When we sell goods to our customers, the terms of trade dictate the shipping costs, insurance premiums, and the amount of risk borne by both parties during transportation. This article explains the currently stipulated terms of trade. Please refer to this article when purchasing goods from us.
Incoterms (Incoterms/International Commercial Terms) are international rules established by the International Chamber of Commerce (ICC) that stipulate the terms and conditions of trade, including the burden and scope of costs in trade transactions.
Incoterms 2020 consists of a total of 11 rules.
In the following section, we will introduce four types of terms and conditions that we often use in trade.
The seller completes the cargo delivery obligation at his/her own facilities or other designated place. All subsequent costs and risks are borne by the buyer. Export customs clearance is also arranged by the buyer.
The seller's delivery obligation is completed when the cargo is loaded onto the buyer's designated vessel, and all subsequent costs and risks are borne by the buyer. Export customs clearance is to be arranged by the Seller.
Under the CIF, the seller bears the costs, ocean freight, and insurance until the goods are loaded on the designated vessel. Therefore, the buyer is charged the cost of the goods as well as the cost to the designated vessel, ocean freight, and insurance.
When goods are left at the disposal of the buyer on the arriving means of transport ready for unloading at the designated destination, the seller's risk and cost burden is transferred to the buyer. The buyer bears the risk and expense after unloading.
We discuss these terms of trade with our customers at the time of quotation and negotiation to establish shipping charges and burden of risk. If you wish to purchase goods from us, an understanding of the above terms of trade will facilitate smooth negotiations.