To know the Commercial and Terms of Trade is very important to run any business. Specially which business mainly done Internationally.
Today I am going to published some Terms of Trade which is very essential for apparel business.
TERMS OF TRADE
C&F (cost and
freight)
The seller/supplier agrees to contract the freight and pay
"cost and freight" for loading the goods, cleared for export, on
board a vessel and the charges to ship the goods to destination. The buyer
bears the risk of the goods from the time they pass the ship's rail at the port
of shipment and pay for the insurance coverage, and for the unloading costs at
the port of destination.
CIF (cost,
insurance, freight)
The seller's price includes all charges, freight and
insurance up to the point where the ship carrying the goods arrives at the port
of destination; the goods must be cleared for export by the seller. From that
point the buyer has to bear all charges and risks, including unloading costs.
CM
This refers to the manufacturing cost and this term means
"cut and make". The buyer supplies all the materials to the
manufacturer.
CMQ
This term means "cut, make and quota" and is
similar to 'CM' except that the manufacturer has to supply the quota as well.
CMT
The term means "cut, make and trim". The buyer
provides the fabric, and the supplier makes the garments.
CMTQ
The term means "cut, make, trim and quota". The
buyer has to provide the fabric and the manufacturer makes the garments as well
as provides the quota.
Ex-Ship
The supplier is responsible for all costs incurred until the
ship reaches the port of destination where the supplier delivers the documents
and the buyer can clear the goods on board the ship. The buyer bears all risks
and costs from that point including unloading charges.
EXW (ex- works)
/&-Factory
The supplier delivers the goods to the buyer at his
premises, i.e., factory, warehouse, etc. He has the minimum responsibility and
does not have to provide minimum documentation unless upon specific request.
The buyer bears all costs and risks involved upon delivery of the goods until
the desired destination.
FOB
This term means "Free On Board". The supplier is
responsible for all charges (including export licences, export taxes, etc.) and
risks until the goods have passed over the ship's rail at the port of shipment;
the merchandise must be cleared for export. The buyer contracts and pays for
the freight and bears all risks for loss or damage to the goods as soon as the
merchandise passes the ship's rail. The buyer also pays for all import duties
and clears the goods through customs at the point of destination.
FOB Airport (FOA)
This is similar to the term FOB except that the mode of
transportation is an air carrier. The supplier fulfils his obligations after he
has delivered the goods to the air carrier. The goods must be cleared for
export by the supplier.
Landed Duty Paid
(LDP)/ Delivered Duty Paid (DDP)
The seller fulfils his obligation to deliver when the goods
have been made available at the named place in the country of importation. The
seller bears the risks and costs, including duties, taxes and other charges of
delivering the goods thereto, cleared for importation. Under these terms, the
seller bears the maximum responsibility, and in this case, the seller has to
clear the goods both for export and import.
Certificate of Origin
A certificate of (CO), is issued when it has been
established that the goods are the natural produce of The Following Country or
the product of a manufacturing process in The Following Country which has
changed permanently and substantially the shape, nature, form or utility of the
basic materials used in manufacture. There are specific origin criteria
applicable to individual types of products manufactured in The Following
Country.
Packing List
This is a document that indicates the contents of each
individual carton/ package in the container. The packing list includes the cubic
measurement of the cartons/package, the weight, the number of cartons /packages,
the breakdown of the goods by size/colour/quantity. This document is prepared
by the seller or the ship owner, and the buyer can specify which information
should be included.
(Collected and Edited)
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Thanks & Best Regards
Thanks & Best Regards
Enamul Haque Bipul
E-mail: ehbipul@gmail.com
Skype: bipul1984
Mob: +8801717264756
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