Terminology of export and import-part.1

Proforma invoice

Is an invoice issued by the seller “exporter” at the beginning of the deal to inform the importer “buyer” by all prices and terms, and this document is adjustable for many times till the importer confirm the order.

Note: this document does not include into LC also there is no need to certify from chamber of commerce.    

Commercial Invoice
is an invoice showing the quantity and value of the goods, specifications and delivery terms. This document issued by the seller and it should be certified from the Chambers of Commerce in seller’s country.

Bill of lading
is a Document issued by the carrier, which is a contract of carriage between the Exporter and the carrier, this document “Bill of lading” shows port of loading, port of destination, a means of transport, freight and payment method.

Bill of lading is considered a confirmation from the carrier with receipt the goods in the holds of the ship.

Bill of lading is an ownership contract for the importer therefore it describes goods in brief description and mention the destination.

Air Waybill
is a Document constitutes an acknowledgment and confirmation of the carrier who is ready for transporting goods.

Waybill
is a written list of the names and descriptions of cargo on a vehicle or a train or a car, and it is the official document can be accepted by the transport company in the case of the importer claimant transport company or the insurance company for the cost recovery of the lost or damaged goods during the shipping. 

EXW (Ex-Works or EX-Factory)

Is a condition pricing is limited to the liability of the seller in the preparation of goods to the buyer in the premises of the vendor, such as factory or warehouse, the buyer bears all costs of transporting goods as well as any risks resulting from the receipt of goods from the seller access to places, and represents this condition the minimum obligation for the Seller.

FOB (Free On Board)
is a condition of Pricing indicate that  the price of shipped goods includes only the price of the goods loaded on board in a specific place, the exporter is no longer responsible for goods after loading it on board, and the buyer bears all costs and risks that may occur to goods in vessel .

Note: the importer “buyer” has to find a carrier and pay shipping costs by himself.

CFR (Cost and Freight)

The exporter “seller” clears goods for export and is responsible for delivering goods into port of loading. Transport or Shipping costs are included (to ship goods to port of destination by the seller “exporter”)  

However, once the goods pass the ship’s rail at the port of shipment, the buyer assumes responsibility for risk of loss or damage,

Note: I don’t prefer CFR term because it has no insurance so the importer will force much risks.

CIF (Cost Insurance and Freight)

The price of goods includes (cost of goods, shipping costs and insurance cost) so we can say that the exporter who find the carrier and insurance company and pay all costs for both.

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