What is the difference between EXW and DDP?
EXW and Delivered Duty Paid (DDP) are two s on opposite sides of the spectrum. Under DDP, the seller has the maximum obligation, while under EXW, the buyer has the maximum obligation. DDP requires the seller to deliver goods from the seller's warehouse to the buyer's final destination.
What incoterm is equivalent to FOB?
Companies that ship domestically within the United States often use the trade term FOB-Free On Board. But FOB has a completely different meaning under the international trade terms, Incoterms 2020. Exporters who want to use the international equivalent to FOB often use the Incoterm FCA-Free Carrier At.
Why do we use CIF Incoterms?
If the buyer is unsure of the product's export requirements, CIF obligates the seller to ensure their products can be correctly exported. This can be helpful when shipping dangerous or hazardous goods, and when purchasing in countries whose rules and regulations are not properly documented.
Who pays for FOB shipping?
the buyerWho Pays Freight for FOB Origin? If the terms include the phrase "FOB origin, freight collect," the buyer is responsible for freight charges. If the terms include "FOB origin, freight prepaid," the buyer assumes the responsibility for goods at the point of origin, but the seller pays the cost of shipping.
Who pays for FOB shipping vs FOB destination?
Free on board destination indicates that the seller retains liability for loss or damage until the goods are delivered to the buyer. FOB shipping point is usually paid for by the buyer, while FOB destination is usually paid for by the seller.
What is the cheapest Incoterm?
Generally, EXW is the cheapest, CIF is the most expensive, and FOB is somewhere in between.
How do you explain Incoterms?
The Incoterms® are a set of 11 individual rules issued by the International Chamber of Commerce (ICC) which define the responsibilities of sellers and buyers for the sale of goods in international transactions.
What is FOB and EXW?
Ex Works (EXW) and Free On Board (FOB) are two Incoterms used for standardising and easing international freight transport. As with all Incoterms, they are used to establish the responsibilities and risks of the seller and buyer – but which one is better for you?
What is C term shipping?
The [C" terms: (CFR, CIF, CPT and CIP) – Terms where the seller/ exporter/ manufacturer is responsible for contracting and paying for carriage of the goods, but not responsible for additional costs or risk of loss or damage to the goods once they have been shipped.
What is the difference between Incoterms and shipping terms?
Shipping terms are also called INCOTERMS. Incoterm is the elided word that shortens International Commercial Terms. They are 3 letter abbreviations recognized throughout the world. They tell each party concisely what is expected of them in selling and in contract negotiations.
