Write the following in full and explain their... | WAEC SSCE - Commerce - 1998

Question 1 Report

Write the following in full and explain their meanings:
(a) C.I.F.
(b) F.O.B.
(c) F.A.S.
(d) F.O.R.
(e) C.F.

Answer

These are shipping and price-quotation terms used in foreign trade to show the costs included in the seller's quoted price.

(a) C.I.F. — Cost, Insurance and Freight. This means that the quoted price includes the cost of the goods, insurance premium and freight charges up to the port of destination. The buyer bears other charges after the goods arrive at the destination port.
(b) F.O.B. — Free On Board. This means that the seller bears all expenses up to the time the goods are loaded on board the ship. The buyer bears the freight, insurance, unloading and other subsequent charges.
(c) F.A.S. — Free Alongside Ship. This means that the seller delivers the goods free alongside the ship at the port of shipment. The buyer bears the cost of loading the goods on the ship, freight, insurance and other subsequent charges.
(d) F.O.R. — Free On Rail. This means that the seller pays all charges up to and including loading the goods on the railway wagon. The buyer bears the subsequent carriage and other charges.
(e) C.F. — Cost and Freight. This means that the quoted price includes the cost of the goods and freight charges to the port of destination. Insurance is not included; the buyer arranges and pays for insurance.

Answer Details

These are shipping and price-quotation terms used in foreign trade to show the costs included in the seller's quoted price.

(a) C.I.F. — Cost, Insurance and Freight. This means that the quoted price includes the cost of the goods, insurance premium and freight charges up to the port of destination. The buyer bears other charges after the goods arrive at the destination port.
(b) F.O.B. — Free On Board. This means that the seller bears all expenses up to the time the goods are loaded on board the ship. The buyer bears the freight, insurance, unloading and other subsequent charges.
(c) F.A.S. — Free Alongside Ship. This means that the seller delivers the goods free alongside the ship at the port of shipment. The buyer bears the cost of loading the goods on the ship, freight, insurance and other subsequent charges.
(d) F.O.R. — Free On Rail. This means that the seller pays all charges up to and including loading the goods on the railway wagon. The buyer bears the subsequent carriage and other charges.
(e) C.F. — Cost and Freight. This means that the quoted price includes the cost of the goods and freight charges to the port of destination. Insurance is not included; the buyer arranges and pays for insurance.

Write the following in full and explain their meanings: (a) C.I.F. (b) F.O.B. (c) F.A.S. (d) F.O.R. (e) C.F.