Shipping is an essential aspect of the trade industry that refers to the transportation of goods from one destination to another. Various shipping terms are employed to govern the sale of goods and the transfer of liability between the seller and buyer. Understanding the shipping terms is crucial as they are integral to the logistics process.

FOB (Free on Board) is a shipping term that means the seller is only responsible for putting the purchased goods on the board a ship, with the responsibility for the goods transferred to the buyer once on-board. CIF (Cost, Insurance, and Freight) is another shipping term that implies the seller carries the burden of paying the cost of transportation, insurance, and estimated insurance charges until they reach the client. EXW (Ex Works) means that the buyer is responsible for arranging and financing transportation of the goods from the seller’s location while DDP (Delivered Duty Paid) means that the seller is entirely responsible for delivering the goods to the buyer’s location and paying all associated taxes and fees.

Therefore, it’s crucial to have a clear understanding of the shipping terms to avoid confusions or disputes between both parties involved in the transaction.