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What are Incoterms?
If your company trades on an international basis, or either ships or receives shipments from an overseas market, then you should be aware of
The International Commerce Terms (Incoterms) are standardized terms used in international trade.
Incoterms are rules of trade that essentially dictate the exact delivery terms between two parties.
These terms would include where and how the goods should be delivered, who pays for what – local charges, export charges, loading charges, … -, who is responsible for insurance, and who handles specific procedures such as unloading.
E terms (EXW): The seller makes available its goods at their premises in order for the buyer to collect. This is the minimum obligation for the seller.
F terms (FCA, FOB, FAS): The seller delivers the goods to a carrier appointed by the buyer. The seller will arrange and pay for delivery of goods to the carrier, but the buyer pays for everything after that.
C terms (CFR, CIF, CPT, CIP): The seller has to contract for carriage, but does not assume the risk of loss or damage after the shipment.
D terms (DAT, DAP, DDP): The seller bears all risk involved in bringing the goods to the buyer.
Is FOB valid for air transport?
Of the three terms contained within the F group two are intended for use only when the goods are carried by sea (but not containerized freight) or inland waterway transport, the other one FCA(Free Carrier … named place) is intended for use by any mode of transport.
If the shipper air freights a consignment of goods which have been ordered as “Free on Board Shanghai airport” the risk which should pass from the seller to the buyer when the goods cross the ships’ rail remains with the seller as there is no ships rail point for the passage of risk from one party to the other.
My name is Wenou Cai, I am a German intern and have worked for 4 and a half months at AGC;
Even though it was only for a short period I could find out and understand the most important aspects of the business world. Until the midterm, it was the learning and development phase. The good thing about a sales person is that you always get to know new people which extends your social network. At the beginning I was not even able to imagine having such a responsibility like calling people from higher positions and visiting suppliers. Because of this I also could travel around China a lot without spending any money. We have visited suppliers in Kunshan, Suzhou, Hangzhou and some in rural areas outside of Shanghai center. I could experience all the local dishes of these different cities in the presence of the GM. I am really grateful and feel honored for this great opportunity.
After midterm, I got to know the feeling of the work routine which means I did less mistakes and spoke more freely with people. First, I called manufacturers of plastic products, then manufacturers of castings and machined parts. Finally, in the last month, I got deeper into the area of PCBA and sensors which is more sophisticated than the other products.
My most important goal was to dive into the business world in overall, finding out the differences between the Chinese and the German market, understand the operation process and if the work fits me or not. Ultimately, I can proudly say that I have reached my goals. Now, I know how the process is working from customer to subcontractor to the supplier or vice versa. Knowing the products and its process is the key to success and it is the hardest but also one of the most interesting parts of that job. Before, I never cared about how and of which components all the products are made. Now, I know all the different specialization and characteristics of the products, how and of which components they are built and who made them. This is really interesting because I had no clue that there were so many suppliers for certain products.
AGC Shanghai Office
Office 16 D, Yujia Mansion
N°1336 Huashan Road
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