INCOTERMS
Incoterms (abbreviation for “International Commercial Terms”) are standard trade definitions most commonly used in international sales contracts. Established by the International Chamber of Commerce in 1936, Incoterms are globally recognized contract standards and they are regularly updated to reflect developments in International trade.
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Overview of Incoterms (State 2020)
Rules for any mode of transport
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EXW: The buyer bears all costs and risks involved in taking the goods from the sellers premises to the desired destination. The sellers obligation is only to make the goods available at their premises, packed for export.
This Term represents minimum obligation for the seller.
This Term can be used across all modes of transport.
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FCA (Nominated Place): The sellers obligation is to hand the goods, cleared for export into the charge of the Carrier named by the Seller at the named place. If no named place is indicated by the buyer then the seller may nominate collection point where the Carrier will take charge of the goods.
Allows for complete door-door control by T&L contractors
This term can be used across all modes of transport.
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CPT: The seller pays the freight for the carriage of goods to the named place. The risk of loss or damage to the goods is transferred from the seller to the buyer only after the delivery has been made to the Carrier and not when the goods reach the place of destination.
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CIP (Named Place): The seller has the same obligation as under CPT but has the added responsibility of obtaining insurance against the buyers risk of loss or damage of goods during the carriage.
This term can be used across all modes of transport.
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DAT (Named Place): Seller delivers when the goods, once unloaded from the delivery vehicle, are placed at the disposal of the buyer at the named port or terminal. Both parties should agree at a point within the terminal where the risks transfer from the Seller to the Buyer
This Term can be used across all modes of transport.
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DAP (Named Place): Seller delivers the goods when they are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination.
This Term can be used across all modes of transport
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DDP (Named Place): The seller is responsible for delivering the goods to the named place in the country of importation, including all costs and risks in bringing the goods to import destination. This includes duties, taxes and customs formalities. This term may be used irrespective of the mode of transport
This Term can be used across all modes of transport.
Rules for sea and inland waterway transport
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FAS (Named Port): The seller has fulfilled his obligation when goods have been placed alongside the vessel at the port of shipment. The buyer is responsible for all costs and risks of loss or damage to the goods from that moment. The buyer is also required to clear the goods for export.
This term should only be used for sea or inland waterway transport.
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FOB: Once the goods are loaded on board at the port of export the buyer is responsible for all costs and risks of loss or damage to the goods from that point. The seller is required to clear the goods for export.
This term should only be used for sea or inland waterway transport.
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CFR (Named Port): The seller must pay the costs and freight required in bringing the goods to the named port of destination. The risk of loss or damage is transferred from seller to buyer when the goods are loaded on the vessel in the port of shipment. The seller is required to clear the goods for export.
This term should only be used for sea or inland waterway transport.
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CIF: The seller must pay the costs and freight required in bringing the goods to the named port of destination. The risk of loss or damage is transferred from seller to buyer when the goods are loaded on the vessel in the port of shipment. The seller is required to clear the goods for export.
This term should only be used for sea or inland waterway transport.