What Are the Different Types of International Trade?

Trade terms of international trade, also known as terms of trade and prices. In international trade, the obligations assumed by buyers and sellers will affect the price of goods. In the long-term practice of international trade, gradually forming certain trade terms and prices that are closely related to prices have been directly linked, forming a number of quotation models. Each model specifies the obligations of the buyer and seller in certain terms of trade. The term used to describe this obligation is called a trade term.

International trade term

For the use of international trade terms,

The first category: applicable to any

Thirteen types of trade terms are listed in the 1990 General Terms for Interpreting International Trade Terms. The main points are as follows:

(1) ex-factory delivery (EXW)

This term is in English "EX Works (... named place)", which means "ex works (... named place)".

It means that the seller has the responsibility to deliver the prepared goods to the buyer at its place, that is, the workshop, factory, warehouse, etc., but is generally not responsible for loading the goods on the vehicle prepared by the buyer or for customs clearance. The buyer bears all costs and risks of moving the goods from the seller's location to the intended destination.

(2) Cargo delivery carrier (FCA)

This term is in English "Free Carrier (... named place)", which means "Cargo Delivery (... named place)"

It means that the seller shall be responsible for delivering the goods he has handed over to the designated carrier at the designated place after the customs clearance. According to commercial practice, when the seller is required to cooperate with the carrier by signing a contract, the seller can do so at the buyer's risk and expense. This term applies to any mode of transport.

(3) Shipside Delivery (FAS)

This term is in English "Free Alongside ship (... named port of shipment)".

It means that the seller delivers the goods to the side of the ship at the designated port or barge. From then on, the buyer must bear all the costs and risks of the loss or damage of the goods, and the buyer must go through the customs clearance procedures. This term applies to sea or inland water transportation.

(IV) Delivery on Board (FOB)

This term is in English "Free on Board (... named port of shipment)", which means "delivery on board (... named port of shipment)".

It means that the seller delivers the goods after passing the ship's rail at the designated port of shipment. After the goods pass the ship's rail, the buyer must bear the full cost, risk, loss or damage of the goods, and additionally requires the seller to go through the export customs clearance formalities. This term applies to sea or inland water transportation.

(5) Cost and Freight (CFR or c & F)

This term in English is "Cost and Freight (named port of shipment)", which means "cost and freight (... named port of shipment)".

It means that the seller must pay the expenses and freight required to ship the goods to the designated port of destination. However, after the goods are delivered to the ship's deck, the risks, loss or damage of the goods and the additional expenses caused after the accident occur, After the ship's rail, the seller turns to the buyer. In addition, the seller is required to go through customs clearance procedures for the goods. This term applies to sea or inland water transportation.

(6) Cost, insurance and freight (CIF)

This term is in English "Cost, Insurance and Freight (... named port of shipment)", which means "cost, insurance and freight (... designated port of destination)".

It means that in addition to the seller having the same obligations as the term cost and freight, the seller must also handle marine insurance and pay insurance premiums for the loss or damage of the goods during the transportation of the goods. This term applies to sea or inland water transportation.

(VII) Freight to (CPT)

This term is in English "Carriage Paid to): tid to (... named place of destination)", that is, "freight to (... named destination)".

This term refers to the freight paid by the seller to the designated destination. The risk of loss or damage to the goods and any additional costs incurred after the goods are delivered to the carrier shall be transferred from the seller to the buyer from the time the goods have been delivered to the carrier for their care. In addition, the seller must go through customs clearance procedures for the export of the goods. This term applies to all modes of transport, including multimodal transport.

(8) Freight and insurance payment to (CIP)

This term is in English "Carriage and Insurance Paid to (... named place of destination)", that is, "Carriage and Insurance Paid to (... named place of destination)".

It means that in addition to the seller having the same obligations as the term "freight to (... named destination)", the seller must also apply for marine insurance for the risk of loss of or damage to the goods which should be borne by the buyer during transportation And pay insurance premiums. This term applies to any mode of transport.

(9) Border Delivery (DAF)

The English name of this term is "Delivered at Frontier (... named place)", which means "border delivery (... named place)".

It refers to the seller's obligation to transport the prepared goods to a designated place on the border, to complete the customs clearance procedures for the export of the goods, and to deliver the goods before the customs clearance of the neighboring country. Other modes of transportation.

(X) Delivery on board at the port of destination (DES)

The English of this term is "Delivered Ex Ship (... named port of destination)", which means "delivered on board (... named port of destination)".

It means that the seller fulfills the following obligations to deliver the prepared goods to the buyer without going through the customs formalities of importing the goods on the ship's deck at the designated port of destination. Therefore, the seller must bear all the costs including shipping the goods to the designated port of destination And risk. This term applies only to sea or inland waterway transportation.

(11) Delivery at the port of destination (DEQ)

The English language of this term is: "Delivered Ex Quay (Duty Paid) (... named port of destination)", which means "delivery at the port of destination (duties paid) (... designated port of destination)".

This term refers to the seller fulfilling its obligations to deliver its prepared goods to the buyer after completing customs clearance at the port of the designated port of destination, and the seller must bear all risks and costs, including Guan Rui, taxes, and other delivery Incurred expenses. This term applies to sea or inland water transportation.

(12) Duty Free Delivery (DDU)

The English name of this term is "Delivered Duty Unpaid (... named place of destination)", which means "unpaid delivery (... named destination)".

It means that the seller will deliver the prepared goods to the place designated by the importing country, and shall bear all the costs and risks (excluding customs duties, taxes and other official fees payable when importing) of the goods to the designated place, and additionally bear Costs and risks of customs procedures. The buyer must bear the extra costs and risks caused by the failure to complete the customs clearance of the goods in time. This term applies to all modes of transport.

(13) Delivery after Duty Payment (DDP)

The English name of this term is "Delivered Duty Paid (... named place of destination)", which means "delivered after payment (... named destination)". It means that the seller delivers the prepared goods at the designated place in the importing country, and bears all the costs and risks of shipping the goods to the designated place, and handles the import clearance. This term can be applied to various modes of transportation.