Export Import Terms For Dummies

moneygolddiamond - Most of us will be happy to sell for money, but when it comes to sell overseas, or import it for instance, could you agree that even a senior in overseas selling or importer sometimes get confusing with terms in export import ? I mean not only freight forwarding terms, but also bank terms, customs clearance terms, international business administration terms, etc.... " No, you kidding, I am a senior and I don't need this creepy articles...." well, if you say so, then this article is not for you, its just for me and my other dummy fellows, so here is article international business & export import terms for dummies.

• CIF Price= "product Cost + Insurance fee + Freight cost
• FOB Price=" product cost + inland delivery cost" (No insurance and No freight)

CIF : IF you sell some product , your responsibility to pack it ,  move it to air port or sea port , book the sea , get Bill of lading and dispatch - Insurance must be taken by you till it reached the destination.
FOB : Your responsibility to pack it and move it to sea port , pay all local charge and hand over the goods to the authorised agents of the customer  and do customer clearance,FOB for buyer(you) means, you need to pay freight, insurrance, and find some forwarder to collect goods to you once goods arrived to your port.

Most  of Supplier prefer FOB price but normal business will done on CIF. But if you need more explanation for that term, I swear I can give u this...

CIF means Cost, Insurance and Freight Named Port of Destination. The Seller has the same obligations as under CFR terms, with the addition that the Seller obtains and pays for insurance coverage against the Buyers’ risk of loss of or damage to the goods during transit. The type of insurance required should be clearly specified in the contract. The Seller is responsible for clearing the goods for shipment. This term is only used for sea and inland waterway transport.

CIP means Carriage and Insurance paid to Named Place of Destination. The Seller has the same obligation as under CPT but with the addition that the Seller has to procure cargo insurance against the Buyer’s risk of loss of or damage to the cargo during the carriage. The type of insurance required should be specified in the contract. Unless otherwise specified, the Seller to arrange the carriage.

CPT means Carriage Paid to Named Place of Destination. The Seller pays the freight for the carriage of the goods to the named destination. The risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time the goods have been delivered to the carrier, is transferred from the Seller to the Buyer when the goods have first been delivered into the custody of the carrier. If being shipped to another country, the Seller shall clear the goods for export.

Unless otherwise specified the Seller to arrange the carriage FOB means Free On Board named port of shipment. The Seller fulfils his obligation to deliver when the goods have passed over the ships rail at the named port of shipment. This term can only be used for sea or inland water transport. Only the cost specified in the contract are payable by the Seller and these should be clearly specified. No duty or clearance for export is the responsibility of the Seller unless this is specified in the contract. Contract to specify who’s responsible for cost of Stowing and

And more explanation about FOB...

First of all, F.O.B. stands for Free On Board and indicates the price for goods including delivery at the seller’s expense to a specified point. In the purchasing world, F.O.B. is also used with an identified physical location to determine a) the responsibility for the payment of the freight charges and b) the point at which title for the shipment passes from the seller to the buyer.


In other words, F.O.B. is a purchasing term that is used between suppliers and customers. Every vendor and customer should have the F.O.B. requirements specified.monty blog


F.O.B. terms identify:


Below are four different ways in which F.O.B. terms are used in a purchasing agreement:


F.O.B. Origin, Freight Collect: The “origin” part means that the buyer assumes title of the goods the moment the freight carrier picks up and signs the bill of lading at the origin pick-up location. The buyer also assumes risk of transportation, and therefore is responsible for filing claims in the case of loss or damage. The “freight collect” part means the buyer is responsible for the freight charges.


F.O.B. Origin, Freight Prepaid: The “origin” part means the same as above, but the “freight prepaid” part means the seller is responsible for the freight charges.woodrow blog


F.O.B. Destination, Freight Collect: The “destination” part means the seller retains title and control of the goods until they are delivered. The seller selects the carrier and is responsible for the risk of transportation and filing claims in case of loss or damage. The “freight collect” part means the buyer is responsible for the freight charges.


F.O.B. Destination, Freight Prepaid: The “destination” part means the same as above and the “freight prepaid” part means the seller is responsible for the freight charges.

Written / Post by : masBuddy
Labels/Categories : export import for dummies