There are many issues that need to be negotiated between exporters and importers before initiating a trade transaction. If such matters needed to be addressed for every transaction, the process would be cumbersome and complex. In order to standardize trade transactions, trade terms established by the International Chamber of Commerce (ICC) are referred to as fixed transaction conditions dubbed “Incoterms”.
The most frequently used terms in Intercoms are FOB, CFR, and CIF.
Ex works (EXW)
Free on board (FOB)
Cost and freight (CFR)
The time of transfer of risk is when products are loaded onto the ship at the export destination.
Export customs clearance and transport are carried out by the exporter, while import customs clearance is carried out by the importer. Transport cost is borne by the exporter.
Details: CFR term is applied to shipping by ship, and the cost of shipping to the place of import and export customs clearance is added to the EXW term price.
Transport cost/Insurance & Freight (CIF)
An illustration of Incoterms that clearly explains the extent to which the exporter is responsible for “risk” and “cost” among the contents of Incoterms is attached.
Types of pricing terms (Incoterms 2020)
COMPANY : Busan Cosmetics Business Association
OWNER : Mun Oesuk
TEL : +82-51-997-8880
FAX : +82-51-955-3884
ADDRESS : 48434, 309, Suyeong-ro, Nam-gu, Busan (Daeyeon-dong) Social Hall (Fifth Hall), B105
BUSINESS LICENSE : 169-82-00213