Common Delivery Methods in International Trade

     In foreign trade exports, different trade terms and delivery methods will be involved. In the “2000 Incoterms Interpretation General Principles”, 13 kinds of incoterms in international trade are uniformly explained, including the place of delivery, division of responsibilities, risk transfer, and applicable modes of transportation. Let’s take a look at the five most common delivery methods in foreign trade.

1.EXW(EX works)

   It means that the seller delivers the goods from the factory (or warehouse) to the buyer. Unless otherwise specified, the seller is not responsible for loading the goods on the car or ship arranged by the buyer, and does not go through export customs formalities. Buyer shall bear all costs and risks from delivery from Seller’s factory to final destination.

2.FOB(FreeOn Board)

This term stipulates that the seller must deliver the goods to the ship designated by the buyer at the designated port of shipment within the shipment period specified in the contract, and bear all costs and risks of loss or damage to the goods until the goods pass the ship’s rail.

3.CIF(Cost,Insurance and Freight)

It means that the seller must deliver the goods at the port of shipment to the vessel bound for the named port of destination within the shipment period specified in the contract. The seller shall bear all the expenses and the risk of loss or damage to the goods until the goods pass the ship’s rail and apply for cargo insurance.

Note: The seller shall bear all costs and risks until the goods are transported to the designated destination, excluding any “taxes” payable at the destination when customs formalities are required (including the responsibility and risk of customs formalities, and payment of fees, duties, taxes and other charges).

4.DDU(Delivered Duty Unpaid)

It means that the seller delivers the goods to the destination designated by the importing country and delivers them to the buyer without going through import formalities or unloading the goods from the conveying means of delivery, that is, the delivery is completed.

5.DPI Delivered Duty Paid)

  It means that the seller transports the goods to the designated place in the importing country, and delivers the goods that have not been unloaded on the delivery vehicle to the buyer. “Taxes”.

   Note: Seller bears all costs and risks prior to delivery of the goods to Buyer. This term should not be used if the seller cannot directly or indirectly obtain an import license. DDP is the trade term for which the seller has the greatest responsibility.