Incoterm

International Commercial Terms (‘Incoterms’) are internationally recognised standard trade terms used in sales contracts.

The Incoterms® rules have become an essential part of the daily language of trade.

They are used to make sure buyer and seller know:

  • who is responsible for the cost of transporting the goods, including insurance, taxes and duties
  • where the goods should be picked up from and transported to
  • who is responsible for the goods at each step during transportation

The current set of Incoterms is Incoterms 2010.


EXW – Ex Works

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Named place – Any mode of transport

The seller must place the goods at the disposal of the buyer at the seller’s premises or another named place not cleared for export and not loaded on any collecting vehicle.

FCA – Free Carrier

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Named place – Any mode of transport

The seller must deliver the goods, cleared for export, to the carrier nominated by the buyer at the named place.

FAS – Free Alongside Ship

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Named port of shipment – Maritime and inland waterway transport only

The seller must place the goods, cleared for export, alongside the vessel at the named port of shipment.

FOB – Free on Board

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Named port of shipment – Maritime and inland waterway transport only

The seller delivers the goods, cleared for export, when they pass the ship’s rail at the named port of shipment.

CFR – Cost and Freight

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Named port of destination – Maritime and inland waterway transport only

The seller delivers the goods when they pass the ship’s rail in the port of shipment and must pay the costs and freight necessary to bring the goods to the named port of destination. The buyer bears all additional costs and risks after the goods have been delivered (over the ship’s rail at the port of shipment).

CIF – Cost Insurance and Freight

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Named port of destination – Maritime and inland waterway transport only

The obligations are the same as under CFR with the addition that the seller must procure insurance against the buyer’s risk of loss of, or damage to the goods during carriage.

CPT – Carriage Paid To

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Named place of destination – Any mode of transport

The seller delivers the goods to the nominated carrier and must also pay the cost of carriage necessary to bring the goods to the named destination. The buyer bears all additional costs and risks after the goods have been delivered to the nominated carrier.

CIP – Carriage and Insurance Paid To

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Named place of destination – Any mode of transport

The obligations are the same as under CPT with the addition that the seller must procure insurance against the buyer’s risk of loss of, or damage to the goods during carriage.

DAT – Delivered at Terminal

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Named terminal at port or place of destination – any mode of transport

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

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Named place of destination – any mode of transport

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

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Named place of destination – Any mode of transport

The seller must deliver the goods to the buyer, cleared for import, and not unloaded at the named place of destination

Key

Seller

Risks:

 Costs:

Buyer

Risks:

 Costs: