In the case of CFR, or Cost and Freight, the seller relinquishes title to the buyer as soon as the goods are loaded onto the ship in the port of origination.  The seller pays the costs of transporting the goods to the named port of destination, but the risk of loss or damage to the goods is transferred to the buyer at the change of title.  The CFR term requires the seller to clear the goods for export.

“Free on Board” (or F.O.B.) is an international trade term that means that the seller is considered to have delivered the goods (i.e. they change title to the buyer) as soon as they pass the ship’s rail at the named port of shipment.  For example, the term “FOB Miami” would mean that the goods are considered delivered as soon as they are loaded onto a ship in the port of Miami for export to their destination.  As soon as the goods change title, the buyer is responsible for bearing costs and risks of loss or damage to the goods from that point.  The FOB term requires that the seller arrange the clearance of the goods for export – This trade term definition brought to you courtesy of trade leads from our business to business marketplace.

The term “Cost, Insurance and Freight” means that title to the goods changes from seller to buyer when the goods pass the ship’s rail at the port from where the goods are being shipped.  In the case of CIF the seller bears the cost of shipping the goods to the named destination port, however the risk of loss or damages are borne by the buyer at transfer of title.  The only exception to this is that the seller must insure the goods (by procuring marine insurance) against loss or damage while they are being carried by the ship.

The CIF term requires the seller to clear the goods for export from the country of origination – This trade term is proudly brought to you courtesy of trade leads from the Arts, Crafts and Hobbies section of the Fuzing.com business to business marketplace.

Ex Works (or EXW) means that the seller delivers (i.e. transfers title to the goods) when the goods are placed at the disposal of the buyer at the seller’s premises (factory or warehouse etc.) – the goods are not cleared for export and are not loaded onto any vehicle for transport.

This term therefore represents very little obligation on the part of the seller because the goods effectively change title at the point of manufacture or storage.  The buyer therefore assumes the costs and risks in taking the goods from the seller’s premises.

An example of the use of such term might be “EXW Miami Warehouse” which would mean that the goods will be transferred to the buyer’s possession at the seller’s warehouse in Miami.  This trade tip is brought to you courtest of trade leads from the Electronics & Electrical section of our Business to Business Marketplace.