Incoterms |
EXW
– Ex Works (named place of delivery) |
The
seller makes the goods available at its premises. This term places the
maximum obligation on the buyer and minimum obligations on the seller. The Ex
Works term is often used when making an initial quotation for the sale of
goods without any costs included. EXW means that a seller has the goods ready
for collection at his premises (works, factory, warehouse, plant) on the date
agreed upon. The buyer pays all transportation costs and also bears the risks
for bringing the goods to their final destination. The seller doesn't load
the goods on collecting vehicles and doesn't clear them for export. If the
seller does load the good, he does so at buyer's risk and cost. If parties
wish seller to be responsible for the loading of the goods on departure and to
bear the risk and all costs of such loading, this must be made clear by
adding explicit wording to this effect in the contract of sale. |
FCA – Free Carrier (named place of delivery) |
The
seller hands over the goods, cleared for export, into the disposal of the
first carrier (named by the buyer) at the named place. The seller pays for
carriage to the named point of delivery, and risk passes when the goods are
handed over to the first carrier. |
CPT - Carriage Paid To (named place of
destination) |
The
seller pays for carriage. Risk transfers to buyer upon handing goods over to
the first carrier. |
CIP – Carriage and
Insurance Paid to (named place of destination) |
The
containerized transport/multimodal equivalent of CIF. Seller pays for
carriage and insurance to the named destination point, but risk passes when
the goods are handed over to the first carrier. |
DAT – Delivered at Terminal (named
terminal at port or place of destination) |
Seller
pays for carriage to the terminal, except for costs related to import
clearance, and assumes all risks up to the point that the goods are unloaded
at the terminal. |
DAP – Delivered at Place (named place of
destination) |
Seller
pays for carriage to the named place, except for costs related to import
clearance, and assumes all risks prior to the point that the goods are ready
for unloading by the buyer. |
DDP – Delivered Duty Paid (named place of
destination) |
Seller
is responsible for delivering the goods to the named place in the country of
the buyer, and pays all costs in bringing the goods to the destination
including import duties and taxes. This term places the maximum obligations
on the seller and minimum obligations on the buyer. |
Rules for Sea and Inland
Waterway Transport |
The four
rules defined by Incoterms 2010 for international trade where transportation
is entirely conducted by water are: |
FAS – Free Alongside Ship (named port of
shipment) |
The
seller must place the goods alongside the ship at the named port. The seller
must clear the goods for export. Suitable only for maritime transport but NOT for multimodal sea transport in
containers (see Incoterms 2010, ICC publication 715). This term is typically used for
heavy-lift or bulk cargo. |
FOB – Free on Board (named port of shipment) |
The
seller must load themselves the goods on board the vessel nominated by the
buyer. Cost and risk are divided when the goods are actually on board of the
vessel (this rule is new!). The seller must clear the goods for export. The
term is applicable for maritime and inland waterway transport only but NOT for multimodal sea transport in
containers (see Incoterms 2010, ICC publication 715). The buyer must instruct the seller the
details of the vessel and the port where the goods are to be loaded, and
there is no reference to, or provision for, the use of a carrier or
forwarder. This term has been greatly misused over the last three decades
ever since Incoterms 1980
explained that FCA should be used for container shipments. |
CFR – Cost and Freight (named port of destination) |
Seller
must pay the costs and freight to bring the goods to the port of destination.
However, risk is transferred to the buyer once the goods are loaded on the
vessel (this rule is new!). Maritime transport only and Insurance for the
goods is NOT included. This term
is formerly known as CNF (C&F). |
CIF – Cost, Insurance
and Freight (named port of destination) |
Exactly
the same as CFR except that the seller must in addition procure and pay for
the insurance. Maritime transport only. |
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