Useful Tools: Export Terms

This section contains a range of relevant export terms used by factories and freight forwarders, when sending goods from China:

Bill of lading

• Bill of lading are contracts between the owner of goods and the carrier. The customer needs an original or a copy as proof of ownership to take possession of the goods.

Bonded Warehouse

• The Customs Service authorises bonded warehouses for storage or manufacture of goods on which payment of duties is deferred until the goods enter the Customs Territory. The goods are not subject to duties if reshipped to foreign points.

CAF (Currency Adjustment Factor)

• A freight surcharge or adjustment factor imposed by an international carrier to offset foreign currency fluctuations. In some cases an emergency currency adjustment factor (ECAF) may be applied when a charge or rate has been originally published in a currency that is experiencing sustained or rapid decline. The CAF is charged as a percentage of the freight.

Clean Bill of Lading

• A receipt for goods issued by a carrier with an indication that the goods were received in apparent good order and condition, without damages or other irregularities

Consignee

• The person or firm named in a freight contract to whom goods have been consigned or turned over. For export control purposes, the documentation differentiates between an intermediate consignee and an ultimate consignee.

Cost & Freight (C&F)

• Cost & Freight to a named overseas port of import. Under this term, the seller quotes a price for the goods that include the cost of transportation to the named point of debarkation. The cost of insurance is left to the buyers account.

Cost, Insurance & Freight (CIF)

• Cost, Insurance and freight to a named overseas port of import.. Under this term the seller quotes a price ofor the goods (including insurance).

Ex Works (EXW)

• A term of sale in which for the quoted price, the seller mearly makes the goods available to the buyer at the sellers “named place”of business. This places the greatest responsibility on the buyer abd minimum obligations on the seller. The Ex Works term is often used when making an initial quotation for the sale of goods without any costs included.

Free on Board (FOB)

• Common price term used in international trade. The seller is responsible for the cost of goods is to the point of loading it onto the ship or aircraft. The risk of loss of or damage to the goods is transferred from the seller to the buyer when the goods have been so delivered.

Freight Forwarder

• An independent business which handles export shipments for compensation. At the request of the shipper, the forwarder makes the actual arrangements and provides the necessary services for expediting the shipment to its overseas destination. The forwarder takes care of all documentation needed to move the shipment from origin to destination, making up and assembling the necessary documentation for submission to the bank in the exporter's name. The forwarder arranges for cargo insurance, makes the necessary overseas communications, and advises the shipper on overseas requirements of marking and labelling.

Packing List

• A shipping document issued by shipper to carrier, Customs and consignee serving the purposes of identifying detail information of package count, products count, measurement of each package, weight of each package, etc.

Pro Forma Invoice

• An invoice provided by a supplier prior to the shipment of merchandise, informing the buyer of the kinds and quantities of goods to be sent, their value, and important specifications (weight, size, and similar characteristics). When an importer applys for Letter of Credit as the means of payment, a Pro Forma Invoice from the beneficiary of such Letter of Credit, usually the exporter, is required by the L/C issuing bank.