Standard Shipping Terms
The below is guide to standard commonly used shipping terms:
|TERMS||EXPORT CUSTOMS DECLARATION||CARRIAGE TO PORT OF EXPORT||EXPORT HANDLING||LOADING ONTO VESSEL / AIRCRAFT||CARRIAGE AIR, ROAD & SEA TO DESTINATION||ARRIVAL TERMINAL CHARGES||LOADING ON TRUCK AT PORT||CARRIAGE TO PLACE OF DESTINATION||INSURANCE||IMPORT CUSTOMS CLEARANCE||IMPORT TAXES|
A simple explanation of shipping terms.
EXW ( Ex Works ) – The supplier of the goods agrees to make the goods available at his “factory gate / warehouse doors”, it is then the buyers responsibility to arrange all transportation and insurance. Very common shipping term when buying from USA and Canada.
FOB ( Free On Board ) – The supplier pays his own local charges and agrees to get the goods to the Port / Airport of departure, it is then the buyers responsibility to arrange all transportation and insurance. Very common shipping term when buying from China & Far East.
CFR ( Carriage, Freight to ships Railing ) – The supplier pays all shipping charges up to the point where the goods cross the “ships railing” at destination. Very traditional shipping term commonly used when selling goods that are being transported by Sea.
CPT ( Carriage Paid To ) – The supplier pays all shipping charges to a specific named place. Often used by UK Exporters when sending shipments by Air Freight.
CIF ( Cost of goods, Insurance and Freight ) – The supplier pays all shipping charges to a specific named place and also pays insurance. Often used by UK Exporters. However a shipping term to be avoided when importing as there are often hidden UK handling charges.
DAT ( Delivered At Terminal ) – Shipper agrees to pay all transport & insurance to a specific Airport, Sea Port or Terminal.
DAP ( Delivered At Place ) – Shipper agrees to pay all transport & insurance to a specific place.
DDU ( Door To Door (taxes) Unpaid ) – This is the term used when shipments are sent door to door, examples being by DHL, Fedex, UPS, TNT, etc. All the consignee pays is his local import taxes. This term although commonly used by most shippers & buyers has been officially superseded by the term DAP. See above.
DDP ( Door To Door (taxes) Paid ) – This is the term used when shipments are sent door to door and the shipper does not want the consignee to have to pay anything, examples being by DHL, Fedex, UPS, TNT, etc. THIS SERVICE IS ONLY AVAILABLE BY SPECIAL ARRANGEMENT.
Disclaimer: The above should be used as a guide only and specific, independent legal advice should be obtained prior to entering into any contracts.