China Sourcing Blog

Navigating the complex labyrinth of international shipping requires a common language, a set of rules that clearly delineates the responsibilities, costs, and risks for both buyers and sellers. This is where Incoterms®—International Commercial Terms—come into play. Established by the International Chamber of Commerce (ICC), these three-letter codes are the cornerstone of global trade contracts. Among these terms, one stands out for placing the maximum obligation on the seller: DDP, or Delivered Duty Paid. For an importer, it can seem like the ultimate convenience. For an exporter, it represents a significant undertaking fraught with potential pitfalls. Understanding DDP is crucial for any business looking streamline their supply chain for their customers or, conversely, to avoid taking on unforeseen liabilities. This in-depth guide will dissect the DDP agreement, exploring its meaning, the intricate division of responsibilities, its pros and cons, ideal use cases, and answers to the most frequently asked questions. 1. What does

1. What does EX Works (EXW) Mean in shipping terms? EX Works (EXW) is an Incoterm® rule, meaning a standardized international trade term published by the International Chamber of Commerce (ICC). It signifies that the seller makes the goods available at their premises (e.g., factory, warehouse, or place of business). The buyer is responsible for all costs and risks involved in collecting the goods from that location and transporting them to the final destination. Essentially, the seller’s responsibility ends at their own dock. 2. What are the Buyers and Sellers Responsibilities with EXW Agreements? Seller:  – Make the goods available at the named place (their premises) at the agreed-upon time. – Package and label the goods appropriately for pickup. – Provide necessary documentation (e.g., commercial invoice, packing list) to assist the buyer in exporting. – Not responsible for loading the goods onto the buyer’s vehicle, nor for clearing the goods

1. What does FCA Mean in shipping terms? FCA stands for “Free Carrier” in shipping terms.It is one of the 11 Incoterms 2020 rules set by the International Chamber of Commerce (ICC).The core idea of FCA: The seller delivers the goods to the carrier nominated by the buyer.The seller must complete export customs clearance before delivery.Once the goods are handed over to the nominated carrier, the risk of loss or damage to the goods transfers from the seller to the buyer.FCA applies to all modes of transport, including multi-modal transport (e.g., road + sea, air + rail). 2. What are the Buyers and Sellers Responsibilities with FCA Agreements? Seller’s Responsibilities Buyer’s Responsibilities 3. Advantages and Disadvantages for the Buyer Advantages Disadvantages 4. When to Use an FCA Agreement? 5. FCA Agreements for China Importing: are they a good idea? Why FCA can be a good idea for China importing Potential

1. What Does FAS Mean in Incoterms? FAS (Free Alongside Ship) is a trade term under the International Chamber of Commerce (ICC) Incoterms® rules, applicable exclusively to sea and inland waterway transport. Its core definition states that the seller delivers goods alongside the designated vessel at the port of shipment (e.g., on a quay or barge), at which point risks and costs transfer to the buyer. Originating in the age of sailing ships, FAS was traditionally used for bulk cargo (e.g., grains, minerals) or heavy machinery, as these goods could be delivered directly at the quayside without containerization. The key distinction between FAS and FOB (Free on Board) lies in loading responsibilities: under FAS, the seller is not required to load goods onto the vessel, whereas FOB obligates the seller to handle loading. 2. What Are the Seller’s Responsibilities? Under Incoterms® 2020, the seller’s primary obligations include: Delivery: Transport goods

Navigating international shipping can feel complicated. There are many rules and terms. One of the most important terms to know is CPT. CPT can be a great option for buyers and sellers. It balances cost and control. But what does it really mean? And when should you use it? This guide will explain CPT in simple English. We will break down the responsibilities, advantages, and disadvantages. Let’s make CPT easy to understand. 1. What does CPT Mean in Shipping Terms? CPT stands for “Carriage Paid To.” It is an Incoterm. Incoterms are international rules for shipping goods. They define who does what, who pays for what, and where risk transfers from seller to buyer. Here is the simple meaning of CPT: Key Takeaway: The seller pays for the main carriage, but the risk transfers to the buyer early in the journey. 2. What are the Seller’s Responsibilities? Under CPT, the seller has

Navigating the complex world of international shipping requires a common language. Misunderstandations over who pays for what, who is responsible for the goods at which point, and who handles customs can lead to costly delays, disputes, and broken business relationships. This is where Incoterms come in. The International Commercial Terms, or Incoterms, are a set of 11 globally recognized rules published by the International Chamber of Commerce (ICC). They define the tasks, costs, and risks involved in the delivery of goods from the seller to the buyer. Among these rules, Delivered at Place (DAP) has become one of the most widely used in modern trade. Its flexibility suits various shipping modes and provides a clear handover point. But what does DAP truly mean for your business? This definitive guide will break down everything you need to know about DAP Incoterms. 1. What does DAP Mean in Shipping Terms? Delivered at