International Shipping Terms

International shipping involves a complex set of terms and abbreviations that define the responsibilities and obligations of buyers and sellers in the process of transporting goods across borders. These terms are outlined in trade contracts and agreements, and they are crucial for establishing clear communication and understanding between parties involved in international trade. Below are some commonly used international shipping terms:

1. EXW – Ex Works:
   • The seller makes the goods available at their premises, and the buyer is responsible for all costs associated with transportation, export duties, and customs clearance.
2. FOB – Free On Board:
   • The seller is responsible for delivering the goods to the named port of shipment, and the buyer assumes responsibility once the goods are on board the vessel.
3. CIF – Cost, Insurance, and Freight:
   • The seller is responsible for the cost of goods, freight charges, and insurance until the goods reach the named port of destination.
4. CIP – Carriage and Insurance Paid To:
   • Similar to CIF, but applicable to any mode of transportation. The seller is responsible for carriage and insurance until the goods reach the named place of destination.
5. DAT – Delivered at Terminal:
   • The seller is responsible for delivering the goods, unloaded from the arriving means of transport, to a named terminal at the destination.
6. DAP – Delivered at Place:
   • The seller is responsible for delivering the goods to a named place at the destination. The buyer is responsible for unloading and import duties.
7. DDP – Delivered Duty Paid:
   • The seller is responsible for delivering the goods to the named place of destination, including all costs and duties. The buyer is responsible only for unloading.
8. DDU – Delivered Duty Unpaid:
   • The seller is responsible for delivering the goods to the named place of destination, excluding import duties. The buyer is responsible for customs clearance and import duties.
9. FCA – Free Carrier:
   • The seller delivers the goods, cleared for export, to the carrier nominated by the buyer at the named place. The risk transfers to the buyer once delivered to the carrier.
10. CFR – Cost and Freight:
    • Similar to CIF, but the buyer is responsible for insurance.
11. FAS – Free Alongside Ship:
    • The seller delivers the goods to the quay or dock next to the vessel named by the buyer.
12. FCA – Free Carrier:
    • The seller delivers the goods, cleared for export, to the carrier nominated by the buyer at the named place. The risk transfers to the buyer once delivered to the carrier.

These terms are part of the International Commercial Terms (Incoterms), which are maintained by the International Chamber of Commerce (ICC). It’s important for parties involved in international trade to clearly specify the chosen Incoterm in their contracts to avoid misunderstandings and disputes.