Common International Trade Terms | Simplified explanation for freight forwarding business
1. EXW (Ex Works)
Goods are ready for collection at the seller’s factory or warehouse.
Buyer takes charge of all subsequent transportation, customs clearance, fees and risks from pickup.
2. FOB (Free On Board)
Seller delivers goods onboard the designated vessel at departure port.
Buyer pays ocean freight, bears all risks and costs after shipment loading.
3. CFR (Cost and Freight)
Seller covers goods cost and main ocean freight to destination port.
Cargo risk transfers to buyer once goods are loaded on board.
4. CIF (Cost, Insurance and Freight)
Seller pays goods cost, ocean freight and basic cargo insurance.
Risk boundary remains the same as FOB and CFR.
5. DAP (Delivered At Place)
Seller delivers goods to agreed destination place, ready for unloading.
Buyer handles import customs clearance and pays relevant duties and taxes.
6. DDU (Delivered Duty Unpaid)
Full door-to-door delivery without import tax payment.
Import duties, VAT and customs charges shall be borne by buyer.
7. DDP (Delivered Duty Paid)
Double clearance & tax included door-to-door service
Seller undertakes all procedures, freight, customs clearance and all taxes.
Buyer just receives goods at designated address with no extra expense.
Core Comparison Tip
DDP is the most worry-free term, widely applied in cross-border e-commerce and bulk cargo shipping. Our team provides one-stop DDP double clearance door-to-door logistics service.