Chapter 23. What are the best incoterms in freight shipping for Xmas Jumpers?

Incoterms refer to terms of Xmas Jumpers sale that stipulate the responsibilities and liabilities passage from the consignor or consignee.That said, there are several incoterms, and knowing which one suits you will either make your entire Xmas Jumpers shipping process run smoothly or be difficult and costly.With that in mind let’s have a look at some of the commonly used incoterms;

• FOB – With Free Onboard shipping, you as the buyer will take full responsibility once the Xmas Jumpers leave the shipper’s shipping dock. At this point, the shipper records a sale as the buyer records an increase in inventory.With FOB, the buyer has ownership of all costs and risks once the cargo leaves the shipping dock. FOB is mostly preferred since you will have control of your shipment and freight costs.
• EXW – EX Works is another commonly used incoterm. You will have fewer responsibilities but again any unplanned fees and arising issues will be subjected to you.EXW would be the ideal incoterm for newbie sellers who are shipping from China with less knowledge of logistics.
• CFR – Means Cost + Freight, which is actually equals to FOB + Freight.
• CIF – Means Cost + Insurance + Freight., which is actually equals to CFR + Insurance.

With the CIF incoterm, the Xmas Jumpers buyer is responsible for;

1. Paying for the cargo;
2. Custom clearance at destination port;
3. Paying for inland transportation fees from the destination port to the warehouse;
4. Paying for import taxes;

With the CIF incoterm, the Xmas Jumpers seller is responsible for;

1. Delivering Xmas Jumpers as per the agreed terms with the buyer;
2. Manage inland Xmas Jumpers transportation in China;
3. Inland Export customs clearance;
4. Paying custom fees in China;
5. Hiring and paying for the sea freight;
6. Paying the port charges at the port of origin;
7. Paying custom fees in china. By choosing to use CIF, you will have very minimal control over your shipment, your costs, and these results in less competitiveness.The CIF incoterm is not highly recommended when shipping from China as it can shoot up your overall costs. FOB stands to be the best of them all, which is also the easiest trade term when you calculate your import duty!

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