Import shipping terms you need to know
As an importer you need not understand every import shipping term available; however, you should be familiar with the four most common import shipping terms.
EXW: Ex Works (Door to door)
This is where you, the importer, assumes all the costs and risks associated with the transportation of the goods. The seller of the goods only has to ensure that the goods are ready for pick-up at their place of business. When we ship goods as Ex work for you, it covers the following:
- Export documents/clearance
- Export pick up
- Destination port surcharges
- Customs clearance
FOB: Free on board (Port to door)
This is similar to Ex Works except that the risk of loss of the goods is not entirely with you, the importer. Responsibility for the goods being shipped is transferred to you only after they have been transported from the seller’s premises to the port of origin. At this point, loading at the port of origin and transportation of the goods to their destination become the buyer’s obligation. When we ship goods for you as FOB, this covers:
- Port Surcharges
- Customs Clearance
Notes on Ex Works and FOB
The main difference between Ex Works and FOB is that with Ex Works the importer is responsible for all aspects of transporting the goods from door-to-door, while with FOB the importer is responsible for the origin port to door at destination.
Customs fees at destination port are optional
With ex-works or FOB terms, customs fees at the origin port are included, however it is optional to include customs fees at destination port. If you want the import freight quote to include destination port customs costs then the terms are ’Ex Works + customs’ or ‘FOB + customs’. If you wish to pay the destination port customs costs yourself, then the terms are simply ‘Ex Works or ‘FOB’.
Insurance and quarantine not included
It is important to know that Ex Works or FOB terms do not include cargo insurance to cover the value of the goods while shipping. We are, however, able to provide this for you if required. These terms do not include any quarantine fees that may occur at the port of destination. Feel free to talk to us if you think you have goods that ‘may be’ subject to quarantine.
CIF: Cost, insurance & freight
This is where the seller of the goods assumes all costs and risks associated with transportation of the goods to the destination port. This includes cargo insurance to the destination port. You, the importer of the goods, are responsible for the unloading and customs clearance of the goods at the destination port, as well as pickup of goods, cargo insurance and delivery to the door at destination.
CFR: Cost & Freight
This is similar to CIF, except that the seller is not responsible for the cargo insurance. You, the importer, are responsible for the cargo insurance.