If you have been following our blog for the last few weeks, you would have realised that we highlighted a few things that relate to sea freight transactions. Last week, we looked at “Sea Freight Shipments and Payment Terms” and highlighted the scope of incoTerms. In this blog, we’re trying to make things more transparent or even easier to understand at first glance. IncoTerms Rules can be hard to decipher depending on the scope that falls on the buyer or the seller when it comes to sea freight transactions.
The following table looks at the IncoTerm Rules for sea freight transaction over the ocean as well as inland waterway transportation.
| IncoTerm | SELLER | BUYER | |
| FAS | Free Alongside Ship | All costs of delivery up to shipside
Nominated by Buyer Includes customs clearance (at origin) Excludes cargo loading costs (at origin) |
All costs from cargo (on shore)
Includes cargo loading costs (at origin) |
| FOB | Free
On Board |
All costs up to loading on board ship
Nominated by Buyer Includes customs clearance & cargo loading costs (at origin) |
All costs from cargo boarding ship
|
| CFR | Cost
and Freight
|
All costs up to delivery at named destination port
Mutual agreement between Buyer & Seller Includes customs clearance (at origin) Excludes insurance |
All costs from delivery at named destination port
Includes customs clearance (at destination) Transportation
|
| CIF
|
Cost
Insurance Freight |
All costs up to delivery at named destination port
Mutual agreement between Buyer & Seller Includes customs clearance and insurance (at origin) |
All costs from delivery at named destination port
Includes customs clearance (at destination) Transportation Excludes insurance |
Image: edited image by FlamingoHoldings