INternational COmmercial TERMS

PRESENTED BY

| PANKAJ PRABHA |&| ANKITA SINGH|

PUNJAB NATIONAL BANK – MANIPAL UNIVERSITY BANGALORE CAMPUS

INCOTERMS

These are internationally accepted commercial terms defining the respective roles and responsibilities (including costs) of the buyer and seller in the arrangement of transportation and other obligations

The Origin and HistoryFirst published by the International Chamber of Commerce (ICC) in 1936 & since updated in 1953, 1967, 1976, 1980, 1990, 2000 and then the current revision in 2010.Incoterms® reflect world-wide trade practices, as practices change, Incoterms® are revised

PurposeTo clarify how functions, costs and risks are split between the buyer and the seller in connection with delivery of goods as required in sales contractEach term clearly specifies the responsibilities of the seller and the buyerDelivery, risks and costs are the critical points

ImportanceReduce the uncertainty caused by trade practices in different countries.Simplify the negotiations involved in international commerce.Ensure common understanding of obligations

Group Term Complete Name Transport ModeE DEPARTURE EXW Ex Works Any F MAIN CARRIAGE UNPAID FCA Free Carrier Any FAS Free Alongside Ship Sea FOB Free on Board Sea C MAIN CARRIAGE PAID CFR Cost and Freight Sea CIF Cost Insurance and Freight Sea CPT Carriage Paid To Any CIP Carriage and Insurance Paid to Any D ARRIVAL DAT Delivered At Terminal Any DAP Delivered At Place Any DDP Delivered Duty Paid Any

Incoterms 2010

Changes in Incoterms from 2000 to 2010

New Terms Added

1. DAT – Delivered at Terminal (named terminal/port of Delivery)2. DAP – Delivered at Place ( named Place of delivery)

Terms Eliminated

1.DAF – Delivered at Frontier (named place of delivery)2.DES – Delivered Ex Ship (named port of delivery)3.DEQ – Delivered Ex Quay (named port of delivery)4.DDU – Delivered Duty Unpaid (named place of destination)

The Steps of Global Logistics

MainInternational

Transportation

4

Handling InboundCustoms

Clearance

Duties

FinalTransportationUnloading

Packing

Loadin

g

PreliminaryTransportation

Customs Clearancefor Export

HandlingOutbound

Insurance

1

2 3

5

6

7

891011

Incoterm 2010

Export-Customs

declaration

Carriage to port of export

Unloading of truck in

port of export

Loading charges in

port of export

Carriage (Sea Freight/Air

Freight) to port of import

Insurance

Loading on truck in port of import

Carriage to place of

destination

Import customs

clearance, Imports Taxes

EXW Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer

Incoterm 2010

Export-Customs

declaration

Carriage to port of export

Unloading of truck in

port of export

Loading charges in

port of export

Carriage (Sea Freight/Air

Freight) to port of import

Insurance

Loading on truck in port of import

Carriage to place of

destination

Import customs

clearance, Imports Taxes

FCA Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer

Incoterm 2010

Export-Customs

declaration

Carriage to port of export

Unloading of truck in port

of export

Loading charges in

port of export

Carriage (Sea Freight/Air Freight) to

port of import

InsuranceLoading on

truck in port of import

Carriage to place of

destination

Import customs

clearance, Imports

taxes

FAS Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer

Incoterm 2010

Export-Customs

declaration

Carriage to port of export

Unloading of truck in

port of export

Loading charges in

port of export

Carriage (Sea Freight/Air Freight) to

port of import

InsuranceLoading on

truck in port of import

Carriage to place of

destination

Import customs

clearance, Imports Taxes

FOB Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer

Incoterm 2010

Export-Customs

declaration

Carriage to port of export

Unloading of truck in

port of export

Loading charges in

port of export

Carriage (Sea Freight/Air

Freight) to port of import

Insurance

Loading on truck in port of import

Carriage to place of

destination

Import customs

clearance, Import Taxes

CFR Seller Seller Seller Seller Seller Buyer Buyer Buyer Buyer

Incoterm 2010

Export-Customs

declaration

Carriage to port of export

Unloading of truck in

port of export

Loading charges in

port of export

Carriage (Sea Freight/Air

Freight) to port of import

Insurance

Loading on truck in port of import

Carriage to place of

destination

Import customs

clearance, Import Taxes

CIF Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer

Incoterm 2010

Export-Customs

declaration

Carriage to port of export

Unloading of truck in

port of export

Loading charges in

port of export

Carriage (Sea Freight/Air

Freight) to port of import

Insurance

Loading on truck in

port of import

Carriage to place of

destination

Import customs

clearance, Import Taxes

CPT Seller Seller Seller Seller Seller Buyer Seller Buyer Buyer

Incoterm 2010

Export-Customs

declaration

Carriage to port of export

Unloading of truck in

port of export

Loading charges in

port of export

Carriage (Sea Freight/Air

Freight) to port of import

Insurance

Loading on truck in port of import

Carriage to place of

destination

Import customs

clearance, Import Taxes

CIP Seller Seller Seller Seller Seller Seller Seller Buyer Buyer

Incoterm 2010

Export-Customs

declaration

Carriage to port of export

Unloading of truck in

port of export

Loading charges in

port of export

Carriage (Sea Freight/Air

Freight) to port of import

Insurance Terminal Charges

Carriage to place of

destination

Import customs

clearance, Import Taxes

DAT Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer

Incoterm 2010

Export-Customs

declaration

Carriage to port of export

Unloading of truck in

port of export

Loading charges in

port of export

Carriage (Sea Freight/Air Freight) to

port of import

Insurance

Loading on truck in

port of import

Carriage to place of

destination

Import customs

clearance, Import Taxes

DAP Seller Seller Seller Seller Seller Seller Seller Seller Buyer

Incoterm 2010

Export-Customs

declaration

Carriage to port of export

Unloading of truck in

port of export

Loading charges in

port of export

Carriage (Sea Freight/Air Freight) to

port of import

Insurance

Loading on truck in port of import

Carriage to place of

destination

Import customs

clearance, Import Taxes

DDP Seller Seller Seller Seller Seller Seller Seller Seller Seller