In international trade there is something referred to as Incoterms. These are three-letter terms that essentially outline who’s bearing certain transportation costs and other risks. The most common ones you are going to come across are EXW, FOB, and CIF.
EXW (Ex Works: Place of supplier)
This basically means that you are responsible for arranging to have your goods picked up at your supplier’s factory and delivering them to your destination (and all of the other costs in between).
FOB (Free on Board: Chinese Port of Shipment)
This is the most common shipment term. Your supplier pays to have your goods loaded onto a ship in China including the local transport costs in China as well as the cost to clear the goods for export. You pay for the cost of sea freight and importing your goods into your country (i.e. customs, taxes, domestic transport, etc.). This is likely to be the most common shipment term you will see.
CFR (Cost and Freight) and CIF (Cost Insurance and Freight)
CIF and CFR are essentially the same thing except CIF includes the cost of insurance and CFR does not. For CIF and CFR freight, your supplier will pay all of the costs to get your shipment from their destination to the desired port in your destination country. You will stay pay for any import fees and overland transportation in your destination country.
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