Theory question 106
Foreign Trade DocumentsCommerce 2 (answer any five questions)
Write the following in full and explain their meanings:
(a) C.I.F
(b) F.O.B
(c) F.A.S
(d) F.O.R
(e) C.F
Show the model answer
(a) C.I.F – Cost, Insurance and Freight: the price includes the cost of the goods, insurance and freight to the named port of destination; the buyer pays from there.
(b) F.O.B – Free On Board: the price covers the goods and all costs until they are loaded on board the ship at the port of shipment; freight and insurance are paid by the buyer.
(c) F.A.S – Free Alongside Ship: the price covers the goods delivered alongside the ship at the port; the buyer pays the cost of loading and all later costs.
(d) F.O.R – Free On Rail: the price covers the goods and the cost of loading them onto the railway wagon at the named station; the buyer pays the rest.
(e) C.F (C & F) – Cost and Freight: the price covers the goods and freight to the port of destination, but not insurance, which the buyer arranges.
Write each term in full and say up to what point the seller pays.