International Marketing Practices

Figure 9. Responsibility exchange between supplier and buyer as derived from [23].

The internationally accepted Incoterms are defined below. Terms marked with an asterisk (*) are relevant only for sea and inland waterway transport; all others are applicable for any mode of transportation. Ex Works (EXW). Ex Works or Ex-Factory indicates the products are transferred to the buyer at the supplier’s facilities or another place, and the buyer takes responsibility for arranging transportation and insurance as well as clearing the goods for export [23]. Free Alongside Ship (FAS).* The supplier quotes both the products and the cost of delivery up to and/or alongside a ship at a defined port for export, where the buyer assumes responsibility of the product [20, 23]. Free On Board (FOB).* The supplier delivers and loads the product onto a vessel at a defined location or port for export, and from then on, the buyer incurs cost [20]. Free Carrier (FCA). The seller delivers the product to a buyer-designated carrier at a clearly defined location, passing responsibility from supplier to buyer. Carriage Paid To (CPT). The goods are delivered to a seller-designated carrier at an agreed location, and the seller contracts and pays for transit costs to a final destination. Carriage and Insurance Paid To (CIP). Similar to CPT, CIP requires the supplier to also contract and pay for minimum insurance during transportation. Cost and Freight (CFR).* An overseas port is agreed upon, and the supplier incurs cost up until the product is loaded for export, passing responsibility to the buyer by giving custody to the carrier. The buyer must contract and pay transportation and insurance costs [20].

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