Delivery Terms

1. FOB (Free On Board) - Free on Board/Free on Ship

Core: Delivery is completed when the seller loads the goods onto the vessel designated by the buyer at the port of shipment specified in the contract. The dividing line between risk and cost is very clear—the ship's rail.

Seller's Responsibilities:

Responsible for clearing customs and exporting the goods at the port of shipment.

Bears all costs and risks until the goods cross the ship's rail.

Provides a commercial invoice and a clean bill of lading as usual.

Buyer's Responsibilities:

Responsible for chartering and booking space, and paying the main freight.

Responsible for cargo insurance and paying the premium.

Bears all costs and risks after the goods cross the ship's rail (including unloading at the port of destination, customs clearance, taxes, etc.).

Applicable Scenarios: Buyers (importers) wish to control transportation and insurance to save costs or have greater autonomy.

2. CIF (Cost, Insurance and Freight) - Cost, Insurance and Freight/CIF Price

Core: The seller is responsible for paying the freight and insurance costs to transport the goods to the designated port of destination, but the point of risk transfer is the same as with FOB, still at the port of shipment. This is a "sale of documents".

Seller's Responsibilities:

Responsible for chartering and booking shipping space, and paying the normal freight to the port of destination.

Responsible for arranging cargo insurance (usually the minimum coverage, such as CIC's All Risks) and paying the premium.

Bear all costs and risks before the goods cross the ship's rail.

Provide a full set of shipping documents (invoice, bill of lading, insurance policy, etc.).

Buyer's Responsibilities:

Bear the risks after the goods cross the ship's rail.

Responsible for unloading, import clearance, and paying all subsequent costs at the port of destination, including import duties.

Important Clarification: CIF is often misunderstood as "the seller assumes responsibility for delivery," which is incorrect. If the goods are lost at sea, and the buyer claims against the insurance company, the seller is not liable for the loss of the goods themselves as long as they provide valid documents. Applicable scenarios: When the seller (exporter) wants to provide a more convenient "one-stop" quote, or when freight/insurance costs are relatively stable.

3. DDP (Delivered Duty Paid)

Core: The seller bears the greatest responsibility, including transporting the goods to the buyer's designated destination (e.g., the buyer's warehouse), handling all import and export customs clearance, and paying all taxes and fees.

Seller's Responsibilities:

Responsible for the entire transportation and insurance process, and paying all costs.

Responsible for handling export and import customs clearance, and paying all taxes and fees, including export tax, import duty, and VAT.

Bears all risks until the goods are delivered to the buyer at the destination.

Buyer's Responsibilities:

Receives the goods at the designated location at the destination.

Cooperates with the seller to provide the necessary import documents or information (e.g., VAT number).

Bears virtually no transportation or customs clearance-related costs or risks.

Applicable Scenarios: The seller has a branch or partner in the importing country and is familiar with local customs regulations. Or, as a strong sales term, providing maximum convenience to the buyer.