INCO TERMS

Definition

•Inco terms are standard trade definitions most commonly used ininternational sales contracts which are devised and published by theInternational Chamber of Commerce.

•ICC introduced the first version of Incoterms - short for "InternationalCommercial Terms" - in 1936

•Most contracts made after 1 January 2000 will refer to the latest edition ofIncoterms, which came into force on that date. The correct reference is to"Incoterms 2000".

•Unless the parties decide otherwise, earlier versions of Incoterms - likeIncoterms 1990 - are still binding if incorporated in contracts that areunfulfilled and date from before 1 January 2000.

Origin Terms

EXW• Ex-Works, named place where shipment is available to the buyer, notloaded.

• The seller will not contract for any transportation.

• This term thus represents the minimum obligation for the seller, and thebuyer has to bear all costs and risks involved in taking the goods from theseller’s premises.

International Carriage NOT Paid by Seller

FCA• Free Carrier, unloaded at the seller's dock OR a named place whereshipment is available to the international carrier or agent, not loaded.This term can be used for any mode of transport.

FAS• Free Alongside Ship, named ocean port of shipment.The seller delivers when the goods are placed alongside the vessel at thenamed port of shipment.

• The FAS term requires the seller to clear the goods for export.

FOB• Free On Board vessel, named ocean port of shipment.The seller delivers when the goods pass the ship’s rail at the named port ofshipment.

•This term is used for ocean shipments only where it is important that thegoods pass the ship's rail.

International Carriage Paid by the Seller

CFR

• Cost and Freight, named ocean port of destination.• The seller delivers when the goods pass the ship’s rail in the port ofshipment.• The seller must pay the costs and freight necessary to bring the goods tothe named port of destination• But the risk of loss of or any damage to the goods, as well as anyadditional costs due to events occurring after the time of delivery, aretransferred from the seller to the buyer.

CIF• Cost, Insurance and Freight, named ocean port of destination.• The seller delivers when the goods pass the ship’s rail in the port ofshipment.• The seller must pay the costs and freight necessary to bring the goods tothe named port of destination BUT the risk of loss or damage to the goods,as well as any additional costs due to the events occurring after the time ofdelivery, are transferred from the seller to the buyer.

• Seller also has to procure marine insurance against the buyer’s risk ofloss of or damage to the goods during the carriage.•Under the CIF term the seller is required to obtain insurance only onminimum cover.• Buyer to make his own extra insurance arrangements.• This term is used for ocean shipments.

CPT• Carriage Paid To, named place or port of destination. This term is usedfor air or ocean consignments.•The seller delivers the goods to the carrier nominated by him but theseller must in addition pay the cost of carriage necessary to bring thegoods to the named destination.• This means that the buyer bears all risks and any other costs occurringafter the goods have been so delivered.

CIP• Carriage and Insurance Paid To, named place or port of destination.

• The seller delivers the goods to the carrier nominated by him but theseller must in addition pay the cost of carriage necessary to bring the goodsto the named destination.

• The buyer bears all risks and any additional costs occurring after thegoods have been so delivered.

• The seller also has to procure insurance against the buyer’s risk of loss ofor damage to the goods during carriage.

• This term is used for air or ocean consignments.

Arrival At Stated DestinationDAF• Delivered At Frontier, named place of destination, by land, notunloaded.

• The seller delivers when the goods are placed at the disposal of thebuyer on the means of transport not unloaded, cleared for export, butnot cleared for import at the named point and place at the frontier, butbefore the customs border of the adjoining country.

• The term “frontier” may be used for any frontier including that of thecountry of export.

• This term is used for any mode of transportation but delivered by land.

DES• Delivered Ex-Ship, named port of destination, not unloaded.• The seller delivers when the goods are placed at the disposal of the buyeron board the ship not cleared for import at the named port of destination.• The seller has to bear all the costs and risks involved in bringing thegoods to the named port of destination before discharging.• This term is used for ocean shipments only.

DEQ• Delivered Ex-Quay, named port of destination, unloaded, not cleared.• The seller delivers when the goods are placed at the disposal of the buyernot cleared for import on the quay (wharf) at the named port ofdestination.• The seller has to bear costs and risks involved in bringing the goods to thenamed port of destination and discharging the goods on the quay (wharf).• The DEQ term requires the buyer to clear the goods for import and to payfor all formalities, duties, taxes and other charges upon import.• This term is used for ocean shipments only.

DDU• Delivered Duty Unpaid, named place of destination, not unloaded, notcleared.

• Duty has to be borne by the buyer as well as any costs and risks causedby his failure to clear the goods for import in time.

• This term is used for any mode of transportation.

DDP - Delivered Duty Paid, named place of destination, not unloaded,cleared. This term is used for any mode of transportation.

EXW FCA FAS FOB

SERVICES Ex Works Free Carrier Free Alongside Ship

Free Onboard

Vessel

Warehouse Storage Seller Seller Seller Seller

Warehouse Labor Seller Seller Seller Seller

Export Packing Seller Seller Seller Seller

Loading Charges Buyer Seller Seller Seller

Inland Freight Buyer

Buyer/

Seller SellerSeller*

Terminal Charges Buyer Buyer Seller Seller

Forwarder's Fees Buyer Buyer Buyer Buyer

Loading On Vessel Buyer Buyer Buyer Seller

Ocean/Air Freight Buyer Buyer Buyer Buyer

Charges On Arrival At Destination Buyer Buyer Buyer Buyer

Duty, Taxes & Customs Clearance Buyer Buyer Buyer Buyer

Delivery To Destination Buyer Buyer Buyer Buyer

CFR CIF CPT CIP

SERVICES Cost & Freight

Cost Insurance &

Freight Carriage Paid To

Carriage Insurance

Paid To

Warehouse Storage Seller Seller Seller Seller

Warehouse Labor Seller Seller Seller Seller

Export Packing Seller Seller Seller Seller

Loading Charges Seller Seller Seller Seller

Inland Freight Seller Seller Seller Seller

Terminal Charges Seller Seller Seller Seller

Forwarder's Fees Seller Seller Seller Seller

Loading On Vessel Seller Seller Seller Seller

Ocean/Air Freight Seller Seller Seller Seller

Charges On Arrival At Destination Buyer Buyer Seller Seller

Duty, Taxes & Customs Clearance Buyer Buyer Buyer Buyer

Delivery To Destination Buyer Buyer Buyer Buyer

DAF DES DEQ DDU DDP

SERVICES

Delivered At

Frontier Delivered Ex Ship

Delivered Ex Quay

Duty Unpaid

Delivered Duty

Unpaid

Delivered Duty

Paid

Warehouse Storage Seller Seller Seller Seller Seller

Warehouse Labor Seller Seller Seller Seller Seller

Export Packing Seller Seller Seller Seller Seller

Loading Charges Seller Seller Seller Seller Seller

Inland Freight Seller Seller Seller Seller Seller

Terminal Charges Seller Seller Seller Seller Seller

Forwarder's Fees Seller Seller Seller Seller Seller

Loading On Vessel Seller Seller Seller Seller Seller

Ocean/Air Freight Seller Seller Seller Seller Seller

Charges On Arrival At Destination Buyer Buyer Seller Seller Seller

Duty, Taxes & Customs Clearance Buyer Buyer Buyer Buyer Seller

Delivery To Destination Buyer Buyer Buyer Seller Seller

Thanking YouOpen for Discussion…