Ex Works
The seller makes the goods available at their premises. The buyer bears all costs and risks from that point forward.
Seller Responsibilities:
- Make goods available at named place
- Provide commercial invoice
Buyer Responsibilities:
- All transportation costs
- Export/import clearance
- All risks from seller's premises
Free On Board
The seller delivers goods on board the vessel at the named port of shipment. Risk transfers when goods pass the ship's rail.
Seller Responsibilities:
- Deliver goods on board vessel
- Export clearance
- Loading costs at origin
Buyer Responsibilities:
- Main carriage costs
- Import clearance
- Risk from ship's rail
Free Carrier
In this type of transaction, the seller is responsible for arranging transportation, but he is acting at the risk and expense of the buyer. Unlike FOB where the freight forwarder or carrier is chosen by the buyer, in FCA the seller chooses and works with the freight forwarder or carrier. "Delivery" is accomplished at a predetermined port or destination point, and the buyer is responsible for insurance.
Seller Responsibilities:
- Arrange transportation
- Delivery at predetermined port or destination point
- Risk and expense until delivery
- Work with chosen freight forwarder or carrier
Buyer Responsibilities:
- Insurance from delivery point onward
- Cost and risk after delivery
Free Alongside Ship
In these transactions, the buyer bears all transportation costs and the risk of loss of goods. FAS requires the shipper/seller to clear goods for export, which is a reversal from past practices. Companies selling on these terms will ordinarily use their freight forwarder to clear the goods for export. "Delivery" is accomplished when the goods are turned over to the buyer’s forwarder for insurance and transportation.
Seller Responsibilities:
- Clear goods for export
- Deliver goods alongside the ship
- Coordinate with freight forwarder for export clearance
Buyer Responsibilities:
- All transportation costs
- Assume risk of loss after delivery alongside the ship
- Insurance and onward transportation
Cost and Freight
This term, formerly known as CNF (C&F), defines two distinct responsibilities — "C" for the cost of the merchandise and "F" for the freight charges to a predetermined destination point. It is the shipper/seller's responsibility to get goods from their door to the port of destination. "Delivery" is accomplished at this time. The buyer is responsible for insurance from the port of origin or port of shipment to the buyer's door. Since the shipper is responsible for transportation, the shipper also chooses the forwarder.
Seller Responsibilities:
- Cost of merchandise
- Freight charges to destination port
- Arrange transportation to port of destination
- Choose and work with the freight forwarder
- Delivery at port of destination
Buyer Responsibilities:
- Insurance from port of origin or shipment
- Cost and risk after delivery at destination port
- Onward transportation from destination port
Carriage and Insurance Paid To
This term is primarily used for multimodal transport. Because it relies on the carrier's insurance, the shipper/seller is only required to purchase minimum coverage. When this agreement is in force, freight forwarders often act as carriers. The buyer’s insurance becomes effective when the goods are turned over to the forwarder.
Seller Responsibilities:
- Arrange and pay for carriage to the named destination
- Purchase minimum insurance coverage
- Delivery to the freight forwarder or carrier
Buyer Responsibilities:
- Insurance coverage beyond minimum requirements
- Risk and cost after delivery to the forwarder
- Onward transportation beyond the named destination
Cost, Insurance & Freight
The seller pays costs, freight, and insurance to bring goods to the named port. Risk transfers when goods pass ship's rail.
Seller Responsibilities:
- Main carriage to destination port
- Marine insurance
- Export clearance
Buyer Responsibilities:
- Import clearance
- Unloading at destination
- Risk from ship's rail at origin
Carriage Paid To
The seller pays freight to the named destination. Risk transfers when goods are handed to the first carrier.
Seller Responsibilities:
- Main carriage to destination
- Export clearance
- Loading at origin
Buyer Responsibilities:
- Import clearance
- Risk from first carrier
- Unloading at destination
Delivered Duty Paid
The seller delivers goods cleared for import at the named destination. Maximum obligation for seller.
Seller Responsibilities:
- All transportation costs
- Export/import clearance
- All duties and taxes
- All risks until delivery
Buyer Responsibilities:
- Take delivery at named place
- Unloading (unless agreed otherwise)
Delivered At Place
The seller delivers goods ready for unloading at the named destination. Import clearance is buyer's responsibility.
Seller Responsibilities:
- All transportation costs
- Export clearance
- Risk until ready for unloading
Buyer Responsibilities:
- Import clearance
- Import duties and taxes
- Unloading at destination
Delivered At Frontier
Here, the seller's responsibility is to hire a forwarder to take goods to a named frontier, usually a border crossing point, and clear them for export. "Delivery" occurs at this time. The buyer's responsibility is to arrange with their forwarder to pick up the goods after export clearance, carry them across the border, clear them for importation, and effect delivery. In most cases, the buyer's forwarder handles accepting the goods at the border across foreign soil.
Seller Responsibilities:
- Hire forwarder to transport goods to named frontier
- Clear goods for export
- Delivery at the frontier point
Buyer Responsibilities:
- Arrange pick up with forwarder after export clearance
- Carry goods across the border
- Clear goods for importation
- Effect final delivery
- Accept goods at border through buyer’s forwarder
Delivered Ex Ship
In this type of transaction, it is the seller's responsibility to get the goods to the port of destination or to engage the forwarder to move the cargo to the port of destination uncleared. "Delivery" occurs at this time. Any destination charges that occur after the ship is docked are the buyer's responsibility.
Seller Responsibilities:
- Get goods to the port of destination
- Engage forwarder to move cargo to port uncleared
- Delivery occurs at port of destination
Buyer Responsibilities:
- Pay any destination charges after ship docking
- Clear goods for import
- Arrange onward transportation
Delivered Ex Quay
In this arrangement, the buyer/consignee is responsible for duties and charges, and the seller is responsible for delivering the goods to the quay, wharf, or port of destination. In a reversal of previous practice, the buyer must also arrange for customs clearance.
Seller Responsibilities:
- Deliver goods to the quay, wharf, or port of destination
Buyer Responsibilities:
- Pay duties and charges
- Arrange customs clearance
- Arrange onward transportation
Delivered Duty Unpaid
This arrangement is basically the same as with DDP, except the buyer is responsible for the duty, fees, and taxes.
Seller Responsibilities:
- All transportation costs
- Export/import clearance
- All risks until delivery
- Delivery to named destination
Buyer Responsibilities:
- Pay all duties, fees, and taxes
- Take delivery at named place
- Unloading (unless agreed otherwise)
