The difference between FOB, CIF, CFR and EXW

1．Price ex works (EXW =Ex Works):

a. Definition: Delivery at the factory means that the seller is responsible for delivering the prepared goods to the buyer at his location (For example: workshop, factory, warehouse, etc.), but usually the seller is not responsible for loading the goods onto the vehicle prepared by the buyer. Or handle customs clearance of goods. The buyer bears all costs and risks of transporting the goods from the seller's location to the intended destination.

b.Risk division

2. FOB price (FOB =Free on Borad):

a.Definition: Delivery on board at the port of shipment, also known as "FOB". Under FOB trade terms, the customer and buyer are responsible for shipping, and the shipping charges and maritime risks are borne by the buyer. The shipper and seller are responsible for delivering the goods to the shipping port designated in the contract and completing the export customs declaration procedures. The loading of goods onto the ship is the delivery point, risk division point and cost division point. Once the goods are loaded onto the ship, the risk is transferred from the seller to the buyer.

b.Risk division

3.Cost and freight (CFR =Cost+Freight):

a. Definition: Also known as cost and freight (specified port of destination) terms. This means that the buyer must pay the costs and freight necessary to transport the goods to the named port of destination, but the risk of loss or damage to the goods after they are delivered to the ship, as well as any additional expenses incurred for any reason, will not occur until the goods cross the ship's rail at the port of shipment. From then on, the major risks and rewards of ownership of the seller are transferred to the buyer.

4.CIF price ( CIF =Cost+Insurance+Freight):

a. Definition: CIF is composed of the first letter of the three words COST, INSURANCE, AND FREIGHT (NAMED PORT OF DESTINATION). The Chinese meaning is cost plus insurance plus freight (specified port of destination), which means when the goods are at the port of shipment The seller completes delivery when the goods pass the ship's rail (actually inside the shipping cabin).

b.Risk division:

5.The common points of these three foreign trade quotation methods: CFR, FOB and CIF:

a. The seller is responsible for loading and giving full notice, and the buyer is responsible for receiving the goods;

b. The seller goes through export procedures and provides documents, and the buyer goes through import procedures and provides documents;

c. The seller delivers the order, and the buyer accepts the order and makes payment;

d. For delivery at the port of shipment, risks and costs are divided consistently, with the ship's rail as the boundary;

e. The nature of delivery is the same, both delivery against document and payment against document;

f. Both are suitable for ocean transportation and inland water transportation;

6.The differences between the three foreign trade quotation methods of CFR, FOB and CIF:

a.FOB: The buyer is responsible for chartering the ship, booking space, paying freight on delivery, handling insurance, and paying insurance;

b. CIF: The seller is responsible for chartering the ship, booking space, prepaying freight, handling insurance, and paying insurance;

c. CFR: The seller is responsible for chartering the ship, booking space, and prepaying freight; the buyer is responsible for handling and paying insurance;

7.Comparison table of EXW, FOB, CFR, CIF