less at risk when shipping under CPT and when the payment terms provide that the products must be paid for at the destination. The fact that the buyer is not compelled to pay for the goods until the cargo shows up at the stated location has considerable benefits for them.</p><p id="">The buyer's obligation for a big portion of the logistics process is reduced because the seller is also in charge of providing the buyer with the Bill of Lading, or Airway Bill. The buyer does not have to deal with any export procedures or costs, which is an additional benefit.</p><p id="">CPT can be helpful when an importer has an agency in charge of clearing the cargo once it reaches the destination country because it gives the buyer authority over the DTHC and customs clearance.</p><figure class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center"><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=CPT" target="_blank"><div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f226681a8e6b413a2e2fa_Blog-Creative-3.png" loading="lazy" alt="638f226681a8e6b413a2e2fa_Blog-Creative-3.png"></div></a></figure><h3 id=""><strong id="">CPT: Disadvantages for the Buyer</strong> </h3><p id="">Since the buyer is obligated to pay for the goods after they are in the custody of the seller's carrier, CPT places a significant degree of risk on them whether shipping by sea freight or air freight. The buyer is responsible for paying for the merchandise because the risk is transferred once the cargo arrives at the destination. The buyer typically has no idea when the products will be sent, which is a big risk.</p><p id="">Since the seller is the one who contracts the carrier, they can ask for a Bill of Lading or Airway Bill before the cargo ever moves.</p><h3 id=""><strong id="">When to Use CPT Incoterm®</strong></h3><p id="">The Incoterm® works extremely well when moving the cargo overland from one location to another. &nbsp;For instance, CPT performs remarkably well in cross-border trading, where the seller arranges the cargo for their carrier to transport the items across many nations.</p>

Incoterms®: Carriage Paid To (Place)

