The Incoterms rules are standard sets of trading terms and conditions designed to assist traders when goods are sold and transported. They are created and published by the International Chamber of Commerce (ICC), with the most recent revision (Incoterms 2010) coming into force on January 1st, 2011. We has compiled these rules into a unique tool that provides buyers and sellers with a point of reference for what each party is obliged to do, and where responsibility lies in event the of loss, damage or other mishap. AS, FOB, CFP, and CIF are Incoterms related to ocean shipping. Other Incoterms apply to any mode of transport.
EXW – EX WORKSThe seller fulfills the obligation to deliver when he has made the goods available at his premises (i.e., works, factory, warehouse, etc.) to the buyer. In particular, the seller is not responsible for loading the goods on the vehicle provided by the buyer or for clearing the goods for export, unless otherwise agreed. The buyer bears all costs and risks involved in taking the goods from the seller’s premises to the desired destination. This term thus represents the minimum obligation for the seller. Term applies to air, rail, road, and containerized/multi- modal transport.
FCA – FREE CARRIER (NAMED PLACE)The seller delivers the goods to the buyer’s nominated carrier at the named place; typically seller’s factory or warehouse. Seller is responsible for loading the carrier picking up the cargo and for performing the Export Clearance. Term applies to all modes of transport.
CPT – CARRIAGE PAID TO (NAMED PLACE OF DESTINATION)The seller must pay for carriage of the freight to the named point of destination. Risk passes when the goods are handed over to the first carrier. Term applies to all modes of transport.
CIP – CARRIAGE AND INSURANCE PAID TO (NAMED PLACE OF DESTINATION)Seller pays for carriage and insurance to the named destination point, but risk passes when the goods are handed over to the first carrier. The seller is obligated, at its own cost, to obtain cargo insurance complying with the coverage provided by Clauses (A) of the Institute Cargo Clauses (LMA/IUA) or any similar clauses as appropriate to the means of transport used. Term applies to all modes of transport.
DAP – DELIVERED AT PLACEThe seller bears all transport costs and the risk up to delivery. “Delivery” takes place when the goods are at the disposal of the buyer on the arriving means of transport, ready for unloading at the named place of destination. Term applies to all modes of transport.
DPU – DELIVERED AT PLACE UNLOADED (NAMED DESTINATION PLACE)The seller bears all transportation costs and the risk up to when goods are unloaded, typically at buyer’s facility. The seller must unload the goods from the arriving means of transport and must then deliver them by placing them at the disposal of the buyer at the agreed point. Term applies to all modes of transport.
DDP – DELIVERED DUTY PAID (NAMED DESTINATION PLACE)The seller pays for all transportation costs and bears all risk until the goods have been delivered. Seller pays the duty and is the “importer of record” in the buyer’s country. Term applies to all modes of transport.
FAS – FREE ALONGSIDE SHIP (NAMED LOADING PORT)The seller must place the goods alongside the ship at the named port. The seller must clear the goods for export. Term applies to maritime transport only.
FOB – FREE ON BOARD (NAMED LOADING PORT)As a common trade term, the seller must load the goods on board the ship nominated by the buyer. Cost and risk transfer once goods are placed on board the ship for transport. “On board the vessel” must be clearly defined in the agreement. The seller must clear the goods for export. Term applies to maritime transport only.
CFR – COST AND FREIGHT (NAMED DESTINATION PORT)The seller must pay the costs and freight to bring the goods to the named destination. However, the risk transfers to the buyer once the goods are placed on board the ship for transport. Term applies to maritime transport only.