INCOTERMS (FOB, CFR, CIF, CMT)
INCOTERMS (INTERNATIONAL COMMERCIAL TERMS)
FOB:
FOB is abbreviated as Free on Board or Freight on Board. FOB means that the
cost of delivering the goods to the nearest port is paid by the seller (i.e.
the main carriage is not paid by seller) and buyer is responsible for shipping
the goods from there. The rest of all expenses to arrive at the buyer premise
must be met by buyer as well. The seller is responsible for the goods until the
goods are loaded and the risk of losses passes to buyer when the goods are
loaded. In garment exporting, pricing of garments is mostly quoted on FOB. (
CIF:
CIF is abbreviated as cost, insurance and freight. In case of CIF price is
quoted by seller/exporter including sea freight and insurance to deliver the
goods up to the named port of destination.
CMT:
CMT is abbreviated as Cut, Make and Trim. In many instances, the buyer takes
the task of purchasing and shipping fabric for the apparel production facility.
Buyer only pays a fee to the factory for sewing, trimming and manufacturing the
final goods which is named as CMT. The finished goods are then shipped to the
buyer.
Besides FOB, C&F, CIF and CMT below
terms are also in use.
- EXW: Ex Works
-
FCA:
Free Carrier
-
FAS:
Free Alongside Ship
-
CPT:
Cost Paid On
-
CIP:
Carrier and Insurance Paid to
-
DAT:
Delivery at Terminal
-
DAP:
Delivery at Place
-
DDP:
Delivery Duty Paid
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