The price structure and conversion of major trading terms

The price structure of three FOB, CFR, and CIF trade terms applies only to maritime or inland water transportation. In the price structure, it usually includes three aspects: purchase cost, cost and net profit. The accounting of expenses is the most complex, including domestic expenses and foreign expenses.

Domestic expenses include:

1. Processing costs;

2. Packaging costs;

3. Storage costs (including warehouse rent, fire insurance, etc.);

4. Domestic transportation costs (from warehouse to terminal);

5. Document fees (including commodity inspection fees, notary fees, consular visa fees, certificate of origin fees, permit fees, customs declaration fees, etc.);

6. Shipment fees (shipping, lifting fees, barge fees, etc.);

7. Bank fees (discount interest, fees, etc.);

8. Expected loss (loss, loss, leakage, damage, deterioration, etc.);

9. Postal and electricity charges (telegraph, telex, mail, etc.).

The main foreign expenses are:

1. Foreign freight (the cost of sea transport from the port of shipment to the port of destination);

2. Foreign insurance (sea cargo transportation insurance);

3. If there is a middleman, it also includes the commission paid to the middleman.

Calculated as follows:

FOB price = purchase cost price + domestic cost + net profit CFR price = purchase cost price + domestic cost + foreign freight + net profit CIF price = purchase cost price + domestic cost + foreign freight + foreign premium + net profit 2 FCA, CPT The price structure of the three trade terms and CIP has a wide range of applications. In the price structure, it usually includes three aspects: purchase cost, cost and net profit.

Domestic expenses include:

1. Processing costs;

2. Packaging costs;

3. Storage costs (including warehouse rent, fire insurance, etc.);

4. Domestic transportation costs (from warehouse to terminal);

5. LCL charges (if the goods do not constitute a full container);

6. Document fees (including commodity inspection fees, notary fees, consular visa fees, certificate of origin fees, permit fees, customs declaration fees, etc.);

7. Bank fees (discount interest, fees, etc.);

8. Expected loss (loss, loss, leakage, damage, deterioration, etc.);

9. Postal and electricity charges (telegraph, telex, mail, etc.).

The main foreign expenses are:

1. Foreign freight (transportation costs from the point of departure of domestic exports to foreign destinations);

2. Foreign insurance premiums;

3. If there is a middleman, it also includes the commission paid to the middleman.

Calculated as follows:

FCA price = purchase cost price + domestic cost + net profit CPT price = purchase cost price + domestic cost + foreign freight + net profit CIP price = purchase cost price + domestic cost + foreign freight + foreign insurance premium + net profit main trading terms Price conversion:

Conversion of a FOB, CFR, and CIF term:

1. FOB price is converted into other price CFR price = FOB price + foreign freight CIF price = (FOB price + foreign freight) / (1-insurance bonus + insurance rate)

2. CFR price is converted to other price FOB price = CFR price - foreign freight CIF price = CFR price / (1-Insurance bonus × insurance premium rate)

3. CIF price is converted to other price FOB price = CIF price × (1 - insurance plus bonus × insurance rate) - foreign freight CFR price = CIF price × (1 - insurance plus bonus × insurance rate)

Conversion of two terms of FCA, CPT and CIP:

1. FCA price is converted into other price CPT price = FCA price + foreign freight CIP price = (FCA price + foreign freight) / (1- insurance plus x insurance rate)

2. CPT price is converted into other price FCA price = CPT price - foreign freight CIP price = CPT price / (1- insurance plus x insurance rate)

3. CIP price is converted into other price FCA price = CIP price × (1-insurance bonus × insurance premium rate) - foreign freight CPT price = CIP price × (1-insurance bonus × insurance premium rate)

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