Topic: Three common trade terms for freight from China to South Africa (Read 574 times)
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« on: Jan 05, 2013, 08:22:32 am »
In the international trade, there are many different types of trade terms, which include EX works, FCA, FAS, FOB, CFR, CIF, CPT, CIP, DAF, DES, DEQ, DDU, and DDP. Different trade terms will have different obligations for both buyer and seller. When shipping by sea from China to South Africa, there are three trade terms that are used frequently.
The first one is FOB which is named port of shipment. The seller should load the goods to the ship appointed by the buyer in the time of shipment and notify the buyer in time. After the goods cross the side of ship in the port of shipment, the risks will be transferred to the buyer. The buyer will be responsible for chartering, booking space and pay for the freight. On one hand, the seller will take the responsibility of obtaining all the required documents and transacting the export formalities. On the other hand, the buyer should gain the documents for customs entry and take charge of customs entry.
The second one is CFR which is named port of destination. Unlike the obligation of seller in FOB, the seller in CRF will take the responsibility of chartering, booking space and paying the freight. For other steps, the obligation of buyer and seller are the same as that in FOB. The third one is CIF. It is named port of destination. If conclude a transaction by CIF, the sell should undertake the obligation of transacting transport insurance and pay the insurance.
To sum up, when shipping from China to South Africa by sea, different trade terms will have different obligations and will influence China ocean freight rate. You should perform the obligations according to the international trade terms strictly thus to avoid any troubles.
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