List of Incoterms Used in Apparel Merchandising Business
Dept. of Knitwear Manufacturing Technology
BGMEA University of Fashion & Technology (BUFT)
The terms of delivery for the materials or goods exported to foreign buyers are discussed here. The delivery terms are governed by the international chamber of commerce (ICC). They issue international commercial terms also known as INCOTERMS which governs all the exports and imports made around the globe. These terms are widely used in international purchase processes. These terms will be normally three lettered abbreviations which are related to contractual sales practices. INCOTERMS is the combination of (IN – International, Co – Commercial, Terms – Terminology). INCOTERMS is very important those who doing garment merchandising business. It is also important for international business. Incoterms were first developed by ICC (International Chamber of Commerce) in Paris France. Incoterms was first developed in 1939. It defines the trade contract, responsibilities and liabilities between buyer and seller. It is invaluable and cost saving tool. These terms clearly provide explanation about the responsibility and allocation of costs to the buyer and seller in a transaction.The importer and exporter need not go under lengthy negotiation about a condition of each transaction after that revised version published in 2000 and 2002.
The responsibility and allocation of costs varies from exworks EXW (all responsibility of loading from exporter’s place of manufacture, transporting, shipping, unloading, transport to importer’s warehouse, insurance payment, customs clearance, duty payment belongs to the importer) to delivery duty paid (DDP) (all responsibility of loading from exporter’s place of manufacture, transporting, shipping, unloading, transport to importer’s warehouse, insurance payment, customs clearance, duty payment belongs to the exporter). Mostly in the garment industry, FOB (Free on board) delivery term is followed and is commonly known as FOB pricing. Sometimes CFR (Cost and freight) is also followed. It is imperative to understand the different delivery terms available and select the appropriate one for the export of goods as per the requirement.
Frequently Used InCoTerms of Apparel Export Business:
FOB – Free on Board
CFR – Cost and Freight
C&F – Clearing and Forwarding
CIF – Cost Insurance and Freight
CM – Cost of Manufacturing
CMT – Cost of Manufacturing and Trim
FCL – Full Container Load.
L/C – Letter of Credit
LCL – Less Container Load.
DAT – Delivery and Terminal.
DAP – Delivery and Port.
CFS – Container Freight Station.
FOA – Free on Air
DDU – Delivery Duty Unpaid.
POD – Port of Discharge.
POD – Proof of Delivery.
POL – Port of Landing.
POL – Port of Loading.
ETA – Estimate Time of Arrival.
ETD – Estimate Time of Departure.
GSP – Generalized System of Preferences.
MAWB – Master Air Way Bill.
HAWB – House Air Way Bill.
FFU – Forty Fit Equivalent
TFU – Twenty Fit Equivalent
PC – Pont Cash.
CO – Country of Origin
GOH – Garments on Hanger.
FPC – Flat Pack Container.
CPT – Carriage Paid to.
CY – Container Yard.
CBM – Cubic Metter.
NVOCC – Non Vassal Operating Common Carrier.
DDP – Delivery Duty Paid.
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Founder & Editor of Textile Learner. He is a Textile Consultant, Blogger & Entrepreneur. He is working as a textile consultant in several local and international companies. He is also a contributor of Wikipedia.