Terms used in shipping such as EXW (Ex Works),FCA (Free Carrier),CFR (Cost and Freight),Terms of Trade etc

The Buyers and Sellers are suggested to use Incoterms 2020, the latest version of delivery terms for movement of goods.  Click here to read the extract of Inco Terms 2020, easily explained.

Terms used in shipping such as EXW (Ex Works),FCA (Free Carrier),CFR (Cost and Freight),Terms of Trade etc.

This post explains about terms used in shipping such as EXW (Ex Works),FCA (Free Carrier),CFR (Cost and Freight),Terms of Trade,TERRITORIAL WATERS,Textile Surveillance Body,Delivered Ex Ship etc. These terms used in international business are arranged in alphabetical order and you may add more information about terms used in export business at the end of this article, if you wish.

Terms used in shipping

The Exporter and Importers may use latest version of Inco Terms 2020 for movement of their goods.  Click here to read the content of Incoterms 2020, easily explained

Terms of Sale:The point at which sellers have fulfilled their obligations so the goods in a legal sense could be said to have been delivered to the buyer. They are shorthand expressions that set out the rights and obligations of each party when it comes to transporting the goods. Following, are the thirteen terms of sale in international trade as Terms of Sale reflected in the recent amendment to the International chamber of Commerce Terms of Trade (INCOTERMS), effective July 1990: exw, fca, fas, fob, cfr, cif, cpt, cip, daf, des, deq, ddu and ddp.

· EXW (Ex Works) (...Named Place): A Term of Sale which means that the seller fulfills the obligation to deliver when he or she has made the goods available at his/her premises (i.e., works, factory, warehouse, etc.) to the buyer. In particular, the seller is not responsible for loading the goods in the vehicle provided by the buyer or for clearing the goods for export, unless otherwise agreed. The buyer bears all costs and risks involved in taking the goods from the seller's premises to the desired destination. This term thus represents the minimum obligation for the seller.

· FCA (Free Carrier) (... Named Place): A Term of Sale which means the seller fulfills their obligation when he or she has handed over the goods, cleared for export, into the charge of the carrier named by the buyer at the named place or point. If no precise point is indicated by the buyer, the seller may choose, within the place or range stipulated, where the carrier should take the goods into their charge.

· FAS (Free Alongside Ship) (...Named Port of Shipment): A Term of Sale which means the seller fulfills his obligation to deliver when the goods have been placed alongside the vessel on the quay or in lighters at the named port of shipment.This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment.

· FOB (Free On Board) (...Named Port of Shipment): An International Term of Sale that means the seller fulfills his or her obligation to deliver when the goods have passed over the ship's rail at the named port of shipment. This means that the buyer has to bear all costs and risks to loss of or damage to the goods from that point. The FOB term requires the seller to clear the goods for export.

· CFR (Cost and Freight) (...Named Port of Destination): A Term of Sale where the seller pays the costs and freight necessary to bring the goods to the named port of destination, Terms of Sale but the risk of loss of or damage to the goods, as (continued) well as any additional costs due to events occurring after the time the goods have been delivered on board the vessel, is transferred from the seller to the buyer when the goods pass the ship's rail in the port of shipment. The CFR term requires the seller to clear the goods for export.

· CIF (Cost, Insurance and Freight) (...Named Place of Destination): A Term of Sale where the seller has the same obligations as under the CFR but also has to procure marine insurance against the buyer's risk of loss or damage to the goods during the carriage. The seller contracts for insurance and pays the insurance premium. The CIF term requires the seller to clear the goods for export.

CPT (Carriage Paid To) (...Named Place of Destination): A Term of Sale which means 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 been delivered into the custody of the carrier. If subsequent carriers are used for the carriage to the agreed upon destination, the risk passes when the goods have been delivered to the first carrier. The CPT term requires the seller to clear the goods for export.

· CIP (Carriage and Insurance Paid To) (...Named Place of Destination): A Term of Sale which means the seller has the same obligations 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 goods during the carriage. The seller contracts for insurance and pays the insurance premium. The buyer should note that under the CIP term the seller is required to obtain insurance only on minimum coverage. The CIP term requires the seller to clear the goods for export.

