Liabilities For Seller & Buyer Under International Trade Terms (INCOTERMS)

To TSTC Automatic Doors, most of our revolving doors, sliding doors or hermetic doors are exported to overseas clients, making familiarity with international trade rules are essential to our business, like the INCOTERMS (International Commercial Terms) . The ranking of liabilities for sellers and buyers under INCOTERMS(V.2020) are as below .

I. Core Logic

Seller's liabilities ascending = Buyer's liabilities descending

Core liability demarcations: risk transfer point, carriage, insurance, customs clearance, freight bearing .

II. Full Rankings (Two Comparative Groups)

Ranking 1: Seller's Liabilities [Minimum → Maximum]

EXW < FCA < FAS < FOB < CFR < CIF < CPT < CIP < DAP < DPU < DDP

Ranking 2: Buyer's Liabilities [Maximum → Minimum]

EXW > FCA > FAS > FOB > CFR > CIF > CPT > CIP > DAP > DPU > DDP

III. Brief Liability Explanation for Each Term

▪ EXW Ex Works

Minimum liability for the seller: Only prepare goods. The buyer arranges collection at the seller's premises and bears all carriage, customs clearance, expenses and risks.

▪ FCA Free Carrier

The seller delivers goods to the designated carrier's warehouse and completes export customs clearance, all subsequent freight and risks rest with the buyer.

▪ FAS Free Alongside Ship

Goods are delivered alongside the vessel at the port of shipment. The seller handles export customs clearance, while the buyer bears ocean freight and insurance.

▪ FOB Free On Board

The seller covers all expenses and risks prior to goods being loaded on board the vessel. Ocean freight and marine insurance are at the buyer's own cost.

▪ CFR Cost and Freight

The seller pays the main ocean freight, insurance is purchased independently by the buyer.

▪ CIF Cost, Insurance and Freight

The seller pays ocean freight plus minimum marine insurance coverage. Risk transfers upon goods being loaded on the vessel at the port of destination.

▪ CPT Carriage Paid To

Applicable to all modes of multimodal transport. The seller pays full main carriage charges, insurance is borne by the buyer.

▪ CIP Carriage and Insurance Paid To

The seller pays full carriage fees plus cargo insurance, valid for all transport modes.

▪ DAP Delivered At Place

The seller undertakes carriage to the destination designated by the buyer, unloading charges are for the buyer's account.

▪ DPU Delivered At Place Unloaded

Goods are delivered to the destination with unloading costs covered by the seller, import customs clearance remains the buyer's responsibility.

▪ DDP Delivered Duty Paid

Maximum liability for the seller: Door-to-door delivery, full carriage and insurance costs, completion of import customs clearance and payment of import duties & VAT. The buyer only takes delivery of goods.

IV. Simplified Comparison of Widely Used Seaborne Terms

Seller's liabilities in ascending order: EXW < FOB < CFR < CIF < DAP < DDP

Buyer's liabilities in ascending order: DDP < DAP < CIF < CFR < FOB < EXW

V. Mnemonic Cheat Sheet

▪ EXW (Ex Works): Buyer covers everything .

▪ FOB (Free On Board): Buyer pays ocean carriage after loading .

▪ CFR: Seller covers freight only .

▪ CIF: Seller covers freight plus insurance .

▪ DAP: Buyer bears unloading fees after goods arrive at destination .

▪ DDP: Seller takes full burden including import duties .