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Transport and insurance costs

In commerce there are a number of abbreviations that explain which price is being quoted to the customer. These include:


ex-works (ex-factory, ex-mill, ex-warehouse)

The buyer will have to pay all the costs once the goods have left the factory, mill, or warehouse. If you are quoted any of these prices you will have to pay for insurance and transport yourself.


f.o.r. (free on rail)

The price quoted covers the cost to the nearest railway station.


f.a.s. (free alongside ship) There are no extra charges up to taking the goods to the side of the ship. In some ports small boats (barges, lighters) are used to take the goods to the ship and an f.a.s. quotation means that there will be no charge for this, but there will be charges for loading the goods on to the ship, plus the usual road/rail transport and insurance charges.


f.o.b. (free on board)

Loading on to the ship is included in the price quoted.


. & f. (cost and freight) In this case the price includes cost and shipping to the destination named, e.g. £300 . & f. Hong Kong. But insurance is not included.


c.i.f. (cost, insurance, and freight) As the term indicates, the price includes all costs up to the named destination, e.g. £500 c.i.f. Bombay.


Note that some of the above abbreviations may also be written without full stops and/or in capital letters (e.g. CIF, F.O.R.). This book uses these abbreviations as above but you may come across variations elsewhere.



The importing port is named, and the price includes delivery to this port, e.g. ex-ship Manila.


Franco quay

The price includes all costs up to the importer's dockside, e.g. franco quay Hamburg.

Two other terms which should be noted, but are usually used only in the UK are:


carriage paid (c.p. orC/p) Charges will be paid by the sender, e.g.

We are replacing the damaged goods and will send replacements carriage paid.


carriage forward (c.f. or C/f) The transport charges are paid by the receiver, e.g. We will send the replacement glasses, but as you were responsible for the breakages, we will send them carriage forward.




Manufacturers and wholesalers sometimes allow discounts to be deducted from the net or gross price. They may allow a trade discounts sellers in similar trades; or a quantity discounter orders over a certain amount; or a cash discount if payment is made within a certain time, e.g. seven days, or a loyalty discount when firms have a long association.

We allow a 3% discount for payment within one month.

The net price of this model is £7.50, less 10% discount for quantities up to 100 and 15% discount for quantities over 100.

We do not normally give discounts to private customers but because of your long association with our company we will allow you 20% off the retail price.

The prices quoted are . & f. Yokohama, but are subject to a 20% trade discount off net price, and we will allow a further 20% trade discount of f net prices for orders of more than 2,000 units.



Methods of payment

When quoting terms, you may require, or at least suggest, any of several methods of payment (letter of credit, bill of exchange, etc.) For a full treatment of this subject, see 6.3.1/2 and 9.5/7.

If you would send us your personal cheque for the amount quoted, we will then send the article by registered mail.

Payment for initial orders should be made by sight draft, payable at Den Norske Creditbank, Kirkegaten 21, Oslo 1, cash against documents.



Quoting delivery

If the enquiry specifies a delivery date, confirm that it can be met, or if not, suggest an alternative date. Do not make a promise that you cannot keep; it will give you a bad reputation, and if a delivery time is a condition of ordering, the customer could sue you if you break the contract, or reject the goods.

... and we are pleased to say that we can deliver by December 1st for the Christmas rush.

As there are regular sailings from Liverpool to New York, we are sure that the consignment will reach you well within the time you specified.

We have the materials in stock and will ship them immediately we receive your order.

As there is a heavy demand at this time of year for heaters, you will have to allow at least six weeks for delivery.

We could not deliver within two weeks of receipt of order, as we would need time to prepare the materials. However, if you could let us have a month, we could guarantee delivery within that period.



Date: 2016-01-03; view: 1605

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