What is EX Work?
Ex Works (EXW) is an international trade term that describes an agreement in which the seller is required to make goods ready for pickup at his or her own place of business. All other transportation costs and risks are assumed by the buyer.
This arrangement is extremely favorable to the seller at the buyer’s expense. The seller is only responsible for packaging the goods and making them available at a designated location, such as the seller’s warehouse. He or she must also help the buyer obtain export licenses or other necessary documentation, but at the buyer’s expense.
Once the goods have been placed at the buyer’s disposal, the buyer is responsible for all costs and risks related to the goods. In practice, this means loading them onto a truck, transferring them to a train, ship or plane, perhaps multiple times, handling customs procedures, unloading them at their destination and storing, using or reselling them, as the case may be. Even if the seller does help the buyer by loading the goods onto a truck, for example, the buyer is the one liable for damage during this process.
EXW price is the factory price for the products with no shipping is included. The buyer must arrange transportation all the way from the factory floor in China to the final destination.
What is CNF?
CNF means “cost and freight” or “cost net freight” and a CNF price includes the cost of shipping to the buyer. CNF is a term used in the export business and may also be indicated as C&F or CFR.
It defines two distinct and separate responsibilities-one is dealing with the actual cost of merchandise “C” and the other “F” refers to the freight charges to a predetermined destination point. It is the shipper/seller’s responsibility to get goods from their door to the port of destination. “Delivery” is accomplished at this time. It is the buyer’s responsibility to cover insurance from the port of origin or port of shipment to buyer’s door. Given that the shipper is responsible for transportation, the shipper also chooses the forwarder.
What is CIF?
Cost, insurance and freight (CIF) is a trade term requiring the seller to arrange for the carriage of goods by sea to a port of destination and provide the buyer with the documents necessary to obtain the goods from the carrier.The supplier arranges delivery to the Port of Destination in the importer’s country. However, Cost Insurance Freight does not include unloading, LCL charges, CSIF or other fees added by the Destination Agent in the Port of Destination.
What is FOB?
1 . Term of sale under which the price invoiced or quoted by a seller includes all charges up to placing the goods on board a ship at the port of departure specified by the buyer. Also called collect freight, freight collect, or freight forward.
2. Used in shipping to indicate that there is no charge to the buyer for goods placed on board a carrier at the point of shipment. Typically followed by the name of a port or city, e.g., F.O.B. London.
The supplier in China delivers the cargo to the Port of Loading (Port of Loading) and takes care of the export clearance. The latter is of high importance since the Chinese Customs Authorities have the right to hold cargo that has not been properly cleared for export.