In a previous post we introduced what Incoterms are. Well, today we are going to talk about which are the most used Incoterms to import from China and what they consist of.
Undoubtedly, the two main Incoterms are
CIF
y
FOB
. However, others such as EXW, CFR or DDP are also used with some frequency.
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| The extent of the seller’s liability according to each Incoterm. |
As we explained in another post, FOB (free on board) implies that the seller loads the goods on the ship and from that moment on the goods are the responsibility of the buyer. This is the most commonly used Incoterm , but if it is used, it is advisable to hire a company to manage the second part of the transport.
It is useful if you have experience as an importer since it allows greater control over logistics and therefore saves costs.
CIF (cost, insurance and freight) makes things easier for the buyer. The seller bears all costs, including main carriage and insurance, until the goods arrive at the port of destination. It should be taken into account that the price will be somewhat more expensive than if we contracted FOB and we take care of the rest of the operation.
It is undoubtedly the best option if we work with a company that manages the transport efficiently, since it is an Incoterm that makes our life easy.
EXW (ex works) basically means that we take care of the transportation. It is typical when a supplier in China does not want to take care of anything other than production. He will drop off the goods at the factory gate and the rest is up to us. In this case, you will have no choice but to hire a reliable import company that can take care of everything, especially the formalities in the country of origin.
CFR (cost and freight) is exactly the same as CIF but the seller does not take care of the insurance, so you could avoid paying it. This saves a cost, but is not recommended. If there were any problems we would be unprotected.
DDP (delivered duty paid) allows the seller to place the goods where we want them in the destination country. It is very easy to work this way, especially for beginners, but it is extremely expensive. A professional importer would never use this Incoterm.
We hope it has served as an initiation. Please do not hesitate to visit wikipedia to find all the details of each Incoterm.
If you want to import from China, do not hesitate to contact us without obligation.
