Key Terms for Sea Transport (FAS, FOB, CFR, CIF) Foreign Trade Agreement (FTA) An FTA is an agreement between two countries that allows them to simplify...
Key Terms for Sea Transport (FAS, FOB, CFR, CIF)
Foreign Trade Agreement (FTA)
An FTA is an agreement between two countries that allows them to simplify or eliminate customs barriers and trade restrictions. Participating countries may establish a customs union or a single market, which can simplify import and export procedures.
Free on Board (FOB)
FOB is a term used in maritime trade that means that the seller is responsible for loading the goods onto the ship and insuring their safe transport until they reach their destination. The buyer is then responsible for unloading and paying the port and insurance costs.
Cost, Insurance and Freight (CIF)
CIF is a term used in international trade that means that the seller is responsible for loading the goods onto the ship, insuring their safe transport, and paying all costs related to the shipment. The buyer is only responsible for paying the seller a price that is equal to the cost of the goods delivered to the port of destination