INCO terms define the responsibilities of buyers and sellers in international commercial transactions. They specify which party is responsible for costs such as transportation, loading, unloading, insurance, and customs clearance and duties. The document then defines and explains 15 common INCO terms - EXW, FCA, FAS, FOB, CFR, CIF, CPT, CIP, DAF, DES, DEQ, DDU, and DDP - that specify the point and terms of delivery and the division of costs and risks between buyer and seller.
INCOTERMS are a set of three-letter standard trade terms used worldwide in international and domestic contracts for the sale of goods. Learn their definitions and how they are used. AFC International can help you import your goods bound for the U.S. quick and easy. Visit http://www.afcinternationalllc.com/ to get started.
In this installment in Trade Risk Guaranty's webinar series, we are joined by one of our marine cargo insurance experts to discuss an introduction to incoterms for United States importers.
The following topics are covered in detail:
- What are Incoterms?
- The 5 Most Common Incoterms
- Identifying Your Incoterms
- Advice from an Expert
DOWNLOAD A FULL INCOTERMS EBOOK: http://bit.ly/2HXGbUD
Watch the full webinar here: https://youtu.be/IZC5NgukKio
The knowledge of INCO terms is very essential for those who are in export import business on the other hand it is also useful for the students of commerce and management.
INCOTERMS are a set of three-letter standard trade terms used worldwide in international and domestic contracts for the sale of goods. Learn their definitions and how they are used. AFC International can help you import your goods bound for the U.S. quick and easy. Visit http://www.afcinternationalllc.com/ to get started.
In this installment in Trade Risk Guaranty's webinar series, we are joined by one of our marine cargo insurance experts to discuss an introduction to incoterms for United States importers.
The following topics are covered in detail:
- What are Incoterms?
- The 5 Most Common Incoterms
- Identifying Your Incoterms
- Advice from an Expert
DOWNLOAD A FULL INCOTERMS EBOOK: http://bit.ly/2HXGbUD
Watch the full webinar here: https://youtu.be/IZC5NgukKio
The knowledge of INCO terms is very essential for those who are in export import business on the other hand it is also useful for the students of commerce and management.
Cost Transfer (Ocean Shipping)
Risk/Ownership Transfer (Ocean Shipping)
Cost Transfer (Air Shipping)
Risk/Ownership Transfer (Air Shipping)
Risk/Ownership Transfer (Land Shipping)
Cost Transfer (Land Shipping)
INCOTERMS 2010
Incoterms are internationally accepted commercial terms defining the respective roles of the buyer and seller in the arrangement of transportation and other responsibilities and clarify when the ownership of the merchandise takes place. They are used in conjunction with a sales agreement or other method of transacting the sale.
EXW - Ex Works -- Title and risk pass to buyer including payment of all transportation and insurance cost from the seller's door. Used for any mode of transportation.
FCA - Free Carrier -- Title and risk pass to buyer including transportation and insurance cost when the seller delivers goods cleared for export to the carrier. Seller is not obligated to load the goods on the Buyer's collecting vehicle (except when the named place is at the seller’s premises); it is the Buyer's obligation to receive the Seller's arriving vehicle unloaded.
FAS - Free Alongside Ship --Title and risk pass to buyer including payment of all transportation and insurance cost once delivered alongside ship by the seller at named port terminal by seller. Used for sea or inland waterway transportation. The export clearance obligation rests with the seller.
FOB - Free On Board and risk pass to buyer including payment of all transportation and insurance cost once delivered on board the ship by the seller. Used for sea or inland waterway transportation.
CFR - Cost & Freight -- Title, risk and insurance cost pass to buyer when delivered on board the main carrier(vessel) by seller who pays the transportation cost to the destination port. Used for sea or inland waterway transportation.
CIF - Cost, Insurance & Freight -- Title and risk pass to buyer when delivered on board the ship by seller who pays transportation and insurance cost to destination port. Used for sea or inland waterway transportation.
CPT - Carriage Paid To -- Title, risk and insurance cost pass to buyer when delivered by seller who pays transportation cost to a named place. Used for any mode of transportation.
CIP - Carriage & Insurance Paid To --Seller delivers goods to the carrier at an agreed place, shifting risk to the buyer, but seller who pays transportation and insurance cost to a named place of destination. Used for any mode of transportation.
DAT - Delivered at Terminal -- Title, risk and responsibility pass to buyer when delivered to named quay, warehouse, yard or terminal at destination. Used for any mode of transportation (replaces DEQ & DES).
DAP - Delivered At Place -- Seller bears cost, risk, responsibility for goods until made available to buyer at named place of destination. Buyer is responsible for imp.
