Shipping trading terms

Release time:2024-03-18 11:00

Shipping trading terms

This guide provides an overview of the most commonly used trading terms in shipping, offering insights into each to help you navigate the complexities of international logistics.

sea freight


Incoterms play a crucial role in international trade by providing a universal language that clarifies the point at which ownership of goods shifts from the seller to the buyer. These terms, essential for clear communication, should be agreed upon by both parties at the start of their commercial relationship and ideally recorded in a contract for future reference. This ensures transparency in determining responsibilities for organizing and covering various segments of the shipping process.


International Commercial Terms, or Incoterms, have been a global standard for international sales contracts since their inception by the International Chamber of Commerce in 1936. The most recent version, known as Incoterms 2010, became effective in January 2011. These standards are widely recognized and utilized across the globe for specifying the responsibilities of buyers and sellers regarding the delivery of goods. Online, you can find numerous resources and illustrations detailing how risks and costs are transferred from seller to buyer under various Incoterms. In this guide, we aim to succinctly cover some of the most frequently used Incoterms.

Ex-Works (EXW)

Ex-Works (EXW): The seller's responsibility is limited to making the goods available at their premises. The buyer bears all transportation costs and risks, including export customs clearance and insurance.

Free Carrier (FCA)

Free Carrier (FCA): The seller delivers the goods to the buyer's nominated carrier. This includes handling export haulage and customs clearance, with the buyer taking over all subsequent costs.

Free On Board (FOB)

Free On Board (FOB): The risk and cost transfer to the buyer once the goods cross the ship's rail at the loading port. The seller covers all charges up to this point.

Cost And Freight (CNF)

Cost And Freight (CNF): The seller must transport the goods to the destination port, with the buyer responsible for destination charges, import haulage, customs clearance, and insurance.

Cost, Insurance, And Freight (CIF)

Cost, Insurance, And Freight (CIF): Similar to CNF, but the seller also covers cargo insurance.

Delivered at Place Unloaded (DPU)

Delivered at Place Unloaded (DPU): The seller handles transportation costs, including ocean freight and destination charges up to the destination terminal, excluding customs clearance.

Delivered At Place (DAP)

Delivered At Place (DAP): The seller arranges for goods delivery to an agreed location, and the buyer handles customs clearance and duties.


Understanding these terms helps in navigating the complexities of international logistics, ensuring a smoother transaction process by clearly defining the division of costs, risks, and responsibilities.

FBABOX provides comprehensive Shipping trading terms solutions for both sea and air freight, catering to diverse global destinations. Should you need guidance on the most suitable incoterm for your business or have any additional inquiries, our team is ready to assist. Reach out to us at or connect via our support line for personalized assistance.