INCOTERMS APPLIED TO SEA AND INLAND WATERWAY

TRANSPORT ONLY Cost and Freight (CFR)

Seller delivers goods on board the vessel, procures goods already so delivered.

The risk of loss of or damage to goods passes when goods are on board the vessel.

This rule has two critical points, because risk passes,costs are transferred at different places.

This rule is unsuitable for containerized transport (the CPT rule should be use).

A.The Seller’s Obligations

provide goods and the commercial invoice in conformity with contract of sale must obtain, at its own risk, expense, export license, other official

authorization, carry out all customs formalities necessary for export goods.

must contract, procure a contract for carriage of goods, has no obligation to buyer to make a contract of insurance.

must deliver goods either by placing them on board the vessel or by procuring goods so delivered. 

Seller bears all risks of loss or damage to goods until delivered, with exception of loss or damage in circumstances,

must pay costs relating to goods, freight, other costs (costs of loading the goods on board, any charges for unloading at port of discharge),

pay cost of customs formalities necessary for export (all duties, taxes, other charges payable upon export), transport through any country, those checking operations

The seller must give buyer any notice needed .

B. The Buyer’s Obligations

must pay price of goods as provided in contract of sale.

has no obligation to seller to make a contract of carriage and insurance.

Must take delivery of goods when delivered as envisaged, receive them from carrier at the named port of destination.

Bears all risks of loss of or damage to goods from time they have been delivered as envisaged.

Must pay all costs, charges relating to goods while in transit until their arrival at the port of destination, …

CIF (Cost, Insurance & Freight)

Means that seller delivers goods on board the vessel or procures goods already so delivered. The risk of loss of goods passes when goods are on board the vessel.

Seller also contracts for insurance cover against buyer‘s risk of loss of or damage to goods during the carriage, required to obtain insurance only on minimum cover.

This rule has two critical points, because risk passes, costs are transferred at different places.

A.The Seller’s Obligations

provide goods, commercial invoice in conformity with contract of sale, other evidence of conformity

must obtain, at its own risk, expense, any export license, other official authorization, carry out customs formalities necessary for export of goods.

must contract or procure a contract for carriage of goods from agreed point of delivers.

B. The Buyer’s Obligations must pay price of goods as provided in contract of sale.

has no obligation to seller to make a contract of carriage and insurance.

Must take delivery of goods when delivered as envisaged, receive them from carrier at named port of destination.

Bears all risks of loss of or damage to goods from the time delivered as envisaged.

Must pay all costs, charges relating to goods while transit until their arrival at port of destination, unloading costs including lighterage, wharfage charges…

Free On Board (FOB) means that seller delivers goods on board the vessel nominated by buyer at

port of shipment or procures goods already so delivered.

Seller has obligation to make contract of carriage, costs of customs formalities necessary for export ,

risk of loss of goods passes when goods are on board the vessel, buyer bears all costs from that moment onwards.

not be appropriate where goods are handed over to carrier before on board the vessel, ex: goods in containers delivered at terminal. In such situations, the FCA rule should be used.

A.The Seller’s Obligations

provide goods, commercial invoice in conformity with contract of sale, other evidence of conformity that may be required by contract.

Where applicable, seller must obtain, at its own risk, expense, any export license, other official authorization, carry out customs formalities necessary for export of goods.

has no obligation to buyer to make a contract of insurance.

must deliver goods either by placing them on board the vessel or by procuring goods so delivered. 

B. The Buyer’s Obligations

must pay price of the goods as provided in contract of sale.

has no obligation to seller to make a contract of insurance.

Bears all risks of loss of or damage to goods until they have been delivered.

pay all costs relating to goods from time delivered as envisaged, all duties, taxes, costs of any mandatory pre- shipment inspection.

Must accept proof of delivery provided as envisaged

Must reimburse seller for all costs, charges incurred by seller

Delivered At Place (DAP)

“Delivered at Place” means that seller delivers when goods are placed at disposal of buyer on arriving means of transport ready for unloading at named place of destination.

The seller bears all risks involved in bringing the goods to name place.

The parties are well advised to specify as clearly as possible point within agreed place of destination, as risks to that point are for account of the seller.

The seller is advised to procure contracts of carriage that match this choice precisely.

DAP requires seller to clear the goods for export, where applicable.

However, seller has no obligation to clear the goods for import, pay any import duty or carry out any import customs formalities.

If parties wish seller to clear the goods for import, pay any import duty ,carry out any import customs formalities , the DDP term should be used.

A.The Seller’s Obligations

provide goods, commercial invoice in conformity with contract of sale, other evidence of conformity that may be required by contract.

must contract at its own expense for carriage of goods to named place of destination, to agreed point.

has no obligation to buyer to make a contract of insurance.

must deliver goods either by placing them at the disposal of the buyer on the arriving means of transport ready for unloading at the agreed point.

B. The Buyer’s Obligations

must pay price of goods as provided in contract of sale.

has no obligation to seller to make a contract of carriage and insurance.

Must take delivery of the goods when they have been delivered as envisaged

Bears all risks of loss of or damage to goods from time they have been delivered.

pay all costs, charges relating goods until be delivered, unloading costs at place of destination, checking operations …

Must reimburse the buyer for all costs and charges incurred by the buyer