Incoterms are widely used in international commerical transaction or procurement process and there used is encourged by trade councils and international lawers
Have you ever wondered about the meaning of commodity trading terms, or Incoterms? FOB…DES…DDP. Say What?!?
Incoterms were established by the International Chamber of Commerce (ICC), a non-governmental organization, to standardize the interpretation of major trade terms.
Sales contracts using Incoterms define the obligations and risks of both the seller and the buyer. The obligations cover the period while the merchandise is in transit, whether by land, sea, air or a combination of modes.
INTERNATIONAL SHIPPING TERMS , INCOTERMSAman Dwivedi
INTERNATIONAL SHIPPING TERMS (INCOTERMS)
1. EXW – Ex Works (named place of delivery)
2. FCA – Free Carrier (named place of delivery)
3. CPT – Carriage Paid To (named place of destination)
4. CIP – Carriage and Insurance Paid to (named place of destination)
5. DAT – Delivered At Terminal (named terminal at port or place of destination)
6. DAP – Delivered At Place (named place of destination)
7. DDP – Delivered Duty Paid (named place of destination)
8. FAS – Free Alongside Ship (named port of shipment)
9. FOB – Free on Board (named port of shipment)
10. CFR – Cost and Freight (named port of destination)
11. CIF – Cost, Insurance & Freight (named port of destination)
2. INCO terms are internationally accepted commercial terms
defining the respective roles of the buyer and seller in the
arrangement 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 at
the seller’s premises. Buyer is responsible for loading the goods
on truck or container at the seller’s premises and for the
subsequent costs and risks. In practice, it is not uncommon that
the seller loads the goods on truck or container at the seller’s
premises without charging loading fee.
The term EXW is commonly used between the manufacturer
(seller) and the export trader (buyer). Some manufacturers may
use 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 container
at the specified point of departure, which is usually a named
railroad station or a named cargo terminal or into the custody of
the carrier, at seller’s expense, cleared for exports. Buyer
responsible for the main carriage / freight, cargo insurance and
other costs and risks.
FAS (+Named port of origin)
Free Alongside Ship – goods are placed in the dock shed or at the
side of the ship, within the reach of its loading equipment so that
they can be loaded aboard the ship, at seller’s expense. Buyer is
responsible for the loading fee, main carriage / freight, cargo
insurance and other costs and risks.
4. FOB (+Named port of origin)
Free On Board – the delivery of goods on board the vessel at the
named port of origin, at seller’s expense. Buyer is responsible for
the main carriage / freight, cargo insurance and other costs and
risks. Under the rules of INCO terms 1990 the term FOB is used
for ocean transport only. However, many still use it for air freight
also.
CFR (+Named port of destination)
Cost and Freight – the delivery of goods to the named port of
destination at the seller’s expense. Buyer is responsible for cargo
insurance and other costs and risks. This term also to be used for
ocean transport only. CFR was formerly written as C&F and many
still use it.
5. CIF (+Named port of destination)
Cost, Insurance and Freight – the cargo insurance and delivery of
goods to the named port of destination at the seller’s expense.
Buyer is responsible for import customs clearance and other costs
and risks. As per 1990 INCO terms this is applicable to ocean
freight only.
CPT (Named place of destination)
Carriage Paid To – the delivery of goods to the named place of
destination at seller’s expense. Buyer assumes the cargo
insurance, import customs clearance, payment of customs duties
and 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 the
cargo insurance to the named place of destination at seller’s
expense. Buyer assumes import customs clearance, payment of
customs 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 at
the frontier at seller’s expense. Buyer is responsible for import
customs clearance, payment of customs duties and taxes and
other 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 named
port of destination, at seller’s expense. Buyer assumes the
unloading fee, import customs clearance, payment of customs
duties and taxes, cargo insurance and other costs and other costs
and risks.
DEQ (+ Named port of destination)
Delivered Ex Quay
The delivery of goods to the quay (the port) at destination at
seller’s expense. Seller is responsible for import customs
clearance and payment of customs duties and taxes at buyers
end. Buyer assumes cargo insurance and other costs and risks
Used for sea and inland waterway transportation
8. DDU (+ Named point of destination)
Delivered Duty Unpaid – The delivery of goods and the cargo
insurance to the final point at destination. Buyer assumes the
unloading fee, import customs clearance, payment of customs
duties and taxes.
Used for any mode of transportation
DDP (+ Named point of destination)
Delivered Duty Paid – the seller is responsible for most of the
expenses, which include the cargo insurance, import customs
clearance, and payment of customs duties and taxes at the
buyer’s end, and delivery of goods to the final point at destination.
Used for any mode of transportation