International Commercial Terms (Incoterms® 2020)
Common Terms for Ocean Freight
FOB (Free On Board)
- Seller's responsibility: All costs and risks until the goods are loaded on board
- Buyer's responsibility: Ocean freight, insurance premium, destination charges
- Mode of transport: Sea and inland waterway transport
- Risk transfer: When the goods are loaded on board
CIF (Cost, Insurance and Freight)
- Seller's responsibility: Freight, insurance premium, export clearance
- Buyer's responsibility: Discharge costs at the destination port, import clearance
- Mode of transport: Sea and inland waterway transport
- Note: CIF price = FOB price + freight + insurance premium
CFR (Cost and Freight)
- Same as CIF, but without insurance premium
Multimodal Terms
EXW (Ex Works)
- Minimum obligation for the seller; the buyer bears all costs and risks
DDP (Delivered Duty Paid)
- Maximum obligation for the seller, who bears all costs and risks up to the named destination
Freight Forwarder's Glossary
| Abbreviation | Full Name | Description |
|---|---|---|
| POL | Port of Loading | Origin port where cargo is loaded |
| POD | Port of Discharge | Destination port where cargo is discharged |
| ETD | Estimated Time of Departure | Expected sailing date |
| ETA | Estimated Time of Arrival | Expected arrival date |
| CY | Container Yard | Container storage depot at the terminal |
| CFS | Container Freight Station | Where LCL groupage and devanning take place |
| THC | Terminal Handling Charge | Terminal handling fee |
| B/L | Bill of Lading | Document of title for the cargo |
| TEU | Twenty-foot Equivalent Unit | Standard container unit (20-foot) |
| FEU | Forty-foot Equivalent Unit | 40-foot container; equals 2 TEU |