INCOTERMS

• Main Carriage


  Freight cost, by air or sea, charged by the carrier (airlines/shipping lines) or amount paid by the shipper to carrier for the transport of goods from country of origin to country of destination
• Pre-Carriage


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


  Cost of transport for hauling goods from the port of discharge to buyer's warehouse or designated place at destination. Also known as "Destination Inland freight".
• Freight Pre-Paid


  Main carriage for the exported goods was paid by seller prior to departure from country of origin and therefore included in seller's invoice price.
• Freight Collect


  Main carriage was paid by the buyer upon arrival of imported goods at country of destination and not included in seller's invoice price.
• Multimodal Transport


  Inter-continental transit of goods involving main carriage that can be carried out both by air or by sea.
• Port to Port Insurance


  Generic name for cargo insurance. It refers to the insurance premium paid in the international transport of goods by air/sea. This is procured by the buyer or seller to cover risks against loss or damage to the cargo during pendency of the voyage from country of origin to destination.
• Internal Insurance


  Insurance coverage taken up by seller to cover risks against loss or damage to the goods while in transit from his premises to a delivery point at origin.
• Origin/Destination LCL Charges


  Cost of handling and moving loose or breakbulk cargoes within a seaport at country of origin or destination.
• Origin/Destination Terminal Handling Charges (THC)


  Cost of handling and moving containerized cargoes within the terminal facilities of a seaport at country of origin or destination.
• Other Charges (O/C)


  Incidental expenses (except main carriage and port to port insurance) incurred by the seller/exporter in relation to fulfilling his contractual obligation to deliver the goods for each of the 11 incoterms.
• Carrier


  Airlines, shipping lines or their agents (NVOCC/IFF)
• Delivery


  Bringing of goods to a specific place or to a carrier/forwarder at country of origin or destination and used as reference point when liability against risk for loss of or damage to the goods passes on from seller to buyer
• EXW (Ex Works)


  • Seller's premises or at another named place (e.i. works, factory, warehouse, etc.)
  • Seller does not need to load the goods on any collecting vehicle
  • Seller is not bound to organize the export clearance
  • Seller has no obligation to the buyer to make a contract of insurance
• FCA (Free Carrier)


  • Seller delivers the goods to the carrier or another person nominated by the buyer at the seller's premises or another named place
  • Risks passes on to the buyer at the delivery point
  • Seller has no obligation to contract for carriage nor to clear the goods for import, pay any import duty or carry out any import customs formalities
  • Seller has no obligation to the buyer to make contract of insurance
• CPT (Carriage Paid To)


  • Seller deliver the goods to the carrier or another person nominated by the seller at an agreed place and that the seller must contract for and pay the costs of main carriage necessary to bring the goods to the named place of destination
  • Seller fulfills his obligation to deliver when it hands the goods over to the carrier and not when the goods reach the place of destination
  • Seller has no obligation to clear the goods for import, pay any import duty or carry out any import customs formalities
  • Seller has no obligation to the buyer to make a contract of insurance
• CIP (Carriage and Insurance Paid To)


  • Seller delivers the goods to the carrier or another person nominated by the seller at an agreed place and that the seller must contract for and pay the costs for carriage necessary to bring the goods to the named place of destination
  • Seller also contracts for insurance cover against the buyer's risk of loss or damage to the goods during the carriage
  • Seller fulfills its obligation to deliver when it hands the goods over to the carrier and not when the goods reach the place of destination
  • Seller has no obligation to clear the goods for import, pay any import duty or carry out any import customs formalities
• FAS (Free Alongside Ship)


  • Seller delivers when the goods are placed alongside the vessel (e. g., on a quay/dock or a barge/lighter) nominated by the buyer at the named port of shipment
  • Risk of loss or damage to the goods passes to the buyer when the goods are alongside the ship and he bears all costs from that moment onwards
  • Seller has no obligation to contract for carriage nor to clear goods for import, pay any import duty, carry out any customs formalities and to make a contract of insurance
• FOB (Free on Board)

  • Seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment
  • Risk of loss or damage to the goods passes to the buyer when the goods are on board the vessel
  • Seller has no obligation to contract for carriage nor to clear goods for import, pay any import duty, carry out any customs formalities and to make a contract of insurance
• CFR (Cost & Freight)


  • Seller delivers the goods on board the vessel at the named port of shipment
  • Seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination
  • Seller fulfills his obligation to deliver when the goods have passed over the ship's rail at the named port of shipment
  • Seller has no obligation to the buyer to make a contract of insurance
• CIF (Cost, Insurance & Freight)


