The FMCG Hub
Trade guide

International FMCG trade,
in plain English

The essentials every buyer, manufacturer and logistics partner should know — the rules, terms and documents that move goods across borders.

Incoterms 2020Sea freightCustomsPayment termsGlossary
Incoterms® 2020

Who pays for what, and when the risk moves

Incoterms are the International Chamber of Commerce’s standard trade terms. They set where the seller’s job ends and the buyer’s begins. Always write the term and a named place — e.g. “FOB Tangier Med, Incoterms 2020”.

TermNameSeller delivers…Risk passes to buyerMode
EXWEx WorksGoods ready at its own premises. Buyer does everything else, even export clearanceAt seller’s premisesAny
FCAFree CarrierExport-cleared goods to the buyer’s carrier at a named placeOn handover to the carrierAny
CPTCarriage Paid ToTo the carrier; seller pays freight to destinationOn handover to the first carrierAny
CIPCarriage & Insurance Paid ToAs CPT, plus seller insures (high cover)On handover to the first carrierAny
DAPDelivered at PlaceTo the named destination, ready to unloadAt destinationAny
DPUDelivered at Place UnloadedTo the named destination, unloadedAt destination, after unloadingAny
DDPDelivered Duty PaidTo destination, import-cleared, duties paidAt destinationAny
FASFree Alongside ShipAlongside the vessel at the port of loadingAlongside the shipSea
FOBFree on BoardLoaded on board at the port of loadingOnce on boardSea
CFRCost & FreightOn board; seller pays freight to destination portOnce on boardSea
CIFCost, Insurance & FreightAs CFR, plus seller insures (minimum cover)Once on boardSea

Tip: FOB, CFR and CIF are for sea freight in bulk or break-bulk. For containers, the ICC recommends FCA, CPT or CIP.

Sea freight

How a container moves

1
BookingSpace reserved with a carrier or forwarder; empty container released.
2
StuffingContainer loaded at the factory, sealed, and a VGM (verified weight) declared.
3
ExportExport declaration filed; container gated in at the port before cut-off.
4
On the waterLoaded and sailed; the bill of lading is issued. Transit times vary by lane and transhipment.
5
ArrivalDischarged, cleared by customs, collected and delivered or stored.
FCL / LCLFull container load (one shipper) or less than container load (shared).
20’ / 40’ / 40’ HCStandard container sizes. Drinks are heavy, so weight often limits before space.
Bill of ladingThe carrier’s receipt, contract of carriage and — if negotiable — title to the goods.
Free time, demurrage, detentionDays allowed at the port or with the container before daily charges start.
Customs

Getting goods across a border

HS codeThe worldwide product code that sets the duty rate and any controls.
Duty & import VATCharged by the importing country on the customs value — rates vary by product and origin.
OriginWhere the goods were made. Trade agreements can lower duty for qualifying origins, with the right certificate.
Customs IDImporters and exporters register with customs — e.g. an EORI number in the UK and EU.
Bonded warehouseA licensed store where duty and import VAT are suspended until goods are released.
Labelling & standardsFood and drink must meet the destination’s labelling, language and safety rules.
Payment terms

How international trade gets paid

MethodHow it worksSuits
Advance paymentBuyer pays before production or shipmentNew relationships, custom orders
Deposit + balancePart up front, balance against documents or before releaseRepeat programmes
Documentary collectionBanks exchange shipping documents for payment or acceptanceEstablished trade, lower cost than LCs
Letter of creditBuyer’s bank guarantees payment against compliant documentsLarge or higher-risk trades
Open accountGoods first, payment on agreed days (e.g. 30 days)Trusted, credit-checked buyers

Security: legitimate suppliers never change bank details by email. Always confirm by phone with a known contact before paying.

Glossary

The words you’ll hear

PFIPro-forma invoice — the seller’s quote in invoice form, issued before shipment.
CI & PLCommercial invoice and packing list — the core shipping documents.
ETD / ETAEstimated time of departure / arrival.
POL / PODPort of loading / port of discharge.
SKUStock-keeping unit — one specific product, pack and size.
Landed costProduct + freight + insurance + duty + handling: the true cost at destination.

This guide is general information, not legal or tax advice. Rules change and vary by country — check before you ship.

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