This presentation includes information of definition of INCO Terms, Importance of INCO Terms in international trade, pros and cons of INCO Terms, explanation of the different INCO Terms (EXW, FCA, FAS, FOB, CFR, CIF, CPT, CIP, DAP, DPU, DDP) and the key differences between each term

1. Subject : APPAREL EXPORTING
Notes by
Shamruthi
INCO
TERMS
This presentation provides an overview of the International Commercial Terms and the
common INCO terms used in the Apparel and Garment Industry
Start
S

2. NOTES BY
SHAMRUTHI
WHAT IS INCO TERMS?
DEFINITION: International Commercial Terms are a set of generally
accepted phrases produced by the International Chamber of
Commerce (ICC) that define the fundamental components of
freight forwarding.
Initially created in 1936.
They are the set of rules for international sales that are accepted
worldwide to avoid confusions related to responsibilities and price
management among the interested parties.
Outlines responsibility of buyers and sellers regarding delivery of
goods.
It defines who is responsible for bearing various costs involved in
Importing and Exporting of goods.
It briefs the risks associated with transportation.

3. Easily understood terms
International standardization
Updated and clarified by an international body (ICC)
Saves time and money that would have previously
been spent on breaking down Incoterms into different
languages for the buyers and sellers.
Eliminates ambiguity between nations making trading
much simpler, especially in negotiating terms
NOTES BY
SHAMRUTHI
Differences between buyer & seller preferences
when choosing terms
Certain terms can expose one party to inflated costs
PROS & CONS OF
INCO TERMS
PROS CONS

4. 11 INCO TERMS FOR ALL
MODES OF TRANSPORT
01
EXW
02
FCA
03
FAS
04
FOB
Ex Works Free Carrier Free Alongside Ship Free on Board
05
CFR
06
CIF
07
CPT
08
CIP
Cost & Freight Cost Insurance & Freight Carriage Paid To Carriage Insurance Paid To
09
DAP DPU
Delivered at Place Delivered at Place Unloaded
NOTES BY
SHAMRUTHI
10 11
DDP
Delivered Duty Paid

6. ExW (Ex-Works)
Ex works refers to the seller offering the buyer access to the goods at the seller's
location or another specified location (e.g., works, factory, warehouse, etc.).
The seller does not need to load the goods on any collecting vehicle. Nor do they have
to bare any transportation costs, nor need to clear them for export, and are free of any
risks involved in transportation.
EXW is suitable for transactions where the buyer has the capability and resources to
manage transportation logistics independently and seeks maximum control over the
entire shipping process.
NOTES BY
SHAMRUTHI

7. FCA (Free Carrier)
The seller fulfills the obligation to deliver the goods by handing them over to a carrier or
another person nominated by the buyer at a named place, typically the seller's premises or
another agreed-upon location. The named place could be a factory, warehouse, or any
other location mutually agreed upon by the buyer and seller.
The seller must complete all export customs formalities and provide the necessary
documentation, such as the commercial invoice, packing list, and export license if required.
The buyer bears the responsibility and costs associated with arranging transportation from
the named place of delivery, through the buyer nominated. The buyer is responsible for
handling import customs clearance and paying any applicable import duties and taxes at the
destination.
NOTES BY
SHAMRUTHI

8. FAS (Free Alongside Ship)
The seller fulfills their obligation to deliver the goods by placing them alongside the vessel nominated
by the buyer at a named port of shipment. Under FAS terms, the seller is responsible for clearing the
goods for export and delivering them to the agreed-upon port of shipment, where they are made
available for loading onto the vessel.
The seller is responsible for delivering the goods alongside the vessel at the named port of shipment,
after clearing the goods for export and providing all necessary documentation, such as the
commercial invoice, packing list, and export license if required. The seller bears the responsibility and
costs associated with delivering the goods to the named port of shipment, including inland
transportation to the port.
The buyer bears the responsibility and costs associated with loading the goods onto the vessel and
arranging for their transportation from port of shipment to the final destination. The buyer must handle
import customs clearance and pay any applicable import duties and taxes at the destination port.
NOTES BY
SHAMRUTHI

9. FOB (Free-on-Board)
The seller is responsible for delivering the goods on board the vessel at the named port of
shipment, typically by placing them on the dock or quay and covering the costs of loading.
The seller must clear the goods for export and provide all necessary documentation, such as
the commercial invoice, packing list, and export license if required. and bears the
responsibility and costs associated with delivering the goods to the named port of shipment,
including inland transportation to the port.
The buyer bears the responsibility and costs associated with the goods from the point they
are loaded onto the vessel at the named port of shipment. The buyer must arrange for the
vessel, pay for freight costs, and handle import customs clearance and any related costs at
the destination port.
NOTES BY
SHAMRUTHI

10. CFR (Cost and Freight)
The seller is responsible for delivering the goods on board the vessel at the named port of
destination, and must cover the costs and freight charges for transporting the goods to the
named port of destination, including loading the goods onto the vessel and arranging for
transportation. The seller must clear the goods for export and provide all necessary
documentation, such as the commercial invoice, packing list, and export license if required.
The buyer bears the responsibility and costs associated with the goods from the point they
are loaded onto the vessel at the named port of shipment. The buyer must arrange for the
vessel, pay for unloading costs, handle import customs clearance, and cover any related
costs at the destination port.
NOTES BY
SHAMRUTHI