Incoterm CPT (Carriage Paid To): Seller & Buyer Responsibilities Explained

<blockquote><em>The International Chamber of Commerce has divided Incoterms® under 11 heads. In this blog post you will get to know about the Incoterm® </em><strong><em>Carriage and Insurance Paid To (Place)</em></strong></blockquote><p>International Commercial Terms – commonly known as Incoterms® - are published by the International Chamber of Commerce (ICC). The latest version was adopted on 1<sup>st</sup> January 2020. The ICC first published the Incoterms® in 1936 and has since updated it at regular intervals to reflect the changes in global trade ecosystem.</p><p>International trade involves transactions between territories that have different rules and regulations. Incoterms® are accepted by governments and regulatory authorities around the world. Parties involved in trade use Incoterms® to decide who bears the cost and when the risk gets transferred from seller to buyer.</p><p><br></p><p><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=CIP" rel="noopener noreferrer" target="_blank"><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f221ea0a3531379525477_Blog-Creative-1.png" alt="638f221ea0a3531379525477_Blog-Creative-1.png"></a></p><h3><strong>Carriage and Insurance Paid To (Place): Overview</strong></h3><p>Under the Incoterms® 2020 rules, Carriage and Insurance Paid To(CIP), indicates that risk passes to the buyer when the seller delivers the goods to the first carrier or to a different person specified by the seller at a designated place of shipping. The expense of transportation and insurance for delivering the products, at the very least, to the specified location, is the seller's responsibility.</p><p>CIP is one of just two Incoterms® regulations (the other being CIF—Cost, Insurance and Freight) that indicates which party must purchase insurance is CIP.</p><p>The amount of insurance required under CIP has increased with the publication of the Incoterms® 2020 rules to at least 110% of the value of the goods as specified in Clause A of the Institute Cargo Clauses rather than the lower level provided under Clause C, which was required for CIP in the 2010 rules and is still required for CIF. This is because CIP is often used for manufactured items with a higher value than the commodities that are more frequently delivered under CIF. The insurance underwriter must be able to establish a permanent residence there.</p><p><br></p><p><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638dd53214dc6e56645636e2_Carriage%20and%20Insurance%20Paid%20To_V2%5B27%5D.jpg" alt="638dd53214dc6e56645636e2_Carriage%20and%20Insurance%20Paid%20To_V2%5B27%5D.jpg"></p><h3><strong>Using CIP Incoterm® </strong></h3><p>The seller is responsible for arranging international shipping and purchasing insurance under all C-group terms, including CPT. The designated location where liability is transferred is always on the side of the buyer.</p><p>What distinguishes CPT and CIP from one another? When a seller arranges transportation, a portion of the risk that the buyer assumes is considered by CIP. In accordance with CIP, the seller is required to insure the goods in the buyer's favour to protect the latter from risk.</p><p>CIP can be applied to any transport mode or situations when there are several transport modes. The seller is in charge of organising transportation to the specified location as well as insurance for the items.</p><p><br></p><h3><strong>Similarity Between CIP and CPT</strong></h3><p>The only significant difference between CIP and CPT is that the seller is responsible for transportation and insurance up until the designated port. CIP can be used to move goods via multiple transit modes, or multi-modal shipping. When the buyer receives the goods at the first port under CIP, the title is transferred.</p><p><br></p><p><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=CIP" rel="noopener noreferrer" target="_blank"><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f224556fe413902d3d886_Blog-Creative-2.png" alt="638f224556fe413902d3d886_Blog-Creative-2.png"></a></p><h3><strong>Carriage and Insurance Paid To: Seller’s Responsibilities</strong></h3><p>The seller manages much more than just making sure the cargo is loaded onto a container ship. Their complete obligations consist of the following:</p><p>1) Costs: The seller has responsibilities till the named place of destination, and will bear costs such as:</p><p><br></p><ul><li>Warehouse charges.</li><li>Inland transit charges for transporting goods from the warehouse to the first port.</li><li>Payment of depot charges.</li><li>Payment of freight forwarder charges</li><li>Freight forwarder’s charges</li><li>Charges for air freight (if transported by air)</li><li>Charges for marine insurance (when goods are moved through ocean)</li><li>Charges for ocean freight and insurance premium</li></ul><p>2) Custom clearance and payment of duties: Customs clearance is a part of CIP, and the seller is responsible for paying all applicable export customs and duty fees. The seller will take care of the freight forwarding process and pay the settlement fees; he is also responsible for assembling and filing all necessary paperwork for customs clearance.</p><p>3) Insurance: In a CIP transaction, the goods' insurance is paid for by the seller. The shipping requirements must be followed, and the seller is responsible for paying any registration and security permit fees. The seller must get goods coverage because he bears the risk of the items until they arrive at the designated port. After the products arrive at the designated port, the seller is not responsible for insuring them. The importer shall deliver all the required paperwork so that the buyer can follow the import regulations.</p><p><br></p><p><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=CIP" rel="noopener noreferrer" target="_blank"><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f226681a8e6b413a2e2fa_Blog-Creative-3.png" alt="638f226681a8e6b413a2e2fa_Blog-Creative-3.png"></a></p><h3><strong>Carriage and Insurance Paid To: Buyer’s Responsibilities</strong></h3><p>Under the CIP Incoterm®, the buyer is accountable for the following:</p><p>1) Costs: The buyer's obligations under CIP trade terms are restricted to the fees and terms stated in the contract. The buyer will be allowed to proceed with the deal immediately following the port of delivery because the place of delivery is crucial in a CIP transaction.</p><p>It may be the first port, when fees are charged from the moment the shipment is transported to the port of the importer country, or it may be the second port, where fees for import procedures and inland transit are incurred.</p><p>2) Freight terms: When the second port is the agreed-upon location for delivery, the buyer is responsible for both the unloading of the shipment at the designated port and the freight for the inland delivery of the shipment from the port to his warehouse. The buyer is responsible for paying the freight duty to transport the goods to the port in the importer country if the designated location is the first port.</p><p>3) Customs clearance and payment of duties: The buyer is responsible for ensuring that he obtains all the paperwork from the seller required for importation under the CIP Incoterm®. The buyer will be responsible for covering costs like import taxes and tariffs since he assumes control immediately after the destination port.</p><p>4) Insurance: In CIP, the buyer is under no duty in terms of insurance (referring to risk and damage of goods). The seller is responsible for paying the insurance coverage fees. According to the terms set forth by the parties, however, the buyer may choose to pay for additional coverage provided by the seller, i.e., insurance from the stated port to the buyer's warehouse.</p><p><br></p><h3><strong>When to Use Carriage and Insurance Paid To Incoterm® </strong></h3><p>CIP can be utilised in multi-mode transport because it is not limited to a certain freight method. The carrier issues a bill of lading to the seller, serving as proof that the goods have been taken by the carrier and the freight has been paid by the seller. This works particularly effectively for shipments covered by a letter of credit. For produced goods with a higher value, CIP works best.</p>

