Freight Policy

These three are the most commonly used trade terms in international trade, especially for heavy and bulky goods. They clearly define the responsibilities, costs, and risk transfer points between buyers and sellers.

1. EXW (Ex Works)

Ex Works means that the seller fulfills their obligation to deliver when they make the goods available at their premises (i.e., works, factory, warehouse, etc.) to the buyer. The seller does not need to load the goods onto the buyer's vehicle, nor does they need to clear the goods for export, unless otherwise agreed.

2. FOB (Free On Board)

Free On Board is a trade term used only for sea or inland waterway transport. The seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the goods are on board the vessel, and the buyer bears all costs from that moment onwards.

3. CIF (Cost, Insurance and Freight)

Cost, Insurance and Freight is applicable only to sea or inland waterway transport. The seller delivers the goods on board the vessel at the port of shipment or procures the goods already so delivered. The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination. In addition, the seller contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage.

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