11. CIF (Cost, Insurance & Freight)
The seller is responsible for delivering the goods on board the vessel at the named port of
destination, and must cover the costs, insurance, and freight charges for transporting the
goods to the named port of destination, including loading the goods onto the vessel,
arranging for transportation, and obtaining marine insurance against the buyer's risk of loss or
damage during transit. The seller must clear the goods for export and provide all necessary
documentation, such as the commercial invoice, packing list, and export license if required.
The buyer bears the responsibility and costs associated with the goods from the point they
are loaded onto the vessel at the named port of shipment. The buyer must handle import
customs clearance, pay for unloading costs, and cover any related costs at the destination
port. While the seller arranges insurance, the buyer may still choose to purchase additional
insurance coverage if deemed necessary.
NOTES BY
SHAMRUTHI

12. CPT (Carriage Paid-to)
The seller is responsible for delivering the goods to the agreed-upon destination, which
could be a specific place, terminal, port, or other location, and must arrange and pay for
transportation of the goods to the named destination, including loading the goods onto the
transportation vehicle and covering the freight charges. The seller is responsible for
obtaining any necessary export licenses or permits and providing all required
documentation, such as the commercial invoice, packing list, and transport documents.
The buyer bears the responsibility and costs associated with the goods from the point they
are delivered to the carrier at the place of shipment. The buyer must handle import customs
clearance, pay for any import duties or taxes, and cover any related costs at the destination.
The buyer is responsible for any additional transportation or handling costs beyond the
agreed-upon destination.
NOTES BY
SHAMRUTHI

13. CIP (Carriage & Insurance Paid-to)
The seller is responsible for delivering the goods to the agreed-upon destination, which
could be a specific place, terminal, port, or other location, and must arrange and pay for
transportation of the goods to the named destination, including loading the goods onto the
transportation vehicle and covering the freight charges. The seller is also responsible for
obtaining insurance against the buyer's risk of loss or damage to the goods during transit,
providing comprehensive coverage until delivery to the named destination. The seller is
responsible for obtaining any necessary export licenses or permits and providing all required
documentation, such as the commercial invoice, packing list, and transport documents.
The buyer bears the responsibility and costs associated with the goods from the point they
are delivered to the carrier at the place of shipment. The buyer must handle import customs
clearance, pay for any import duties or taxes, and cover any related costs at the destination.
The buyer is responsible for any additional transportation or handling costs beyond the
agreed-upon destination.
NOTES BY
SHAMRUTHI

14. DAP (Delivered at Place)
The seller is responsible for delivering the goods to the agreed-upon destination, which
could be a specific place, terminal, warehouse, or other location, and must arrange and pay
for transportation of the goods to the named destination, including loading the goods onto
the transportation vehicle and covering the freight charges. The seller bears the
responsibility and risks associated with transporting the goods to the named destination,
including any costs related to transportation delays or damage during transit. The seller is
responsible for obtaining any necessary export licenses or permits and providing all required
documentation, such as the commercial invoice, packing list, and transport documents.
The buyer bears the responsibility and costs associated with the goods from the point they
are delivered to the agreed-upon destination. The buyer must handle import customs
clearance, pay for any import duties or taxes, and cover any related costs at the destination.
The buyer is responsible for unloading the goods at the agreed-upon destination and
transporting them to the final destination, if applicable.
NOTES BY
SHAMRUTHI

15. DPU (Delivered at Place, Unloaded)
The seller is responsible for delivering the goods to the agreed-upon destination, which
could be a specific place, terminal, warehouse, or other location, and must arrange and pay
for transportation of the goods to the named destination, including loading the goods onto
the transportation vehicle and covering the freight charges. The seller bears the
responsibility and risks associated with transporting the goods to the named destination,
including any costs related to transportation delays or damage during transit. The seller is
responsible for obtaining any necessary export licenses or permits and providing all required
documentation, such as the commercial invoice, packing list, and transport documents.
The buyer bears the responsibility and costs associated with the goods from the point they
are delivered to the agreed-upon destination. The buyer must handle import customs
clearance, pay for any import duties or taxes, and cover any related costs at the destination.
The buyer is responsible for unloading the goods at the agreed-upon destination and
transporting them to the final destination, if applicable.
NOTES BY
SHAMRUTHI

16. DDP (Delivered Duty Paid)
The seller is responsible for delivering the goods to the agreed-upon destination, which
could be a specific place, terminal, warehouse, or other location, and must arrange and pay
for transportation of the goods to the named destination, including loading the goods onto
the transportation vehicle and covering the freight charges. The seller bears the
responsibility and risks associated with transporting the goods to the named destination,
including any costs related to transportation delays or damage during transit. The seller is
responsible for obtaining any necessary export licenses or permits and providing all required
documentation, such as the commercial invoice, packing list, and transport documents. The
seller is also responsible for handling import customs clearance, paying any import duties,
taxes, and other charges, and delivering the goods to the buyer at the named destination,
ready for unloading.
The buyer is only responsible for unloading the goods at the agreed-upon destination.
NOTES BY
SHAMRUTHI

17. Notes by
Shamruthi
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