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Under this cargo delivery term the shipper or exporter pays the cost and insurance for the product but the receiver or buyer pays the costs of freight.



Related Terms

FORCE MAJEURE

A clause limiting responsibilities of charterers, shippers and receiver of cargo

GENERAL AVERAGE

When a cargo loss occurs and general average is declared during a voyage, especially when there are multiple shippers and commodities, the amount of the total loss is averaged against all the cargo on the vessel based on a valuation formula. The settlement of the claims are paid by each and every shipper or their insurance carrier based on the average. A shipper, or their insurance carrier, may have to pay a share of a partial loss to others who had a loss or damage claim even when their own cargo may not have incurred any of the same damage or loss.

CARRIAGE AND INSURANCE PAID TO

CIP - a Term of Sale which means the seller has the same obligations as under CPT, but with the addition that the seller has to procure cargo insurance against the buyer's risk of loss of or damage to the goods during the carriage. The seller contracts for insurance and pays the insurance premium. The buyer should note that under the CIP term the seller is required to obtain insurance only on minimum coverage. The CIP term requires the seller to clear the goods for export.

PADAG

Abbreviation for 'Please Authorize Delivery Against Guarantee.' A request from the consignee to the shipper to allow the carrier or agent to release cargo against a guarantee, either bank or personal. Made when the consignee is unable to produce original bills of lading.

OCEAN BILL OF LADING

A contract for transportation between a shipper and a carrier. It also evidences receipt of the cargo by the carrier. A bill of lading shows ownership of the cargo and, if made negotiable, can be bought, sold or traded while the goods are intransit.

GRAB

A piece of cargo handling equipment made from two halves which when dropped onto bulk products and pulled up 'grabs' a bite of the product for discharging or loading.

CARGO MANIFEST

A detailed statement of a vessel’s cargo which includes all data regarding the shipper consignee and cargo quantity.

SPOT VOYAGE

A charter for a particular vessel to move a single cargo between specified loading port(s) and discharge port(s) in the immediate future. Contract rate (spot rate) covers total operating expenses, i.e., bunkers, port charges, canal tolls, crew's wages and food, insurance and repairs. Cargo owner absorbs, in addition, any expenses specifically levied against the cargo.

VESSEL LOAD FREE OUT

(VLFO) - The loading and discharge terms for the cargo to be shipped, as agreed to in the charterer party. The vessel (carrier) pays for the loading of the cargo on board the ship and the receiver pays for the discharge of the cargo from the ship to the pier.

INHERENT VICE

An insurance term referring to any defect or other characteristic of a product that could result in damage to the product without external cause (for example, instability in a chemical that could cause it to explode spontaneously). Insurance policies may exclude inherent vice losses.

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