Presentation incoterms 2010 Fresh Fruit and Vegetables

1. Connecting Central America
Promoting sustainable exports
from Central American SMEs to the European
market
› INCO TERMS 2010
› International Commercial Terms
by the ICC (International
chamber of commerce)

2. Who is responsible and has to pay the
damage/loss??

3. PURPOSE OF INCOTERMS
◼ To provide a set of
international rules for the
interpretation of trade
terms used in international
trade
◼ To clarify the obligations of
both seller and buyer in a
format that will be
understood by
businessmen worldwide

4. MAJOR ASPECTS
◼ Rights and obligations of
each party in terms of
delivering tangible goods
sold internationally
◼ Two parties only: seller and
buyer
◼ Which party bears the costs,
risks and responsibility of
delivery
◼ Importance of named port
or place
◼ Point of delivery = point of
risk transfer

5. 11 INCOTERMS (changing next year)
11 terms, ranging from a point of delivery
which carries the minimum cost,
risk and responsibility for the seller
to a point of delivery that carries the
maximum obligation for the seller

6. INCOTERMS 2010
GROUP E EX WORKS (… NAMED PLACE
of loading)Departure EXW
GROUP F
Departure
FREE CARRIER (… NAMED PLACE of loading)
FREE ALONGSIDE SHIP (… NAMED PORT OF SHIPMENT)
FREE ON BOARD (… NAMED PORT OF SHIPMENT)
Main
Carriage
Unpaid
FCA
FAS
FOB

7. INCOTERMS 2010
CFR
GROUP C
Departure
COST, INSURANCE & FREIGHT (… NAMED PORT OF
DESTINATION)
CARRIAGE PAID TO (… NAMED PLACE OF DESTINATION)
CARRIAGE & INSURANCE PAID TO (… NAMED PLACE
OF DESTINATION)
Main
Carriage
Paid
CIF
CPT
CIP
COST AND FREIGHT (… NAMED PORT OF DESTINATION)

8. INCOTERMS 2010
DATGROUP D
Arrival
DELIVERED AT PLACE (… NAMED PLACE)
Carriage
Paid
DAP
DELIVERED AT TERMINAL (… NAMED PLACE)
DELIVERED DUTY PAID (… NAMED PLACE OF
DESTINATION)
DDP

9. INCOTERMS BY MODE OF TRANSPORT
◼ Sea and inland waterways:
FOB, CFR, CIF
◼ Any mode of transport
including containerization:
EXW, FCA, CPT, CIP, DAT,
DAP, DDP

10. SELLER’S RESPONSIBILITIES
◼ Supply goods and commercial
invoice according to sales-
contract
◼ Pack the goods for safe transit
and delivery
◼ Deliver the goods at named
point on or before agreed date
or within time-period
◼ Provide buyer with proof of
delivery
◼ Provide buyer with any
document issued /he needs for
importing the goods

11. BUYER’S RESPONSIBILITIES
◼ Take delivery of the goods
◼ Pay all additional costs
arising from his/her failure
to take delivery of the
goods at the port or place
of delivery
◼ Pay the price of the goods
◼ Accept all risks from when
they are transferred to
him/her

12. S BSELLER’S COSTS
SELLER’S RISK
Goods uncleared
for export
BUYER’S RISK
BUYER’S COSTS
EX WORKS (EXW)
The seller is responsible for making the goods available,
inspected, packed and ready for collection at the place of
delivery (factory, warehouse). The buyer must bear all risks
and charges in taking the goods to the required destination.
This term carries the minimum obligation for the seller.
➔ EXW (… named place)
➔ Any mode of transport including containerization

13. FREE CARRIER (FCA)
S BBUYER’S COSTS
BUYER’S RISK
Goods cleared
for export
SELLER’S RISK
SELLER’S COSTS
The seller is responsible for delivering the goods into the
custody of the transport carrier at the named place in the
country of dispatch. The responsibility for, and the risks of
damage to or loss of the goods are transferred from seller to
buyer at this point.
This term is based on the same principle as FOB except that the
seller fulfils his/her obligation when he delivers the goods into
the custody of the carrier at the named place.
➔ FCA (… named place) – buyer’s right to nominate carrier
➔ Any mode of transport including containerisation

