The freight, in this case, is essentially the cost of international shipping, which can be sea fare or airfare. Freight Prepaid is the agreement in case of incoterms such as C&F,CIF,CFR,DDU, whereas Freight Collect is seen in the case ofEXWand FOB. Read on to understand how either arra...
The biggest difference between prepaid and collect is the payment time. Under the freight prepaid case, the buyer should pay for the freight before shipping. Under the freight collect case, the buyer needs to pay for this cost when his cargo arrives at the destination. For importers with a ...
The term “freight on board” originated from the days of sailing ships when goods were “passed over the rail by hand,” as defined in Incoterm. The term “FOB” was used to refer to goods transported by ship since sea transport was the main method of transporting cargo from far countri...
Despite common belief and practice, FOB Incoterm should only be used for non-contained ocean freight. This error is so common that it becomes a misunderstanding that is deeply ingrained in the minds of importers and exporters. The main risk involved is the port of origin. Under FOB, the ris...
Basically, an incoterm consists of two components: a three-letter code and a city name. Let’s begin with the first part. The three letters incoterm code specifies “how far” the supplier shall ship the cargo. Basically, how much of the shipping you pay the supplier to handle. Based ...
Whoever in your unique situation is deemed the shipper, they are responsible for the first leg of the shipping process. The shipper checks, packs, marks, and prepares the goods for delivery. Depending on the Incoterm used for the shipment and the terms of the contract of carriage, the shipp...
They are made available for the buyer to collect as individual pieces already unloaded. Therefore the seller CANNOT deliver DAP Airport!For delivery at the buyer’s premises the seller pays for carriage into the airport terminal. Then the seller’s carrier or their local office/agent again takes...
incoterms is to provide a set of international rules for the interpretation of the most commonly used trade term in foreign trade. Thus, the uncertainties of interpretations of such terms are mitigated. The chart below provides a graphical representation of the key points of each incoterm. EXW(...
Proof Of Delivery, or a cargo/package receipt with the signature of recipient. This term has been widely used in courier and express industry and also gaining more attention and implementation at air cargo industry.. Pro Forma Invoice An invoice provided by a supplier prior to the shipment of...
Free on board is an international trade term under theIncotermsrules published by theInternational Chamber of Commerce (ICC).Costs associated with FOB include transportation of the goods to the port of shipment, loading the goods onto the shipping vessel, marine freight transport, insurance, and un...