What is an Incoterm The terms of shipment and delivery, as well as the transfer of risk, between thebuyer and seller. Who Created Incoterms were created by the International Chamber of Commerce (ICC) andare a registered trademark of the ICC. Incoterms are reviewed every 10 years to keep pace with the ever-changingworld of international trade. The latest edition is the Incoterms 2010 which are effective January 1, 2011.
ChangesThe number of categories reduced from four to two in new Incoterms – 2011These two categories are : Terms for any mode or modes of transport Term for sea and inland waterway transport previous 13 Incoterms reduced to 11Reduced Incoterms are following DAF DES DEQ DDU Introduced new Incoterms are : DAT DAP
Terms for any mode or modes of transportThese Consists of following seven terms CIP - CARRIAGE AND INSURANCE PAID TO CPT - CARRIAGE PAID TO DAT - DELIVERED AT TERMINAL DAP - DELIVERED AT PLACE DDP - DELIVERED DUTY PAID FCA - FREE CARRIER EXW - EX WORKS All of these terms need to specify the port or destination
Term for sea and inland waterway transport These Consists of following Four terms To the named CFR - COST AND FREIGHT port of CIF – COST, INSURANCE AND FREIGHT destination FAS - FREE ALONGSIDE SHIP To the named FOB - FREE ON BOARD port of Shipment
CIP - CARRIAGE AND INSURANCE PAID TO The Seller pays for moving the goods to destination. From the time the goods aretransferred to the first carrier, the Buyer bears the risks of loss or damage. TheSeller, however, purchases the cargo insurance. CPT - CARRIAGE PAID TOThe Seller pays for moving the goods to destination. From the time the goods aretransferred to the first carrier, the Buyer bears the risks of loss or damage.
DAT - DELIVERED AT TERMINALThe Seller delivers when the goods, once unloaded from the arriving means oftransport, are placed at the Buyers disposal at a named terminal at thenamed port or place of destination. "Terminal" includes any place, whethercovered or not, such as a quay, warehouse, container yard or road, rail or aircargo terminal. The Seller bears all risks involved in bringing the goods to andunloading them at the terminal at the named port or place of destination.DAP - DELIVERED AT PLACEThe Seller delivers when the goods are placed at the Buyers disposal on thearriving means of transport ready for unloading at the names place ofdestination. The Seller bears all risks involved in bringing the goods to thenamed place. DDP - DELIVERED DUTY PAID The Seller delivers the goods -cleared for import - to the Buyer at destination.The Seller bears all costs and risks of moving the goods to destination,including the payment of Customs duties and taxes.
FCA - FREE CARRIERThe Seller delivers the goods, cleared for export, to the carrier selected by theBuyer. The Seller loads the goods if the carrier pickup is at the Sellers premises.From that point, the Buyer bears the costs and risks of moving the goods todestination.EXW - EX WORKSThe Sellers only responsibility is to make the goods available at the Sellerspremises. The Buyer bears full costs and risks of moving the goods from there todestination.
CFR - COST AND FREIGHTThe Seller clears the goods for export and pays the costs of moving the goods todestination. The Buyer bears all risks of loss or damageCIF - COST INSURANCE AND FREIGHTThe Seller clears the goods for export and pays the costs of moving the goods tothe port of destination. The Buyer bears all risks of loss or damage. The Seller,however, purchases the cargo insurance.
FAS - FREE ALONGSIDE SHIPThe Seller delivers the goods to the origin port. From that point, the Buyer bearsall costs and risks of loss or damage.FOB - FREE ON BOARDThe Seller delivers the goods on board the ship and clears the goods for export.From that point, the Buyer bears all costs and risks of loss or damage
Source : InternationalChamber of Commerce (ICC) , http://www.iccwbo.org/incoterms/ http://en.wikipedia.org/wiki/Incotermshttp://www.export911.com/e911/export/comTerm.htm