14. S B
FREE ON BOARD (FOB)
Goods cleared
for export
SELLER’S COSTS
SELLER’S RISK
BUYER’S COSTS
BUYER’S RISK
Under this term, the seller is responsible for delivering the
goods
on board the ship at the named port of shipment.
Responsibility, costs and risks transfer from seller to buyer
when
the goods pass the ship’s rail in the port of shipment.
➔ FOB (… named port of shipment) – buyer’s right to nominate vessel
➔ Sea freight (bulk and break-bulk cargo)

15. S B
COST AND FREIGHT (CFR)
Goods cleared
for export
Goods uncleared
for import
SELLER’S COSTS
SELLER’S RISK
BUYER’S COSTS
BUYER’S RISK
The seller is responsible for all costs in delivering the goods on board
the ship and the cost of freight in bringing them to the named port of
destination.
The risk of loss of or damage to the goods or any additional charges
payable to the carrier after shipment, are transferred from seller to
buyer when the goods pass the ship’s rail in the port of shipment.
➔ CFR (… named port of destination) – C&F, CNF
➔ Sea freight (bulk and breakbulk cargo)

16. COST, INSURANCE AND FREIGHT (CIF)
S B
Goods cleared
for export
Goods uncleared
for import
SELLER’S COSTS
SELLER’S RISK
BUYER’S COSTS
BUYER’S RISK
➔ CIF (… named port of destination)
➔ Sea freight (bulk and breakbulk cargo)
This term is the same as CFR, with in addition the seller
having to procure marine insurance at his/her cost to cover
the goods against the buyer’s risk of loss or damage during
transit.
Minimum cover (Clauses C; norm is Clauses A) on basis of CIF
+ 10% unless buyer stipulates otherwise.

17. CARRIAGE PAID TO (CPT)
S B
Goods uncleared
for import
Goods cleared
for export
SELLER’S COSTS
SELLER’S RISK
BUYER’S COSTS
BUYER’S RISK
➔ CPT (… named place of destination)
➔ Any mode of transport including
containerisation
The seller is responsible for all costs in delivering the goods to the
carrier and the cost of freight in bringing them to the named place
of destination. The risk of loss of or damage to the goods, or any
additional charges payable to the carrier after delivery, are
transferred from seller to buyer when the goods have been delivered
into the custody of the first carrier in the country of dispatch.
This term is the equivalent of CFR.

18. CARRIAGE AND INSURANCE PAID TO (CIP)
S B
Goods uncleared
for import
Goods cleared
for export
SELLER’S COSTS
SELLER’S RISK BUYER’S RISK
BUYER’S COSTS
➔ CIP (… named place of destination)
➔ Any mode of transport including containerisation
This term is the same as CPT, with in addition the seller having
to
procure marine / Transport insurance at his/her cost to cover
the goods against
the buyer’s risk of loss or damage during transit.
Minimum cover (Clauses C; norm is Clauses A) on basis of CIP
+ 10% unless buyer stipulates otherwise.
This term is the equivalent of CIF.

19. DAP
DDP
Delivered AT PLACE
Delivered Duty Paid
Cost
Risk
Documents

20. INCOTERMS AND COSTS
◼ EXW = factory price +
packing, inspection
◼ FCA = EXW + inland
transport, customs and
various other costs/charges -
origin
◼ CPT = FCA + freight
◼ CIP = CPT + marine
insurance
◼ DAP = CIP + customs, inland
transport and various other
Costs/charges - destination

21. Who is responsible and has to pay
the damage??
FOB
CIP
FCA
DAP

22. Thank you!
www.cbi.eu/devco-ca
devco-ca@cbi.eu
CBI.EU / Connecting Central America
@cbi_nl

23. Assignment INCO Terms:
1. What is the INCO term with the lowest risk for the exporter?
2. A pallet falls between the exporters warehouse and the
transporters truck; who is responsible and who pays the costs
if the term is ex works?
3. A container on its way to Europe is washed overboard of the
ship and sinks in to the ocean; who is responsible and who
pays the costs if the term is CFR?
4. Upon discharge in Rotterdam a pallet falls from the crane in to
the water; who is responsible and who pays the costs if the
term is CIF?
5. What is the Inco term with the highest risk for the exporter?
6. How should your INCO terms correctly be mentioned in your
offer and on documents / invoice?