Seller bears cost, risk and responsibility for cleared goods at named place of destination at buyers disposal. Buyer is responsible for unloading. Seller is responsible for import clearance, duties and taxes so buyer is not “importer of record.”

Under EXW, an exporter’s responsibility ends at their facility’s loading dock, which includes making the goods available for pick up and providing any product information needed for filing the Electronic Export Information (EEI). The importer’s agent (i.e. their designated. freight forwarder) will arrange and pay for the pre-carriage, shipping, insurance and any additional costs from the exporter’s door.

Title and risks including payment of transportation costs and insurance pass to the buyer once the goods are delivered alongside ship by the seller whether used for sea or inland waterways transport. However export clearance obligation rests with the seller. Seller’s responsibility ends as soon as the goods are placed cleared alongside the ship. The buyer’s responsibility for all expenses and insurance start with the arrival of goods alongside ship.

The seller’s responsibility is to deliver the goods into the custody of the transporter at the named points or load the goods on the buyer’s vehicle. It is the buyer’s responsibility to receive the seller’s arriving vehicle unloaded. Thus title and risk pass to the buyer including transportation and insurance. The buyer decides the means of transport and insurance cover. The seller and the buyer agree upon the point of delivery of goods.

Under this term the exporter bears the cost of carriage (freight). Risk passes from the exporter to the buyer at the port of shipment. The seller gives the notice of shipment to the buyer to enable him to arrange insurance. Until shipment, the risks however remain with the shipper. The buyer is responsible for insurance from the time he assumes the risks, that is, from the point of shipment. The transfer of risks is the same as in FOB. The seller needs to protect his interests by insuring the risks in goods from his warehouse till the goods are loaded in the overseas vessel. C&F price is inclusive of Ex-Works price, packing charges, transportation charges up to shipment & freight.

The seller is responsible for insurance from own warehouse to that of the buyer at the destination point. This policy is called “warehouse to warehouse” marine policy. The policy is taken in the sellers’ name and the claim is negotiated by the buyer, generally through a claims settling agent at the destination place in his own country. The seller is responsible to arrange insurance on warehouse-to-warehouse basis protecting the interests of both the seller and the buyer. Title and risks pass to the buyer when goods have been delivered aboard the ship at the loading point. Buyer supports the entire risk of transportation. CIF includes Cost, Freight and Insurance as the term provides.

Under FOB contracts, the seller undertakes to deliver the goods over the ship’s rail, at which point the risks pass from the seller to the buyer. The seller’s responsibility is to pay all expenses until this point. He is to arrange for insurance up to the point. The buyer is also responsible for insurance from the time he assumes the risks, that is, once the goods pass the ship’s rail. Sellers are responsible to clear customs dues, quality inspection charges and other export related dues. It is important that the shipment term in the bill of lading must carry the wording “Shipped on Board,” it must bear the signature of the transporter or the carrier or his authorized representative with the date on which the goods are boarded. FOB price is inclusive of Ex-Works price, packing charges, transportation charges up to the place of shipment.

Enlargement of a risk by the insured beyond the intent of the Insurance Company when the original Policy was issued. Suspension of liability of the Company will result from such material increase in hazard. A manufacturer producing a low risk non-inflammable product would increase the hazard if he converted to making paint or explosive.