Incoterms
RULES FOR ANY MODE OR MODES OF TRANSPORT
●EXW | Ex Works
●FCA | Free Carrier
●CPT | Carriage Paid To
●CIP | Carriage and Insurance Paid To
●DAP | Delivered at Place
●DPU | Delivered at Place Unloaded
●DDP | Delivered Duty Paid
RULES FOR SEA AND INLAND WATERWAY TRANSPORT
●FAS | Free Alongside Ship
●FOB | Free On Board
●CFR | Cost and Freight
●CIF | Cost Insurance and Freight
RULES FOR ANY MODE OR MODES OF TRANSPORT
EXW – Ex Works
“Ex Works” means that the seller delivers when it places the goods at the disposal of
the buyer at the seller’s premises or at another named place (i.e., works, factory,
warehouse, etc.). The seller does not need to load the goods on any collecting vehicle, nor does it need to clear the goods for export, where such clearance is applicable.
FCA – Free Carrier
“Free Carrier” means that the seller delivers the goods to the carrier or another person nominated by the buyer at the seller’s premises or another named place. The parties are well advised to specify as clearly as possible the point within the named place of
delivery, as the risk passes to the buyer at that point.
CPT – Carriage Paid to
“Carriage Paid To” means that the seller delivers the goods to the carrier or another
person nominated by the seller at an agreed place (if any such place is agreed between parties) and that the seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination.
CIP – Carriage and Insurance Paid to
“Carriage and Insurance Paid to” means that the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such place is agreed between parties) and that the seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination. The seller also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage. The buyer should note that under CIP the seller is required to obtain insurance only on minimum cover. Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements.
DAT – Delivered at Terminal
“Delivered at Terminal” means that the seller delivers when the goods, once unloaded from the arriving means of transport, are placed at the disposal of the buyer at a named terminal at the named port or place of destination. “Terminal” includes a place, whether covered or not, such as a quay, warehouse, container yard or road, rail or air cargo terminal. The seller bears all risks involved in bringing the goods to and unloading them at the terminal at the named port or place of destination.
DAP – Delivered at Place
“Delivered at Place” means that the seller delivers when the goods are placed at the
disposal of the buyer on the arriving means of transport ready for unloading at the
named place of destination. The seller bears all risks involved in bringing the goods to
the named place.
DDP – Delivered Duty Paid
“Delivered Duty Paid” means that the seller delivers the goods when the goods are placed at the disposal of the buyer, cleared for import on the arriving means of transport ready for unloading at the named place of destination. The seller bears all the costs and risks involved in bringing the goods to the place of destination and has an obligation to clear the goods not only for export but also for import, to pay any duty for both export
and import and to carry out all customs formalities.
RULES FOR SEA AND INLAND WATERWAY TRANSPORT
FAS – Free Alongside Ship
“Free Alongside Ship” means that the seller delivers when the goods are placed alongside the vessel (e.g., on a quay or a barge) nominated by the buyer at the named port of shipment. The risk of loss of or damage to the goods passes when the goods are alongside the ship, and the buyer bears all costs from that moment onwards.
FOB – Free On Board
“Free On Board” means that the seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the goods are on board the vessel, and the buyer bears all costs from that moment onwards.
CFR – Cost and Freight
“Cost and Freight” means that the seller delivers the goods on board the vessel or
procures the goods already so delivered. The risk of loss of or damage to the goods passes when the goods are on board the vessel. the seller must contract for and pay
the costs and freight necessary to bring the goods to the named port of destination.
CIF – Cost, Insurance and Freight
“Cost, Insurance and Freight” means that the seller delivers the goods on board the vessel or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the goods are on board the vessel. The seller must contract for and
pay the costs and freight necessary to bring the goods to the named port of destination.
The seller also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage. The buyer should note that under CIF the seller is required to obtain insurance only on minimum cover. Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements.
An overview of Incoterms® 2020 for 11 Terms, 7 for any mode of transport.
EXW – Ex-Works or Ex-Warehouse
●Ex works is when the seller places the goods at the disposal of the buyer at the seller’s premises or at another named place (i.e., works, factory, warehouse, etc.).
●The seller does not need to load the goods on any collecting vehicle. Nor does it need to clear them for export, where such clearance is applicable.
FCA – Free Carrier
●The seller delivers the goods to the carrier or another person nominated by the buyer at the seller’s premises or another named place.
●The parties are well advised to specify as explicitly as possible the point within the
named place of delivery, as the risk passes to the buyer at that point.
FAS – Free Alongside Ship
●The seller delivers when the goods are placed alongside the vessel (e.g., on a quay or a barge) nominated by the buyer at the named port of shipment.
●The risk of loss of or damage to the goods passes when the products are alongside the ship. The buyer bears all costs from that moment onwards.
FOB – Free On Board
●The seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment or procures the goods already so delivered.
●The risk of loss of or damage to the goods passes when the products are on board the vessel. The buyer bears all costs from that moment onwards.
CFR – Cost and Freight
●The seller delivers the goods on board the vessel or procures the goods already so
delivered.
●The risk of loss of or damage to the goods passes when the products are on board the vessel.
●The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.
CIF – Cost, Insurance and Freight
●The seller delivers the goods on board the vessel or procures the goods already so
delivered. The risk of loss of or damage to the goods passes when the products are on
the ship.
●The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.
●The seller also contracts for insurance cover against the buyer’s risk of loss of or
damage to the goods during the carriage.
●The buyer should note that under CIF the seller is required to obtain insurance only on minimum cover. Should the buyer wish to have more insurance protection, it will need
either to agree as much expressly with the seller or to make its own extra insurance
arrangements.
CPT – Carriage Paid To
●The seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such site is agreed between parties).
●The seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination.
CIP – Carriage And Insurance Paid To
●The seller has the same responsibilities as CPT, but they also contract for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage.
●The buyer should note that under CIP the seller is required to obtain insurance only on minimum cover. Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance
arrangements.
DAP – Delivered At Place
●The seller delivers when the goods are placed at the disposal of the buyer on the
arriving means of transport ready for unloading at the named place of destination.
●The seller bears all risks involved in bringing the goods to the named place.
DPU -Delivered At Place Unloaded (replaces Incoterm® 2010 DAT)
●DPU replaces the former Incoterm® DAT (Delivered At Terminal). The seller delivers
when the goods, once unloaded are placed at the disposal of the buyer at a named
place of destination.
●The seller bears all risks involved in bringing the goods to, and unloading them at the named place of destination.
DDP – Delivered Duty Paid
●The seller delivers the goods when the goods are placed at the disposal of the buyer,
cleared for import on the arriving means of transport ready for unloading at the named place of destination.
●The seller bears all the costs and risks involved in bringing the goods to the place of
destination. They must clear the products not only for export but also for import, to pay.
