INCOTERMS 1

• INCOTERMS 2020
• The INCOTERM rules or International Commercial Terms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC). They are widely used in international commercial transactions or procurement processes.
• Incoterms rules


  A series of three-letter trade terms related to common contractual sales practices, intended primarily to clearly communicate the tasks, costs, and risks associated with the transportation and delivery of goods
• The Guide explains the changes since the last Incoterms® rules, looks at the differences between the terms, and provides an overview of buyers' and sellers' obligations. The guide also explains the evolution of the Incoterms® rules since 1936 and how they work in conjunction with contracts of sale, insurance and payment as well as the consequences following from the choice of the different terms.
• Detailed section-by-section comments on each of the Incoterms® rules are presented in a clear, user-friendly manner.
• Obligations


  Who does what as between seller and buyer, e.g. who organizes carriage or insurance of the goods or who obtains shipping documents and export or import licences
• Risk


  Where and when the seller "delivers" the goods, in other words where risk transfers from seller to buyer
• Costs


  Which party is responsible for which costs, for example transport, packaging, loading or unloading costs, and checking or security-related costs
• Key questions about Incoterms 2020

  • Where is the delivery to be made?
  • Who pays the freight charges of goods?
  • Who pays the insurance of goods?
  • Who pays the other charges of goods?
• Exporter


  A natural or juridical person engaged in the exportation of any goods or commodities to a foreign country from the Philippines
• Importer


  A natural or juridical person engaged in the importation of any goods into the Philippines
• Parties involved in international trade

  • Seller
  • Buyer
• Ocean freight refers to charges for the transportation cost of goods by sea via vessel.
• Airfreight refers to charges for the transportation cost of goods by air via aircraft.
• Main carriage refers to charges for transportation cost either by sea or air.
• Pre-carriage


  The cost of transport for hauling of goods from seller's premises to a designated point at country of origin. Also known as ''Origin Inland Freight''.
• On-carriage


  The cost of transport for hauling of goods from the port of discharge to buyer's warehouse or designated place at destination. Also known as ''Destination Inland Freight''.
• Marine insurance


  Charges for protection to cover the risks in the transportation of goods by sea via vessel.
• Port-to-port insurance


  Charges for protection to cover the risks in the transportation of goods by air/sea via aircraft/vessel.
• Origin other charges


  All charges incurred by the seller or buyer related to the delivery of goods in the country of origin.
• Destination other charges


  All charges incurred by the seller or buyer related to the delivery of goods in the country of destination.
• Incoterms 2020


  • EX-WORKS (EXW)
  • FREE CARRIER (FCA)
  • CARRIAGE PAID TO (CPT)
  • CARRIAGE AND INSURANCE PAID TO (CIP)
  • FREE ALONGSIDE SHIP (FAS)
  • FREE ON BOARD (FOB)
  • COST AND FREIGHT (CFR)
  • COST, INSURANCE AND FREIGHT (CIF)
  • DELIVERED AT PLACE (DAP)
  • DELIVERED AT PLACE UNLOADED (DPU)
  • DELIVERED DUTY PAID (DDP)
• EX-WORKS (EXW)


  The seller's only responsibility is to make the goods available at the seller's premises (i.e. warehouse or factory). The buyer bears full costs and risks of moving the goods from there to destination.
• Delivery and Risk - EX-WORKS (EXW)

  The seller delivers the goods to the buyer when it places the goods at the disposal of the buyer at a named place (like a factory or warehouse), and that named place may or may not be the seller's premises.
• Responsibilities - EXW


  • SELLER
  • ORIGIN O/C
  • FREIGHT
  • INSURANCE
• FREE CARRIER (FCA)


  The seller fulfils his obligation to deliver when he has handed over the goods, cleared for export, into the charge of the carrier named by the buyer.
• Carrier


  The person, actually transporting goods or in charge of or responsible for the operation of the means of transport such as airlines, shipping lines, freight forwarders, cargo consolidators, non-vessel operating common carriers and other international transport operators.
• Delivery and Risk - FREE CARRIER (FCA)


  The seller delivers the goods to the buyer when they are loaded on the means of transport arranged by the buyer, or when they reach the named other place, are ready for unloading from the seller's means of transport, and are at the disposal of the carrier or of another person nominated by the buyer.
• Origin other charges - FCA

  • Loading to Truck
  • Origin Inland Freight/Trucking/Haulage Costs (Pre-Carriage)
  • Origin Internal Insurance Costs
  • Export Documentation and Clearance
  • Export Duties and Taxes
• Responsibilities - FCA


  • EXW
  • ORIGIN O/C
  • FREIGHT
  • INSURANCE
• CARRIAGE PAID TO (CPT)


  The seller pays the freight for the carriage of the goods to the named destination. The seller deliver the goods to the custody of the carrier.
• Delivery and Risk - CARRIAGE PAID TO (CPT)

  The seller delivers the goods and transfers the risks to the buyer by handing them over to the carrier contracted by the seller or by procuring the goods so delivered, giving the carrier physical possession of the goods in the manner and at the place appropriate to the means of transport used.
• Responsibilities - CPT


  • EXW
  • ORIGIN O/C
  • FREIGHT
  • INSURANCE
• CARRIAGE AND INSURANCE PAID TO (CIP)

  The seller pays freight and transport insurance against risk of loss or damage to the goods during main carriage. The seller deliver the goods to the custody of the carrier.
• Delivery and Risk - CARRIAGE AND INSURANCE PAID TO (CIP)

  The seller delivers the goods and transfers the risks to the buyer by handing them over to the carrier contracted by the seller or by procuring the goods so delivered, giving the carrier physical possession of the goods in the manner and at the place appropriate to the means of transport used.
• Responsibilities - CIP


  • EXW
  • ORIGIN O/C
  • FREIGHT
  • INSURANCE
• FCA, CPT, CIP are distinguished by who is responsible for freight and insurance.
• FREE ALONGSIDE SHIP (FAS)


  The seller fulfills his obligation to deliver when the goods have been placed alongside the vessel on the quay or in lighters at the named port of shipment cleared for export.
• Delivery and Risk - FREE ALONGSIDE SHIP (FAS)

  The seller delivers the goods to the buyer when the goods are placed alongside the ship (e.g. on a quay or barge) nominated by the buyer at the named port of shipment, or when the seller procures goods already so delivered.
• Quay


  A landing place or pier, usually of solid construction, where vessels berth to load or unload cargo.