Ningbo Chuangqi Machinery Equipment Co., Ltd. products for global sales, due to the restrictions of international logistics conditions, for different regions and countries will use different shipping methods, and will produce different transportation costs, in order to avoid buyers in different regions and countries caused unnecessary losses, we will make a specific explanation of the main transaction methods:
- FOB, CIF: Support global buyers
- DDP: Currently only supported: USA, Canada, Australia, EU member states, Malaysia, Indonesia
Before placing an order, please carefully choose the above 3 trading methods according to your actual situation to avoid unnecessary losses;
Below we will list the general rules of interpretation of the above 3 trading methods for understanding:
FOB Incoterm (Free on Board)
Under the FOB Incoterm, the goods are deemed to be delivered by the seller to the buyer when they are delivered on board the ship nominated by the buyer at the named port of shipment or the seller procures the goods so delivered.Therefore, the risk of loss/damage to the goods is shifted onto the buyer once the goods are placed on board the ship. The seller shall clear the goods for export, not import.
No insurance is required under the FOB Incoterm to be concluded by the seller or the buyer.
CIF Incoterm (Cost, Insurance and Freight)
The regime of the CIF Incoterm is very similar to the one under the CFR Incoterm:
- the goods are to be delivered under the CIF Incoterm when the seller places them on board the ship or procures them so delivered;
- although the transfer of risk takes place at the port of delivery, the seller has an obligation to conclude a contract of carriage of the goods until the port of destination;
- the seller must bear all costs related to unloading at the port of destination resulting from the the contract of carriage, unless agreed otherwise;
- the seller has an obligation to clear the goods for export, not import.
DDP Incoterm (Delivered Duty Paid)
Under the DDP Incoterm, the goods are supposed to be delivered by the seller to the buyer if they are placed at the disposal of the buyer, cleared for import, on the arriving transportation vehicle, ready for unloading at the place of destination or an agreed point within such place, if any.The DDP Incoterm imposes the maximum responsibility on the seller as it is the only Incoterm requiring import clearance by the seller.
As in the case of the other Incoterms, the DDP Incoterm requires that the seller conclude the contract of carriage or otherwise arrange the carriage at its expense. No insurance contract is, however, required from the seller/the buyer.