Incoterms®: Carriage and Insurance Paid To

Incoterm CIP (Carriage and Insurance Paid To): Scope, Risks & Costing

<blockquote><em>The International Chamber of Commerce has divided Incoterms® under 11 heads. In this blog post you will get to know about the Incoterm® </em><strong><em>Delivered at Place Unloaded (Place).</em></strong></blockquote><p>International Commercial Terms – commonly known as Incoterms® - are published by the International Chamber of Commerce (ICC). The latest version was adopted on 1<sup>st</sup> January 2020. The ICC first published the Incoterms® in 1936 and has since updated it at regular intervals to reflect the changes in global trade ecosystem.</p><p>International trade involves transactions between territories that have different rules and regulations. Incoterms® are accepted by governments and regulatory authorities around the world. Parties involved in trade use Incoterms® to decide who bears the cost and when the risk gets transferred from seller to buyer.</p><p><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=DPU" rel="noopener noreferrer" target="_blank"><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f221ea0a3531379525477_Blog-Creative-1.png" alt="638f221ea0a3531379525477_Blog-Creative-1.png"></a></p><h3><strong>Delivered at Place Unloaded: Overview</strong></h3><p>Delivered at Place Unloaded (DPU) calls for the seller to place the products at the buyer's disposal following their unloading from the incoming mode of transportation. This is the only Incoterm® that requires that the seller unload items at the destination is DPU.</p><p>DPU can be used with any—and multiple—modes of transportation. A named place of destination should be agreed upon both the buyer and seller. Where appropriate, DPU requires the seller to clear items for export. Once the goods are unloaded, the risk is transferred from the seller to the buyer. This is the only Incoterm® that requires the seller to complete delivery by unloading the goods.</p><p>This is the only Incoterm® that requires the seller to unload the contents, and it is frequently used for combined containers with many consignees. This is so that the seller can divide the cargo to make the goods available for each of the various consignees.&nbsp;Additionally, the seller should use this term if the things need additional or special handling for which they agree to be responsible. However, if unloading involves a lot of danger, expense, or complication, then Incoterm® might not be advantageous to the seller.</p><p><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638ddc3fadbcad1385de8c61_Delivered%20At%20Place%20Unloaded%20V2%5B25%5D.jpg" alt="DeliveredAtPlaceUnloaded"></p><p>The most recent Incoterm® as of now is DPU. It has replaced DAT (Delivery at Terminal) Incoterm®. The DPU Incoterm® is applicable to all forms of transportation, including combinations of modes. Until the products have been delivered to the agreed-upon location and have been unloaded, the seller is responsible for all risks of loss or damage.</p><h3><strong>Delivered at Place Unloaded: Seller’s Responsibilities</strong></h3><p>When transacting using DAP Incoterms®, the seller is accountable for the following:</p><p>1) Cost: The seller shall be responsible for following costs in DAP Incoterm®:</p><ul><li>Warehouse rent for maintaining goods.</li><li>Packaging, labelling, and marking charges as per export standards.</li><li>Transport charges for inland movement.</li><li>Freight forwarder charges for handling logistics.</li><li>Documentation charges for creating and submitting the paperwork necessary for shipping process.</li></ul><p>2) Transfer of risk: The seller is still responsible for the items until they reach the designated port. Once the items are unloaded at the designated port, the seller remains responsible for any risk relating to damage to the products.</p><p>3) Customs and duty: The seller is responsible for export customs procedures. He continues to be in charge of creating the required paperwork. The seller is responsible for covering all port fees, tariffs, and local fees associated with the customs clearance process.</p><p><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=DPU" rel="noopener noreferrer" target="_blank"><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f224556fe413902d3d886_Blog-Creative-2.png" alt="638f224556fe413902d3d886_Blog-Creative-2.png"></a></p><h3><strong>Delivered at Place Unloaded: Buyer’s Responsibilities</strong></h3><p>Under the DPU Incoterm®, the buyer is accountable for the following:</p><p>1) Cost: The buyer shall bear the following costs:</p><ul><li>Charges for import customs</li><li>Port clearing procedures</li><li>Charges for inland transport from port to warehouse</li><li>Warehouse charges after the delivery of goods</li></ul><p>2) Delivery terms: The buyer is required by DPU conditions to accept the seller's proof of documents at the destination port. He will accept the cargo that has been delivered to the port.</p><p>3) Transfer of risk: Following delivery, ownership of the goods passes to the buyer. Additionally, the risk and damage will be assumed by the buyer if he omits to tell the seller of the designated port.</p><p>4) Customs and duties: The buyer is accountable for import customs and duties when they transfer at the designated harbour. After that, he is still responsible for all risks and fees. This is where the distinction between the DAT and DDP shipping Incoterms® is evident. Under DDP, the seller retains ownership of the duties, payments, and documentation.</p><p><a href="https://cogoport.com/signup/?utm_source=web&amp;utm_medium=incoterm&amp;utm_campaign=DPU" rel="noopener noreferrer" target="_blank"><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/638f226681a8e6b413a2e2fa_Blog-Creative-3.png" alt="638f226681a8e6b413a2e2fa_Blog-Creative-3.png"></a></p><h3><strong>When to Use DPU Incoterm®</strong></h3><p>This rule benefits the seller in situations where they are stronger, holding them accountable and responsible for all tasks in the export country, and it favours the buyer in situations where they are stronger, holding them accountable and responsible for all tasks in the import country. For the main freight, the seller is likewise liable and accountable. A terminal serving as the stated location where the buyer is responsible for unloading is also to be considered.</p><p>To avoid confusion in the transfer of risk and cost, it is crucial to clearly designate the place of delivery. Additionally, the point of import clearance must be evaluated. In any instance, there must be an implicit partnership between the buyer and seller to ensure that the paperwork and procedures go well.</p>

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