Do you feel confused by the commonly used terms of international Trade? Below are simple explanations to some of the frequently used trade terms.
Incoterms®: Incoterms® or International Commercial Terms are a set of rules which define the responsibilities of sellers and buyers for the delivery of goods under sales contracts for domestic and international trade. These rules are published by the International Chamber of Commerce (ICC).
The two main categories of Incoterms® 2010 are based on modes of transport. These are used in contracts and help in defining clearly the responsibilities of sellers and buyers.
Group 1. The following terms apply to any mode of transport:
EXW Ex Works
FCA Free Carrier
CPT Carriage Paid To
CIP Carriage and Insurance Paid To
DAT Delivered at Terminal
DAP Delivered at Place
DDP Delivered Duty Paid
Group 2. The following terms apply to sea and inland waterway transport:
FAS Free Alongside Ship
FOB Free on Board
CFR Cost and Freight
CIF Cost, Insurance, and Freight
You can learn more about Incoterms® here
Freight forwarder: Freight forwarders can handle your export or import shipments. Their services include consolidating shipments, arranging transportation, coordinating the movement of cargo to the port of embarkation and preparing documents and clearing goods.
You can find a list of freight forwarders at http://www.ciffa.com/membership/member-directory/
Custom broker: Custom brokers can get goods cleared for importers and exporters at a commercial port. Their services include liaison with the CBSA, help with tariff classification, advice on import regulations and release of imported goods.
You can find a list of customs brokers at Canadian Society of Customs Brokers or at CBSA
I’ll explain some more trade terms in the 2nd part of this blog. If you have any questions about how we can help you with exporting and/or importing, send us an email or call us at 1.800.643.7014 ext. 112.