INCOTERMS

Incoterms are the International Chamber of Commerce official rules for the interpretation of trade terms. Some of the ones more commonly used ones are:

FAS
Free Alongside Ship (...named port of shipment) means that the seller has delivered when the goods are alongside the vessel at the named port of shipment. The buyer has to bear all costs and risks of loss of or damage to the goods from that moment.

FCA
Free Carrier (...named place) means the seller has delivered the goods, cleared for export, to the carrier nominated by the buyer at the named place. If delivery takes place at the seller's premises, the seller is responsible for loading. If delivery takes place elsewhere, the seller is not responsible for unloading.

FOB
Free on Board ( ... named port of shipment) means that the seller has delivered when the goods pass the ship's rail at the named port of shipment The buyer has to bear all costs and risks of loss or damage from that point. FOB also requires the seller to clear the goods for export.

CFR
Cost and Freight (...named port of destination) means the seller has delivered when the goods pass the ship's rail in the port of shipment. The seller must pay the costs and freight necessary to bring the goods to the named port of destination but the risk of loss or damage to the goods, as well as any additional costs due to events occurring after the time of delivery, are the buyers responsibility. CFR requires the seller to clear the goods for export.

CIF
Cost, Insurance and Freight (...named port of destination) means the same as CFR in that the seller has delivered when the goods pass the ship's rail and, in addition, the seller also has to procure marine insurance against the buyers risk of loss or damage. Consequently, the seller pays the insurance premium. CIF requires the seller to clear the goods for export.

These and some of the other more commonly used Incoterms are included in the diagram below which defines the buyer and seller responsibilities under that Incoterm during the transportation of the cargo.

What is a “Weight/Measure Price”?

Weight/measure indicates that the price is based either on the weight of the consignment or the cubic volume of the consignment. Unless indicated otherwise the price quoted will be per tonne or cubic metre and will be charged on whichever measure is the greater number of units.

For example:

A consignment of, say, two pallets, total weight 2,750 kgs and total volume 1.5 cubic metres (m3) will be charged at 2.75 times the weight/measure rate.

A consignment of, say, two pallets, total weight 1,150 kgs and total volume 3.75 cubic metres win be charged at 3.75 times the weight/measure rate.