Commonly used price terms based on sea transportation
FOB - ie delivery on board (... designated port of shipment). It means that the seller delivered the goods on the ship's railboard at the designated port of shipment. After crossing the ship's rail, the buyer must bear the full cost, risk, loss or damage of the goods. In addition, the seller is required to go through the customs clearance procedures for the goods. This term applies to shipping or inland shipping.
Therefore, FOB are usually designated goods, usually foreign customers specify the consignor, consignee, notifier, designated shipping company, the specified shipping sales price, cost of sales, and sometimes specify the freight forwarding company. At present, the goods that take FOB exports account for 80% of China's total exports, and have formed a pattern in which overseas customers provide services to domestic designated freight forwarders.
CFR or C&F—that is, cost plus freight (...named port of destination). It means that the seller must pay for the expenses and freight required to transport the goods to the designated port of destination. However, after the goods are delivered to the ship's deck, the risk, loss or damage of the goods and the additional expenses incurred after the accident are caused by the goods crossing the designated port. After the ship's side, the seller turned to the buyer. In addition, the seller is required to handle the customs clearance procedures for the goods. This term applies to shipping or inland shipping.
CIF - ie cost, insurance plus freight (...named port of destination). It means that the seller shall bear the same obligations as the CCAR in addition to the term cost and freight, and the seller must also handle the maritime insurance of the goods lost or damaged by the buyer during transportation and pay the insurance premium. This term applies to shipping or inland shipping.
The same point and difference of FOB CIF CFR
What they have in common is: 1. Both apply only to shipping and inland shipping, and do not apply to other modes of transportation. 2. The place of delivery is at the port of shipment, that is, the seller completes the delivery at the port of shipment. In particular, note that the CIF term is delivered at the port of shipment, not at the port of destination. 3. The boundaries of risk transfer are the same, and the risk is that the goods are transported to the importer at the port of shipment. 4, are symbolic delivery.
Differences: 1. The two sides have different division of labor in transportation and insurance. FOB terms are the importer's responsibility for transportation and insurance, CIF is the exporter's responsibility for transportation and insurance, CFR is the exporter's responsibility for transportation, and the importer is responsible for insurance. 2, the composition of the price of goods is different. FOB is only the cost price, CIF is the "cost price + insurance + shipping" price, CFR is the "cost price + freight" price.