Terms used for import from China

1. EXW (Ex Works)

EXW or Ex Works refers to the international trade agreement whereby the supplier is expected to make goods ready for pickup at his/her business place. The buyer will be responsible for all costs and liabilities of the shipment once it leave the sellers business address.

When using these shipping terms, the cost and risks of shipping goods lie with the buyer alone. This implies that Ex Works enables the buyer to have a clearer picture of the costs involved ahead of time. The buyer will also be in control of the whole shipment thereby preventing the seller from increasing their local costs.

2. FOB (Free on Board)

FOB or Free on Board is an agreement that demonstrates whether the buyer or the seller has liability for goods that are damaged in transit. “FOB shipping point” implies that the buyer will bear the risk if the goods are shipped while “FOB destination” implies that the seller will bear the risk of any loss until the buyer gets the goods.The term FOB is employed in non-containerized sea freight or inland waterway transport. It does not refer to the transfer ownership of goods.

3. C&F (Cost and Freight)

C&F or Cost and Freight refers to a legal recourse term that is employed in international trade whereby the seller does not need to procure marine insurance against the risk of loss or damage to the goods being purchased while shipping goods. Under this term, the seller is expected to cater for the carriage of goods by sea to a port of destination and give the buyer the necessary documents.

4. CIF (Cost, Insurance and Freight)

CIF or Cost, Insurance and Freight is a trade term that requires the supplier to arrange for the transportation of the goods by sea to a port of destination and also provide the buyer with the necessary documents. EU countries use the CIF value for calculating the duty that must be paid on an import.

5. B/L

B/L (Bill of Landing) refers to a document issued by a carrier or its agent to a shipper. It stands as a contract of carriage of goods. It also acts as a receipt for a cargo that is accepted for transportation and needs to be presented before the goods’ delivery can be taken at the destination.

A bill of landing contains a number of components, these include;
- Consignor’s and consignee’s names, 
- Ports of departure/arrival 
- Vessal name
- Dates of departure/arrival 
- List of goods being transported 
- Packaging details
- Weight, volume and cost of freight

6. AWB

AWB (Airway bill) is a type of bill of landing that enables tracking of the cargo. Once the airplane departs, the cargo rights will be changed from the supplier to that of the consignee. Airway Bill serves as a receipt of goods by a carrier, contract of carriage between the shipper and the carrier. It provides information about the conditions of carriage and the carrier’s limits of liability and claims procedures. AWB is a non-negotiable instrument and does not state the flight that the shipment will arrive with or the time of delivery.

7. ETA and ETD

ETA and ETD (Estimated Time of Arrival and Estimated Time of Delivery respectively) refer to the time and date that a ship will arrive at a particular port. The estimated delivery date depends on the supplier’s handling time, the shipping service used and when the supplier receives the cleared payment. Knowing the estimated delivery date will enable you to determine how long it will take you to get your item.

8. FCL and LCL

FCL (Full Container Load) and LCL (Less Container Load) are terms used in shipping under international trade business. FCL refers to one full container load (20” or 40”) that contains cargo for one importer. It is the cheapest means of transportation when importing products from China.

LCL refers to a cargo that is owned by different importers and grouped together in one and the same container. It enables importers to ship a small amount of cargo that are not large enough to fit into the FCL option.

9. POD and POL

POD (Port of Destination) refers to the intended final point of arrival of a shipment.

POL (Port of Loading) refers to the place where the cargo is loaded by the carrier onto the ocean vessel.

10. RMB

RMB (Renminbi) is the official currency of the People’s Republic of China. Its basic unit is the yuan.

11. PI

PI (Proforma Invoice) signifies a sales contract or an estimated invoice that is being sent by a supplier to an importer in advance of a shipment or delivery of goods. It portrays the nature and quantity of goods, their value and other important information like weight and transportation charges. They are often used as preliminary invoices with a quotation or for customs purposes while importing goods.

12. MOQ

MOQ meaning is Minimum Order Quantities. Chinese suppliers are utilized to 10,000 amount orders for their domestic industry. Therefore they typically look down at something under 500 portions, which does not all the time fit well with a small-scale business or start-up.