  • Seller delivers the goods on board the vessel at the named port of shipment
  • Seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination
  • Seller also contracts for insurance cover against the buyer's risk of loss or damage to the goods during the carriage
  • Seller fulfills his obligation to deliver when the goods have passed over the ship's rail at the named port of shipment
• DPU (Delivered at Place Unloaded)

  • Seller delivers the goods, unloaded from the arriving means of transport, at the named place of destination
  • Seller bears all risks and costs in bringing the goods to the named place
• DAP (Delivered at Place)


  • Seller delivers the goods, ready for unloading, at the named place of destination
  • Seller bears all risks and costs in bringing the goods to the named place, except for import clearance
• DDP (Delivered Duty Paid)


  • Seller delivers the goods, ready for unloading, at the named place of destination
  • Seller bears all risks and costs in bringing the goods to the named place, including import clearance and payment of any import duties
• The ICC INCOTERMS RULES specifically defines the respective contractual obligations and allocation of costs that exist between buyer and seller in relation to:
• FAS


  Seller clears goods for export but has no obligation to contract for carriage, clear goods for import, pay import duty, or make a contract of insurance
• FAS Seller's Obligations


  1. Deliver goods alongside the carrying vessel at a specific seaport at origin

  2. Main carriage (sea only) not included in seller's invoice price

  3. Port to port insurance not included in seller's invoice price
• FOB


  Seller delivers goods on board the vessel nominated by the buyer at the named port of shipment. Risk of loss or damage passes to buyer when goods are on board the vessel.
• FOB Seller's Obligations


  1. Deliver goods on board the carrying vessel at a specific seaport where vessel lies at anchor at country of origin

  2. Main carriage (sea only) not included in seller's invoice price

  3. Port to port insurance not included in seller's invoice price
• CFR


  Seller delivers goods on board the vessel and contracts for and pays the costs and freight necessary to bring the goods to the named port of destination.
• CFR Seller's Obligations


  1. Deliver goods on board the carrying vessel at a specific seaport where vessel lies at anchor at country of origin

  2. Main carriage (sea only) included in seller's invoice price

  3. Port to port insurance not included in seller's invoice price
• CIF


  Seller delivers goods on board the vessel and contracts for and pays the costs, freight, and insurance necessary to bring the goods to the named port of destination.
• CIF Seller's Obligations


  1. Deliver goods on board the carrying vessel at a specific seaport where vessel lies at anchor at country of origin

  2. Main carriage (sea only) included in seller's invoice price

  3. Port to port insurance included in seller's invoice price
• DPU


  Seller delivers when the goods are unloaded from the arriving means of transport at the buyer's warehouse or designated place, and placed at the disposal of the buyer.
• DPU Seller's Obligations


  1. Deliver goods to the specific location of the buyer's designated place/warehouse at the country of destination, unloaded from the arriving delivery vehicle

  2. Main carriage included in seller's invoice price

  3. Port to port insurance not included in seller's invoice price
• DAP


  Seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination.
• DAP Seller's Obligations


  1. Deliver goods to the specific location of the buyer's designated place/warehouse at the country of destination, not unloaded from the arriving delivery vehicle

  2. Main carriage (air/sea) included in seller's invoice price

  3. Port to port insurance not included in seller's invoice price
• DDP


  Seller delivers the goods when they are placed at the disposal of the buyer, cleared for both export and import, on the arriving means of transport ready for unloading at the named place of destination.
• DDP Seller's Obligations


  1. Deliver goods to the specific location of the buyer's designated place/warehouse at the country of destination, not unloaded from the arriving delivery vehicle

  2. Main carriage included in seller's invoice price

  3. Port to port insurance not included in seller's invoice price
• Distinctions on Insurance, Freight, and Delivery

  • Insurance premium paid by seller (CIP & CIF)
  • Insurance premium paid by buyer at his option (EXW, FAS, FCA, FOB, CFR, CPT, DPU, DAP, DDP)
  • Freight pre-paid by seller (EXW, CPT, CFR, CIP, CIF, DPU, DAP, DDP)
  • Freight collect, paid by buyer (EXW, FAS, FOB, FCA)
  • Delivered on board vessel (FOB, CFR, CIF)
  • Delivered to carrier/forwarder (FCA, CPT, CIP)
  • Delivered to buyer's warehouse ready for unloading (DAP & DDP)
  • Delivered and unloaded at buyer's warehouse (DPU)