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What is CIF?

CIF means Cost, Insurance and Freight. This Incoterm (international commercial term) is also commonly referred to as DDP, which means Delivered Duty Paid to the destination port. The supplier basically takes responsibility for the product from manufacturing, freight, customs and duty for the buyer. It normally works out a little more expensive for the buyer than if they were doing it themselves or FOB but it is an option many prefer as they...

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What is Ex-works?

Ex-works means that the product is available for the purchaser to take custody of the goods at the factory only. The purchaser has to pay for all expenses to get the goods to their destination address. The purchaser can do this whole procedure themselves but it is highly advisable and both economically and time efficient to enact a shipping agent or freight forwarder to take care of this for them.

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How does payment work in an FOB destination port situation from a Chinese import perspective?

Payment terms for an FOB product in China can be from 20%-50% initial deposit/down payment to begin manufacturing/assembly of the product. Once completed and ready for delivery the supplier will load the product into the container (FCL and LCL) and export it to be loaded onto the container ship at the port. The product will then be shipped to the destination port. At this point the B/L (Bill of Lading) is exchanged for the remainder of the...

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How does payment work in an FOB port of loading situation from a Chinese export perspective?

Payment terms for an FOB product in China can be from 20%-50% initial deposit/down payment to begin manufacturing/assembly of the product. Once completed and ready for delivery the supplier will load the product into the container (FCL and LCL) and export it to be loaded onto the container ship at the port. At this point the B/L (Bill of Lading) is exchanged for the remainder of the order value. Once this has been exchanged, the product is...

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How to calculate this into your overall costs involving FOB?

FOB as explained before covers the cost of your product either until your shipment is loaded or until it has arrived at your destination port. If it is FOB destination port, then the purchaser has to pay for: Shipping Fee. Customs fee at the destination port. Duty on the product if it requires any (Your will have to research this or shipping agent should be able to classify the product. Once released, delivery to the final destination as...

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What is FOB?

As a general term, FOB means ‘Freight On Board’ or ‘Free On Board’ as it is more generally used in international shipping. This means that the seller will pay for the goods to be loaded onto the vehicle of transport. The term FOB can be used to clarify which part of the shipment is being paid for by the supplier and which part is to be paid for by the purchaser. For instance FOB, (port of loading) indicates that the seller will pay...

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