Inco terms

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  • 1. INCO TERMS ByG. HARI SHANKAR PRASAD
  • 2. INCO terms are internationally accepted commercial termsdefining the respective roles of the buyer and seller in thearrangement of transportation and other responsibilities.EXW (+ the named place)Ex Works – Ex means from, works means factory, warehouse,which is seller’s premises. EXW applies to goods available only atthe seller’s premises. Buyer is responsible for loading the goodson truck or container at the seller’s premises and for thesubsequent costs and risks. In practice, it is not uncommon thatthe seller loads the goods on truck or container at the seller’spremises without charging loading fee.The term EXW is commonly used between the manufacturer(seller) and the export trader (buyer). Some manufacturers mayuse the term Ex factory which is same as Ex Works
  • 3. FCA (+ Named point of departure)Free Carrier – the delivery of goods on truck, rail car or containerat the specified point of departure, which is usually a namedrailroad station or a named cargo terminal or into the custody ofthe carrier, at seller’s expense, cleared for exports. Buyerresponsible for the main carriage / freight, cargo insurance andother costs and risks.FAS (+Named port of origin)Free Alongside Ship – goods are placed in the dock shed or at theside of the ship, within the reach of its loading equipment so thatthey can be loaded aboard the ship, at seller’s expense. Buyer isresponsible for the loading fee, main carriage / freight, cargoinsurance and other costs and risks.
  • 4. FOB (+Named port of origin)Free On Board – the delivery of goods on board the vessel at thenamed port of origin, at seller’s expense. Buyer is responsible forthe main carriage / freight, cargo insurance and other costs andrisks. Under the rules of INCO terms 1990 the term FOB is usedfor ocean transport only. However, many still use it for air freightalso.CFR (+Named port of destination)Cost and Freight – the delivery of goods to the named port ofdestination at the seller’s expense. Buyer is responsible for cargoinsurance and other costs and risks. This term also to be used forocean transport only. CFR was formerly written as C&F and manystill use it.
  • 5. CIF (+Named port of destination)Cost, Insurance and Freight – the cargo insurance and delivery ofgoods to the named port of destination at the seller’s expense.Buyer is responsible for import customs clearance and other costsand risks. As per 1990 INCO terms this is applicable to oceanfreight only.CPT (Named place of destination)Carriage Paid To – the delivery of goods to the named place ofdestination at seller’s expense. Buyer assumes the cargoinsurance, import customs clearance, payment of customs dutiesand taxes, and other costs and risks.Used for any mode of transportation.
  • 6. CIP (+Named place of destination)Carriage and Insurance Paid To – the delivery of goods and thecargo insurance to the named place of destination at seller’sexpense. Buyer assumes import customs clearance, payment ofcustoms duties and taxes and other costs and risks.Used for any mode of transportation.DAF (+Named point at frontier)Delivered At Frontier – Delivery of goods to the specified point atthe frontier at seller’s expense. Buyer is responsible for importcustoms clearance, payment of customs duties and taxes andother costs and risks.Used for any mode of transportation
  • 7. DES (+ Named port of destination)Delivered Ex Ship – The delivery of goods on board at the namedport of destination, at seller’s expense. Buyer assumes theunloading fee, import customs clearance, payment of customsduties and taxes, cargo insurance and other costs and other costsand risks.DEQ (+ Named port of destination)Delivered Ex QuayThe delivery of goods to the quay (the port) at destination atseller’s expense. Seller is responsible for import customsclearance and payment of customs duties and taxes at buyersend. Buyer assumes cargo insurance and other costs and risksUsed for sea and inland waterway transportation
  • 8. DDU (+ Named point of destination)Delivered Duty Unpaid – The delivery of goods and the cargoinsurance to the final point at destination. Buyer assumes theunloading fee, import customs clearance, payment of customsduties and taxes.Used for any mode of transportationDDP (+ Named point of destination)Delivered Duty Paid – the seller is responsible for most of theexpenses, which include the cargo insurance, import customsclearance, and payment of customs duties and taxes at thebuyer’s end, and delivery of goods to the final point at destination.Used for any mode of transportation
  • 9. THANK YOU