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If you have been following our blog for the last few weeks, you would have realised that we highlighted a few things that relate to sea freight transactions. Last week, we looked at “Sea Freight Shipments and Payment Terms” and highlighted the scope of incoTerms. In this blog, we’re trying to make things more transparent or even easier to understand at first glance. IncoTerms Rules can be hard to decipher depending on the scope that falls on the buyer or the seller when it comes to sea freight transactions.

The following table looks at the IncoTerm Rules for sea freight transaction over the ocean as well as inland waterway transportation.

IncoTerm SELLER BUYER
FAS Free Alongside Ship All costs of delivery up to shipside

Nominated by Buyer

Includes customs clearance (at origin)

Excludes cargo loading costs (at origin)

All costs from cargo (on shore)

Includes cargo loading costs (at origin)

FOB Free

On

Board

All costs up to loading on board ship

Nominated by Buyer

Includes customs clearance & cargo loading costs (at origin)

All costs from cargo boarding ship

 

CFR Cost

and

Freight

 

All costs up to delivery at named destination port

Mutual agreement between Buyer & Seller

Includes customs clearance (at origin)

Excludes insurance

All costs from delivery at named destination port

Includes customs clearance (at destination)

Transportation

 

 

CIF

 

Cost

Insurance

Freight

All costs up to delivery at named destination port

Mutual agreement between Buyer & Seller

Includes customs clearance and insurance (at origin)

All costs from delivery at named destination port

Includes customs clearance (at destination)

Transportation

Excludes insurance

 

Image: edited image by FlamingoHoldings

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