Our Services
.Following Incoterms EXW, FOB, and CIF
This document outlines the application of three key Incoterms – EXW (Ex Works), FOB (Free On Board), and CIF (Cost, Insurance, and Freight) – within the context of Dilip and Sarita Exim, a hypothetical exporter of spices. It details the responsibilities, costs, and risks associated with each Incoterm, providing a clear understanding of how Dilip and Sarita Exim might utilize them in their international trade operations.
.EXW (Ex Works)
EXW represents the minimum obligation for Dilip and Sarita Exim as the seller. Under EXW terms, Dilip and Sarita Exim makes the goods available at their premises (e.g., warehouse, factory) . The buyer, let's say a spice importer , is responsible for all costs and risks involved in taking the goods from Dilip and Sarita Exim's premises to their desired destination as per the Countries.
Responsibilities of Dilip and Sarita Exim (Exporter):
Make the goods available at the agreed-upon location and time.
Provide the buyer with notice that the goods are ready for collection.
Package the goods appropriately for collection.
.FOB (Free On Board)
FOB signifies that Dilip and Sarita Exim, as the seller, is responsible for delivering the goods, cleared for export, and loaded onto a vessel nominated by the buyer at the named port of shipment (e.g., Nhava Sheva Port, Mumbai etc ). The risk of loss or damage to the goods passes from Dilip and Sarita Exim to the buyer when the goods pass the ship's rail at the named port.
Responsibilities of Dilip and Sarita Exim (Seller):
Deliver the goods to the named port of shipment.
Load the goods onto the vessel nominated by the buyer.
Obtain export licenses and complete export customs formalities.
Provide the buyer with proof of delivery (e.g., bill of lading).
.CIF (Cost, Insurance, and Freight)
CIF means that Dilip and Sarita Exim, as the seller, is responsible for delivering the goods, cleared for export, and loaded onto a vessel at the port of shipment. Additionally, Dilip and Sarita Exim must pay for the cost of freight and insurance necessary to bring the goods to the named port of destination. However, the risk of loss or damage to the goods passes from Dilip and Sarita Exim to the buyer when the goods pass the ship's rail at the port of shipment.
Responsibilities of Dilip and Sarita Exim (Seller):
Deliver the goods to the named port of shipment.
Load the goods onto the vessel.
Obtain export licenses and complete export customs formalities.
Pay for the freight to the named port of destination.
Obtain and pay for marine insurance covering the buyer's risk of loss or damage to the goods during transit to the named port of destination. The insurance coverage is typically minimal.
Provide the buyer with the necessary documents to claim the goods at the port of destination (e.g., bill of lading, insurance policy).
Responsibilities of the Buyer ( Importer):
Handle import clearance procedures in port of destination, including customs duties, taxes, and documentation.
Bear all risks of loss or damage to the goods from the moment they pass the ship's rail at the port of shipment.
Unload the goods at the port of destination.
Arrange and pay for transportation from the port of destination to their warehouse.
