Glossary of Trade Terms

The exporter pays the costs and freight necessary to get the goods to the named destination. The risk of loss or damage is assumed by the buyer once the goods are loaded at the port of embarkation.

Cost, Insurance and Freight (CIF)

The exporter pays the cost of goods, cargo and insurance plus all transportation charges to the named port of destination.

Delivered at Frontier

The exporter’s obligations are met when the goods arrive at the frontier but before they reach the “customs border” of the importing country named in the sales contract. The expression is commonly used when goods are carried by road or rail.

Delivered Duty Paid

The exporter assumes the risk of damage/loss and paying duty. It is at the other extreme from delivered ex works under which the seller assumes the least responsibility.

Delivered
Ex Quay

The exporter makes the goods available to the buyer on the quay or wharf at the destination named in the sales contract. There are two types of ex quay contracts in use: ex quay duty paid whereby the seller incurs the liability to clear the goods for import, and ex quay duties on buyer’s account whereby the buyer assumes the responsibility.

Delivered
Ex Ship

The exporter makes the goods available to the buyer on board the ship at the location stipulated in the contract, assuming all responsibility and cost for bringing the goods up to this point.

Delivered
Ex Works

The exporter is required only to make the goods available to the buyer at the exporter’s premises or factory. The buyer bears all responsibility for loading the goods on the vehicle provided by the buyer and transporting the goods from the exporter's place of business to their destination.

Ex Works
(EXW)

The price quoted applies only at the point of origin, and the exporter agrees to place the goods at the disposal of the buyer at the specified place on the date or within the period fixed who is then responsible for all other charges.

Free Alongside Ship (FAS)

The price quoted includes charges for delivery of the goods alongside a vessel at the port. The exporter handles the cost of unloading; wharfage, loading, ocean transportation, and insurance are left to the buyer.

Free Carrier...
(named port)

Similar to Free on Board, except that the exporter’s obligations are met when the goods are delivered into the custody of the carrier at the named port. The risk of loss/damage is transferred to the buyer at this time and not at the ship’s rail.

Free on Board (FOB)

The exporter is responsible for the cost of goods to the point of loading them on board the vessel deck or aircraft loading deck at the port of shipment specified in the sales contract. The risk of loss or damage is transferred to the buyer when the goods have been so delivered.

Free on Rail and Free on Truck (FOR/FOT)

The same principles apply as in the case of ordinary FOB, except that the goods are transported by rail or road.