Friday, January 23, 2015


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.


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.

This refers to the manufacturing cost and this term means "cut and make". The buyer supplies all the materials to the manufacturer.

This term means "cut, make and quota" and is similar to 'CM' except that the manufacturer has to supply the quota as well.

The term means "cut, make and trim". The buyer provides the fabric, and the supplier makes the garments.

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.

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.

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)

Thanks & Best Regards

Enamul Haque Bipul
Skype: bipul1984
Mob: +8801717264756

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