Common transaction methods and differences in foreign trade

There are several common transaction methods for international freight.
1. FOB price
In simple terms, foreign customers have already designated a freight forwarder, and the shipper only needs to arrange the trailer and customs clearance at the port of departure. There is also an EXW ex-factory price, which is delivered directly at the factory or at the customer's designated place. The trailer and customs clearance are arranged by the customer, and the customer picks up the goods by himself, and the factory delivery is fine.
2. CIF Cost plus Insurance and Freight
To put it simply, it means door to port (including trailer + customs declaration + ocean freight at the port of departure). It is generally said that insurance is not included. If the customer requires insurance, it will be calculated based on the value of the goods. The term CIP can also be used, but CIF is generally only used in ocean shipping. CIP is applicable to all modes of transport including multimodal transport, such as air transport.
3. DDU (Delivery Duty Unpaid)
DDP means delivery after double clearance and duty paid (tax included). It can be generally understood as door-to-door. The so-called one-stop service of double clearance includes trailer at the port of departure + customs declaration + sea transportation + customs clearance at the port of destination. Whether door-to-door delivery is needed depends mainly on the needs of customers. It should be noted that DDP must provide the value of the goods because the tax payment is based on the value of the goods.
Therefore, when asking for quotes from a freight forwarder, it is best to first state whether it is FOB/CIF/DDU/DDP, etc.

If it is FOB, you need to provide: Goods Name/Container Type/Quantity/Weight/Loading Address/Port of Departure/Bill of lading or document. Of course, it may also be bulk cargo, you don't need to provide the container type, just the quantity: how many square meters.

The most common transaction methods are: EXW FOB CFR CIF [EXW]      

EXW (Ex Works), which means "Ex Works" in Chinese, means that when the seller hands over the goods to the buyer at its location or other designated locations (such as workshops, factories or warehouses), the delivery is completed. The seller does not go through export customs clearance procedures or load the goods on any means of transport. Under this trade method, the seller generally cannot obtain export goods transportation documents. The customs will generally print "FOB" in the transaction method column of the customs declaration.

FOB (Free On Board) means "free on board" in Chinese, also known as "offshore price". It refers to a transaction based on the off-shore price. The buyer is responsible for sending a ship to pick up the goods, and the seller shall load the goods onto the vessel designated by the buyer at the port of shipment and within the specified time limit specified in the contract, and notify the buyer in a timely manner.

CFR (Cost and Freight) means "cost plus freight" in Chinese. It means that the goods are delivered on board the ship at the port of shipment, and the seller needs to pay the cost of transporting the goods to the designated port of destination.

CIF (Cost, Insurance and Freight) means "Cost plus Insurance plus Freight" in Chinese. Under this term, the price of goods includes the usual freight from the port of shipment to the agreed port of destination and the agreed insurance premium. Therefore, in addition to the same obligations as under the CFR term, the seller must also arrange freight insurance for the buyer and pay the insurance premium.