· DAF (Delivered At Frontier) (...Named Place): A Term of Sale which means the sellers fulfill their obligation to deliver when the goods have been made available, cleared for export, at the named point and placed at the frontier, but before the customs Terms of Sale border of the adjoining country. (continued)

· DDU (Delivered Duty Unpaid) (...Named Port of Destination): A Term of Sale where the seller fulfills his obligation to deliver when the goods have been made available at the named place in the country of importation. The seller has to bear the costs and risks involved in bringing the goods thereto (excluding duties, taxes and other official charges payable upon importation) as well as the costs and risks of carrying out customs formalities. The buyer has to pay any additional costs and to bear any risks caused by failure to clear the goods for in time.

· DDP (Delivered Duty paid) (...Named Port of Destination): "Delivered Duty Paid" means that the seller fulfills his obligation to deliver when the goods have been made available at the named place in the country of importation. The seller has to bear the risks and costs, including duties, taxes and other charges of delivering the goods thereto, clear for importation. While the EXW term represents the minimum obligation for the seller, DDP represents the maximum.

· DES (Delivered Ex Ship) (...Named Port of Destination): A Term of Sale where the seller fulfills his/her obligation to deliver when the goods have been made available to the buyer on board the ship, uncleared for import at the named port of destination. The seller has to bear all the costs and risks involved in bringing the goods to the named port destination.

· DEQ (Delivered Ex Quay, [Duty Paid]) (...Named Port of Destination): A Term of Sale which means the DDU term has been fulfilled when the goods have been available to the buyer on the quay (wharf) at the named port of destination, cleared for importation. The seller has to bear all risks and costs including duties, taxes and other charges of delivering the goods thereto.

· Dimensional Weight:Dimensional weight is a calculation of the shipment's weight based on its volumetric standard instead of its actual weight. Dimensional weight is calculated by multiplying the length by width by height of each package in inches or centimeters and dividing by a dimensional weight divisor. The dimensional weight divisor varies by service offering and unit of measure (inches or centimeters).For FedEx International Priority, FedEx International First & FedEx International Economy rates are based on the total weight of all packages in one shipment using one air waybill. Any fraction of a kilo takes the next higher weight.When dimensional weight exceeds actual weight, shipments will be charged according to the IATA volumetric standard.

Dimensional weight in kg = Length x Height x Width in cm

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Terms of Trade - Terms of trade refers to the economic factors affecting a country's foreign trade in goods and services, such as dependency on foreign sourcing and relative competitiveness in production.

TERRITORIAL WATERS:That portion of the sea up to a limited instance which is immediately adjacent to the shores of any country and over which the sovereignty and exclusive jurisdiction of that country extend.

TEU - Twenty Foot Equivalent Unit - Unit of measurement equivalent to one 20 foot shipping container. Thus a 40-foot container is equal to two t.e. u.s. This measurement is used to quantify for example, the container capacity of a ship, the number of containers on a particular voyage or over a period of time, or it may be the unit on which freight is payable.

Textile Surveillance Body - The TSB is an international body which meets in Geneva at the GATT to monitor the Multi-Fiber Arrangement. The TSB receives reports of all textile restrictions and can make recommendations to participants. It can mediate disputes between parties to the MFA but has no binding powers. Membership is balanced between importing and exporting members.

TF - Trade Fair (Overseas-Recruited)

TFC - Trade Fair Certification

T-floor:Interior floor in a reefer, so named because of the longitudinal T-shaped rails which support the cargo and form a plenum for air flow beneath the cargo.

TFW - Trade Fair (Washington-Recruited)

THC (TERMINAL HANDLING CHARGE):A charge made for certain handling services performed at terminals.

THC:Terminal handling charge, levied by CY and CFS operators for goods passing through their operations.

The Exporter and Importers may use latest version of Inco Terms 2020 for movement of their goods.  Click here to read the content of Incoterms 2020, easily explained

The above details describes about terms called in shipping such as EXW (Ex Works),FCA (Free Carrier),CFR (Cost and Freight),Terms of Trade,TERRITORIAL WATERS,Textile Surveillance Body,Delivered Ex Ship etc. These phrases may help importers and exporters on their day to day business activities. The readers can also add more information about terms used in shipping business below this post.Terms used in shipping such as Summit Conference,Super 301,Supply Access ,Surety Company,Surveillance,Surveillance Body

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